Summary
Daewoong Pharmaceutical Co. Ltd. ("Daewoong"), a South Korean pharmaceutical company, applied for a patent in India covering a crystalline form of a diphenylmethane derivative used as an SGLT inhibitor in diabetes treatment. The Controller of Patents rejected the application under Section 3(d) of the Patents Act, finding that the data on stability, solubility, and dissolution rate demonstrated only pharmacokinetic properties and fell short of proving enhanced therapeutic efficacy. On appeal before the Delhi High Court, Daewoong filed additional efficacy data by way of an affidavit, explaining that the Covid-19 pandemic had prevented timely submission before the Controller. The court allowed the additional material on record and remanded the matter to the Controller for a fresh Section 3(d) determination, directing that the application be treated as pending rather than refused. The ruling reinforces that Section 3(d) is an evidential threshold, and that exceptional circumstances may entitle an applicant to a second opportunity to meet it.
Background
Section 3(d) enhanced efficacy is the most contested criterion in Indian pharmaceutical patent law. The Patents Act, 1970 (“Patents Act”) bars the grant of a patent for a new form of a known substance unless the applicant demonstrates that the new form shows significantly enhanced therapeutic efficacy over the known form. Few provisions attract as much attention from innovator companies, generic manufacturers, public health bodies, and courts, because the outcome directly shapes whether incremental pharmaceutical innovations earn patent protection in India.
Daewoong Pharmaceutical Co. Ltd. (“Daewoong”), a South Korean pharmaceutical company, sought to cross that threshold for a crystalline form of a compound known as Formula c28, a diphenylmethane derivative that acts as an inhibitor of the sodium-dependent glucose cotransporter (SGLT). SGLT inhibitors are a medically significant class of compounds used in the management of type 2 diabetes. Daewoong filed Indian Patent Application No. 201817048074 in December 2018 as a national phase entry of a PCT application filed in June 2017. Three divisional applications were eventually carved out of the parent application; two, covering method claims, were subsequently granted by the patent office. The parent application, directed at a product claim for the crystalline Form A of Formula c28, met a different fate.
After examining the application, issuing a First Examination Report, conducting a hearing, and considering written submissions, the Controller of Patents refused the parent application by order dated January 4, 2022. The Controller cleared the inventive step objection under Section 2(1)(ja) of the Patents Act, accepting that the invention demonstrated inventive step over the cited prior art. However, the Controller held that the Section 3(d) barrier had not been crossed. Daewoong appealed to the Delhi High Court.
Issues
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- Whether Daewoong’s data on improved stability, non-hygroscopicity, solubility, and dissolution rate of crystalline Form A satisfies the requirement of Section 3(d) enhanced efficacy under the Patents Act, or whether such data constitutes only pharmacokinetic and physical property evidence falling short of the statutory standard.
- Whether additional efficacy data, not placed before the Controller during the original proceedings, could be admitted into the appellate record, and, if so, whether the court should itself evaluate that data or remand the matter for fresh determination by the Controller.
Daewoong’s Arguments
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- The crystalline Form A of Formula c28 shows clear advantages over the amorphous form disclosed in prior art, including improved stability, non-hygroscopic properties, higher solubility, and a superior dissolution profile
- A better dissolution profile leads directly to enhanced therapeutic efficacy as an SGLT inhibitor, because faster dissolution drives improved absorption and pharmacological action in the body
- The failure to submit complete clinical and pharmacological data before the Controller resulted from the Covid-19 pandemic, which severely disrupted pharmaceutical research and cross-border operations in both India and South Korea during 2020 and 2021, when the critical stages of examination were underway
- Submitting additional data and evidence before the appellate authority to overcome Section 3(d) objections is a recognised practice under Indian patent law, as the IPAB confirmed in University of Miami vs. The Controller of Patent (OA/33/2015/PT/KO), where it noted that filing additional documents and evidence to overcome objections raised by the Controller is permissible under Indian law and is consistent with practice in other jurisdictions as well
Controller’s Arguments
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- Amended claim 1 covers a crystalline form of a compound that the prior art already disclosed, used for pharmacological properties well-established in the field
- All comparative data submitted by Daewoong, covering stability, non-hygroscopic behaviour, solubility, and dissolution rate, represents pharmacokinetic parameters and physical property measurements; it does not constitute proof of enhanced therapeutic efficacy in the sense that Section 3(d)of the Patents Act demands
- The statutory threshold requires the applicant to demonstrate that the new form shows superior therapeutic efficacy against the known substance, and no conclusive evidence to that effect was placed on record before the Controller
Court’s Analysis and Observations
Section 3(d) as an Evidential Threshold, Not an Absolute Bar
The court observed that the Controller’s impugned order rejected the application not because the crystalline Form A was inherently incapable of satisfying Section 3(d), but because the evidence before the Controller at the time of its decision did not meet the evidentiary standard the provision requires. The court noted that the Controller acknowledged Daewoong’s data showing improvements in stability, non-hygroscopicity, solubility, and dissolution rate, but characterised that data as pharmacokinetic and physical property evidence distinct from therapeutic efficacy in the statutory sense. The court’s observation here is significant: the Section 3(d) enhanced efficacy requirement is an evidence-driven inquiry, and a failure to produce the right evidence is not the same as a conclusion that the right evidence cannot exist.
Admitting Additional Evidence and the Scope of Appellate Review
Once the court took the additional efficacy data on record during the pendency of the appeal, the question was how that material should be dealt with. The court observed that an appellate court receiving additional evidence may either assess that evidence itself, after giving the other side a reasonable opportunity to respond, or refer the matter to the authority below to record and evaluate the evidence. The court found that the Section 3(d) question involves a technical and evidentiary assessment of pharmaceutical data, a task for which the Controller is best placed, particularly where the data was not before the Controller at all during the original proceedings. The court therefore opted for a limited remand, confined to the Section 3(d) issue.
The court also took note of the IPAB’s reasoning in University of Miami vs. The Controller of Patent, which confirmed that filing additional documents and data to overcome Controller objections is permissible under Indian patent law and consistent with practice across other jurisdictions. That precedent lent further support to the view that the Section 3(d) question deserved to be reconsidered rather than foreclosed.
The Pandemic Rationale
The court found Daewoong’s explanation for the delayed submission credible. The court observed that the examination proceedings before the Controller coincided with the peak of the Covid-19 pandemic, which created genuine operational difficulties for a Korean pharmaceutical company seeking to gather and submit clinical and efficacy data into proceedings in India. Treating this as an exceptional circumstance, the court held that justice required giving Daewoong a meaningful opportunity to place the relevant data before the authority that would actually decide on it.
Limiting the Remand to What Remains Open
The court was careful to preserve what the Controller had already decided. The inventive step objection under Section 2(1)(ja) of the Patents Act had been expressly cleared in the impugned order, and the court directed that this finding be maintained and not reopened by the Controller on remand. The remand was therefore surgical: the Controller was to reconsider only the Section 3(d) question in light of the additional data in Daewoong’s affidavit, with a fresh hearing and a decision within four months.
Findings
In view of the observations and the arguments presented by both parties, the Delhi High Court held that:
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- The Controller’s rejection of the parent application turned entirely on the absence of adequate efficacy evidence and not on a substantive finding that crystalline Form A of Formula c28 was incapable of satisfying the Section 3(d) enhanced efficacy requirement under the Patents Act
- The additional efficacy data submitted by Daewoong by way of affidavit was validly brought on the appellate record and warranted fresh evaluation by the Controller before a final determination on Section 3(d) could be made
- The matter was remanded to the Controller of Patents for a de novo determination of the Section 3(d) question based on the affidavit and additional data submitted by Daewoong
- The Controller was directed to issue a fresh hearing notice to Daewoong or its agent, consider the additional data, and decide the Section 3(d) issue within four months of receipt of the order
- The status of Indian Patent Application No. 201817048074 was directed to be corrected from “refused” to “pending” in the patent office records within seven days
- The finding on inventive step under Section 2(1)(ja) of the Patents Act, reached in Daewoong’s favour by the Controller in the original order, was maintained and was not to be disturbed on remand
Case Citation: Daewoong Pharmaceutical Co. Ltd. & Anr. vs. Controller General of Patents Designs and Trademarks, C.A.(COMM.IPD-PAT) 23/2022, Delhi High Court, decided on March 23, 2026. Available at http://indiankanoon.org/doc/146023333/
Authored by Gaurav Mishra, Patent Attorney, BananaIP Counsels