Product-by-Process claim: DHC to the rescue

An image of forest in the background with the text "Don't miss the Forest for the Trees".
Image from here

The Delhi High Court (DHC) judgement in Vifor (International) Ltd. v. MSN Laboratories Pvt. Ltd.,explaining and allowing product-by-process claims as fundamentally concerned with the product in question, is of seminal importance for Indian Patent jurisprudence. In my opinion, the judgement, although verbose, brings much needed clarity on Patent-by-Process in India by locating it within the Act, laying out its scope and applicability and interaction with Process Patent u/s 48(b).  This judgement, decided by a Division Bench (DB) in an appeal against a Single Bench (SB) decision, clarifies the position on product-by-process patent claim in India. It elaborates what a product-by-process patent claim is, locates it in the Patents Act, lays down the elements which must be focused upon while examination, and most importantly, decides how such patent is to be enforced while deciding infringement. In this post, I will explain the factual background, holdings of the SB, divergence therefrom by the DB and reasons thereof. I will conclude by addressing a question raised in one of our earlier posts regarding the SB judgement and how the DB resolves the same. 

Judgement: Analysis and Findings

The DHC(DB) in Vifor (International) Ltd. v.  MSN Laboratories Pvt. Ltd, hearing an appeal from the SB order last year, has clarified the scope of product-by-process claim during infringement analysis. Praharsh has previously written on the SB order here.  Vifor had claimed infringement of their invention with patent number IN’536. It contended that IN’536 claims ‘a product’ (Claims 1, 7-9) and ‘a process for preparing the product in Claim 1 (Claims 2-6)’. Therefore, the patented invention comprised of an independent product, Ferric Carboxymaltose  (FCM), in addition to dependent claims which ‘directed to the process to prepare the product’. As Praharsh explains, a product-by-process claim aids instances where, owing to the challenges in describing the physical or structural characteristics of the invention, an inventor files a specification with claims disclosing the product and the process to manufacture the product. The DB calls this a ‘rule of necessity’, where, “new products could not be fully described by their structure or where complex compounds defied precise explanation compelling the patent applicant to rely upon the process of manufacture”.(Para 111)

Similarly, here, FCM (inventive product) was described by an illustrative process in Claim 2-6 owing to the rule of necessity.  According to the 2014 Guidelines for Examination of Patent Application in the Field of Pharmaceuticals, in Para 7.9, product-by-process claims cannot be granted unless the product is “novel and non-obvious” and not merely the novelty and non-obviousness of the process. The guidelines go on to state, “the applicant has to show that the productdefined in process terms, is not anticipated or rendered obvious by any prior art product.

It was not contended that the present invention was not a novel or non-obvious invention. Rather, the SB conceded to that extent, noting, that “IN’536 is a product-by-process since it does not fit into the definition of ‘product claim’”. The respondents also did not contest this aspect. The DB, similarly, in para 170, notes that the “claims and specification explain the improvement and advantages that FCM achieved over the prior art”. Therefore, the inventive attribute of the patent was indeed the chemical compound titled FCM. In principle, both benches agree with the applicable test for patentability of a product-by-process claim. 

However, the problem emerges as regards scope of protection of a product-by-process claim. Praharsh had also pointed out the lack of clarity regarding the scope of protection in such a case. Is it limited only to the end product regardless of the disclosed method/ process? Or is it limited to the extent of process patent alone used to produce the end product? Or does it extend to protect both the product and the process directed to produce it? 

The answer to the above question can be found in Para 143 wherein the court held that “as long as the product-by-process claim pertains to a product which is novel and inventive and unknown in the prior art it would remain a product which would fall within the ambit of Section of 48(a)”. Further, in Para 128, “primary focus even in such claims is thus directed towards the product as opposed to the process of manufacture”. Thus, the focus in product-by-process claim is on the product attributes rather than the process. 

Scope of protection of Product-by-Process claim

The SB had noted that infringement analysis involves two steps- (a) determining the meaning, scope and ambit of the suit patent claims; and (b) comparing the construed claims with the allegedly infringing product/process. The language of the claim is relied upon to define the legal scope of the claim. Therefore, every element of such claim becomes relevant to define the scope of the patent. 

Relying on above, the SB held that “It is categorically asseverated in the complete specification that present invention is a process for producing iron carbohydrate complexes…what Vifor overlooks in making the submission that the process is inconsequential, is that the characteristic properties that it claims in FCM, distinguished from the prior art, are a direct result of the process used by Vifor…that the claim leads to a product claim only, would render the description of the claim with a detailed and a specific process meaningless and otiose(Para 67, 71). Therefore, relying on the principle that claims define the territory or scope of protection, in a product-by-process claim, “monopoly will be limited to the product obtained by the specific process in the claims”.

The court then went on to compare the process used by defendant to produce FCM. It concluded that the “process adopted by them to obtain FCM is outside the limits of the scope of IN’536 and it is held that the impugned process of CRPL and VBPL is non-infringing”.

The DB, denouncing the above position, held that the SB erred by holding that process terms used in a claim will limit the protection to process patent. This understanding, it said, is premised on the understanding that ‘process’ and ‘product’ operate in silos. Rather, sec. 48(a) & (b) of the Act are indicative that the Act “acknowledges that both product as well as processes may be imbued with inventive qualities and thus be patentable”. (Para 107) It holds that product-by-process is “an amalgam or a hybrid and one which ―straddles the otherwise discernible and recognized distinction between products and process patents per se.” (Para 109) Such claims relate to “a novel product whose unique attributes are sought to be explained by reference to its manufacturing process” owing to rule of necessity. In Para 127, it notes that a “a product-by-process claim would be accepted and accorded statutory protection, only if the product itself be novel”. Here, the court reasons that if the premium is placed on the novelty of product for assessing product-by-process, it cannot be a process patent. (127)  

Regarding the SB observation that a product patent must be “defined by its composition and structure, both physical and chemical and not limited by a process”, the DB observes that this is an erroneous understanding of product-by-process patent. Why? Because such patent are meant to deal with the exceptional situation where “composition or the constituents of the product cannot be explained in explicit terms except by reference to a process of manufacture”. Therefore, it is erroneous to limit the protection to process claims based on the reason that such process has been defined in the patent claim since “a product-by-process claim though employing process terms is fundamentally concerned with an inventive product”. (Para 132) 

The readers must remember that infringement analysis is answered on the basis of product attributes and de hors the process of manufacture. (Para 166).Keeping this in mind, can the Division Bench be also criticised for treating ‘product’ and ‘process’ in silos by fixating the infringement analysis on the former similar to Single Bench? What will happen in a situation where a novel product produced by a novel process is sought to be protected under the Product-by-Process claim? Will the infringement analysis be limited to the product attributes then? I leave this for the readers to decide. Also, another question is where do further appeals from this order lie? I have previously discussed here that abolishment of IPAB has reduced the appeal mechanism to two tier system- Single Bench and Division Bench. Per 2(l)(iii), IPD rules will apply ‘except matters to be dealt by Division Bench’. Sec. 8(iii) states that DHC rules will apply to civil writ petition in IPR matters so long as there is no inconsistency with IPD rules. The present matter is a civil miscellaneous application. For now, it seems, the only remaining avenue for appeal is a Special Leave petition under Article 136 to the Supreme Court. 

The court made another important observation. It noted that the SB order, in effect, accepts a ‘theory of distinct set of rules’ for examination and infringement process. In other words, whereas the novelty and non-obviousness of product would be given primacy in examining whether to grant patent, the same will be disregarded when enforcing the same patent for infringement of patent where focus will solely be on process employed. The court reject such shifting lines of protection, reasoning, that such an interpretation will whittle down the scope of protection available to an inventor merely because of lack of clarity of the structure of the invention. Here, the court also seems to countenance the argument of appellant that it is a cardinal principle that “patent claim… construed in an identical manner both while considering validity as well as infringement”. (Para 51) 

Based on the above observations, court ultimately held that since FCM was a novel product, located under sec. 48(a) of the Act, the question of infringement would depend upon the basis of product attributes and de hors the process of manufacture. (para 166)

Obtained by v. Obtainable by- Intent of Patentee

An argument was raised by the respondent that the intent of patentee, by not describing the structure and composition of the product, hinted that the protection sought was limited to process claim. As explained above, this is an erroneous understanding of product-by-process patent which require reference to process “only to aid in explaining the novel attributes of a new product unknown in the prior art”. The court makes some important observations with regard to ascertaining intent of patentee from claims and specifications by resorting to language used in sec. 48(a) & (b).

Borrowing from EPO, it created a distinction between ‘obtainable by’ used in clause (a) and ‘obtained by’ in clause (b). It observes that the former conveys a ‘descriptive process by which the claimed product could be manufactured or produced.’ However, such process is not considered the inventive element. The phrase will, therefore, usually feature in a product-by-process claim. The latter, however, ‘convey a direct linkage between the product and the process’. That is, usage of such wording conveys the intent of patentee to restrict the scope of the patent to process claims only. 

This, in my opinion, will aid in future construction of claim of a product-by-process patent by focusing the analysis on the novelty of the product under sec. 48(a). However, it is unclear whether the process directed to produce the product itself would be protected in an infringement analysis. 

What Lies Ahead?

In previous posts here and here, the point was raised regarding lack of clarity over product-by-process patent claims within the Indian patent regime. The above observations made by the Judgement clarifies what is product-by-process claim, scope of protection thereof and its importation in sec. 48(a) of the Act. Significantly, the judgement answers a pertinent doubt raised by Praharsh on the SB order: “ I doubt that this order will inspire any applicant to willfully disclose their invention using ‘product-by-process’ claims owing to the oscillating considerations to the ‘product patent’ aspect of the invention while examining the claims first, and then later investigating the allegations of infringement considering the invention to be a process.” This judgement, in extending the scope of protection for ‘product-by-process’ claims by using the same standard for examination and infringement, incentivises innovation in fields where it is difficult to ascertain the structure of the invention from the beginning. Understood in this sense, the judgement strikes the right balance between “expectations of the patentee while at the same time avoiding the specterof over-protectionism”.

Read More