Section 3(d) of the Indian Patents Act, 1970 was never so controversial till the insertion of an amendment in 2005, which states that “the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance". The Explanation to this amendment is that “For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance unless they differ significantly in properties with regard to efficacy" deepen this controversy further.

In a recent case, the Madras High Court looked into how far a claim for the biochemical composition of different elements can be stretched to apply the exceptions under Section 3(d).[ Novozymes Vs Assistant Controller of Patents (T) CMA (PT) No.33 of 2023 in(OA/6/2017/PT/CHN)] The appeal was filed to challenge the refusal of the patent application primarily on the grounds that the claimed invention is in respect of a known substance which is not patent-eligible under Section 3(d) and that the composition claims (claims 8 to 11) fall within the scope of Section 3(e) of the Patents Act because the composition is a substance obtained by the mere admixture of ingredients.

Analysis and decision on the applicability of Section 3(d)

In this appeal case, Justice Senthilkumar Ramamoorthy dissected the provisions of Section 3(d) and observed that “The principal clause of Section 3(d) contains about three limbs, which are separated by the disjunctive “or”.

The three limbs are as follows:

1. The mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance.
2. The mere discovery of any new property or new use for a known substance.
3. Of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.”

Justice Ramamoorthy went on further to add that "there are four and not three limbs because of the placement of the disjunctive "or " before the phrase "new use for a known substance" in what I labelled above as the second limb, I conclude that the second limb is one limb consisting of two segments because the subject of both segments (i.e. "new property" or "new use") of the said limb is "known substance”.

This break-up of Section 3(d), according to the Court, reveals that both the first and second limbs deal with and govern claims relating to known substances. While the first limb deals with and governs claims relating to new forms of a known substance, the second deals with and governs new properties or uses.

Is Section 3(d) applicable to Biochemicals?

The primary question before the Court in this case was whether the provisions under Section 3(d) apply to biochemical substances like 'Phytase' or not. The appellant contended that:

“the Explanation to Section 3(d) enumerates several derivatives of chemical substances. After such enumeration, the generic expression “and other derivatives of known substance” is used. After contending that all the enumerated derivatives fall within the genus “derivatives of chemical substances”, she relied on the ejusdem generis principle and contended that the generic expression “and other derivatives of known substance” should be limited to derivatives of chemical substances and that it should not be extended to biochemical substances such as phytase.

The respondent Controller in the present case contented that:

“Section 3(d) of the Patents Act uses the expression “known substance” and not “pharmaceutical substance”. Therefore, it was contended that Section 3(d) is not limited to pharmaceutical products. Since phytase is a biochemical substance, the respondent submitted that it falls within the scope of Section 3(d) and, in particular, the Explanation thereto. With reference to the Explanation, the respondent contended that the expression “and other derivatives of known substance” also applies to variants of phytase because phytase and its variants are biochemical substances. It was further submitted that there is nothing in the text of the Explanation that limits the scope thereof to synthesised chemicals.”

The Court considered the ruling of the Madras in Novartis DB, where refusal of a claimed invention for the beta crystalline form of Imatinib Mesylate under Section 3(d) was challenged on the grounds that this amendment violates the Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPS Agreement) and Article 14 of the Constitution of India. The Division Bench (DB) upheld the validity of Section 3(d) and ruled that:

“.... The amended section is not confined only to drugs as it deals with machines and apparatuses as well. However, we are clear in our mind that the portions of the amended section and the Explanation under attack are definitely referable only to the pharmacology field, namely, drugs." (emphasis added)

The court also looked into the ruling of the Supreme Court in invalidation proceedings in Novartis SC and observed that:

“15. Thus, it was held in Novartis SC that the amendment of Section 3(d) by the Patents (Amendment) Act, 2005 was primarily and especially intended to deal with pharmaceutical products and agrochemical products. It does not, however, follow from the above that it only applies to pharmaceutical and agrochemical substances and not to biochemical substances. It was further held by the Supreme Court that the test of efficacy under Section 3(d) would vary depending on the product under consideration and that, in the context of pharmaceutical products, it means therapeutic efficacy. “

The Court considered the rival contention and the ruling of "Novartis DB" and "Novartis SC" and held that:  

“18. The limited fallout of the above discussion is that the appellant may claim that the phytase variants for which it seeks a patent are new forms of a known substance. Even so, the appellant would not be entitled to a patent unless the appellant passes the filter of “result in the enhancement of known efficacy of that substance" prescribed in the substantive provision dehors the Explanation.”

It clearly means that Section 3(d) bar also applies to biochemical products, including phytase and its variant in the 'Novozymes’ case. Therefore, the applicability of Section 3(d) exception to phytase variants, as claimed in Claim 1-7, cannot be ruled out. This means that this invention falls within the hitting line of Section 3(d).

Applicability of Section 3(d) to specific kind of efficacy

The last question before the Court in relation to the dispute on the limits of the applicability of Explanation was whether Section 3(d) applies to any specific type of efficacy. To answer this question, the court used the ruling in the Novartis case, where the Supreme Court concluded that the test of efficacy would be different depending on the function, purpose or utility of the product. The respondent Controller contended that phytase is an enzyme, and the enhancement of efficacy means no more than enhancement of the enzymatic activity of the phytase variant. Plainly stated the respondent Controller refused claims 1-7 for the reason that the expression “enhancement of the known efficacy of the substance” should be construed as limited to enhanced hydrolysis of phytate resulting in improved breakdown of the indigestible form of phosphorus to a digestible form.

The appellant contended that the enhanced thermostability, which is disclosed and supported by the description in the specification, should be considered by the Controller to assess the applicability of Section 3(d) explanation. The Court found sufficient material evidence to support and considered the improved thermostability of the phytase variants as enhanced efficacy and concluded that.

“Since increased thermostability precludes denaturation and enables production, storage and sale in pellet form, it enhances the known efficacy of the enzyme in aiding digestion, especially when used in animal feed. In my view, there is nothing in the text or context of Section 3(d) which supports the interpretation that enhancement of the known efficacy of the substance should be restricted to engineering or prospecting variants of phytase with inherently greater enzymatic activity over the reference phytase.” (Emphasis added)

Quantum of efficacy 

This case would also be known for the Court's ruling on the quantum of efficacy. In this case, the court answered the question relating to marginal improvement of efficacy. In this context, the court ruled that "The substantive provision, by contrast, only requires enhancement of the known efficacy with no indication as regards margin of enhancement.” The Court also quipped that. 

“Given that Section 3(d) applies to new forms of a range of known substances, even by way of guidelines, it may not be possible to fix a numerical value or percentage of enhancement that applies across the board, and this appears to be the position taken by the Patent Office in its guidelines.

Accordingly, the only workable solution appears to be for the patent applicant “to establish that there is reasonable enhancement of efficacy to the satisfaction of the Controller of Patents, and reasonable enhancement may be defined as enhancement that is material from an improvement of efficacy perspective.” The Court applied this reasoning to allow the claims 1-7 of the patent in dispute as the Court found that “numerical values were assigned to the claim of enhanced efficacy by adopting measurement units such as IF, and no objections were raised as regards materiality by the respondent.

Takeaway points  

The applicability of Section 3(d) to a particular case depends on the facts of that case. There are no rigid guidelines on what is essential to satisfy the requirement of enhanced efficacy of known substances. In the Phytase case, the court found the enhancement in thermostability supported by numerical data is sufficient to conclude that the claimed invention of the appellant satisfies the requirement of enhancement of the known efficacy of claimed phytase variants. The Court also ruled that there is no bar on the applicability of Section 3(d) to biochemicals. The expert opinion would be handy to get favourable results in relation to patent eligibility of the biomedical and biochemical products if they are likely to fall under Section 3(d).