Summary: The Calcutta High Court, in a recent decision involving ITC, tested the extent to which the public health exception contained in Section 3(b) of the Patents Act, 1970, can be used to reject an application for a patent.
The Calcutta High Court's recent judgment in ITC Limited vs. The Controller of Patents, Designs & Trademark (IPDPTA No. 121 of 2023, dated 30.4.2025) underscores the principle that the grant of a patent is independent of potential restrictions on its commercial exploitation. The case, an appeal against the Controller's decision in ITC's patent application no. 685/KOL/2015, for "A Device and method for generating and delivery of a Nicotine Aerosol to a user", highlights the limitations of the Patent Office's purview in making policy decisions based on public health concerns.
Brief overview
ITC's invention concerned a device designed to produce a nicotine salt-based aerosol via a chemical reaction.
The Controller rejected the patent application under Section 3(b) of the Patents Act, 1970 ("the Act"), citing concerns that granting the patent would impede the Central Government's ability to protect public health. This conclusion was based on a 2019 "White paper on Electronic and Nicotine Delivery System" published by the Indian Council of Medical Research ("ICMR"), as well as various health-related statutes:
- Environment (Protection) Act, 1986,
- Manufacture, Storage and Import of Hazardous Chemical Rules, 1989,
- Food Safety and Standards (Prohibition and Restrictions on Sales) Regulations, 2011 under the Food Safety and Standards Act, 2006,
- Drugs and Cosmetics Act, 1940 and Drugs and Cosmetics Rules, 1945,
- Insecticides Act, 1968, and
- Prohibition of Electronic Cigarettes (Production, Manufacture, Import, Export, Transport, Sale, Distribution, Storage and Advertisement) Act, 2019.
Besides the statutes, the Controller also mentioned regulations under statutes, and constitutional provisions, indicating the prohibition of nicotine in food, and ICMR's stance on e-cigarettes, and the health risks associated with Electronic Nicotine Delivery Systems (ENDS).
Notably, although the ICMR paper was referred to in the hearing notice, the Controller did not bring up the various statutes in either the First Examination Report ("FER") or the hearing notice.
Issues Before the Court
ITC's key contention was that the Controller had relied on new evidence after the hearing, which was violative of natural justice principles. The High Court concurred, noting that ITC was denied an opportunity to deal with these contentions raised by the Controller.
ITC also challenged the direct application of Section 3(b), arguing it should be interpreted in light of the invention's "primary or intended use" and that the Patent Office should not overstep into policy decisions regarding the desirability of innovation. ITC cited Article 27(2) of Agreement on Trade Related aspects of Intellectual Property ("TRIPS") and Article 4quater of the Paris Convention for the Protection of Industrial Property ("Paris Convention"), suggesting patentability should not be denied solely due to potential commercial restrictions.
Grant vs. Commercialization
It is useful to understand the operation of the public health exception to patentability in India contained in Section 3(b) of the Act.
Section 3(b) prohibits from patentability "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."
In the present case, while rejecting the application under this exception, the Controller focused on the potential harm and the government's public health objectives.
However, the Court was not satisfied with the Controller's conclusions. At the first instance, the Court referred to a slideshow available on the website of the World Intellectual Property Organization authored by a person, who was at the time, Deputy Controller of Patents and Designs in India. This slideshow provided an explanation of what constitutes a fit case for attracting Section 3(b), and none of the accompanying examples mentioned tobacco, smoking or nicotine or inventions relating thereto.
The Court also noted that 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)".
With reference to Article 27(2) of TRIPS and Article 4quater of the Paris Convention, the Court noted that the grant of patent shall not be refused on the ground that the sale of the patented product (or a product obtained by a patented process) is subject to restrictions and limitations in domestic law.
The Court reiterated the fundamental principle that patents are granted to encourage inventions and to secure that the inventions are worked in India on a commercial scale and to the fullest extent that is reasonably practicable without undue delay. Crucially, the Court said that the grant of a patent does not inherently override the central government's power to take measures protecting public health. The Court recognized that regulatory frameworks governing the commercialization of a patented product are distinct from the decision on its patentability.
Ultimately, the Calcutta High Court set aside the Controller's rejection order and remanded the application for fresh consideration.
Continuing a trend
In another recent decision in R J Reynolds Tobacco Company Vs The Controller General of Patents Designs and Trademarks and Anr. (IPDPTA/31/2023, dated 16.4.2025), the Calcutta High Court allowed an appeal against Controller's decision where the application was refused under Section 3(b) for being related to tobacco ("a method of preparing a sugar containing syrup from the stalk of a plant of the Nicotiana species"). While allowing the appeal, the Court noted that the fact that the subject invention causes serious prejudice to human health is a conclusion "without any evidence at all", and that an invention relating to tobacco cannot be outrightly rejected based on preconceived notion that tobacco is injurious to health. In this decision, the Court also flagged the Controller's order being particularly subjective, and "without any reasoning or consideration of the scientific evidence or data" submitted by the patent applicant.
Way Forward
Concerns with the phrasing of the exception under Section 3(b) are not new. In its 161st Report titled "Review of the Intellectual Property Rights Regime in India", the of the Parliamentary Standing Committee on Commerce observed that the broad wording of Section 3(b) may lead to arbitrary decisions and refusal of socially useful inventions such as nicotine chewing gums, which are used for de-addiction to smoking, or smoking devices which make smoking less hazardous. The Committee recommended amending Section 3(b) to limit exclusions to inventions barred by law, and introduce a safeguard mechanism to prevent arbitrary decisions.
An increasing number of decisions such as the present one surely invites a considered review of the statute. There clearly appears to be a lack of clarity on what this section can and cannot do and better fleshed-out guidance is necessary.
However, such matters cannot be left to Parliament alone. It behoves the Patent Office to issue proper directions to its officers that arbitrary decisions on patentability must be avoided at all costs.
At the same time, the Court, on its part, also appears to have missed an opportunity to clearly explicate adjudicative principles that must be followed, particularly where policy issues are simultaneously at play. Merely re-stating relevant provisions from TRIPS and the Paris Convention, and concluding directly that restrictions in domestic law do not impact patent grant, is arguably not an adequately rigorous assessment of the underlying issue, i.e., patent applications being rejected because of extraneous policy concerns.
Nevertheless, this decision is an addition to the growing jurisprudence on this subject, and will assure applicants like the ITC that objections to tobacco/ nicotine related inventions may not, in and of themselves, be liable to be rejected under Section 3(b) of the Act.
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