Summary
The Delhi High Court ruled that employment agreements and internal IP policies can fulfill the 'proof of right' requirement under Section 7(2) of the Patents Act. The judgment in Nippon Steel Corp. v. Controller of Patents eases patent filing hurdles when formal assignments from deceased inventors are unavailable.
In the case of Nippon Steel Corporation v. Controller of Patents, the Delhi High Court set aside the Patent Office’s rejection of a patent application for lack of ‘proof of right’ from a deceased inventor. The Court held that an employment agreement combined with internal corporate policy and declarations was sufficient under Section 7(2) of the Patents Act to establish the applicant’s right to file the application.
Background
Nippon Steel Corporation filed Indian Patent Application No. 202117029591 titled ‘High-Strength Steel Sheet and Manufacturing Method of High-Strength Steel Sheet’ on July 1st, 2021. The application listed four inventors, one of whom-Mr. Kohichi Sano had passed away before the filing date. To comply with the proof of right requirement, Nippon submitted Form 1 signed by the other three inventors, along with a declaration enclosing the company’s Basic Regulations on Intellectual Property, which assigned employee inventions to the company. A request for examination was filed leading to a First Examination Report that raised objections, including lack of proof of right for Mr. Sano under Section 7(2). Nippon responded, asserting compliance through the filed documents. A hearing notice was then issued and at the hearing, Nippon presented oral arguments and later filed written submissions including an affidavit with the Employer-Employee Agreement dated July 1, 2021, between Nippon and Mr. Sano. However, the Controller refused the application, citing non-compliance with Sections 6(1)(b), 6(1)(c), and 7(2) of the Patents Act due to lack of a formal assignment from the deceased inventor or his legal representative.
Issues before the Court
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- Whether an employment agreement and internal corporate policy documents constitute valid ‘proof of right’ under Section 7(2) of the Patents Act.
- Whether the absence of a signed assignment from the deceased inventor or his legal representative invalidates the patent application.
Key Arguments
Nippon submitted that at the time of filing, Form 1 was executed by three inventors, accompanied by a declaration on company letterhead enclosing Article 8 of the Basic Regulations, which vests employee-developed intellectual property in the company. To address the Controller’s concerns, Nippon filed the Employer-Employee Agreement signed by Mr. Sano, with an English translation, showing that as an employee, his inventions were automatically assigned to Nippon. Further, Nippon contended that the Controller incorrectly rejected employment contracts as proof of right, contrary to Patent Office practices, as six prior applications with the same inventors and documents had been granted.
The Controller submitted that Nippon had not informed the Patent Office about Mr. Sano’s demise until the hearing, despite declaring it to the USPTO on May 24th, 2021, and failed to produce a death certificate. The Employer-Employee Agreement was disregarded, as there was no specific IPR Transfer Clause. The Controller asserted that Paragraph 12(i) of Form 1 requires inventors’ signatures or an assignment, which Nippon did not provide or execute before filing. Further, the Controller also contended that an assignment from Mr. Sano’s legal representative with proof of death was also not submitted.
Court’s observations and analysis
The Court noted that the main issue was whether the Employer-Employee Agreement and declaration suffice as proof of right under Section 7. The court stated that Section 68, which applies to the assignment of a granted patent, did not govern the present case. Instead, Section 7(2), which deals with the assignment of the right to apply for a patent, was applicable. The Court noted that the Employer-Employee agreement, which was duly signed by the deceased inventor, declaration, and internal policy, taken together, were sufficient to establish the ‘proof of right’ requirement under Section 7(2) of the Act. Relying on Kailash v. Nanhku & Ors., (2005) 4 SCC 480, the Court opined that the procedural laws were intended to subserve, and not to subvert, the cause of justice. The court also referred to the European Patent Guide and the USPTO Manual of Patent Examining Procedure, both of which allowed employment agreements as valid evidence of ownership. The Court also noted that six other patent applications with the same four inventors were accepted upon submission of the same declaration and Employer-Employee Agreement.
Conclusion:
The Court set aside the order and allowed the appeal. The Court directed the Controller to pass appropriate directions for the grant of the patent in accordance with the law.
Citation: Nippon Steel Corp. v. Controller of Patents, C.A.(COMM.IPD-PAT) 10/2025 (High Ct. of Delhi Dec. 24, 2025)
Article review and Accessibility review by: Gaurav Mishra