Gone Up In Smoke: Analysing the Controller’s Rejection of an E-cigarette Patent under Section 3(b)

[Tejaswini Kaushal]

The single judge bench of the Delhi High Court comprising of J. Mini Pushkarna on 4 July 2024 passed an order in Phillip Morris Products SA v. Assistant Controller Of Patents And Design accepting  an appeal against the Controller’s decision rejecting a patent application for “aerosol generating article with multi material susceptor.” The rejection had been based on the invention being “contrary to public order or morality or which causes serious prejudice to human, animal or plant life or health or to the environment” under Section 3(b) of the Indian Patent Act, 1970. The rejection of the Controller’s order by the DHC was rightly done to allow the appeal given the Controller’s incongruent application of section 3(b) in the matter. The decision is rather interesting, as it brings back to attention the debate (which started back in 2019 with the passing of the Prohibition of Electronic Cigarettes Act, 2019) over the patentability of e-cigarettes and provides an opportunity to reassess whether the restriction on patent grants under Section 3(b) should hold valid. 

Understanding Why the Patent Application Went Up in Flames

The patent application (no. 201617028283) via the First Examination Report (FER) (pdf) issued on 21 January 2020 faced objections, including lack of inventive step under Section 2(1)(j) based on prior art documents as well as on the Section 3(b) restriction. The appellant (Phillip Morris Products SA) submitted its reply (pdf) to the hearing notice (pdf) and attended a hearing where it gave its rationale for the observations in the FER being unsustainable.

Firstly, the appellant argued that using a combination of multiple documents to challenge the inventive step itself reflects the non-obviousness of their invention. They also cited cases like Technograph v. Mills & Rockley and J. Mitra And Co. Pvt. Ltd. v. Kesar Medicaments to support the concept that combining documents (“mosaicing”) is permissible in obviousness only if a skilled person lacking inventive capacity would naturally do so. They argued that the prior arts lacked the essential features of their invention and were aimed at different objectives and invoked Biogen Inc v Medeva plc and F. Hoffmann-La Roche v. Cipla Ltd., emphasising that the inventive step lies in the specific solution devised and not merely the general method or goal.

Secondly, as for the Section 3(b) objection coupled with the prohibition of the invention under The Prohibition of Electronic Cigarettes (Production, Manufacture, Import, Export, Transport, Sale, Distribution, Storage and Advertisement) Act, 2019, which bans the production, manufacture, import, export, transport, sale, distribution, storage, and advertisement of electronic cigarettes to protect public health, the appellant established a trifecta of reasoning broadly: Firstly, and most importantly, the term “contrary to public morality” is undefined in the Act, making it ambiguous. A product seen as against public morality from one perspective may be acceptable from another (e.g., a device cutting iron vs. cutting locks). The invention aims to reduce the harmful effects of smoking, not to cause serious harm to humans, animals, or plants. Secondly, it contended that the Indian Patent Office (IPO) has consistently granted patents for similar technical fields, including smoking articles, compositions, wrapper materials, and traditional cigarettes.  If e-cigarette inventions are deemed under Section 3(b), the argument should equally apply to traditional cigarette patents, but the granting of traditional cigarette patents suggests otherwise. Thirdly, domestic and international statutes were referred to to argue that the patent application predates the 2019 Act and that future amendments may allow for regulated e-cigarette sales/manufacture in India. Also, as a signatory to the Paris Convention (Article 4quater) and TRIPS agreement (Article 27), India must not refuse patents solely because products are restricted under domestic law, as emphasised by these agreements.

However, the Controller refused the patent on 01 February 2024 under Section 15 (pdf) under the reasoning that Section 3(b) cannot operate independently of other laws and given the explicit inclusion of health concerns in both Section 3(b) and the 2019 Act, their interlinked application is justified. The Controller’s rationale was that granting patents for inventions barred by a government ban would create ambiguity and contradict governmental policy, especially concerning public health. Furthermore, speculative arguments about potential future changes in government policy or legal reforms were deemed unsubstantiated. Lastly, the Controller rejected the applicability of Article 27 of the TRIPS Agreement and Article 4quater of the Paris Convention as the Controller believed that Section 3(b) aligns with TRIPS by excluding inventions harmful to public health, not merely because of legal prohibition but due to health concerns, and the umbrella ban on electronic cigarettes under the 2019 Act supports this view.

Application Rejected under Section 15 by the Controller

This appeal was filed under Section 117A of the Patent Act challenging the order and was granted in the 4 July 2024 order by the Single Bench.

Interestingly, this isn’t the first time Phillip Morris’s patent application has been rejected by the Controller on these very grounds. Their application for a “tobacco-based nicotine aerosol generation system” (Application number 7127/DELNP/2011) in 2020 also faced rejection (discussed here). However, while this one clearly mentioned tobacco as the ingredient being harmful to health, the extant invention doesn’t include that at all. Instead, it faces restrictions due to the 2019 Act. However, the Controller’s rejection without sufficient justification and based on subjective terms like ‘public order’, ‘morality’ and ‘serious prejudice’ is a concern that is reflected in the present case equally. 

Other precedents where these ambiguous terms have caused trouble in the patent applications under Section 3(b) include the “electro-mechanical sexual stimulation device” (No. 4668/DELNP/2007), the NBRA Bill that conferred the regulator power to regulate research, manufacture, import and marketing of genetically modified organisms (discussed here), etc. Some other illustrations for what is considered morally improper to patent include the Oncomouse (genetically modified to develop cancer for the purposes of medical research but can also cause cancer to be publically transmitted), inventions involving animal models or genetic modification of animals for research, etc. Many have also been faced with a lot of flak. One of the interesting ones includes a device for controlling the position of numbering wheels in printing presses for numbering documents, particularly banknotes and securities, with each wheel driven independently (Application no. 1375/DELNP/2009), which was refused by the patent office under Section 3(b) as it could potentially be used for unauthorised printing of currency and securities. However, this narrow interpretation overlooks that similar patents have been granted in Europe, Japan, and China and that unauthorised use would be penalised under Sections 489A to 489E of the Indian Penal Code (IPC), 1860 (now incorporated under Sections 176 to 186 of the Bharatiya Nyaya Sanhita (BNS), 2023) anyway. The very same logic is applicable in the extant case as well.

Clearing the Smoke: Are E-Cigarettes Patentable? 

Under Section 3(d) of the Drugs and Cosmetics Act, 1940, “electronic cigarette” means “an electronic device that heats a substance, with or without nicotine and flavours, to create an aerosol for inhalation and includes all forms of Electronic Nicotine Delivery Systems, Heat Not Burn Products, e-Hookah and the like devices, by whatever name called and whatever shape, size or form it may have, but does not include any product licensed under the Drugs and Cosmetics Act, 1940.” The 2019 Act came as a pallbearer for these inventions. The ban halted thriving e-cigarette manufacturing businesses and left researchers and designers seeking patents on e-cigarettes at a loss. 

It’s indeed paradoxical that while traditional cigarettes remain legal in the country, e-cigarettes are banned under the 2019 Act, posing the biggest problem yet for acceptance of applications for e-cigarette inventions. It has made the IPO hesitant to approve related patent applications, but a ban should not technically affect how the “inventiveness” and “non-obviousness” of any application are gauged, and if it fulfils these criteria, a patent grant should be the way to go.

If a domestic law thereafter prohibits the sale, use, etc., of that invention, the invention should be made subject to that, but that stage comes much later. The government has banned the production, manufacture, import, export, transport, sale, distribution, storage, and advertisement of e-cigarettes, and the penalties provide that violation of the 2019 Act for the first time, the person can be imprisoned for up to one year or charged a fine of up to 1,00,000 INR or both. In the case of repeated crime, the person can be detained for up to three years and a 5,00,000 INR fine. A person stocking e-cigarettes will face imprisonment for up to six months or a fine of 50,000 INR or both. These fines should definitely be made applicable in the second stage if it’s the upholding of the ban that’s in question. However, these commercial and legislative aspects shouldn’t affect the Controller’s decision on the grant of the patent at the first stage of the matter. Moreover, the IPO is neither qualified nor empowered to make legal decisions regarding the enforcement of bans under other legislations.

What would be truly unfair to the patent applicants is the refusal of their application when this 2019 Act is in force and, subsequently, significant commercial losses if government policy changes. They would lose their first-mover advantage in the market with an already patented product and might also face issues with prior art found in their own rejected application documentation. And then the vagueness in the terms within Section 3(b) continues to remain a concern regardless even if we consider that the 2019 Act implies the inclusion of e-cigarettes within the ambit of 3(b).

Furthermore, patents for e-cigarettes and vaping tools are granted internationally even though most countries have statutory restrictions on patent grants for inventions harmful to health (as reported here), so why not in India? Some examples of e-cigarette patents include U.S. Patent No. 10,966,463, U.S. Patent No. 9,888,721, U.S. Patent No. 9,295,286, China Patent 103179870, European Patent 2653047, Polish Patent Application PL2653047, etc.

Another assertion made in favour of granting patents in this application, and also supported by several litigators (here and here, for instance), is how granting patents for e-cigarette-related inventions will actually keep the rights exclusive and confined to the applicant, thereby assisting the government’s objective to reduce the circulation of e-cigarettes. It would be a win-win for both parties. However, even this argument was deemed untenable by the Controller in the current case.

In this instance, a rejection based on factors of non-inventiveness may hold, but rejections based on Section 3(b) and the 2019 Act fail to hold water. The appeal has been rightly allowed, and it remains to be seen what outcomes this case will yield. This case might finally provide an opportunity for a more in-depth analysis of Section 3(b) and a balanced interpretation that considers the benefits to all stakeholders in the IP regime.

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