Calcutta High Court
Itc Limited vs The Controller Of Patents on 30 April, 2025
IN THE HIGH COURT AT CALCUTTA
ORIGINAL SIDE
COMMERCIAL DIVISION
Present:
The Hon'ble Justice Krishna Rao
IPDPTA No. 121 of 2023
ITC Limited
Versus
The Controller of Patents, Designs & Trademark
Mr. J. Sai Deepak, Sr. Adv.
Mr. Paritosh Sinha
Mr. Manosij Mukherjee
Mr. Samik Chakraborty
Ms. Mitul Dasgupta
Ms. Amrita Majumdar
Mr. K. K. Pandey
Mr. Gyan Prakash
Mr. T. Das
Ms. Mallika Bothra
Ms. Pooja Sett
... For the appellant.
Mr. Amit Chakraborty
Ms. Sanjukta Gupta
... For the respondent.
2
Hearing Concluded On : 08.04.2025
Judgment on : 30.04.2025
Krishna Rao, J.:
1. This is an appeal under Section 117A of the Patents Act, 1970 against
the order passed by the Controller of Patents and Designs, Kolkata,
dated 26th June, 2023 under Section 15 of the Patents Act, 1970
wherein the application filed by the appellant being Indian Patent
Application No. 685/KOL/2015 dated 10th June, 2015 was rejected.
2. The application filed by the appellant before the Controller is for
invention titled "A Device and method for generating and delivery of a
Nicotine Aerosol to a user".
3. Mr. J. Sai Deepak, Learned Senior Advocate representing the appellant
submits that the device does not have any electrical/electronic
components or like arrangement. The device consists of a tube
enclosing at least two components. One of the components holds at
least one aerosol generating substance i.e. nicotine/alkaloids and
another component holds at least one aerosol promoting substance, i.e.
pyruvic acid. He submits that the two components are arranged parallel
to each other in a novel configuration. During inhalation, the aerosol
generating substance reacts with the aerosol promoting substance at a
particular location to generate the nicotine salt-based aerosol to be
delivered to the user.
4. Mr. Sai Deepak submits that the subject invention disclosed in the
application is not an e-cigarette nor does it belong in the category of
Electronic Nicotine Delivery System (ENDS). He submits that since it
does not use electrical or electronic or like sources of heat to generate
aerosol. He submits that the device is activated by a process wherein
nicotine salt aerosol is generated by a chemical reaction without any
deployment of heating/ electrical/ electronic element. He submits that
the subject invention is, therefore, able to generate aerosol through a
novel design configuration when combined with an effective and
productive process based solely on a chemical reaction without the
deployment of any heating or electronic means/ method.
5. Mr. Sai Deepak submits that the respondent has cited new documents
in the impugned order which were not a part of the First Examination
Report. He submits that no documents in support of the ground of
Section 3(b) were cited in the First Examination Report. The documents
in support of objection under Section 3(b) were cited for the very first
time in the hearing notice. The document which was cited is an online
newspaper article.
6. Mr. Sai Deepak submits that in the impugned order found reference to
a White Paper titled "White paper on Electronic and Nicotine Delivery
System" dated 29th May, 2019 by the Indian Council of Medical
Research (hereinafter referred as "ICMR") and several statutes and
portions from the same were relied upon. He submits that the ICMR
White Paper dated 29th May, 2019 was neither cited in the First
Examination Report or Hearing Notice nor was served upon the
appellant prior to passing of the impugned order. In support of his
submissions, he has relied upon the judgment reported in the case of
Ssangyong Engineering and Construction Company Limited Vs.
National Highways Authority of India (NHAI) reported in 2019 SCC
OnLine SC 677.
7. Mr. Sai Deepak submits that the subject invention is not an electronic
cigarette, the reliance on the News Paper Article dated 31st May, 2019,
the ICMR White Paper dated 29th May, 2019 and the contents therein
and the e-cigarette Prohibition Act is completely misplaced and
unjustified.
8. Mr. Sai Deepak submits that the respondent has failed to appreciate
that the term "serious prejudice" in Section 3(b) of the Patents Act,
1970 has to be read together with the rest of the provision which uses
the words "primary or intended use". In support of his submissions, he
has relied upon the judgment in the case of Balsinor Nagrik Co-op.
Bank Ltd. Vs. Babubhai S. Pandya reported in AIR 1987 SC 849.
9. Mr. Sai Deepak submits that as per PowerPoint presentation by Shri
DPS Parmar, the then Deputy Controller of Patents and Designs
available on the website of World Intellectual Property Organization,
providing explanation with examples on what constitutes a fit case for
attracting Section 3(b) of the Act. He submits that none of the examples
provided Section 3(b) exclusion mention tobacco, smoking or nicotine
or inventions relating thereto.
10. Mr. Sai Deepak submits that if patentability of an invention is denied
merely because its commercial exploitation is prohibited, it would
violate of Article 27(2) of the Agreement on Trade Related Aspects of
Intellectual Property Rights (TRIPS) and Article 4quarter of Paris
Convention for the Protection of Industrial Property (Paris Convention).
He submits that the Patent Office is not empowered to decide on policy
issues regarding incentivizing/ disincentivizing innovation in a
particular filed of invention which exclusively lies within the realm of
the Government/ Executive.
11. Mr. Sai Deepak submits that Section 83(e) of the Patents Act further
reinforces the fact that grant of a patent does not necessarily mean that
the claimed invention can be commercially exploited. He submits that
the fundamental aspect of Patent Law that "grant of patent" is distinct
from "commercialization" and that the grant of patent does not result in
a consequential right to sell the product.
12. Mr. Sai Deepak submits that the Patent office has granted several
tobacco related inventions. He submits that recently by an order dated
18th April, 2024, granted patent of such invention but the application of
the appellant is rejected arbitrarily. In support of his submissions, he
has relied upon the judgment in the case of Manganese Ore (India)
Ltd. vs. Regional Asstt. CST reported in (1976) 4 SCC 124.
13. Mr. Amit Chakraborty, Learned Advocate representing the respondent
submits that the invention claimed by the appellant falls under
Nicotine Replacement Therapy (NRT) which uses nicotine for
replacement of smoking. He submits that as per the Drugs and
Cosmetics Act, 1940, Nicotine Replacement Therapy is not approved
and the present invention uses 90 microliters of nicotine each in three
channels. The 90 microliters are equivalent to 90 mg. of nicotine, which
is way beyond permissible limit as per Drugs and Cosmetics Act, 1940
and Drugs Rules, 1945.
14. Mr. Chakraborty submits that the present device uses salt of nicotine
which is 60 microlitre or 60 mg to 90 microlitre or 90 mg. in each tube.
Nicotine is a known addictive substance that can have serious health
effects. He submits that any device that could potentially promote or
facilitate nicotine addiction might be seen as against public health
policies.
15. Mr. Chakraborty submits that nicotine even in therapeutic use, has
health risk. Inhaling nicotine-based aerosols could have adverse effects
on the lungs and cardiovascular system. He submits that the device
delivers aerosolized nicotine directly to the lungs, as such, it is harmful,
especially given increasing global concerns about vaping and e-cigarette
related lung deceases.
16. Mr. Chakraborty submits that as per the Drugs and Cosmetics Act,
1940 and the Drugs Rules, 1945 permit the use of nicotine upto 2 mg
and 4 mg in gums, lozenges and strips. He submits that such a product
should be adhere to the provisions of chapter IV of the Drugs and
Cosmetics Act and Rules made thereunder, which requires them to
manufactured under a valid Drug manufacturing license and valid
sales license for products containing more than 2 mg of nicotine.
17. Mr. Chakraborty submits that the Controller has satisfied that the
application filed by the appellant does not comply with the provisions of
Section 3(b) of the Patents Act, 1970 and accordingly, the same was
rejected.
18. Mr. Chakraborty submits that the notice of hearing was given to the
appellant on 1st May, 2023, an opportunity of hearing was given to the
appellant on 30th May, 2023. The appellant attended the hearing and
submitted his reply on 14th June, 2023 and thereafter, the Assistant
Controller has passed the order dated 26th June, 2023, thus the
appellant cannot say that the respondent has violated the principles of
natural justice.
19. Mr. Chakraborty submits that the documents and statutes relied by the
Assistant Controller are available in the Government website and
statutes books. The ICMR report is mentioned in the hearing notice
dated 1st May, 2023. He submits that the appellant had the knowledge
about all the documents relied by the Assistant Controller but the
appellant has not dealt with the said documents either in the reply or
at the time of hearing of the application.
20. Mr. Chakraborty submits that the final product of Electronic Nicotine
Delivery System and NRT are "Nicotine Based Aerosol" which is same as
that of the ICMR Report. He submits that Vapes, NRT and ENDS have
common properties and all three are designed to deliver nicotine to the
user through "Nicotine based aerosol". All three generate nicotine
based aerosols, which are inhaled and delivered to the lungs. He
submits that unlike traditional cigarettes, vapes do not burn tobacco
but instead create an aerosol by vaporizing the liquid. He submits that
the aerosol contains nicotine, which is absorbed through the lungs into
the bloodstream due to which the ICMR report and the advisory issued
by the Government of India dated 20th August, 2018, are quoted in the
order passed by the Assistant Controller.
21. Mr. Chakraborty submits that Article 47 of the Constitution of India
provides duty of the State to raise the level of nutrition and the
standard of living and to improve public health. He submits that in
view of Article 47 of the Constitution of India, nicotine which causes
serious prejudice to human, animal or plant life or health or to the
environment cannot be permitted to use in the present device beyond
the permissible limit for the purpose to protect and improve public
health.
22. Mr. Chakraborty submits that it is a settled legal proposition that
Article 14 of the Constitution of India is not meant to perpetuate
illegality or fraud, even by extending the wrong decisions made in other
cases. He submits that if some other similarly situated persons have
been granted some relief inadvertently or by mistake, such an order
does not confer any legal rights on others to get the same relief as well.
In support of his submissions, he has relied upon the judgment in the
case of Basawaraj and Another Vs. Special Land Acquisition
Officer reported in (2013) 14 SCC 81 and Fuljit Kaur Vs. State of
Punjab and Others reported in (2010) 11 SCC 455.
23. The first issue raised in the present application whether the documents
relied by the respondent was served upon the appellant or not or
whether the appellant get an opportunity to deal with the documents
relied by the respondent.
24. In the impugned order, the respondent has relied upon the following
documents:
"i. ICMR White Paper on Electronic Nicotine Delivery
System dated May 29, 2019.
ii. Environment (Protection) Act, 1986.
iii. The Manufacture, Storage and Import of
Hazardous Chemical Rules, 1989.
iv. Food Safety and Standards (Prohibition and
Restrictions on Sales) Regulation, 2011.
v. The Food Safety and Standards Act, 2006.
vi. Information on Nicotine Sulfate as seen on
https://pubchem.ncbi.nlm.nih.gov/compound/Nico
tine-sulfate.
vii. Government of India, Ministry of Health &
Family Welfare order no. F.No.-P-16012/19/2017-
TC dated 28/08/2018.
viii. Insecticide Act 1968.
ix. The Drugs and Cosmetics Act, 1940 & Rules,
1945.
x. Circulars purportedly issued by the State
Governments of Punjab, Karnataka, Mizoram,
Kerala, Jammu & Kashmir; Uttar Pradesh and
Bihar;
xi. Promulgation of the Prohibition of Electronic
Cigarettes (Production, Manufacture, Import,
Export, Transport, Sale, Distribution, Storage And
Advertisement) Ordinance, 2019.
xii. The Prohibition of Electronic Cigarettes
(Production, Manufacture, Import, Export,
Transport, Sale, Distribution, Storage and
Advertisement) Act, 2019, dated 5th December
2019.
xiii. Judgement related to Civil Writ Petition (PIL)
No. /2022, Priyansha Gupta vs Union of India &
others."
25. In the hearing notice dated 1st May, 2023, the respondent has
mentioned about the documents which are as follows:
"Without prejudice to any other objections,
prima facie it seems that the subject matter of
amended claims 1-17 of the alleged invention
discloses an invention the primary or intended use
or commercial exploitation of which could be
contrary to public order or morality or which causes
serious prejudice to human animal or plant life or
health or to the environment.
Hence the subject-matter of amended claims
1-17 as filed in the instant application prima facie
development to a stimulant cigarette or e-cigarette
and falls within the scope of clause (b) of section (3)
of the Patents Act, 1970 (as amended). Therefore,
the invention claimed in the said amended claims
is not patentable.
Application fails to explain how to control the
addition effect of the nicotine with controlled
nicotine delivery, which is hazardous to the health
and therefore it cannot be allowed as per Section
3(b) of IPA-1970.
The Indian Council of Medical Research (ICMR)
has released a paper on May 31, 2019, titled
"Vaping Could Put You on Path from Womb to
Tomb": ICMR Recommends Ban on E-cigarettes
May 31, 2019 has recommended a complete ban on
e-cigarettes and other electronic nicotine delivery
systems (ENDS) and said that it "adversely" affects
almost all the human body systems with
impact....from womb to tomb". The ICMR noted that
e-cigarettes could, in fact increase the possibility of
nonsmokers turning to smoking, "Use of ENDS or e-
cigarettes by non-smokers can lead to nicotine
addiction and regular smoking, "it said and added
that several studies have found that youth using
ENDS or e-cigarettes were "more likely to use
regular cigarettes later". Passive smoke from e-
cigarettes or vapes is also harmful, it said "Passive
exposure to vapors during pregnancy can severely
affect the health of both mother and foetus". ICMR
recognizes ENDS are devices that heat a solution to
create an aerosol, which also frequently contains
flavours, usually dissolved into propylene glycol
and glycerin. There are various types of ENDS
devices like e-cigarettes, heat-not-burn devices,
vape, e-sheesha, e-nicotine flavored hookah among
others. The most common type is an e-cigarette that
produces an aerosolized mixture of the flavored
liquids and nicotine, which is inhaled by the user.
The release of the white paper comes amid a raging
debate over the harm reduction aspects of ENDS
with some organizations claiming that they held in
smoking cessation and are less harmful
alternatives to traditional cigarettes. Professor K
Srinath Reddy, President, Public Health Foundation
of India and a renowned cardiologist who chaired
the ICMR expert group for this white paper said
that the tobacco consumption, especially cigarette
smoking has shown a decline in India in recent
years, in response to several tobacco control
measures that has already been initiated. "Thus, at
this juncture, marketing of product like ENDS or e-
cigarettes, with unproven benefit and high potential
harm from addiction and health risks, is
unwarranted as a tobacco control measure"."
26. The contention of the respondent is that the said documents are
available in the Government Website, in other words it is admitted that
the said documents were not supplied to the appellant. The respondent
in the impugned order relied upon (i). The Environment (Protection) Act,
1986, (ii) the Manufacture, Storage and Import of Hazardous Chemical
Rules, 1989, (iii) The Food Safety and Standards (Prohibition and
Restrictions on Sales) Regulations, 2011 under the Food Safety and
Standards Act, 2006, (iv) The Drugs and Cosmetics Act, 1940 and
Drugs and Cosmetics Rules, 1945, (v) Insecticides Act, 1968, and (vi)
The Prohibition of Electronic Cigarettes (Production, Manufacture,
Import, Export, Transport, Sale, Distribution, Storage and
Advertisement) Act, 2019. In the hearing notice dated 1st May, 2023,
the respondent has not mentioned about the said Acts or informed the
appellant that the respondent will consider the said Acts.
27. In the case of Ssangyong Engineering (Supra) wherein the Hon'ble
Supreme Court held that:
"73. Given these parameters of challenge, let
us now examine the arguments of the learned
counsel on behalf of the appellant. There can be no
doubt that the government guidelines that were
referred to and strongly relied upon by the majority
award to arrive at the linking factor were never in
evidence before the Tribunal. In fact, the Tribunal
relies upon the said guidelines by itself and states
that they are to be found on a certain website. The
ground that is expressly taken in Section 34
petition by the appellant is as follows:
"It is pertinent to mention here that no
such guidelines of the Ministry of Industrial
Development had been filed on record by
either of the parties and therefore, the
Tribunal had no jurisdiction to rely upon the
same while deciding the issue before it.
Accordingly, the impugned award is liable to
be set aside."
74. The learned counsel for the respondent
also agreed that these guidelines were never, in
fact, disclosed in the arbitration proceedings. This
being the case, and given the authorities cited
hereinabove, it is clear that the appellant would be
directly affected as it would otherwise be unable to
present its case, not being allowed to comment on
the applicability or interpretation of those
guidelines. For example, the appellant could have
argued, without prejudice to the argument that
linking is dehors the contract, that of the three
methods for linking the New Series with the Old
Series, either the second or the third method would
be preferable to the first method, which the
majority award has applied on its own. For this
reason, the majority award needs to be set aside
under Section 34(2)(a)(iii)."
28. In the present case, the respondent in his argument as well as in the
written notes of argument, it is mentioned that the documents and
statutes, which were mentioned in the order by the Assistant Controller
are available in the website. In the hearing notice also the respondent
has not indicated that in terms of the Acts and the Rules as mentioned
in para 26 (supra), the appellant will not get patent.
29. This Court finds that the documents on the basis of which the
respondent has refused to grant patent to the appellant, the appellant
was denied an opportunity of hearing to deal with the said documents
and the Acts relied by the respondent.
30. Section 3, 3(b) and 3 (d) of the Patents Act, 1970 are reads as follows:
"3. What are not inventions.--The following
are not inventions within the meaning of this Act,--
(b) an invention the primary or intended use or
commercial exploitation of which could be contrary
public order or morality or which causes serious
prejudice to human, animal or plant life or health or
to the environment;
(d) the mere discovery of a new form of a
known substance which does not result in the
enhancement of the known efficacy of that
substance or the mere discovery of any new
property or new use for a known substance or of
the mere use of a known process, machine or
apparatus unless such known process results in a
new product or employs at least one new reactant.
Explanation.--For the purposes of this
clause, salts, esters, ethers, polymorphs,
metabolites, pure form, particle size, isomers,
mixtures of isomers, complexes, combinations and
other derivatives of known substance shall be
considered to be the same substance, unless they
differ significantly in properties with regard to
efficacy."
31. In the impugned order, the respondent has cited that the Prohibition of
Electronic Cigarettes (Production, Manufacture, Import, Export,
Transport, Sale, Distribution, Storage and Advertisement) Act, 2019 (e-
cigarette Prohibition Act) which is statute regulating and banning
electronic cigarettes.
32. The appellant claims that the device as claimed in claims 1 or 2 or 3 or
4, wherein said aerosol promoting substance concentration is from
about 10 microliters to 90 microliters and preferably in between 60
microliters to 90 microliters. It is the further case that the claim nos.1
or 2 or 3 or 4, wherein said aerosol promoting substance concentration
is from about 90 microliters to 10 microliters and preferably in between
120 microliters to 140 microliters. It is also that the device as claimed
in 1 or 2 or 3 or 4 generates, nicotine aerosol concentration from about
0 microgram per puff to 50 microgram per puff and preferably from
about 1.4 microgram per puff to 3.2 microgram per puff.
33. As per the case of the appellant, the present invention discloses a
device (system), embodying a novel configuration (e.g. parallel
configuration) to hold at least one aerosol generating substrate (e.g.
tobacco, alkaloid, nicotine and the like) and aerosol promoting
substance (e.g. acid), to generate and deliver the aerosol of a nicotine
salt to the user. The present invention provides an efficient, parallel
design device that delivers nicotine to the users without burning or
heating of tobacco and/or nicotine. The figures are as follows:
As per Figure-1(a):
Nicotine -60 microliters each in two channels,
Pyruvic Acid -140 microliters in one channel,
Nicotine Delivery -1.4 to 9.2 microgram per puff.
As per Figure -1(b):
Nicotine -90 microliters each in three channels,
Pyruvic Acid - 140 microliters in the well,
Nicotine Delivery - 0 to 15 microgram per puff.
As per Figure -2:
Nicotine -60 Microliters,
Pyruvic Acid-140 microliters,
Nicotine Delivery -2.9 to 3.2 microgram per puff.
34. Figure-1 relates to chemical evaluation of electronic cigarettes. The
terms, electronic cigarette are broadly classified under "Electronic
Nicotine Delivery System" which does not involve burning or
combusting of tobacco/nicotine to generate aerosol.
35. It is the case of the appellant that the present invention does not belong
to electronic nicotine delivery system, thus it does not use electrical or
electronic sources to generate aerosol. It uses chemical to generate
nicotine aerosol wherein it is totally eliminate electrical or electronic
components.
36. In the present case, the respondent by taking into the consideration of
the ICMR White Paper publication, the Drugs and Cosmetics Act, 1940
and Rules, 1945 framed therein and considering the other Acts has
come to the conclusion that the device is an e-cigarette but the
respondent has not taken the said plea in the hearing notice and the
appellant has been denied an opportunity to deal with the said
contention of the respondent.
37. The respondent has applied the serious prejudice by referring Section
3(b) of the Patents Act. Section 3(b) is the intent principle and not the
effect or harm principle. Shri DPS Parmar, the then Deputy Controller of
Patents and Designs provided explanation with examples on what
constitutes a fit case for attracting Section 3(b) of Patents At which are
as follows:
In none of the examples provided above discussing Section 3(b)
exclusions mention tobacco, smoking or nicotine or inventions relating
thereto. In the "Patents Manual" does not include tobacco/smoking/
nicotine related inventions at the time of giving examples of inventions
that fall within the ambit of Section 3(b) of the Patents Act.
38. Article 27.2 of the Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS), it is mentioned that:
"27.2. Members may exclude from
patentability inventions, the prevention within their
territory of the commercial exploitation of which is
necessary to protect order public or morality,
including to protect human, animal or plant life or
health or to avoid serious prejudice to the
environment, provided that such exclusion is
not made merely because the exploitation is
prohibited by their law."
Article 4quarter of the Paris Convention read as follows:
"Patents: Patentability in Case of Restrictions of
Sale by Law
The Grant of a patent shall not be refused and a
patent shall not be invalidated on the ground that
the sale of the patented product or of a product
obtained by means of a patented process is
subject to restrictions or limitations resulting
from the domestic law."
Taking into consideration, this Court finds that the grant of patent
shall not be refused on the ground that the sale of the patented product
or of a product obtained by means of a patented process is subject to
restrictions and limitations resulting from the domestic law.
39. Section 83(d) and (e) of the Patents Act, 1970 reads as follows :
"83. General principles applicable to
working of patented inventions.--Without
prejudice to the other provisions contained in this
Act, in exercising the powers conferred by this
Chapter, regard shall be had to the following
general considerations, namely;--
(d) that patents granted do not impede
protection of public health and nutrition and
should act as instrument to promote public
interest specially in sectors of vital importance
for socio-economic and technological
development of India;
(e) that patents granted do not in any way
prohibit Central Government in taking measures
to protect public health."
The patents are granted to encourage inventions and to secure
that the inventions are works in India on a Commercial Scale and to
the fullest extent that is reasonably practicable without undue delay.
The patents granted do not in any way prohibit Central Government in
taking measures to protect public health.
40. Considering the above, this Court finds that it is the fit case to set aside
the order passed by the Assistant Controller of Patent at Kolkata dated
26th June, 2023 and remand the matter back to the respondent for
considering of the matter a fresh within a period of six months from
this date. It is directed that the matter shall be heard a fresh by any
competent officer other than the officer who has passed the impugned
order. It is made clear that the officer concern is free to take its decision
without being influenced, if any, observation made in this order.
41. IPDPTA No. 121 of 2023 is allowed.
(Krishna Rao, J.)
