Deciphering Product-By-Process Claims under Patents Act: Insights on Novelty and Inventiveness

In a recent judgment, in an appeal which involved a dispute between Vifor International Ltd. (appellant) and Dr. Reddy's Laboratories Ltd. (respondents) [2024 SCC OnLine Del 784] the division bench of the Delhi High Court issued a significant directive regarding the interpretation of "product-by-process" claims under the Indian Patents Act.

In the Indian Patents Act, 1970, protection is sought over either a product or a process. ‘Product by process’ claims is a type of product claim used when the novel product cannot be adequately described solely by its characteristics and requires to be described by the description of its process. Even though the product is described using a process, the claimed subject matter still represents a novel and inventive product.

Vifor held the patent to manufacture Ferric Carboxymaltose (FCM), which is used  for intravenous treatment of iron deficiency and iron deficiency anemia. During the validity period of its patent, Vifor routinely initiated legal proceedings against infringing companies.

In the instant case, Vifor filed an infringement suit against Dr. Reddy’s Laboratories Ltd before the Delhi High Court.

Dr. Reddy's Laboratories argued that it did not infringe upon Vifors’ patent because its process of producing FCM differed from the process outlined in the patent's claims.

A single judge, vide an order dated July 24, 2023, refused to grant an interim injunction to Vifor and determined that a ‘product-by-process’ claim fundamentally constitutes a "process" claim for achieving the specified product. 

The Court held that Dr. Reddy's Laboratories was deemed not to infringe the FCM patent since each party claimed to utilize a different process for preparing FCM from the process specified in claim 1 of the patent.

Aggrieved by the order, Vifor preferred an appeal before the division bench of the Delhi High Court.

Before the division bench, Vifor argued that despite the expiration of the patent in October 2023, they have benefitted from its monopoly for 12 years. Vifor highlighted FCM as a new and novel product not known in prior art.

Vifor submitted that the said patent was for a novel water-soluble iron carbohydrate complex of iron and oxidation product, comprising of one or more maltodextrins. They also submitted the said patent was filed as both, ‘a product claim’ and ‘a product-by-process claim’.

Vifor contended that, according to the 'Guidelines for Examination of Patent Applications in the Field of Pharmaceuticals', the patentability of a ‘product-by-process’ claim depends on the product itself, rather than its process. Vifor challenged the single bench’s decision,  inter alia, on the ground that it failed to address Vifors’ claim concerning the novelty and inventiveness of FCM.

The respondents (Dr. Reddys’ Laboratories Pvt ltd.), argued that even if the outcome of the claim is a product, the scope of the monopoly is not determined solely by the product itself but rather by the wording used in framing the claim. In view thereof, the respondents contended that the Act recognizes only two categories of inventions, namely, a product or a process. A reading of claim 1 filed by Vifor in the Patent office showcases a process, the respondents submitted.

The division bench allowed the present appeals and set aside the impugned order dated July 24, 2023. 

The division bench made important observations with regard to the ‘Product-by-process’ claims:

1. The division bench observed that the learned single judge had erred in understanding the product-by-process claims. In its findings, the division bench opined that the impugned order failed to acknowledge the essence of the appellants' position vis-à-vis the guidelines of the Indian Patent Office (IPO), European Patent Office (EPO) and United States Patent and Trademarks Office (USPTO) which collectively indicated that the appellant categorized FCM as a ‘product-by-process’ patent. The Court further added the fundamental fallacy in the judgment arises from the judge's perception of a difference between a "product by process claim" and a "pure product claim," and this fundamental misunderstanding forms the basis of the judgment's unsustainability.

2. The division bench's decision mainly focused on Section 48 of the Indian Patents Act which outlines the exclusive rights (for a product and a process) patentees enjoy once their invention is granted a patent. In that context, the bench rightly pointed out that, “The mere adoption of the product-by-process format would not result in a novel product being downgraded to Section 48(b) of the Act. It would inevitably have to be tested on principles enshrined in Section 48(a). Mere usage of process terms cannot be accepted as limiting nor is there any justifiable rationale to accept the advocated distinction between validity and infringement. If the rule of necessity were to compel the applicant to submit an application embodying a product-by-process claim, there would appear to be no justification to stultify the extent of protection"

3. Further, the division bench also emphasized that such claims should be examined with a focus on the creation of a "novel and non-obvious product," regardless of whether the applicant describes the invention through a process. A product-by-process patent is founded on a claim relating to a novel product whose unique attributes are sought to be explained by reference to its manufacturing process. Stating that the products must always be defined by their composition and structure would be entirely inaccurate and rigid, the division bench rightly observed, “It would be wholly incorrect to hold that products must necessarily and invariably be described by their composition and structure or at least recognize it to be an inflexible precept. That would go against the underlying compulsions which govern product-by-process claims. Patent Registries and courts globally acknowledge and accept the possibility of structurally indefinable products and have propounded the ― rule of necessity with respect to product-by-process claims. As understood by the IPO Guidelines, product-by-process patents are neither unconventional nor unknown and the Indian patent regime itself contemplates product-by-process claims."

   Furthermore, a widely recognized principle, reflected in guidelines from organizations like the IPO, EPO, and USPTO, states that a product-by-process claim will only be granted legal protection, if the product itself is novel, the Court noted.

4. The division bench opined it would be completely wrong to insist that products must always be described solely by their composition and structure, or to see this as an inflexible rule. This would contradict the essential principles of product-by-process claims. Further, it added that patent offices and courts around the world recognize and accept that some products cannot be fully described in terms of their structure, and they have established the "rule of necessity" for such cases. As explained in the IPO Guidelines, product-by-process patents are not unusual or unfamiliar, and the Indian patent system itself allows for such claims. The Rule of Necessity means acknowledging that there could be products that cannot be fully described in terms of their structure. Product-by-process patents are common and recognized in the Indian Patent System, not something strange or uncommon.

5. The Court clarified that there is a difference between a product that is "obtained by" a process and one that is "obtainable by" a process. When we say "obtainable by," it simply describes the process without implying that the process itself is what is unique about the invention (the basis of this can be found under Section 48(a) of the Act). On the other hand, "obtained by" indicates a direct connection between the product and the process. In Section 48(b), this phrase is linked with process claims. Even if an inventor chooses to describe their invention through a manufacturing process, a product-by-process claim still needs to prove that the product itself is new and inventive. It must meet the standards outlined in Section 48(a). Simply using process terms is not enough to limit the claim. The Court relied upon Kirin Amgen Inc v. Hoechst Marion Roussel Ltd., [2004] UKHL 46 (‘Kirin Amgen’) wherein a "product-by-process" was explained by the House of Lords. This concept allows the inventor of a new process to not only take legal action against a manufacturer who copied their process but also against someone who sold a product made using that process. Additionally, the case of Kirin Amgen acknowledged a principle followed by the European Patent Office (EPO) which allows the claiming of ownership of a product based on the process used to make it, especially if the product is new and its properties cannot be described in typical scientific terms.

6. The Court observed that the patentability of a product can always be challenged, regardless of the terms used to describe the process, whether it's about validity or infringement. In fact, if someone defends themselves against a claim of infringement by arguing that the patent should not have been granted in the first place, they can claim that it lacks novelty or is not eligible for a patent for other reasons. When determining patentability, it is important to assess the product independently of how it is named or described in terms of the manufacturing process. Just because a chemical formulation has been assigned an International Non-Proprietary Name (INN), it does not automatically prove that it is a patented invention. At best, the assignment of an INN supports the claim that a patentable product has been created, but it does not serve as conclusive evidence of the invention.

The division bench of the Delhi High Court upholds the requirements outlined in Clause 7.9 of the "Guidelines for Examination of Patent Applications in the Field of Pharmaceuticals" regarding ‘product-by-process claims. The division bench's ruling has provided clarity on such claims and has emphasized that the focus should primarily be on the product itself, with the process details not limiting the product's scope.

Therefore, both the assessment of patentability and infringement for product-by-process claims should concentrate on the product features outlined in the claim. The division bench also acknowledged that several technical documents had not been considered.

Further, the ruling serves as a fresh evaluation or reconsideration of product-by-process claims within the framework of Indian Patent Law. It lays down a precedent as to how such claims should be understood and applied in the context of Indian patent regulations.

About the authors: Mahua Roy Chowdhury is the Managing Partner of Royzz & Co. Gauri Phulambrikar is an Associate of the Firm.