In the intricate world of intellectual property, patent disputes often hinge on the delicate balance between innovation and prior art. The case of Annikki GmbH v. Assistant Controller of Patents and Designs, adjudicated by the Madras High Court, exemplifies this tension. Annikki GmbH, an Austrian company, sought to overturn the rejection of its patent application for a novel non-fermentative process to produce xylitol from lignocellulosic material. The appeal, filed under Section 117-A of the Patents Act, 1970, challenged the Assistant Controller’s order dated 10.12.2019, which dismissed the application on grounds of lacking novelty, inventive step, and falling under the exclusionary provisions of Section 3(d). This case study delves into the factual and procedural intricacies, the legal issues at play, the arguments of the parties, the judicial reasoning, and the broader implications of the court’s decision, offering a comprehensive analysis of a pivotal moment in patent law adjudication.

Detailed Factual Background: Annikki GmbH, based in Graz, Austria, filed Indian Patent Application No. 467/CHENP/2012, titled “Process for the Production of Carbohydrate Cleavage Products from a Lignocellulosic Material.” The invention proposed a non-fermentative method to produce xylitol, a valuable sugar alcohol, from lignocellulosic material. Unlike traditional fermentative processes, Annikki’s method emphasized high selectivity in lignin degradation, reduced enzyme costs, and limited energy expenditure. The process utilized alcohol and treated lignin as a valuable byproduct rather than a mere energy source for fermentation, marking a significant departure from conventional techniques.

The complete specification highlighted these advantages, particularly on internal pages 5 and 7, underscoring the technical and economic benefits of the invention. However, the Assistant Controller of Patents and Designs rejected the application, citing prior art documents (D1 to D6) that allegedly rendered the invention obvious and lacking inventive step. The rejection also invoked Section 3(d) of the Patents Act, claiming the process was a mere combination of known processes without enhanced efficacy.

Detailed Procedural Background:
The procedural journey of the patent application began with the issuance of the First Examination Report (FER) on 30.11.2017, which raised objections based on lack of novelty and inventive step, referencing prior art documents D1 to D6. Annikki responded on 28.05.2018, submitting amended claims to address the objections. A hearing notice dated 31.05.2018 maintained the FER’s objections, leading to a hearing on 13.07.2018. Post-hearing, Annikki filed written submissions on 09.08.2018. Despite these efforts, the Assistant Controller issued the impugned order on 10.12.2019, rejecting the application.

The order relied heavily on prior art D5, which was interpreted as disclosing a non-fermentative process, and combined elements from D1 to D4 to argue that the invention lacked inventiveness and was barred under Section 3(d). Aggrieved, Annikki filed a Transferred Civil Miscellaneous Appeal (T)CMA(PT) No. 70 of 2023 before the Madras High Court, seeking to quash the order and secure the grant of the patent.

Issues Involved in the Case:
The case presented several critical legal issues for adjudication. First, did the Assistant Controller err in concluding that the invention lacked novelty and inventive step based on prior art documents D1 to D6? Second, was the rejection under Section 3(d) of the Patents Act, which excludes the mere use of a known process unless it results in a new product or employs a new reactant, legally sustainable? Third, did the Assistant Controller adequately consider Annikki’s responses to the FER and the hearing submissions, or were the reasons in the impugned order inconsistent with prior objections? Finally, did the non-fermentative nature of Annikki’s process constitute a technical advancement over the cited prior art, warranting patent protection? These issues required a meticulous examination of the prior art, the statutory framework, and the procedural fairness of the patent examination process.

Detailed Submission of Parties:
Annikki’s presented a robust defense of the invention’s patentability. They argued that the invention’s non-fermentative process for xylitol production was novel and inventive, as it avoided fermentation, reduced enzyme costs, and enhanced lignin utilization. Referencing the complete specification, they highlighted the process’s high selectivity and energy efficiency.

Addressing prior art D5, they contended that the Assistant Controller misconstrued it as non-fermentative, pointing to Figure 3 and column 7 of D5, which clearly described a fermentative process. For D1, titled “Selective Solvent Delignification for Fermentation Enhancement,” they noted its explicit reliance on fermentation, with lignin used as an energy source, as evidenced by Table 3. D2 was dismissed as irrelevant due to its alkali treatment, distinct from Annikki’s method.

D3 was argued to operate at significantly higher temperatures, and D4 was criticized for involving fermentation in its fourth step. Annikki further alleged procedural lapses, asserting that the Assistant Controller ignored their FER response and raised new objections in the impugned order without prior notice. They supported their claim of technical advancement with a declaration from Mr. Mag. Ortwin Ertl, the co-inventor and CEO, which included experimental data not previously submitted due to the absence of specific objections.

Detailed Discussion on Judgments and Citations: The court’s analysis referenced one key precedent, Novozymes v. Assistant Controller of Patents & Designs (2023: MHC: 4261), to interpret Section 3(d) of the Patents Act. In Novozymes, the Madras High Court elucidated that Section 3(d) comprises three limbs, with the third limb excluding the “mere use of a known process” unless it results in a new product or employs a new reactant. The court applied this interpretation to scrutinize the Assistant Controller’s reliance on Section 3(d). Annikki’s cited Novozymes to argue that combining processes from multiple prior arts (D1 to D5) did not constitute a “known process” under Section 3(d), as the exclusion applies only to a single known process.

Detailed Reasoning and Analysis of Judge:
The Court meticulously dissected the Assistant Controller’s order, identifying multiple errors in law and fact. On Section 3(d), the court found the Assistant Controller’s conclusion unsustainable. The impugned order’s assertion that Annikki’s process was a mere combination of known processes from D1 to D5 was flawed, as Section 3(d)’s third limb applies to a single known process. The court reasoned that combining distinct processes from multiple prior arts did not qualify as a “known process” unless previously integrated, rendering the objection legally invalid. This analysis leaned heavily on the Novozymes precedent, which clarified the scope of Section 3(d)’s exclusions.Regarding the inventive step, the court scrutinized the Assistant Controller’s reliance on D5, which was erroneously interpreted as disclosing a non-fermentative process. The court examined paragraph 3 of column 7 and Figure 3 of D5, confirming that D5 involved fermentation, contrary to the impugned order’s findings.

This misinterpretation undermined the objection of obviousness. The court also criticized the Assistant Controller’s reliance on “common general knowledge” to assert that enzyme-based xylose degradation was obvious, noting the absence of cited sources or materials to substantiate this claim. For D2, the court found the Assistant Controller’s conclusion that it was analogous art illogical, given its focus on ethanol production rather than xylitol, and the lack of explanation for its relevance.The court further addressed procedural irregularities, noting that the Assistant Controller failed to consider Annikki’s FER response and introduced new objections in the impugned order without prior notice. This lack of fairness necessitated judicial intervention. Annikki’s submission of Mr. Ertl’s declaration, which included experimental data supporting the non-fermentative process’s technical advantages, was deemed significant. Since this evidence was not presented earlier due to the absence of specific objections, the court found it an additional reason for remanding the matter.

Final Decision: The Madras High Court set aside the impugned order dated 10.12.2019 and remanded the matter to the Patent Office for reconsideration. The court stipulated that a different officer, not the one who issued the original order, should conduct the review to avoid bias. The Patent Office was directed to provide Annikki a reasonable opportunity to present its case and issue a reasoned decision within four months. The court refrained from opining on the patent application’s merits, ensuring an impartial re-evaluation. The appeal was disposed of without costs.

Law Settled in This Case: This case clarified the application of Section 3(d) of the Patents Act, particularly its third limb, which excludes the “mere use of a known process.” The court established that combining processes from multiple prior arts does not constitute a “known process” under Section 3(d) unless previously integrated, preventing overbroad rejections of patent applications. It also underscored the importance of procedural fairness in patent examinations, requiring controllers to consider applicants’ responses and provide consistent objections. Additionally, the judgment reinforced the need for evidence-based conclusions when asserting obviousness or relying on common general knowledge, setting a higher standard for patent office determinations.

Case Title: Annikki GmbH Vs Assistant Controller of Patents and Designs: Date of Order: 24.04.2025: Case No.: (T)CMA(PT) No. 70 of 2023 (OA/19/2020/PT/CHN): Name of Court: High Court Madras: Name of Judge: Senthilkumar Ramamoorthy J.

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Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: ajayamitabhsuman@gmail.com, Ph no: 9990389539