Daikin Industries Ltd Vs Union of India

Patent examination must follow the "why" and "what" standard, ensuring proper justification for rejection

Brief Facts of the Case:

The case involved an appeal against an order dated 22nd October 2021, wherein Daikin Industries Ltd's patent application 1481/KOLNP/2014, titled "Air Conditioning Apparatus", was rejected. The rejection was based on the ground that the invention lacked inventive step under Section 2(1)(ja) of the Patents Act, 1970.

Daikin argued that: 1. The impugned order was unreasoned and unsustainable.2. The order mechanically relied on prior art documents (D1-D5) without explaining their relevance.3. The Controller introduced D5 in the hearing notice dated 14th June 2021, which was absent in the First Examination Report (FER).4. The procedure followed was contrary to natural justice principles.

Brief Issue:Whether the rejection of Daikin’s patent application on the ground of lack of inventive step under Section 2(1)(ja) of the Patents Act, 1970, was justified, considering the procedural lapses and the absence of proper reasoning in the impugned order.

Reasoning of the Court:The Court found that the Controller's order lacked proper reasoning and merely reproduced prior art documents without independent analysis.The order failed to satisfy the "why" and "what" test, as laid down in the case of Toyo Engineering Corporation & Anr. vs. The Controller General of Patents.The absence of an analysis on how the cited prior arts invalidated Daikin’s invention rendered the order unsustainable.The Court held that the rejection violated principles of natural justice since one of the prior art documents (D5) was introduced at a later stage without giving the applicant sufficient opportunity to counter it.

Decision:The Court set aside the impugned order.It remanded the matter back to the Controller for a fresh hearing within four months.The Court clarified that no adjudication on merits was made and all questions remained open.

Law Point Settled:Patent rejection orders must contain clear reasoning explaining why an invention lacks inventive step, rather than merely reproducing prior art references.Introduction of new prior art documents at later stages without due process violates natural justice principles.Patent examination must follow the "why" and "what" standard, ensuring proper justification for rejection.This judgment reinforces transparency and fairness in patent rejection decisions, particularly in cases involving inventive step analysis under Section 2(1)(ja) of the Patents Act, 1970.

Case Title: Daikin Industries Ltd Vs Union of India

Date of Order: 26th February 2025

Case Number: IPDAID/38/2024 [OLD NO AID/19/2022]

Court: High Court at Calcutta 

Hon'ble Judge: Justice Ravi Krishan Kapur

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Written By: Advocate Ajay Amitabh Suman,IP Adjutor [Patent and Trademark Attorney] ,High Court of Delhi