The product-by-process tightrope: Striking a balance between granting and enforcing patents

Recently, in a landmark decision, the Division Bench of the Delhi High Court in Vifor (International) Limited and Anr. v. MSN Laboratories Pvt. Ltd. and Anr., FAO(OS)(COMM) 159/2023, shed much-required clarity on product-by-process claims (“PBP claims”) in India by locating it within the Patents Act, 1970 (hereinafter referred to as the “Act”), and explaining the scope of such patents, and the tests to be applied during their examination and their enforcement.

The Division Bench disagreed with the decision of the single judge, who had ruled that while analysing infringement claims, patent protection for PBP claims is limited to the specific process claimed in the patent, rather than the product as a whole. A summary of the single judge’s decision can be accessed here.

The Court, in consonance with the foreign decisions in the EU and US, observed that PBP claims must also define a novel and non-obvious product and that its patentability cannot depend on the novelty and non-obviousness of the process limitations alone. As regards the scope of PBP claims, the Court held that even though PBP claims employ process terms, they are only an aid to explain the novel attributes of a new product, and therefore, the patent should not be limited to the process claims.

The Court also recognized that the tests employed while assessing the inventive characteristic of a product of a PBP claim should also be applied while adjudicating the infringement allegations of such a claim, and two distinct tests cannot be applied. The Court’s rationale was that since an applicant is required to justify the novelty and non-obviousness of a product while assessing the patentability of a PBP claim, a court cannot limit enforcement of the same PBP claim to the process after the patent has been granted.

Difference in claim construction in patentability v. enforceability of product-by-process claims

At the outset, the Division Bench in Vifor v. MSN Laboratories held that since PBP claims pertain to a novel and inventive product, it will fall within the ambit of Section 48(a) of the Act. The Court also opined that while Section 48(b) of the Act, which describes process terms, creates a statutory bar to prevent third parties from using the patented process, it does not adopt the “obtainable by” language, which is distinct from the “obtained by” language in a claim. Therefore, allegations of infringement of PBP claims containing an ‘obtainable by’ language cannot be confined within the ambit of Section 48(b) of the Act, and, thus be, restricted to the process terms of the PBP claim. As per the Court, the term “obtained by” conveys a direct link between the product and the process, and finds a place within the confines of Section 48(b) of the Act. The term "obtainable by" language conveys a descriptive process by which the claimed product could be manufactured, which is not necessarily the inventive element of the product.

In the ruling in Hospira (UK) Limited v. Genentech, Inc., the Court held that where the claim uses “obtained by” or synonymous language, a product will result in infringement if it is obtained from the recited process. However, where the claim uses “obtainable by” or synonymous language, such a claim is infringed if the resultant product has every characteristic which is the inevitable consequence of the process specified in the claim.

Therefore, as per the decision in Hospira, the jurisprudence in the United Kingdom follows that “obtained by” and “obtainable by” PBP claims are both treated equally to determine the novelty of a patent (since the product is assessed irrespective of the method used to make it), but for infringement, a claim with “obtainable by” language has a broader scope and confers greater protection to the product.

The Division Bench in Vifor v. MSN Laboratories, while discussing the decision in Hospira, noted that it is an incorrect reading of the decision to contend that the principles of claim construction which may apply while answering a question of patentability would not be relevant in actions for infringement. Instead, as per the Division Bench, the decision in Hospira lays emphasis on the need to strike a balance between the ‘clarity and fairness’ of claim construction, especially in situations where the applicant is unable to identify a characteristic or parameter disclosed in the patent except by way of an “obtainable by” process definition. As per the Division Bench, it is incorrect to place a plea of infringement of PBP claims within the confines of Section 48(b) of the Act and deprive inventive products of the protection provided by the Act.

Diversion from the decision in Abbott Laboratories v. Sandoz, Inc

In the year 2009, an en banc panel of the United States Court of Appeals in Abbott Laboratories v. Sandoz, Inc., 566 F.3d 1282, 1293 (Fed. Cir. 2009) (“Abott Labs”), clarified the conflicting US rulings for the analysis of PBP claims in infringement actions as per the previous decisions in Scripps Clinic & Research Foundation v. Genetech, Inc., 927 F.2d 1565 (Fed. Cir 1991) (“Scripps”) and Atlantic Thermoplastics Co. v. Faytex Corp., 970 F.2d 834 (Fed. Cir. 1992) (“Atlantic Thermoplastics”). In Scripps, the Federal Circuit Court had held that while analysing PBP claims, they should be construed the same way for validity as for infringement, and that PBP claims should not be limited to the process set forth in the claims. Whereas, in Atlantic Thermoplastics, the court had held that the PBP claims are limited by the recited claims.

The majority in Abbott Labs overruled the decision in Scripps and held that PBP claims are not infringed by products made by processes not meeting the claimed process limitations. The panel acknowledged that while determining the validity of a PBP claim, the focus is on the claimed product and not the process of making it. However, in determining infringement of a PBP claim, the focus is on the process of making the product as much as it is on the product itself. The panel also held that the use of the phrase “obtainable by” in Abbott’s patent also did not provide a “free pass” from the product-by-process rule. Therefore, in case someone makes an identical product from a different process, or if the identical process does not result in the claimed product, then the PBP claim is not infringed. However, the panel in Abbott Labs did not clarify whether the process steps affect the validity of PBP claims, or whether different rules of interpretation should guide the validity and infringement of PBP claims.

Soon after, a three-judge panel of the Federal Circuit Court in Amgen Inc. v. F. Hoffman-La Roche Ltd., 580 F.3d 1340, held that in determining the validity of a PBP claim, the focus is on the product and not the process of making it, whereas in determining infringement of that claim, the focus is on the process of making the product as much as it is on the product itself. The court reasoned for its difference in the approach on the rationale that a product in the prior art made by a different process can anticipate a PBP claim, but an accused product made by a different process cannot infringe a PBP claim.

Even though the decisions in Abbott Labs and Amgen Inc. have not yet been overruled, the decisions forced jurists in the USA to question the benefits of drafting their patent claims as PBP claims, since every applicant of a PBP claim would be required to demonstrate the patentability of the product independent of its process, which would limit the enforcement of rights against infringement only to products that have been made by the cited process.

The Division Bench in Vifor v. MSN Laboratories did not agree with the majority decision in Abbott Labs, and noted that the decision did not find acceptance in any other jurisdictions as well. As per the Division Bench, it is unjustified that while an inventive characteristic of a product sets it apart from the claimed subject matter and prior art, the same should be disregarded when it comes to infringement analysis. It recognized that such an interpretation would lead to a situation where while a patent may be validly accepted to be a product at the stage of grant, it will become confined to a process for the purposes of examining infringement.

Striking a balance between public interest and granting patent monopoly rights

It is usually understood that when any entity - especially those serving the public such as pharmaceutical companies or energy conservation companies - is accorded patent protection for a manufacturing process instead of the product itself, it allows such companies to protect their innovative manufacturing method while enabling other companies/ individuals to develop alternative processes to arrive at the same product.

The balancing act between public interest and patent monopoly rights is clear for traditional process patents. However, the developing jurisprudence on the enforceability of PBP claims makes the balancing act a bit tricky. This is because, a patentee can claim a particular process for manufacturing a particular product in its patent application, and confine the scope of the patentability of the product to the unique characteristics derived from the process of making the product. However, it is given a free reign to enforce its patent with PBP claims against manufacturers of the same product who might have used different processes, thereby stifling public interest. While public interest cannot override the well-established principles of claim construction of patents that a court has to consider while considering infringement claims, courts have to consider the harm to innovation and accessibility of a product that may result from the adjudication of PBP claims.

To address these concerns, the Division Bench enunciated the circumstances in which PBP claims would be entertained in order to balance the interests of the inventor while also securing the public interest so that a claim does not travel beyond the invention. The Division Bench elucidated that the ‘rule of necessity’ should be postulated, and PBP claims would merit acceptance only where the product is indefinable except when explained alongside a process of manufacture, i.e., where the structures of the product are indefinable at the time of patent filing, and where an applicant is constrained to resort to process terms in order to render sufficient clarity on the inventive qualities of the claimed product which would define and regulate the grant. As per the Division Bench, this would incentivise acceptance of novel and inventive products while also balancing the public interest which would be impacted by the grant of a patent.

Conclusion

The decision of the Division Bench in Vifor v. MSN Labs will definitely pave the course of understanding the claim construction and scope of PBP claims in India. While the decision has stayed silent as to whether applicants would be granted protection for the process directed to produce the product under a PBP claim, it aims to steer clear of the decision in Abbott Labs which resulted in legal jurists viewing PBP claims to only have limited benefits. By locating the scope of PBP claims within the Act, the decision will assist in claim construction of PBP claims in the future by focusing the analysis on the novelty of the product. The judgment is also significant in making the consideration of the ‘rule of necessity’ essential for the acceptance of any PBP claims, as it would assist courts in striking a balance between the public interest and innovators’ right of monopoly over the patent.

About the authors: Urfee Roomi is a Partner and Anuja Chaudhury is a Senior Associate at Sujata Chaudhri IP Attorneys.

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