Section 3(c) exception to patent eligibility is reaching out to the discovery of all living things and nonliving things occurring in nature as the noun “discovery” in the third limb is intended to apply both to living things and non-living substances occurring in nature. Interpretation of section 3(c) was under scanner in two appeals, viz. one before Delhi High Court in Diamond Star Global Sdn. Bhd. v. Joint Controller of Patents and Designs, 2023 SCC OnLine Del 1879 (Diamond Star case) and other before Madras High Court in Genmab vs Assistant Controller of Patents decision dated 06.03.2024 (GENMAB A/S case).
In the Diamond Star case, when the question of the patent eligibility of discovery of any nonliving substance occurring in nature came before the Delhi High Court, the Court looked into the reach of ‘nonliving substance occurring in nature’. The Court observed that the adjective ‘mere’ and the noun ‘discovery’ extend to the ‘nonliving substance occurring in nature’. It concluded that the invention claimed in the case in question is for ‘the process by which the wood vinegar obtained from the Rhizophora apiculata tree was added to the skin care preparations at a concentration of 18 to 22%, and the product which was so added,’ and it was not for seeking to merely patent wood vinegar obtained from the Rhizophora apiculata tree. The patent, in this case, was granted.
In the second appeal (GENMAB A/S case), a patent was also granted for antibodies against CD38 for the treatment of multiple myeloma. The Court rejected the contention of the respondent that:
“The qualifier “mere” does not extend to the third limb dealing with the “discovery of any living thing or non-living substance occurring in nature”, and that Parliament’s intention, in this regard, is clear upon comparing and contrasting Section 3(c) with Section 3(d), which contains the qualifier “mere” before every limb. Hence, in conclusion, it was further contended that the claimed invention is in respect of antibodies that occur in nature and that such claims are not patent eligible under Section 3(c) of the Patents Act.”
The Court accepted the argument of the appellant that the claimed antibody was produced by substantial human intervention and was not directly isolated from nature. Applying the principles of the ordinary rule of grammar, the Court observed that:
“the statutory construction is that a modifier, such as the word “mere”, would qualify the entire series of nouns or verbs if such series is a straightforward parallel construction, whereas it would be restricted to the nearest reasonable referent otherwise. For instance, if the second limb did not exist and Section 3(c) had been framed as follows: the mere discovery of a scientific principle or any living thing or non-living substance occurring in nature, both the adjective “mere” and the noun “discovery” would have applied to both limbs as the phrase would not make sense otherwise.”,
and concluded that:
“this is a pointer, albeit not conclusive, that the adjective “mere” does not extend to this limb as otherwise even a “living thing” could fall outside the scope of patent exclusion if there were to be something more than mere discovery.”
Understanding Section 3 Exclusions
The patent exclusions in the Indian Patent Act are not only unique but also calibrated to cover all universally non-patentable subject matter. We have seen the judicial interpretation of section 3 in many cases in India. If, in the Novartis case, the Supreme Court interpreted the reach of section 3 (d). In The Chinese University Case, the Madras High Court gave judicial meaning to section 3(i), particularly relating to the term ‘diagnostics’, which was introduced in the patent law through an amendment of the Patent Act 1970 in 2002 (Act 38 of 2002). Extending the judicial interpretation of coverage and limits of section 3, the Madras High Court in the Genmab A/S case looked into the reach of section 3(c), which states that “the mere discovery of a scientific principle or the formulation of an abstract theory or discovery of any living thing or non-living substance occurring in nature“.
The portion shown in bold was introduced in 2002 to keep the discovery of any living thing or non-living thing out of the reach of patentability under patent law in India. Since this exception relates to the subject matter itself, the Controller is required to interpret the meaning of the words and phrases used in section 3(c). The first possible clue for the Controller is found in the Parliament’s intentions while introducing this provision in notes on clauses/statements of reasons and objectives relating to this amendment to Act 38 of 2002, which was enacted pursuant to the Patents (Second Amendment) Bill 1999 (Bill No.49).
If we see the ‘Statement of Objects and Reasons’ with regards to the amendment of Section 3 we find it is stated that this is done “(b) to modify section 3 of the present act to include exclusions permitted by TRIPS Agreement and also subject matters like discovery of any living or nonliving substances occurring in nature in the list of exclusions which in general do not constitute patentable invention”. Notes on Clause 4 of the bill states that “sub-clause (b) seeks to amend clause (c) of Section 3 so as to include discoveries of any living thing or nonliving substance occurring in nature as not inventions patentable.” This was clearly meant to convey to the Controller that the subject matters in an application for a patent, like the discovery of any living or nonliving substances occurring in nature, fall within the list of exclusions which, in general, do not constitute a patentable invention.
Interpretation of Section 3(c) in Diamond Star Case
The question of the patent eligibility of discovery of any nonliving substance occurring in nature came before the Delhi High Court in the Diamond Star case. In this case, Court examined the patentability of discovery in the context of the claim for (i) identifying the wood vinegar obtained from the Rhizophora apiculata as being free of guaiacol and, therefore, suitable for addition of skin care cosmetics and (ii) working out the composition of 18 to 22% as the appropriate strength in which, on addition of the said wood vinegar to the skin care preparations, optimum antimicrobial properties, which would do away with harmful bacteria even while preserving beneficial lactic acid bacteria. The Court differentiated between discovery and mere discovery of living things as stipulated under section 3(c) and observed that:
“35. To analogize the issue to the facts of the present case, for example, if someone were to seek a patent for guaiacol, it would be possible to reject the application on the ground that guaiacol is a substance occurring in nature and, therefore, even if it had not been earlier discovered, the mere discovery of guaiacol was not patentable as an invention, in view of the proscription contained in Section 3(c).”
This, in fact, appears to me to be one of the major grounds on which the Controller has erred in the impugned order.”
The Court looked into the objections raised in the FER.
“A running thread, through the impugned order as well as in the FER which preceded it, is the observation of the Controller that the applicant was merely seeking to take advantage of the property of a naturally occurring substance, i.e. wood vinegar from the Rhizophora apiculata tree, being the absence of guaiacol. To the extent that the appellant was, in fact, stressing the absence of guaiacol in the wood vinegar obtained from the Rhizophora apiculata tree, the observations of the Controller do not brook any cavil. “
Additionally, the Court looked into where the Controller erred when the Court observed:
“……. the Controller has erred in failing to observe that the appellant was not seeking to merely patent wood vinegar obtained from the Rhizophora apiculata tree. The claim of the appellant was that, as an antimicrobial additive to skin care preparations, which would be free of any pungent constituents as well as capable of eradicating harmful bacteria even while preserving beneficial lactic acid bacteria, the wood vinegar obtained from the Rhizophora apiculata tree, added to the skin care preparations at a strength of 18 to 22%, would provide optimum results.
It is in this background that the appellant sought to patent the process by which the wood vinegar obtained from the Rhizophora apiculata tree was added to the skin care preparations at a concentration of 18 to 22%, and the product which was so added in Claims 1 to 14 and Claim 15, respectively, in the appellant’s application.”
Consequentially, the Controller’s impugned order dated 2nd June 2022 was quashed and set aside. The Court ruled that since there is no other objection to the patenting of the invention, the applicant is entitled to grant of a patent.
The outcome of the Diamond case left doubt in the mind of the inventors that the word ‘mere’ in the first limb also extends to “the discovery of any living thing or non-living substance occurring in nature. This leaves enough room for patenting living things if it is more than mere discovery.
Section 3(c) Redefined after GENMAB A/S
In the second appeal, the question of the patent eligibility of discovery of any living substance occurring in nature came before the Madras High Court in the Genmab A/S case for the invention “Antibodies against CD38 for Treatment of Multiple Myeloma”. In this case, the Court examined the patentability of discovery in the context of the claim for the antibodies. In this case, the Controller refused the patent. When Justice Senthilkumar Ramamoorthy relooked into the reach and limitations of section 3(c) in Genmab A/S, he expressed his disagreement with the conclusion in the Diamond case that the word ‘mere’ in the first limb of section 3(c) also extends to “the discovery of any living thing or non-living substance occurring in nature.
He observed that if this is the correct position, then it will ‘leave enough room for patenting living things if it is more than mere discovery which is not intended by the parliament when this bill was passed.’ Giving an elaborate reasoning in support of this, the Court observed that:
“It is noticeable that the qualifier “mere” was not used in the Statement of Objects and Reasons for Bill No.49 or in clause. If Parliament intended to apply the qualifier, it is likely that the word “mere” would have found place before the word “discovery”. It should also be noticed that clause (d) of Section 3, which also uses the qualifier “mere” uses it in each limb of the provision.”
Additionally, the Court observed that:
“It should also be noticed that clause (d) of Section 3, which also uses the qualifier “mere” uses it in each limb of the provision”, and that is not the case in Section 3(c). and concluded that.
“Hence, the text, interpreted as per the ordinary rules of grammar, the immediate statutory context, and the legislative history of amended clause (c) of section 3, point to the same conclusion, i.e. that the qualifier “mere” is confined to the nearest reasonable referent “discovery of a scientific principle” and does not extend to “the discovery of any living thing or non-living substance occurring in nature.” [emphasis added]
Consequentially, the outcome of this case did not leave any doubt in the mind of the inventors that the word ‘mere’ in the first limb also extends to “the discovery of any living thing or non-living substance occurring in nature. This leaves no room for patenting living things if it is more than mere discovery.
Nonliving Things Discovered vs Manmade
The Court in GENMAB A/S case also investigated the use of the expression “occurring in nature” and whether it qualify “discovery of a non-living substance” and observed that.
“While it could be argued that this qualifier is only intended to underscore that the exclusion would not apply to a non-living substance that is manmade, in my view, said explanation does not withstand close scrutiny because such non-living substance, if manmade and novel, would not be discovered; it would be created or invented. If manmade but not novel, it would be produced and not discovered. It would also not surmount the Section 2(1)(j) hurdle, and the Section 3(c) exclusion is clearly not intended for such non-living substances.”
The Court went on further to note that the sequitur of the use of the expression “occurring in nature” in section 3(c) means that if a synthetic version of a substance that rarely occurs in nature but is required to be produced in large quantities for the treatment of serious illnesses it would qualify for grant of a patent. For this, the patent applicant should establish that such non-living substances never occur in nature. The text of clause (c) of Section 3 contains guidance on what should be excluded from patent protection.
The Court further observed that.
“The statutory prescription is “discovery of any … non-living substance occurring in nature”. Both the use of the noun “discovery”- which implies finding something which already exists and not producing, engineering, or making something – and the use of the present continuous form “occurring in nature” indicate that the exclusion will only apply to the process of finding a hitherto undiscovered non-living substance by identifying and isolating it from nature. While reaching this conclusion, I take on board the presumption in statutory construction that redundancy should not be imputed to Parliament and that the expression “occurring in nature” should not be robbed of all meaning and purpose. Ultimately, it should not be lost sight that Section 3(c) is confined to patent exclusions or ineligibility and passing through such a filter does not guarantee the grant of a patent.
Establishing Nonliving/Living Substances Never Occurs in Nature
The applicant who claims a synthetic version of a substance that rarely occurs in nature must establish that the claimed substance, living or nonliving, is not occurring in nature in free form. In the GENMAB case, the appellant asserted that the claimed antibody was produced by substantial human intervention and was not directly isolated from nature. This fact is good enough to obtain a patent for subject matter involving antibodies. The Court, in this case, also laid emphasis on the fact that. “Ultimately, it should not be lost sight of that Section 3(c) is confined to patent exclusions or ineligibility and passing through such filter does not guarantee the grant of patent.” This means even where the applicant is able to clear section 3(c), it will not guarantee the grant of the patent. In this case, the Court also examined the claims of the applicant for having inventive steps or not.
On ‘Occurring in Nature’ to Qualify ‘Discovery of a Nonliving Substance’?
It is not clear from the text of section 3 (c) that the expression ‘occurring in nature’ used at the end of the third limb would qualify as ‘discovery of a non-living substance’. The Court investigated this aspect and observed that.
“While it could be argued that this qualifier is only intended to underscore that the exclusion would not apply to a non-living substance that is manmade, in my view, said explanation does not withstand close scrutiny because such non-living substance, if manmade and novel, would not be discovered; it would be created or invented. If manmade but not novel, it would be produced and not discovered. It would also not surmount the Section 2(1)(j) hurdle, and the Section 3(c) exclusion is clearly not intended for such non-living substances.” [emphasis added]
This interpretation leaves enough room for grant of patents for man made or synthetic substance. This interpretation goes well with the patent office practice where many patents on synthetic chemicals are granted as they are believed to be created and invented. The manmade substances would be produced and not discovered.
Speaking on the impact of the phrase “occurring in nature” and whether it also applies to the expression “living thing”, the Court in the Genmab A/S case observed that:
“The ordinary rules of syntax would indicate the following structure if the intention were to extend “occurring in nature” to “living thing”: ‘the discovery of any living or non-living thing occurring in nature’. Even otherwise, given the current state of science, the extension of “occurring in nature” to “living thing” would create a redundancy that cannot ordinarily be imputed to Parliament. Thus, I conclude that the expression “occurring in nature” in the third limb of Section 3(c) only qualifies the nearest reasonable referent “non-living substance”. [Emphasis Added]
Concluding Remarks
The real challenge regarding a patent application with respect to a synthesized non-living substance, especially a monoclonal antibody, is establishing novelty or technical advances and not patent eligibility. For such purposes, the sequence of the antibody, especially the CDRs, may need to be compared with known antibody sequences. The patent applicant may also be required to establish that it does not fall within other exclusions in Section 3 (d) apart from meeting the requirements of Section 2(1)(j) of the Patents Act. Both the appeals preferred by the applications for refusal of patents by the Controller were for seeking a clear interpretation of section 3(c).
In the first appeal (Diamond Star case), the Court allowed the patent, maintaining that it was not for seeking to merely patent wood vinegar obtained from the Rhizophora apiculata tree. In the second appeal in Genmab A/S vs Controller of Patent, the claim for the invention for “Antibodies against CD38 for Treatment of Multiple Myeloma” was refused, and the Court allowed the appeal and granted the patent accepting the argument of the appellant that the claimed antibody was produced by substantial human intervention and was not directly isolated from nature. This means that the section 3(c) exception to patent eligibility is reaching out to the discovery of all living things and nonliving things occurring in nature, as the noun “discovery” in the third limb is intended to apply both to living things and non-living substances occurring in nature.
However, the adjective “mere” used in the first limb of section 3(c) does not extend to the third limb as otherwise, even a “living thing” could fall outside the scope of patent exclusion if there were to be something more than mere discovery. Both cases, though, made contrasting observations relating to the extension of the adjective ‘mere’, but the overall result in both of the cases was that patents were allowed by the Court after finding that both the subject matters were eligible for the grant of patent. This will lead to the interpretation of section 3(c), which supports the grant of patents for all manmade nonliving things if they satisfy other provisions of sections 3(d) and 2(1)(j). Expert advice in seeking patents on monoclonal antibodies would be useful to clearly understand the implications of the interpretation of section 3(c) as explained by Justice Senthilkumar in the Genmab case.
