"Two of the Three Reasons for Refusal Were Not Even Notified to the Petitioner": Bombay High Court Sets Aside Patent Rejection and Directs Reconsideration

Kiran Raj

The Bombay High Court, Commercial Division, has set aside an order issued by the Controller of Patents and Designs rejecting a patent application concerning a Heat Transfer Assembly for Heat Exchanger. The Single Bench of Justice Manish Pitale found that the Controller’s order lacked reasoning and did not consider crucial materials placed on record, including the Netherlands Arbitration Institute (NAI) award and the Deed of Assignment. The court has remanded the matter for fresh consideration by a different officer within the Patent Office.

The petitioner, Euro-Apex B.V., is engaged in the manufacturing and licensing of heat transfer technology. The case pertains to a dispute arising from a licensing agreement between Euro-Apex B.V. and Shinhan Apex Corporation, executed on February 22, 1993, which authorized Shinhan Apex Corporation to manufacture and sell the petitioner’s products in South Korea. Under the agreement, ownership of the technology remained with Euro-Apex B.V., while Shinhan Apex Corporation had a limited right to use it.

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Following the termination of the agreement on February 22, 2008, a dispute arose regarding patent rights. The petitioner contended that Shinhan Apex Corporation had filed patent applications in Korea and India using proprietary information covered under the confidentiality clause of the terminated agreement. The Indian patent application, initially filed by Shinhan Apex Corporation on October 6, 2008, was later assigned to Euro-Apex B.V. pursuant to the NAI award dated December 23, 2011.

To comply with the arbitration award, Shinhan Apex Corporation executed a Deed of Assignment on April 4, 2012, transferring the ownership of the Indian patent application to Euro-Apex B.V.. The petitioner subsequently sought changes to the applicant’s name and inventor details in the Indian application, requesting that Mr. Dinulescu, associated with Euro-Apex B.V., be recognized as the inventor instead of Mr. Mun-Jae Cho, who was originally listed in Shinhan Apex Corporation’s application.

The Controller of Patents and Designs rejected the application on July 13, 2021, citing three grounds:

The change in inventor from Mun-Jae Cho to Mr. Dinulescu was not supported by a No Objection Certificate (NOC) from Mr. Mun-Jae Cho.

There was an alleged absence of a proper assignment document.

The corresponding Korean patent had been nullified.

Justice Manish Pitale examined the order passed by the Controller and found that it failed to consider the NAI award, the Deed of Assignment, and other relevant materials submitted by the petitioner. The court observed, "The impugned order does not refer to the chronology of events and peculiar facts of the present case, particularly in the backdrop of the inter se disputes between the petitioner and Shinhan Apex Corporation."

The court further noted that two of the three grounds for refusal were never communicated to the petitioner in the First Examination Report (FER) or during hearings, depriving the petitioner of an opportunity to respond. It stated, "Two of the three reasons assigned for refusal were not even notified to the petitioner, thereby depriving the petitioner of an opportunity to meet the same."

Regarding the insistence on a No Objection Certificate from Mr. Mun-Jae Cho, the court recorded that the patent rights had already been transferred through the Deed of Assignment following the arbitration award. The judgment states, "In such a situation, the respondent cannot insist upon Mr. Mun-Jae Cho giving a ‘no objection’ for the patent application to be pursued."

The court also took into account that the United States Patent and Trademark Office (USPTO) had granted a patent for the same technology, recognizing Mr. Dinulescu as the inventor and Euro-Apex B.V. as the applicant. The judgment noted, "It is significant that the same invention has been granted a patent in the United States, where the applicant is recorded as Euro-Apex B.V., with Mr. Dinulescu as the inventor."

Additionally, the court found that the Controller did not acknowledge the binding nature of the Netherlands Arbitration Institute award, despite its recognition in legal forums across multiple jurisdictions. It stated, "The respondent has failed to refer to the deed of assignment, which was placed on record by the petitioner after the hearing. The respondent proceeded as if the deed of assignment was not on record and that the change of applicant in form-6 was filed on the basis of only the partial final award."

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Justice Manish Pitale set aside the order issued by the Controller of Patents and Designs and directed as follows:

"The impugned order dated 13th July 2021 is quashed and set aside."

"The matter is remanded to the Controller of Patents and Designs for fresh consideration."

"The matter shall be placed before an officer other than the officer who passed the impugned order."

"The Controller shall pass a fresh order within a period of six months from today, in accordance with law."

"The material brought on record along with the said representations can be taken into account by the respondent while deciding the patent application of the petitioner on merits."

"All such material and contentions raised by the petitioner and the said Indian licensee i.e. Bharat-Apex Industries Limited can be taken into account by the respondent as an aid to decide the patent application of the petitioner on merits."

Advocates representing the parties:

For Petitioner (Euro-Apex B.V.):