IPR II Compiled

Novelty, Deepak

The concept of invention forms the foundation of patent law. Section 2(1)(j) of the Patents Act,
1970 defines the term invention in the following terms: “invention” means a new product or
process involving an inventive step and capable of industrial application.

Essential elements of section 2(1)(j) are as follows-

i. The invention must be a “product” or a “process”.

ii. In order to qualify as an invention, a product or process:
o Must be “new”; and
o Must involves an “inventive step”; and
o Must be “capable of industrial application”.

According to Section 2(1)(l), “new invention” means any invention or technology which has
not been anticipated by publication in any document or used in the country or elsewhere in the
world before the date of filing of patent application with complete specification, i.e., the subject
matter has not fallen in the public domain or that it does not form part of the state of the art.

Statutory exclusions

Apart from Section 2(j), Section 3 also provides guidance regarding the scope of the concept
of inventions. The Supreme Court in the now landmark case of Novartis AG versus Union of
India, categorized Section 3 of the Act into two parts: The Supreme Court found that
subsections such as (d) and (e) are ‘deeming’ provisions that “declare that certain things shall
not be deemed to be inventions”; other sub-sections of Section 3 such as (b) provide that even
though resulting from an invention, some things may not be granted a patent for “other
considerations”.

Section 3 declares that certain things – new forms of known chemical substances, process for
the medicinal, surgical, curative, prophylactic, diagnostic, therapeutic or other treatment of
human beings, algorithms, mathematical methods, business methods, computer programmes
per se etc. – will not be considered as inventions even if they satisfy the requirements of Section
2(j).

An invention has to pass through both these sections [section 2(j) and Sec. 3] to be eligible for
grant of a patent.

Why is Novelty required?

1|Page
Patent shall not be issued if the effect is:

i. To remove existent knowledge from the public domain; or

ii. To restrict free access to the materials already available.
iii. To encourage early disclosure (it keeps the publicly known state of the art closer to the
tech and thus help others in the field to avoid wasting on a solution that has already
been achieved).

How to determine novelty

New is a relative term. New, compared to what? Section 2 (1)(l) creates a baseline – the date
of filing of the complete application, we then assess an invention’s novelty against this
baseline.

** The term ‘new’ is not defined by the Act. In these circumstances, one has to use the
common law meaning of the term to understand the meaning of the term new. A commonly
used definition of “new”/ “novelty” is this – a claim is considered new if all the elements of
the claim cannot be found in a single prior art reference.

Prior art means everything made available to the public by means of a written or oral
description, by use, or in any other way, before the priority date of the invention. The most
commonly used prior art are written documents – both previously published patents and other
articles published in journals.

To destroy novelty of a claim, all the elements of the claim must be found in a single prior art
reference and thus combination of two prior art documents is not possible in the novelty
context.

Let’s take an example. An inventor felt that existing three – legged chairs were too unstable
and thus came up (for the first time) with a four – legged chair. A claim for a four-legged chair
can read as under:

“A device for resting comprising of a seating platform, four legs, a backrest and an armrest.”

The element of this patent are:

1. It is a device (a product patent) which must be used for resting.

2. It must have a seating platform.

3. It must have four legs.

4. It must have a backrest.

2|Page
 5. It must have an armrest.

Let’s say there is a prior patent that discloses three-legged chair having a seating platform, a
backrest and an armrest. Even though all other elements of our four – legged chair are known,
since element ‘3’ described above is missing from the prior art document, the claim on the four
legged chair can be considered ‘new’.

Now let’s say another patent discloses a four – legged stool which has a seating platform and
four legs. This patent alone does not make our four – legged chair not ‘new’. This is because
elements ‘4’ and ‘5’ of the chair identified above are missing from the four – legged stool. One
cannot combine the disclosures made in the patent relating to the three – legged chair and the
four legged stool to destroy the novelty of the four – legged chair. The law does not permit this
combination or ‘mosaicing’.

** Prior art must contain the following to negate patentability-

i. Anticipation’s identity
ii. Enablement requirement

Does the prior art describe or show each and every limitation of the claimed invention?

Does the prior art enable the PHOSITA to make the invention?

If the answer to both is YES then the reference defeats the claim’s novelty, i.e., prior art
anticipates the claim or the claim reads on the prior art.

Anticipation

In patent law, anticipation refers to the prior invention or disclosure of the claimed invention
by another, or the inventor's own disclosure of the claimed invention by publication, sale, or
offer to sell prior to the inventor's application for a patent. In other words, if someone else has
known about or used the invention before the patent applicant applies for a patent, that patent
applicant will not be entitled to a patent. Anticipation is a grounds for invalidating or rejecting
a patent because it means that the claimed invention lacks novelty.

The Indian Patents Act mentions what are not anticipations in Sections 29 to 34, rather than
defining anticipation. These are:

i. Anticipation by previous publication (Sec 29): If the invention has been published prior to
filing of the patent application, if the applicant or the patentee proves that the matter
published was obtained from him or any person from whom he derives title without his

3|Page
 consent or the consent of any such person, then a complete specification filed shall not be
deemed to have been anticipated
ii. Anticipation by previous communication to the government (Sec 30): If the invention has
been communicated to the government or any person authorised by the government for the
purpose of investigation of the invention, then a complete specification filed shall not be
deemed to have been anticipated.
iii. Anticipation by public display (Sec 31):If the invention has been displayed in an exhibition
to which the provisions of the instant section has been extended by the Central Government;
or the invention is described in a publication in consequence of display of the invention in
such an exhibition; or the invention has been used by any person without the consent of the
true and first inventor or a person deriving title from him after it has been displayed in such
an exhibition; or disclosing the invention before a learned society or publishing the
invention in the transaction of such society; provided the application is filed within 12
months from aforementioned public display, then a complete specification filed shall not be
deemed to have been anticipated.
iv. Anticipation by public working (sec 32): If the invention has been filed within 12 months
after the invention has been publicly worked for the purpose of reasonable trial considering
the nature of the invention, then a complete specification filed shall not be deemed to have
been anticipated.
v. Anticipation by use and publication after provisional specification (sec 33): If the invention
has been used and published after filing a provisional application, then a complete
specification filed shall not be deemed to have been anticipated.

Enablement requirement

A patent application is said to be enabled if the application provides sufficient details that
enable a person of ordinary skill in the related field to practice the invention. Related to this is
the 'best mode' requirement that arises in jurisdictions like the US and India: the patent
application must disclose the 'best mode' of carrying out the invention known to the inventors.
In other words, the patent application cannot hide the optimum conditions of the invention from
someone who tries to make and use the invention described in the patent.

The Enablement Requirement in TRIPS - Under Article 29(1) of the Agreement on Trade-
Related Aspects of Intellectual Property Rights (TRIPS), member countries must include a
requirement that patent applicants provide a disclosure that enables a person skilled in the art
to practice the invention. However, the requirement to disclose the 'best mode' is optional.

4|Page
Enablement in India- Section 10(4) of the Patents Act, 1970 require disclosure of the 'best
mode' of carrying out the invention as known to the inventor.

ILLUSTRATIVE CASES

On principle of novelty

Titanium Metal Corp. of America v. Banner, 1985

Titanium Metals Corp (TMC) filed a patent for a new type of titanium alloy to use in offshore
oil wells. The USPTO rejected the patent. USPTO found that the patent was anticipated by a
Russian scientific article. the USPTO found that if 'someone skilled in the art' had read the
article, then it would be pretty obvious for them to have come up with TMC's alloy. Therefore
the patent should be denied because of a lack of novelty.

TMC appealed. The Trial Court reversed and order the patent granted. The Trial Court found
that while the Russian scientists had clearly made the alloy, the article did not discuss the alloys'
improved corrosion resistance (so it couldn't be said that the prior art had fully anticipated the
patent).

USPTO appealed. The Appellate Court reversed and denied the patent. The Appellate Court
found that reading the Russian article would let someone know that the alloy exists, what its
general properties are, and how to make it. Therefore the alloy cannot be considered "new." It
existed in the prior art. The Court found that even if the Russian article didn't talk about every
single useful property of the alloy, it still enables. TMC didn't discover a new product, they
discovered a new use for an old product.

On what is printed publication?

In re Klopfenstein, 2004

FACTS: Appellant applicants Carol Klopfenstein and John Brent sought a patent for methods
of preparing foods comprising extruded soy cotyledon fiber. In 1998, which was nearly two
years before they filed their application, the applicants had presented a printed slide
presentation at a meeting of chemists and at a university. The presentation was displayed
continuously for two and a half days and one day, respectively. Every limitation of the
invention was disclosed in the presentation. Although no copies of the presentation were
disseminated, there was no prohibition on note-taking or copying. Only a few slides recited
what was not already known in the field. The presentation was never catalogued or indexed in
any library or database.

5|Page
Patent application was rejected because that the full invention was made publicly accessible to
those of ordinary skill in the art and that this introduction into the public domain via printed
display represented a "printed publication". The applicants sought further review.

Held - In affirming the Board's decision, the United States Court of Appeals for the Federal
Circuit held that, because the presentation had been made publicly accessible, it constituted a
printed publication. The Liu reference was shown for an extended period of time to members
of the public having ordinary skill in the art. Those members of the public were not precluded
from taking notes or even photographs of the reference. Accordingly, the Court concluded that
the Liu reference was made sufficiently publicly accessible to count as a "printed publication".

In re Cronyn, 1989

Fact - The student presents the thesis to a Thesis Oral Board, composed of four faculty members
including the student's faculty sponsor and another faculty member from the student's
department. In neither the main library nor the chemistry department library are the theses
generally indexed or cataloged. They are not assigned catalog numbers.

It was held that thesis presentation made to a handful of faculty and not catalogued or indexed
in a "meaningful" way was not a printed publication.

In re Hall, 1986

FACTS: The patent application included a copy of a doctoral thesis that was found to have
been available as a printed publication more than one year prior to the application's filing date.
The thesis was indexed and placed in the main collection at Freiburg University in Germany.
The application was rejected. Appellant sought review.

Held - The court held that the doctoral thesis at issue was available as a printed publication, a
single catalogued copy constituted sufficient accessibility under the statute.

Massachusetts Institute of Technology v. AB Fortia, 1985

Facts- In September, 1975, MIT research team delivered an oral presentation in Birmingham,
Alabama, printed copies of which were distributed to a number of scientists (the "Birmingham
paper"), which indicated that optimal cell adhesion and growth could be obtained by reducing
the total charge capacity of microcarriers such as the A-50 beads. The MIT group filed a patent
application covering the development of limited-charge cell culture microcarriers in
November, 1976.

6|Page
Held - It was held that a paper that was orally presented and distributed without restriction to
six people constituted a "printed publication".

In re Wyer, 1981

Facts: On March 13, 1972, appellant filed Australian Patent Application. The entire application
was open to public inspection by the Australian Patent Office and a printed abstract thereof
was published. A microfilm copy of the Australian application preserved in the Australian
Patent Office as a security reel. Diazo copies were also available for sale to the public upon
application to the Australian Patent Office. The disclosure of the instant U.S. application
corresponds to that of the Australian application.

Held – It was held that the microfilm of the Australian application meets the "printed"
requirement, where microfilm copy was available to the public at patent office and abstract was
published. It was further observed that a reference is proven to be a “printed publication” “upon
a satisfactory showing that such document has been disseminated or otherwise made available
to the extent that persons interested and ordinarily skilled in the subject matter or art, exercising
reasonable diligence, can locate it.

On what is public use

Beachcombers v. Wildewood Creative Products, 1994

FACTS: Carol Bennett, a third party and the designer of prototype kaleidoscope called
"Odylic," hosted a party for 20 to 30 guests on April 12, 1985. At her party she displayed and
personally demonstrated the Odylic to her friends to solicit feedback on the device. Bennett
had "made no efforts to conceal the device or keep anything about it secret."

Held - It was held that a demonstration of a working invention in front of twenty to thirty guests
at a house party, all of whom lacked an obligation of secrecy regarding the invention,
constituted public use.

7|Page
 INVENTIVE STEP & NON-OBVIOUSNESS, Sokti

 Introduction

The fundamental principle of Patent Law in India is that a patent is always granted for an
invention, which is novel, new, non-obvious and useful. Inventive step without novelty is myth.
These play a critical role in deciding the fate of a patent application. Novelty and Non –
obviousness are the criteria which provides different functions and add to different
characteristics of intellectual product. Novelty is needed for a patent claim to be patentable and
to rearrange the concept in the intellectual property. The basic aim for novelty and originality
is to get preserved just like nonregistered designs.2 For a patent primary novelty and
obviousness is key concept and an invention will not be part of it because invention is not new
and its already known to the public. Section 2(1)(ja) of the Patents Act sets out the criteria for
patentability and defines 'inventive step' as “a feature of an invention that involves technical
advance as compared to the existing knowledge or having economic significance or both
and that makes the invention not obvious to a person skilled in the art".
The major factors to consider when examining a patent application thus relate to the following:
 defining the person skilled in the art;
 assessing inventive step; and
 evaluating the prospective commercial viability of the invention.
These factors are largely influenced by the regimes in parallel foreign jurisdictions. However,
the Patent Office interprets the terms 'technical advancement' and 'economic
significance' subjectively. These terms are presumably dealt with simultaneously by Section
2(1)(ac) of the act, which defines “capable of industrial application”, alongside Section 3,
which sets out an exhaustive list of inventions which are not patentable in India.
 Justification and Reason
The philosophy behind the doctrine of obviousness is that the public must not be prevented
from doing anything which was merely an obvious extension of what was already known at
the priority date. Obviousness must not be measured with respect to prior art alone, it is a
requirement of an inventive step.
(Bhati Sir bullet points)
• Unjust in principle and injurious in consequence- if absent.
• Socially wasteful for us to pay for an invention which we are certain to receive for free
and in about the same amount of time – as a matter of course.

8|Page
 • Additional cost other artisans would be transferred to consumers with no such invention
that would otherwise would not have happened.
• Patent liability would be narrowed down to a copying-based standard with full defense
of independent creation (as in ©) from the current use-based standard with no defense
for independent creation.
The purpose of the inventive step, or non-obviousness, requirement is to avoid granting patents
for inventions which only follow from "normal product design and development", to achieve a
proper balance between the incentive provided by the patent system, namely encouraging
innovation, and its social cost, namely conferring temporary monopolies. The non-obviousness
bar is thus a measure of what society accepts as a valuable discovery. Additional reasons for
the non-obviousness requirement are providing incentives for fundamental research rather than
for "incremental improvements", and minimizing the "proliferation of economically
insignificant patents that are expensive to search and to license".
According to the inducement theory, "if an idea is so obvious that people in the field would
develop it without much effort, then the incentives provided by the patent system may be
unnecessary to generate the idea". Thus, there is a need "to develop some means of weeding
out those inventions which would not be disclosed or devised but for the inducement of a
patent."
 Origin and Development
The U.S. Supreme Court considered the issue of inventiveness/non-obviousness/discovery for
the first time in 1822 in Evans v. Eaton when it approved the interpretation of a lower court
that a patentable improvement must involve a change in the "principle of the machine" not "a
mere change in the form or proportions".
Hotchkiss v Greenwood (1851) - Plaintiff claimed his invention was an improvement in the
manufacture of clay or porcelain knobs, such as doorknobs. The improvement was
accomplished by dovetailing the hole where the screw was to be inserted by making it largest
at the bottom and then pouring metal into the hold to form the screw. Defendant argued that
the improvement was obvious and therefore should not be granted a patent in the first place.
The court ruled that "for unless more ingenuity and skill in applying the old method of
fastening the shank and the knob were required in the application of it to the clay or porcelain
knob than were possessed by an ordinary mechanic acquainted with the business, there
was an absence of that degree of skill and ingenuity which constitute essential elements of
every invention." The patent is invalid because: "the improvement is the work of the skillful
mechanic, not that of the inventor."
9|Page
The test of the Hotchkiss case may be described as: whether, at the time the claimed invention
was made, the differences between the features of the claimed invention and the things that
persons skilled in the relevant art already knew were such that it would have been within the
level of skill of an ordinary artisan in that art to combine those known features to make the
claimed invention.
Following the Supreme Court’s decision in Hotchkiss, courts varied in how rigorously they
applied the “ingenuity and skill” test, particularly given the brevity of the Court’s explication
of the test. In Reckendorfer v. Faber (1875), the Court merely described the relevant standard
as one “between mechanic skill... and inventive genius.” It said that an instrument or
manufacture which is the result of mechanical skill merely is not patentable. Indeed, even
at the Supreme Court itself, standards varied significantly. The vagueness in the Court’s
decision made it possible for lower courts to interpret the standard too narrowly or too
stringently.
 Subsequent Developments
By early 1950s, Anti- monopoly sentiments that arose during the depression period laid
increasing stress on difference between mechanical skill and patentable ingenuity. The result
was that the bar got too high, patentability became more elusive and the rule showed positive
proof that it embodies a high level of inventive accomplishment. The Courts struggled to find
both the required levels of inventiveness and obviousness and practically useful criteria to
measure these levels. This was a result of two important cases:
The 1941 US Supreme Court case of Cuno Engineering v. Automatic Devices Corp. (Case
1), which was said to establish the flash of genius doctrine as a test of patentability of an
invention: As per Justice Douglas, "the new device must reveal the flash of creative genius, not
merely the skill of the calling".
The Flash of Genius approach was thought to have shifted the analysis of inventiveness from
importance and to the state of mind of the inventor; it caused uproar in the patent law
community as courts struggled to find alternative approaches. One notable example of this
struggle is the positions of Justice Douglas in Great Atlantic & Pacific Tea Co. v.
Supermarket Equipment Corp. (Case 2) in 1950, where he opined that to deserve a patent,
an invention "had to serve the end of science—to push back the frontiers of chemistry, physics,
and the like".
The focus shifted on what came to be later known as secondary consideration, particularly an
invention when it long felt need that other artisans had tried but failed to meet.

10 | P a g e
  Amednment in 1953
Developments subsequent to Supreme Court's decision in Cuno engineering led to the
introduction of non-obviousness as a criterion for patentability under 35 USC § 103 in 1952.
In its efforts to bring uniformity, the Federal Circuit adopted the teaching suggestion and
motivation test to define the scope of the prior art. Section 103 introduced in US Patents Act.
It brought 5 changes:
1. Adopts central perspective a PHOSITA (evoking ordinary mechanic of Hotchkiss)
2. States a negative test i.e., deny patentability to which would have been obvious.
3. Expressly prohibits hindsight bias: i.e. judge when the invention is made.
4. Extra guard against hindsight by restricting it to pertinent prior art;
5. Test is objective, not subjective (meaning CUNO is done away with and Hotchkiss is
restored)
These were put to test in Graham and Adams cases.
In Graham v. John Deere Co (1966).,the Court held that § 103 required a determination of the
following questions of fact to resolve the issue of obviousness:
1. the scope and content of the prior art;
2. the level of ordinary skill in the art;
3. the differences between the claimed invention and the prior art.
4. Secondary considerations (commercial success, long felt but unsolved needs, failure of
others etc.: they shed light on circumstances surrounding the origin of the subject matter
sought to be protected.)
In addition, the Court mentioned "secondary considerations" which could, when appropriate,
serve as evidence of non-obviousness. They (along with of Great A.&P. Tea's rejection rule for
a combination that "only unites old elements with no change in their respective functions")
constitute what is a practically useful approach to the determination of what claimed invention
is non-obvious, and they are commonly referred to as the "Graham factors". The latter, after
several revisions by lower courts, look in the modern form as follows:
1. commercial success resulting from the device's inventive aspect;
2. long felt but unsolved needs; and
3. persistent failures of others (In order for such evidence to be indicative of
obviousness/non-obviousness, it must be demonstrated that the claimed invention
solves a specific problem and that previous unsuccessful attempts were made to solve
that very same problem by skilled persons equipped with an informed knowledge of
the problem and with prior art tools necessary to solve it.
11 | P a g e
Subsequent case law developments emphasized that Graham factors and other secondary
consideration cannot overcome a strong prima facie case of obviousness.
In practice, these (and other later added) secondary considerations became the most useful
criteria for non-obviousness: "Indeed, evidence of secondary considerations may often be the
most probative and cogent evidence in the record. It may often establish that an invention
appearing to have been obvious in light of the prior art was not."

US v Adams (1966) [Both case on the same day] - This case was a companion case to Graham
v. John Deere, decided on the same day. The United States sought review of a judgment of the
Court of Claims, holding valid and infringed a patent on a wet battery issued to Adams.

The suit was brought by Adams and others holding an interest in the patent against the
Government charging the Government with infringement and breach of an implied contract.
The Government challenged the validity of the patent and denied that it had been infringed or
that any contract for its use had ever existed. The Supreme Court's Adams opinion invokes
several secondary considerations in favor of nonobviousness. In particular, the Court observed
that the record disclosed the skepticism of experts before the invention, the endorsement of
experts after disclosure, and unexpected results. In a case that featured a great deal of prior art
very close to the invention, these secondary considerations evidently played an important,
perhaps even dispositive, role.

 Indian Perspective (not taught by Bhati)

Initially to prove that novelty exists then the necessary element is that it must fall under state
of art. In India prior use of patent is part of prior art. The Indian Patent Act 1970 does not define
"state of the art" but through various case laws we can refer that the state of the art means prior
art, prior knowledge and prior use all of which would infringe the patentee's claim if carried
out and it will have been anticipated. State of art is defined under the English Law it has been
defined as an invention which is comprise of all matter i.e. a product, process, information
about either, or anything else, which has available to the public at any time before the priority
date of invention either by written or oral description or in any other way. Moreover the concept
of 'state of art' is result of European/English standards of novelty.

Obviousness consisting of four steps always which was observed in the case of Windsurfing
International v Tabur Marine and all these tests have been reiterated by the court in
Bishwanth Prasad's case. These steps are as follows-firstly identification of inventive steps is
must in form of prior use, prior art or prior knowledge; Secondly the difference is needed

12 | P a g e
between known matter and alleged invention by the skilled person; Thirdly consideration is
important to create or observe differences to the aforesaid skilled person to the alleged
invention and Fourthly to obtain the invention the degree of invention is needed. So novelty
has been accepted by all the authorities as prerequisite of patentability.

In case of M/S Bishwanath Prasad Radhey Shyam Vs. M/S. Hindustan Metal Industries,
it was held that there must be novelty in application. And also observed in case of Blakey and
Co. v. Lathem and Co. is that to be new in patent only novelty or subject matter can show
invention. Recently Delhi High Court observed the criteria of patentability as "Non-
obviousness" and "Inventive- step."

13 | P a g e
 Patenting of Microorganisms, Suryansh
The Indian Patents Act, 1970 added microorganisms under the purview of patentability through
the Patents (Amendment) Act, 2002, in compliance with the TRIPS.
According to Section 3(j) of the Patents Act, 1970, a plant, animal, seeds and biological
processes, apart from microorganisms are not patentable. Therefore, section 3(j) of the Indian
patents act, allows patentability of microorganisms.
Article 27(3)(b) of the TRIPS 1994, further established that microorganisms and non-biological
and microbiological processes are patentable by stating that, "Members may also exclude from
patentability, plants and animals other than micro-organisms, and essentially biological
processes for the production of plants or animals other than non-biological and microbiological
processes."
'Microorganisms per' se can be patented, however, it should be noted that a patent is not granted
for a discovery rather for an invention which is novel, non-obvious, useful and capable of
industrial application. Therefore, a patent can only be granted for a micro-organism, when
there's a human intervention to create a new, non-obvious and useful microorganism by way
of genetic modification/engineering, cell fusion, gene therapy or other micro-biological or non-
biological techniques.
What led to this?
The case of Diamond v. Chakrabarty1 in 1980s, opened gates for the patentability of
microorganisms, wherein the claim of a Micro-biologist Dr. Ananda Chakrabarty, for the grant
of patent for a live human made & genetically engineered bacterium, capable of breaking the
components of crude oil was accepted by the US Supreme Court. In this case, the controller of
patents of the United States denied the claim for patenting the bacterium per se, stating that,
microorganism are product of nature and hence are non-patentable according to the US patents
regime, which was reversed by the United States Court of Customs and Patent Appeals.
Dejected by the decision of the US court of Customs and Patents Appeal, Sideny A. Diamond,
the commissioner of Patents and trademarks appealed to the US Supreme court2 which again
went in favour of Chakrabarty by establishing that a human made, genetically engineered
bacteria was capable of treating oil spills and thus was an invention accompanied by novelty,
usefulness, utility, non-obviousness and industrial applicability3, which a naturally occurring
microorganism was incapable of.
Before the US Supreme Court's decision in the case of Diamond v. Chakrabarty, Patent
protection was not granted to microorganisms as product claims, but only to the process claims
in which microorganisms was used as a medium in inventions.
14 | P a g e
Invention v. Discovery
The question as to whether certain substances isolated or derived from naturally occurring
living organisms are "inventions" or "discoveries" has triggered widespread discussion. Its
operating principle, which is traceable back to the nineteenth century, is entirely
straightforward: one cannot patent a product that occurs in nature in essentially the same form.
For more than a hundred years, the Patent Office and the courts around the world have denied
patentability to claims on what have been regarded as true products of nature. The phrase has
actually been used in two different but related ways.
In the first sense, product of nature refers to a composition of matter that does not comprise
patentable subject matter because it is indistinguishable from something that occurs in nature.
To illustrate this meaning, the USPTO Manual of Patent Examining Procedures gives the
example of a shrimp with the head and digestive tract removed.
In its other sense, the phrase refers to claims that failing the novelty and/or non-obviousness
tests because they are drawn to known natural products that have been derived from a new
source or process, or are in only a marginally purer form than is found in nature.
The product of nature doctrine appears as early as 1889, when, in Ex Parte Latimer, the
Commissioner of Patents rejected a claim on a new article of manufacture . . . consisting of the
cellular tissues of the Pinus australis [southern pine] eliminated in full lengths from the
silicious, resinous, and pulpy parts of the pine needles and subdivided into long, pliant
filaments adapted to be spun and woven. In the initial rejection of the claim, the examiner
emphasized the identity of the claimed substance and its natural counterpart: The claim and
description do not set forth any physical characteristics by which the fiber can be distinguished
from other vegetable fibers. . . . Hence, since the fiber claimed is not, and cannot be,
distinguished from other fibers by any physical characteristic, the claim therefor must be
refused.” This case has laid down following elements for product of nature: A product whose
physical characteristics are indistinguishable from those of its naturally occurring counterpart
does not constitute patentable subject matter. Alternatively, it may be said that such a product
is non patentable because it lacks novelty. Neither the novelty of a process used to produce a
product of nature, nor the unprecedented status of its discovery, can cure the inherent non
patentability of the product. The utility and consequent value of the product is irrelevant to its
status as patentable subject matter.
However, Section 3© of the Indian Patent Act provides that, ““The mere discovery of a
scientific principle or the formulation of an abstract theory or discovery of any living thing or
non-living substances occurring in nature”
15 | P a g e
It is quite clear that it does not prohibit any invention which is result of human intervention,
where living beings has been used initially for conducting experimentation.
Moreover, the Draft Patent Manual of India reads that there is a difference between discovery
and invention. A discovery adds to the amount of human knowledge by disclosing something
already existent, which has not been seen before, whereas an invention adds to the human
knowledge by creating a new product or processes involving a technical advance as compared
to the existing knowledge.
A scientific theory is a statement about the natural world. These theories themselves are not
considered patentable, no matter how radical or revolutionary an insight they may provide,
since they do not result in a product or process. However, if the theories lead to practical
application in the process of manufacture of article or substance, they may well be patentable.
A claim for formulation of abstract theory is not patentable. For example, the fact that a known
material or article is found to have a hitherto unknown property is a discovery and not an
invention. But if the discovery leads to the conclusion that the material can be used for making
a particular article or in a particular process, then the article or process could be patentable.

Product of Nature

Under common law something has already happened, that’s how law is shaped. So if we
look at inventions, they are not defined positively. So in this scenario what happens is that
some people will end up to say meaning of word not achieved or can say intermediary
meaning not expressed by act itself or act not foresee a situation. Invention bring us to
stage higher. Life is a morality matter and product of nature. Microorganism which are
technical and not available in nature patentable being novelty, utility and non-
obviousness (its important if obvious then people would have reached to level
beforehand).
In Merck and Co. v. Olin Matheison Chemical Corporation, This was a case upon the
product claims of patent Vitamin B12-Active Composition and Process of Preparing Same. The
substance now known as vitamin B12 is produced in minute quantities in the bodies of cattle. It
is also produced by certain microorganisms. As found in the liver and the contents of the rumen
of cattle it has some therapeutic and commercial value, but the great superiority of the patented
compositions is clearly established. This superiority also exists with respect to the liver-derived
extracts and concentrates. As found in "natural" fermentates, it has no utility, therapeutically
or commercially, until converted into compositions comparable to the patented products.
16 | P a g e
The Patent Act of 1952 (35 U.S. C.A. § 101), as its predecessors, authorizes a patent for "any
new and useful * * composition of matter * * *," provided only that the conditions for
patentability, which are specified in succeeding sections, are met. There is nothing in the
language of the Act which precludes the issuance of a patent upon a "product of nature" when
it is a "new and useful composition of matter" and there is compliance with the specified
conditions for patentability. All of the tangible things with which man deals and for which
patent protection is granted are products of nature in the sense that nature provides the basic
source materials. The "matter" of which patentable new and useful compositions are composed
necessarily includes naturally existing elements and materials.
A product of nature which is not a "new and useful * * * machine, manufacture, or composition
of matter" is not patentable, for it is not within the statutory definition of those things which
may be patented. Even though it be a new and useful composition of matter it still may be
unpatentable if the subject matter as a whole was obvious within the meaning of § 103 (35
U.S.C.A. 103), or if other conditions of patentability are not satisfied.
In Union Carbide Co. v. American Carbide Co., 2 Cir., 181 F. 104, 106-107, it was said:
"In determining the question of patentable novelty, there can be no hard and fast rule. Each
case must be decided upon its own facts. Mere change of form in and of itself does not disclose
novelty. A new article of commerce is not necessarily a new article patentable as such. But
patentable novelty in a case like the present may be founded upon superior efficiency; upon
superior durability, including the ability to retain a permanent form when exposed to the
atmosphere; upon a lesser tendency to breakage and loss; upon purity, and, in connection with
other things, upon comparative cheapness. So, as supplementing other considerations,
commercial success may properly be compared with mere laboratory experiments."
Judge Learned Hand in Parke-Davis & Co. v. H. K. Mulford Co., C.C.S.D.N.Y., 189 F. 95,
103, stated the principle:
"Nor is the patent only for a degree of purity, and therefore not for a new `composition of
matter.' As I have already shown, it does not include a salt, and no one had ever isolated a
substance which was not in salt form, and which was anything like Takamine's. Indeed, Sadtler
supposes it to exist as a natural salt, and that the base was an original production of Takamine's.
That was a distinction not in degree, but in kind. But, even if it were merely an extracted
product without change, there is no rule that such products are not patentable. Takamine was
the first to make it available for any use by removing it from the other gland-tissue in which it
was found, and, while it is of course possible logically to call this a purification of the principle,

17 | P a g e
it became for every practical purpose a new thing commercially and therapeutically. That was
a good ground for a patent."
In Malcolm e Bergy Case,

In Diamond v Chakraborty,
RULE:
The U.S. Supreme Court reads the term "manufacture" in 35 U.S.C.S. § 101 in accordance with
its dictionary definition to mean the production of articles for use from raw or prepared
materials by giving to these materials new forms, qualities, properties, or combinations,
whether by hand-labor or by machinery. Similarly, composition of matter is construed
consistent with its common usage to include all compositions of two or more substances and
all composite articles, whether they are the results of chemical union, or of mechanical mixture,
or whether they are gases, fluids, powders or solids.
FACTS:
Respondent microbiologist filed patent claims for human-made, genetically engineered
bacterium that was capable of breaking down multiple components of crude oil. The US Court
of Customs and Patent Appeals allowed the claim. Petitioner, Commissioner of Patents and
Trademarks, appealed the judgment. The court affirmed the judgment that allowed respondent
microbiologist's patent claims. The language of the patent statute covered respondent's
invention of a living, genetically engineered micro-organism.
ISSUE:
Does respondent's micro-organism plainly qualify as patentable subject matter?

18 | P a g e
ANSWER:
Yes.
CONCLUSION:
The court affirmed the judgment that allowed respondent's claims. The court rejected the
argument of the patent office board of appeals that 35 U.S.C.S. § 101 was not intended to cover
living things such as laboratory created micro-organisms. The court held that respondent's
micro-organism constituted a "manufacture" or a "composition of matter" within the meaning
of 35 U.S.C.S. § 101 and thus qualified as patentable subject matter. The court found that
respondent had produced a new bacterium with markedly different characteristics from any
found in nature and which had the potential for significant utility. The court held that the
language of 35 U.S.C.S. § 101 embraced respondent's invention.
Patent and Morality:
Section 3(i) talks of process any process for the medicinal, surgical, curative, prophylactic
diagnostic, therapeutic or other treatment of human beings or any process for a similar
treatment of animals to render them free of disease or to increase their economic value or that
of their products. In 2003 amendment plants removed and in section 3(j) deals with plants-
plants and animals in whole or any part thereof other than micro-organisms but including
seeds, varieties and species and essentially biological processes for production or propagation
of plants and animals

If we look in section 3(B) we see human life given more importance. Basic argument is man
should not play god. If human being develop something why not let it? So ques comes upto
product or process. If liver can be developed technically then it will solve problem as not
required to be replanted from donor itself.
Patent allows microorganism but we see in clause b and clause I of section3 it made difference
made in pant animal and human but in clause j humans absent so question comes of morality.
Therefore not allowed. There is no Restriction on person to create multicellular organism as
per clause j of section 3, so only clause as a remedy to prevent such action is dealing with
contrary to morality. God gives life he can take it back.
But this morality clause is so vague and is contrary to invention. Public order can be
understood in three perspective- public order is one in which simplest way that whatever
disturb peace and calm will be contrary to it. Suppose XYZ broke red light is criminal offence
and not public order issue. So if medicine sold lakhs/month it would lead to public disorder.
Clause j says micro org and not every micro org so suppose if micro org can create havoc. For
eg corona so it cannot be given patent as can cause serious prejudice to human life and hence
can be prevented under section 3(b). so if micro org against morality, public order will be
against and not granted patent.
3(j)- plants and animals in whole or any part thereof other than micro organisms but including
seeds, varieties and species and essentially biological processes for production or propagation
of plants and animals;
biological claim on process claim- Indian patent act influenced by European countries. Here
consensus as to essential and non essential [Link] non essential if technical
interverntion. If biological and nt involve technical then essestial, if for progpogation of plant

19 | P a g e
or to increase productivity of plant method was to pruning tress and cutting it in a particular
manner, then It would not be essential biological process. If go for corss breeding of horses.
So plant and animal claim is allowed if meet substantive requirement- involve technical
intervention and criteria of novelty non-obvious and useful one.

3(b), (i) excluded from patentiibilty but clause talks of patentibilty nowehre mention of human
in it. So can we say if part of human produced outside can it will be patentable. No it csnt be
read as these clause cannot be read in islolation. As clause of morality will apply and according
to it this saction is immoral. But micro organism are not considered diginity of higher life and
is lower loife and hence allowed while human not mentioned inclause j yet not patentnable.
Stem cell technology are not patentable in india.

In Harvard College v Canada, Oncomouse case,

20 | P a g e
DIMMINACO AG V CONTROLLER OF PATENTS DESIGNS

21 | P a g e
22 | P a g e
23 | P a g e
MONSANTO V NUZIVEEDU – LINK, yeh case mujhe samajh nahi aaya bhai log toh copy
karlena iss link se
[Link]
opportunity-by-the-supreme-court/

24 | P a g e
 UTILITY ( CAPABLE OF INDUSTRIAL APPLICATION), Aniket

Patent is granted for an “invention” – this is a universally accepted principle of patent law. The
patent specification describes the invention and if the application is granted by the Patent
Office, the patentee is entitled to exclusive rights over the “invention”. The grant of a patent
confers on the patentee exclusive right that often enable it to eliminate competition. Thus the
law seeks to ensure that such a monopoly is granted with caution and only where the patentee
is able to show that the product or process is truly worthy of such a monopoly.

Section 2(j) of the Patents Act, 1970 defines the term invention- “invention” means a new
product or process involving an inventive step and capable of industrial application”

The invention must be a “product” or a “process”.

In order to qualify as an invention, a product or process:

o Must be “new”; and

o Must involves an “inventive step”; and

o Must be “capable of industrial application”

The term “capable of industrial application “is defined under Section 2(ac) of the Patents
Act which states that “in relation to an invention, means that the invention is capable of
being made or used in an industry. It means enough to demonstrate utility. If we compare it
with novelty and non-obviousness (Not known to PHOSITA), we can say utility lies at lowest
pedestal. It is easiest to judge. Toughest factor hierarchy for patent requirement are-
novelty>non obviousness> utility. Words used are “capable of being used” rather than simply
“being used’. Thus, the patentee need not have actually used the invention in an industry to
satisfy this requirement.

Why we require utility?-

25 | P a g e
STATIC VIEW- According to it, two ques need to answered that why would one patent a
non-useful product as patenting is expensive exercise? If patent given to in order to exclude
other to use will it not be inconsequential as whom patentee will prevent as there wont be any
users as the invention was not useful at first place?

Suppose I make compound beta today and which is not known at present for medicinal value
but later can be used for medicines. So, problem which arise is that patent last 20 yr. So if in
gap of 20 yr, if someone come up with utility that same compound can have medicinal value
then he will not be able to use it, as he is excluded from use for 20 yrs. So in such case who
should be rewarded right of patents one person who comes with no utility value or one who
come up with useful product. In prior case if granted, then monopoly can be exercised. Utlity
can also be discovered at later time when compound discovered and earlier remained unknown.

Utility is not a problematic area. But prob arise in chemical compound and biotech field. As
slight change in chemical leads to new non predictable result.

Brenner v manson-

26 | P a g e
In this case, application of patent for making steroids made by brenner. Later manson, also
comes up with claim he was first to make it. In usa, in inception days, first to invent procedure
followed for patent and not first to file, but patent office rejected his application as he failed to
show utility. Manosn to show utility referred to article of 1956 which showed steroid being
used in screeing for cancer disease.

CCPA reversed decision and stated when claimed product produces a prod it not necessary to
show utlity unless not alleged detrimental to public. Precedents were cited of ccpa decision

Manson arguments are three and slide has two arguments-

1) He demonstrated utility by reference by referring to article but court not accept it as

they article were undergoing screening. They may have potential of cancer treatment but not
specific utlity. Potential utility and specific utility are different.

2) He says can we say is it useful coz it work- as steroid formed so has [Link] held
many things though useful but are also harmless. This runs contrary to idea that if trivial
inconsequential than cannot be granted patent.

If granted patent without utility, then monopoly also would extend on knowledge. So Manson
was denied patent as had no specific utility.

Pearson vs post- in this case both person go for hunting a Fox. Pearson chase fox while Post
kills it. Ques arose as to fox belonged to whom? Whether it belonged to post as he had resource
to shoot or pearson who was chasing it. Court gave un favour of post. So by this case we seen
one who has utility he gets patent.

27 | P a g e
Unfortunately, this definition of utility is not very helpful and not many Courts have dealt with
this issue in any detail. Leading case, Eli Lilly versus Human Genome Sciences Inc
summarizes the law as it stands today. According to it, - “The notion of industry must be
construed broadly. It includes all manufacturing, extracting and processing activities of
enterprises that are carried out continuously, independently and for commercial gain. However,
it need not necessarily be conducted for profit and a product which is shown to be useful to
cure a rare or orphan disease may be considered capable of industrial application even if it is
not intended for use in any trade at all.

The capability of industrial exploitation must be derivable by the skilled person from the
description read with the benefit of the common general knowledge. The description, so read,
must disclose a practical way of exploiting the invention in at least one field of industrial
activity.

An enquiry as to whether there is a sound and concrete basis for recognising that the
contribution could lead to practical application in industry. Nevertheless, there remains a need
to disclose in definite technical terms the purpose of the invention and how it can be used
to solve a given technical problem. Moreover, there must be a real prospect of exploitation
which is derivable directly from the specification, if not already obvious from the nature
of the invention or the background art. (SPECIFIC UTILTY) Conversely, the
requirement will not be satisfied if what is described is merely an interesting research
result that might yield a yet to be identified industrial application. (POTENTIAL
UTILITY)

A speculative indication of possible objectives that might or might not be achievable by

carrying out research is not sufficient. Similarly, it should not be left to the skilled reader to
find out how to exploit the invention by carrying out a research programme.

28 | P a g e
The purpose of granting a patent is not to reserve an unexplored field of research for the
applicant nor to give the patentee unjustified control over others who are actively investigating
in that area and who might eventually find ways actually to exploit it. If a substance is disclosed
and its function is essential for human health then the identification of the substance having
that function will immediately suggest a practical application. If, on the other hand, the function
of that substance is not known or is incompletely understood, and no disease has been identified
which is attributable to an excess or a deficiency of it, and no other practical use is suggested
for it, then the requirement of industrial applicability is not satisfied. Using the claimed
invention to find out more about its own activities is not in itself an industrial application.

29 | P a g e
 Intro, Amar

A semiconductor is a material which has electrical conductivity to a degree between that of

a metal such as copper and that of an insulator such as glass. The semiconductor integrated
circuit is an integral part of every computer chip. The fifth generation computers are using Very
Large Scale Integration (VLSI) where numerous transistors are accommodated on a single chip.
A chip typically has multiple layers, each layer having a unique mask creating the required
circuits. These layers of masks, collectively called ‘mask work’ or ‘layout-design’, manifest
the three-dimensional layout of the chip. It is a chip’s layout-design or three-dimensional
organization that requires protection.

Washington treaty of 1990 asked for states to protect layout-designs. After TRIPS adopted
this treaty, it called its members to adhere to its provisions. As a member of TRIPS Agreement,
India has enacted the Semiconductor Integrated circuit layout-Design Act, 2000. The Act
gives recognition to a new form of intellectual property, namely, the ‘layout-designs’ used in
semiconductor integrated circuits. It protects original, inherently distinctive layout-designs that
have not been previously commercially exploited.

As per s. 2(h) “layout-design” means a layout of transistors and other circuitry elements and
includes lead wires connecting such elements and expressed in any manner in a semiconductor
integrated circuit;

S. 2(r) states: “semiconductor integrated circuit” means a product having transistors and other
circuitry elements which are inseparably formed on a semiconductor material or an insulating
material or inside the semiconductor material and designed to perform an electronic circuitry
function;

Protection under Patent or other IP Law

Not protected under patent law: S. 3(o) of Patents Act provides that topography of a
semiconductor integrated circuit (SIC) is not patentable. It has not been made patentable even
though it has industrial design and goodwill. It does not merit protection under patent law as it
does not has dignity to be called invention. These circuitry elements used in layout design have
certain aspects that are common. The patent law requirement is too high for SIC to fulfil. Since
common usage and not novel, it is not be patentable.

30 | P a g e
SIC is not protected under Design patents as design patents protect the ornamental, but not the
functional, aspects of an article of manufacture described in its drawings. Since integrated
circuit layout is more functional than ornamental, design patent protection is generally
inapplicable to integrated circuits.

Not protected under copyright law: Copyright is provided for extensive period of time-
life+60 yrs which is too long period for semiconductor industry. There is a problem also as to
originality. (explained later). Moreover, SIC have industrial application and cannot be termed
as work under copyright. Also, the circuit consists of staple forms which are in public domain.
Due to all these factors, SIC cannot be protected under copyright law.

Conditions for registration (s.7)

It has been carved out in negative terminology. S.7(1) provides that:

A layout-design—

(a) which is not original; or

(b) which has been commercially exploited anywhere in India or in a convention country; or

(c) which is not inherently distinctive; or

(d) which is not inherently capable of being distinguishable from any other registered
layoutdesign,

shall not be registered as a layout-design:

a) Originality

As per s.7(2) A layout-design shall be considered to be original if it is the result of its creator's
own intellectual efforts and is not commonly known to the creators of layout-designs and
manufacturers of semiconductor integrated circuits at the time of its creation.

The standard of originality in this Act is higher as compared to copyright law, but it does not
raises to the bar of novelty under patent law:

For copyright, work must be emanating from author and requires a minimal degree of
creativity. But under this Act, it must be result of creator’s own work and intellectual efforts.
Intellectual efforts demand more than minimal degree of creativity.

31 | P a g e
Under patent law, novelty requirement demands that it must be absolutely new and must not
be common case and in existence before. This Act requires that SIC is “not commonly known”
which means that there can be common design. The requirement of originality in this Act is
not raised to standard of novelty as in patent act.

According to proviso of s.7(2), a layout-design consisting of such combination of elements and

interconnections that are commonly known among creators of layout-designs and
manufacturers of semiconductor integrated circuits shall be considered as original if such
combination taken as a whole is the result of its creator's own intellectual efforts. So this is
different from non-obviousness requirement. Even when it is a combination of commonly
known elements, it is regard as original if taken as a whole, it is result of creator’s own
intellectual efforts.

Common knowledge or common place: trivial; no special attention is given to what has been
created; creators and manufacturers are not excited about it and not paying attention to it.

In the case of Ocular Sciences Ltd v. Aspect VisionCare Ltd attempt was made at understanding
what ‘commonplace’ meant. Whilst not wanting to paraphrase a word used in a statute, Laddie
J like counsel’s submission that any design which is ‘trite, trivial, common-or-garden,
hackneyed or of the type which would excite no particular attention in those in the relevant art
is likely to be commonplace’.

b) Commercial exploitation:

It includes not only monetary gains, but also contractual gains. According to s.2(e),
“commercial exploitation”, means to sell, lease, offer or exhibit for sale or otherwise distribute
such semiconductor integrated circuit for any commercial purpose.

Proviso to s.7(1) states that a layout-design which has been commercially exploited for not
more than two years from the date on which an application for its registration has been filed
either in India or in a convention country shall be treated as not having been commercially
exploited for the purposes of this sub-section.

Hence, commercial exploitation can be done but registration must be done within 2 years. If
exploited from 8 April 2021 then to obtain right under this Act, he must file within 8 April
2023.

32 | P a g e
c) and d)

Concept of distinctiveness and inherent capable of distinguishability is different from

trademark law. There are several tests, but no specific law or judgements for it. For instance:

 If function is new and is different from exsisting layout then it is inherently disitinctive
 When elements used are different from what used in other registered layout.
Duration of Registration

The registration of the layout design shall be only for the period of 10 years counted from the
date of filing an application for registration or from the date of first commercial exploitation
anywhere in any country, whichever is earlier.

S. 16.

No action of infringement of unregistered layout-design.—No person shall be entitled to

institute any proceeding to prevent, or to recover damages for, the infringement of an
unregistered layout-design. There is no common law remedy to unregistered layout design as
provided under trademark and copyright law. Hence, a layout-design has to be registered to
receive protection under the Act.

Rights of registered proprietor

S 17- Rights conferred by registration.—Subject to the other provisions of this Act, the
registration of a layout-design shall, if valid, give to the registered proprietor of layout-design
the exclusive right to the use of the layout-design and to obtain relief in respect of
infringement in the manner provided by this Act. Thus two positive rights are provided.

Infringement

What will constitute the infringement of layout design has been explained in detail in the
SICLD Act, 2000. As per section 18(1)-

A registered layout-design is infringed by a person who, not being the registered proprietor of
the layout-design or a registered user thereof,—

(a) does any act of reproducing, whether by incorporating in a semiconductor integrated circuit
or otherwise, a registered layout-design in its entirety or any part thereof, except such act of

33 | P a g e
reproducing any part thereof which is not original within the meaning sub-section (2) of section
7;

(b) subject to the provisions of sub-section (5), does any act of importing or selling or otherwise
distributing for commercial purposes a registered layout-design or a semiconductor integrated
circuit incorporating such registered layout-design or an article incorporating such a
semiconductor integrated circuit containing such registered layout-design for the use of which
such person is not entitled under this Act.
How much copy permissible? If minor portion taken then also infringement?- it is not about
quantity copied, but quality. It depends upon how relevant or material is the part that was
copied. Even if a small part is copied, it will be infringement if it is material part.

Exceptions/Defence

The registration of the layout design gives to the registered proprietor of the layout design the
exclusive right to the use of the layout design and to obtain relief in respect of infringement.
Only a registered proprietor of the layout-design or a registered user can make use the layout
design. A person may be registered as a registered user of the layout design when the registered
proprietor and the proposed registered user apply jointly in writing to the Registrar. Use of
registered layout-design with the written consent of the registered proprietor of a registered
layout-design also shall not constitute infringement.

The proprietor of a registered layout-design has powers under the Act to assign the layout-
design for any consideration. The registered layout-design may be transferred with or without
good will. However, the person who becomes entitled by assignment or transmission to a
registered layout-design shall also have to register his title with the Registrar as per the
procedure provided in the Act.

Moreover, s. 18 provides following cases which do not constitute infringement.

Educational purpose

S. 18(2): Notwithstanding anything contained in section 17, sub-section (1) or sub-section (5),
the performance of the act of reproduction referred to in clause (a) of sub-section (1), where
such act is performed for the limited purposes of scientific evaluation, analysis, research or
teaching, shall not constitute act of infringement within the meaning of that clause.

34 | P a g e
Hence, any person may reproduce the layout-design “for the purposes of scientific evaluation,
analysis, research or teaching…”. This is similar to the fair dealing exception in copyright law.
This is an significant exception to the exclusive right of he registered-proprietor to reproduce
by any means the registered layout-design or any substantial portion of it.

Reverse engineering

The Act also allows persons to ‘reverse-engineer’ layout-designs for the purpose of analysing
the layout-designs and incorporating the insights of their analysis into an original layout-design
of their own. S. 18(3) states that where a person, on the basis of scientific evaluation or analysis
of a registered layout-design, creates another layout-design which is original within the
meaning of sub-section (2) of section 7, that person shall have the right to incorporate such
another layout-design in a semiconductor integrated circuit or to perform any of the acts
referred to in sub-section (1) or sub-section (5) in respect of such another layout-design and
such incorporation or performance of any act shall not be regarded as infringement within the
meaning of sub-section (1).

Such a provision is considered to be justified, in accordance with Article 6(2)(b) of the IPIC
Treaty and the provisions in the TRIPS Agreement, as there is a need to encourage creativity
through the improvement of existing layout-designs. Moreover, to successfully enter an
integrated circuit market segment with a new product, the new entry must usually be
compatible with established products. However, the information needed to achieve
compatibility is often not publicly available. Thus, aspiring competitors must gather this
information another way. However, they must do so without infringing layout-design rights
under the Act.

(Brooktree Corporation v. Advanced Micro Devices: Provided later)

Defence of innocence

S. 18(5) provides that where a person does not possess any knowledge or has no reasonable
ground to know while performing or directing to be performed such act in respect of such
semiconductor integrated circuit or article that it incorporated a registered layout-design, it will
not amount to infringement.

But, after the time when such person has received notice of such knowledge, if continues to
perform or directing to be performed such act then, he shall be liable to pay the proprietor of

35 | P a g e
the registered layout-design a sum by way of royalty. The amount shall be determined by
negotiation between registered proprietor of the registered layout-design and that person or by
the Appellate Board having regard to the benefit accrued to such person by performing or
directing to be performed such act.

Innocent purchaser

S. 18(6) provides that where any other person purchases a semiconductor integrated circuit
incorporating a registered layout-design or any article incorporating such a semiconductor
integrated circuit referred to in sub-section (5) from a person referred to in that sub-section,
then, such other person shall be entitled to the immunity from infringement in respect of that
semiconductor integrated circuit or article.

Independent creation

S. 18(8) where any person by application of independent intellect has created a layout-design
which is identical to a registered layout-design, then, any act of such person in respect of the
layout-design so created shall not be the infringement of the registered layout-design. Paper
trail evidence can be brought by such an independent creator to prove that his creation was an
exercise of “intellectual efforts” and it was not copied.

Cases

Brooktree Corporation v. Advanced Micro Devices

Brooktree had registered layout design and claimed that AMD copied their layout design.
Although, it was not copied entirely but Brooktree claimed that qualitatively material part has
been copied. Whereas, AMD claimed reverse engineering.

The US Court of Appeals for the Federal Circuit has held in the case
of BrooktreeCorporation v Advanced Micro Devices that a ‘paper trail does not exclusively
prove a reverse engineering defence’ under the SCPA. The Court explained that the statute
does not excuse copying where the alleged infringer first tried and failed to reverse engineer a
chip layout without copying.

The Court rejected the claim that the reverse engineering defence can be established by the
sheer volume of paper, pointing that the paper trail is evidence of independent effort but not
incontrovertible proof of either originality of the end product or the absence of copying.

36 | P a g e
Nintendo vs centronics (australlia)- Nintendo, holds the EL rights in its video games. The
defendant, Centronics, imported video game circuits which were unauthorised copies of
Nintendo's circuit layout which Nintendo manufactured and marketed in regard to its game
products. Nintendo initiated proceedings against Centronics and three of its directors for
infringement of various intellectual property rights, including Nintendo's circuit layout rights.
The chip was copied in entirety. Size of chip copied was smaller than original layout design
which was registered, so copied was miniature.

The Court held such copying to be infringement. Only the size of the chip was minimized. It
was not an original work, as it was not result of creator’s own intellectual efforts.

Conclusion

The enactment of this Act fulfils India’s obligations under the TRIPS Agreement as the Act
fulfils the TRIPS norms. This Government initiative to protect integrated circuits will build
confidence in the industry and the global investing community. The Act compares well with
overseas enactments in all important aspects, at times going further even, for example, the
requirement of inherent distinctiveness and provision of criminal remedies for infringement.

The IP regime in India before this Act did not fully cater to the requirements of this specialty
area leaving a chip developer with insufficient protection for his work. Recognition of layout-
designs for sui generisprotection will go a long way in benefiting the industry as well as the
consumers of chip products by attracting more players in the chip industry and maintaining
healthy competition between them, which in turn translates into more competitive pricing.
India in itself is slowly emerging as an important player in the multi-billion dollar global
semiconductor industry. Indian companies today are claiming to do substantial project work in
the area of chip design and have their targets set at making India the design powerhouse of the
world.

But India being a developing country, considerable foresight and planning are required by the
government to institute the right policies. TRIPS obliges a high level of IP protection, which
should ensure a secure legal environment to encourage such innovative activity.

37 | P a g e
 MATHEMATICAL OPERATION, COMPUTER ALGORITHM CASES AND
PATENT, Mohit
What is Algorithm or Software/Computer Programs for the purpose of Patent: The word has
not been defined in the Patent Act 1970; however, the Patent Manual defines as follows: “any
invention the performance of which involves the use of computer, computer network or other
programmable apparatus, or an invention one or more features which are realized wholly or
partially by means of a computer program. Computer programs are a set of instructions for
controlling a sequence of operations of a data processing system. It closely resembles a
mathematical method. It may be expressed in various forms e.g., a series of verbal
statements, a flowchart, an algorithm, or other coded form and maybe presented in a form
suitable for direct entry into a particular computer or may require transcription into a different
format (computer language). It may merely be written on paper or recorded on some
machine-readable medium such as magnetic tape or disc or optically scanned record, or it
may be permanently recorded in a control store forming part of a computer.” The Patent on
Software, Algorithms are per se not patentable in India or even in US. Section 3(k) of Patent
Act, 1970 Quote “The following inventions are not inventions within the meaning of this Act
- a mathematical or business method or a computer program per se or algorithm” Unquote.
Though the section has not been interpreted by the Courts in India so in absence of a clear
interpretation by the Courts we can say the Patent protection is accorded when the software is
incorporated into a Hardware that has some technical effects.
The Manual of Patent Practice of Indian Patent Office describes the policy for Patent of
Program/Software/Algorithms as follows: The relevant portions are underlined. “If the patent
application relates only to a machine i.e., hardware based invention, the best mode of
operation may be described along with the suitable illustrations. However, in the case of a
process related inventions, the necessary sequence of steps should clearly be described so as
to distinguish the invention from the prior art with the help of the flowcharts. The source or
pseudo/object codes may be incorporated in the description optionally.
[[Link]

38 | P a g e
1) Diamond v. Diehr, 450 U.S. 175 (1981)
The respondents filed a patent application claiming the invention of a process for molding
raw, uncured synthetic rubber into cured precision products. Whereas the process was already
possible using well-known time, temperature, and cure relationships to calculate when to
open the press, the respondents held that their invention allows to exactly measure the
temperature inside the mold which was so far an uncontrollable variable in the process. This
innovation would enable the industry to obtain -hitherto impossible- uniformly accurate cures
by constantly measuring the temperature inside the mold and feeding the data into a computer
which then uses an existing equation to calculate the optimal cure time.
Legal Issues
The Court had to decide on whether the respondent's claims fall within the categories of
potentially patentable subject matter.
First, it had to construe the word “process” as used in 35 U.S.C. §101, whose subject matter
is defined as “any new and useful process, machine, manufacture or composition of matter, or
any new or useful improvement (thereof)”. It affirmed the definition of a “process” which
holds that "a process is a mode of treatment of certain materials to produce a given result. If
new and useful, it is just as patentable as a piece of machinery”.
Secondly, the Court then addressed the question of the patentability of processes including
elements that are excluded from patentable subject matter. It confirmed that a process “is not
unpatentable because it contains a law of nature or a mathematical algorithm” and went on to
establish that in judging whether a claim or an invention at hand represent patentable subject
matter, they need to be considered as a whole rather than being dissected into their various
elements. The decisive factor in determining the patentability of a process is whether it, being
considered as a whole, is performing a function which the patent laws were designed to
protect: Furthermore, it holds that concerning the determination whether an invention falls in
general under patentable subject matter, it is irrelevant whether it meets the criteria of
“novelty” and “non-obviousness”.
The Court ruled that the respondents did not seek to patent a mathematical formula, but rather
a protection for a process of curing synthetic rubber including a formula. The claims thus
contain patentable subject matter.

39 | P a g e
2) Gottschalk v. Benson
In 1972, for the first time, the United States Supreme Court addressed the issue of whether a
computer program could be patentable subject matter under section 101. The United States
Supreme Court said that a patent on the computer program involved would in effect be a
patent on the algorithm used and is thus not allowable. The court held that a mathematical
algorithm converting binary coded decimal numerals into pure binary code itself is not
patentable as a process, because it is merely an abstract idea.
The CCPA interpreted Benson narrowly, stating that the opinion disallowed a process claim
on a formula or a process claim that included steps for determining the values of variables
with the formula as the final step.4' Nevertheless, where the program was only part of a
process claim, and there was sufficient post solution activity, Benson was deemed not to
apply and the claim was allowed. The CCPA reasoned that with the claim thus restricted, the
formula was not preempted by the claim. Also, claims drawn in apparatus form were allowed,
with Benson being considered restricted to process claims.

3) Parker v Flook
Flook's patent application contained process claims on a method of updating alarm limits
during the catalytic conversion of hydrocarbons." That method used a formula to determine
an alarm limit value, and then the alarm limit was adjusted to that value. -Although the
program was essentially a formula, the claim included a final step of adjusting the alarm
limit.
The Court held that a process can be patented only if it is new and inventive without the
formula. "The process itself, not merely the mathematical algorithm, must be new and useful.
Indeed, the novelty of the mathematical algorithm is not a determining factor at all." The
Court summarized its holding in a footnote: "Very simply, our holding today is that a claim
for an improved method of calculation, even when tied to a specific end use, is unpatentable
subject matter under § 101." The Court considered the computer program to be an algorithm
or a mathematical formula, which is like a law of nature. A law of nature cannot be patented;
only an inventive application of it can. The Court rejected the reasoning of the CCPA, saying
that "[the notion that post-solution activity, no matter how conventional or obvious in itself,
can transform an unpatentable principle into a patentable process exalts form over substance.

40 | P a g e
The Court goes on to say that in determining whether a process is statutory subject matter,
first the formula should be considered as though it were well known, then the process as a
whole should be examined for inventiveness. Because any inventiveness must lie in the
nonformula steps, and these steps in Flook's claim were well known, Flook's process is not
statutory subject matter.
[Link]
urnal

4) Telegraph Case - O'Reilly v. Morse [56

U.S. (15 How.) 62 (1854)]
RULE: Whoever discovers that a certain useful result will be produced, in any art, machine,
manufacture, or composition of matter, by the use of certain means, is entitled to a patent for
it; provided he specifies the means he uses in a manner so full and exact, that any one skilled
in the science to which it appertains, can, by using the means he specifies, without any
addition to, or subtraction from them, produce precisely the result he describes. And if this
cannot be done by the means he describes, the patent is void. And if it can be done, then the
patent confers on him the exclusive right to use the means he specifies to produce the result
or effect he describes, and nothing more.
FACTS: This patent infringement action was brought by appellees, one of whom was the
alleged original inventor of the electro-magnetic telegraph, Samuel Morse. The circuit court
ruled in favor of appellees after finding that appellants had produced and were operating a
similar telegraph machine that infringed on appellee inventor's patent. The circuit court
issued an injunction against appellants' further use of the telegraph. On appeal, appellants
argued that appellee inventor was not the original and first inventor of the telegraph described
in his patents, and further claimed that his patents were void. There were several issues in the
case, e.g. whether Morse was indeed first to invent the telegraph, the issue of lasting
importance concerned Morse's eighth claim, which was directed to a method of
communicating intelligible information to any distance:” Eighth. I do not propose to limit
myself to the specific machinery or parts of machinery described in the foregoing
specification and claims; the essence of my invention being the use of the motive power of
the electric or galvanic current, which I call electro-magnetism, however developed for
marking or printing intelligible characters, signs, or letters, at any distances, being a new
application of that power of which I claim to be the first inventor or discoverer.”
41 | P a g e
ISSUE: Was Morse’s Claim No. 8 on the telegraph patentable?
ANSWER: No
CONCLUSION: Morse claimed the exclusive right to every improvement where the motive
power is the electric or galvanic current, and the result is the marking or printing intelligible
characters, signs, or letters at a distance. If this claim can be maintained, it matters not by
what process or machinery the result is accomplished. For aught that we now know, some
future inventor, in the onward march of science, may discover a mode of writing or printing
at a distance by means of the electric or galvanic current xxx. His invention may be less
complicated -- less liable to get out of order -- less expensive in construction, and in its
operation. But yet if it is covered by this patent, the inventor could not use it, nor the public
have the benefit of it, without the permission of Morse. New discoveries in physical science
may enable him to combine it with new agents and new elements, and by that means attain
the object in a manner superior to the present process and altogether different from it. And if
he can secure the exclusive use by his present patent, he may vary it with every new
discovery and development of the science, and need place no description of the new manner,
process, or machinery upon the records of the patent office. The United States Supreme Court
noted that Morse's claim was to an exclusive right to use a manner and process which Morse
had not described and indeed had not yet invented. The Supreme Court held that the claim is
too broad and not warranted by law.

5) Telephone case- Dolbear vs American

bell telephone company- graham bell
The controversial telephone war occurred in the late 1870s and 1880s based on a strange and
curious fact – Alexander Graham Bell, who is now considered the inventor of the telephone,
filed his telephone patent on the same day another inventor, Elisha Gray, filed his own patent
application for the telephone. Bell’s was the fifth filed that day, February 14, 19876, while
Gray’s was the 39th. In this case, Bell was granted U.S. Patent No. 174,465 for “The method
of, and apparatus for, transmitting vocal or other sounds telegraphically, as herein described,
by causing electrical undulations, similar in form to the vibrations of the air accompanying
the said vocal or other sounds, substantially as set forth.” Gray filed his patent caveat only a
few hours after Bell’s patent was filed (at the time a means to reserve a priority date, similar
to today’s provisional applications, abolished in 1909). The Dolbear case was brought by
Western Union as it fought Bell for monopoly-power in the telephone industry, but the
42 | P a g e
Supreme Court found that Bell’s patent was valid despite numerous inventors coming before
him, thus validating his claim to invention to the public.
The Supreme Court held that “It appears from the proof in these causes that Alexander
Graham Bell was the first discoverer of the art or process of transferring to, or impressing
upon, a continuous current of electricity in a closed circuit, by gradually changing its
intensity, the vibrations of air produced by the human voice in articulate speech, in a way to
cause the speech to be carried to and received by a listener at a distance on the line of the
current; and this discovery was patentable under the patent laws of the United States.”

6) In re Abrams case
The United States Court of Customs and Patent Appeals (CCPA), the predecessor to the
Federal Circuit, issued the clearest opinion articulating the point-of-novelty test. In re Abrams
involved claims “for Petroleum Prospecting Method.” In this case, the non-statutory elements
of the claim were objected to as “purely mental in character.” The illustrative claim four
recites “a method of prospecting for petroliferous deposits” with six steps; the court
determined the last three were “mental steps.” The first three steps were determined to be
statutory elements: “sinking a number of boreholes,” “sealing off each said boreholes from
the atmosphere,” and “reducing the pressure.” The three mental steps involved “measuring
the rate of pressure rise,” “determining the rate . . . at a standard reference,” and “comparing
the rates . . . to detect anomalies.”
Abrams asserted that analyzing mental-step claims such as this needed a logical rule to
follow. Abrams’s brief proposed a rule, which the court appeared to adopt implicitly, that
determines patentability by sorting claims into one of three categories. The first category is
where all method steps “are purely mental in character,” which would clearly not be
patentable. The second and third are the difficult ones. The second category is where “a
method claim embodies both positive and physical steps as well as so-called mental steps,”
but the novelty is in the mental steps; “then the claim is considered unpatentable for the same
reason that it would be if all the steps were purely mental in character.” The last category is
where the novelty “resides in one or more of the positive and physical steps,” and contains
patentable subject matter.
Though the court did not disagree with Abrams’s proposed rule in Abrams, it nevertheless
found that the claim fell within the second category of claims. The court found steps
“involving therein such purely mental terms as ‘determining’, ‘registering’, ‘counting’,

43 | P a g e
‘observing’, ‘measuring’, ‘comparing’, ‘recording’, and ‘computing’” to be non-statutory.
Since the first two steps were determined to be “old for the purposes of the present
application,” the novelty was in the final three steps, which involved measuring, determining,
and comparing respectively. Since the court determined that these terms were non-statutory,
the claim failed the test.

7) In re Prater. 1969
In Prater, the Court of Customs and Patent Appeals (“CCPA”) refined the broadest
reasonable interpretation standard such that the standard was to be applied consistent with the
specification. In particular, the claims at issue in Prater were admitted by Prater to be broad
enough to cover purely mental processes (and thus non-statutory subject matter under 35
U.S.C. §101), but Prater urged the court that, read in view of the Prater’s specification which
disclosed an analog device to perform the task, the claim must cover a statutory machine. The
CCPA agreed with Prater regarding reading claims in light of the specification, but viewed
the particular issue as a request to read a limitation into the claims, as opposed to interpret a
particular limitation in view of the claims.

8) TRAGEDY OF ANTI-COMMONS
The idea of the “anti-commons” was introduced to the law and economics literature by Heller
(1998)1 and Heller and Eisenberg (1998)2 using an analogy with Hardin’s “tragedy of the
commons.” Heller defined the anti-commons as a situation on which “multiple owners are
each endowed with the right to exclude others from a scarce resource, and no one has an
effective privilege of use.” The term was coined by Frank Michelman, who, challenging the
presumptive efficiency of private property, defined anticommons as “a type of property in
which everyone always has rights respecting the objects in the regime, and no one,
consequently, is ever privileged to use any of them except as particularly authorized by
others”. The tragedy of the anticommons is a type of coordination breakdown, in which a
single resource has numerous rightsholders who prevent others from using it, frustrating what
would be a socially desirable outcome.

44 | P a g e