The Delhi High Court recently ruled that an employment agreement signed by a deceased inventor serves as a valid ‘Proof of Right’ document, overturning the Patent Office’s rejection. This decision in Nippon Steel Corporation v. Controller of Patents clarifies procedural requirements for corporate patent applicants. It emphasizes substance over hyper-technical form, in establishing ownership during prosecution.
Case Background
Nippon Steel filed Indian Patent Application No. 202117029591 on July 1, 2021. The application concerned a proposed invention titled “High-Strength Steel Sheet and Manufacturing Method of High-Strength Steel Sheet,” named four inventors— Hiroyuki Kawata, Eisaku Sakurada, Kohichi Sano, and Takafumi Yokoyama— all employees of Nippon Steel. Notably, inventor Kohichi Sano had passed away before the filing. His death had been reported to the U.S. Patent Office in May 2021 but was not immediately disclosed to the Indian Patent Office (‘IPO’). The company submitted Form 1 with the IPO signed by surviving inventors, a declaration with internal IP regulations vesting employee inventions in the employer, and later an employment agreement signed by the deceased inventor Kohichi Sano.
Objection raised by the IPO
The Controller rejected the application, demanding a formal assignment from Sano's legal heirs. Nippon argued that prior similar patent applications with identical documents were ‘granted’, and employment terms automatically transferred rights.
Court’s Analysis
Aggrieved by said rejection, an Appeal was filed before the Delhi High Court. The Court observed that the central question was whether the Employer–Employee Agreement together with the submitted declaration adequately constituted “Proof of Right”. It clarified that the relevant statutory provision- being Section 68 of the Patents Act, 1970 (as amended) (the ‘Act’), which governs assignment of granted patents, had no relevance in this context. Instead, the applicable provision was Section 7(2) of the Act, which concerns the transfer of the right to apply for a patent.
The Court further held that the signed Employer–Employee Agreement, along with the declaration and the company’s internal IP policy, collectively satisfied the statutory requirement of proving the applicant’s right under Section 7(2) of the Act. Citing Kailash v. Nanhku & Ors., (2005) 4 SCC 480, the Court reiterated that procedural laws are designed to facilitate justice rather than obstruct it.
To strengthen its reasoning, the Court referenced the European Patent Guide and the USPTO Manual of Patent Examining Procedure, both of which recognize employment agreements as valid evidence of ownership for patent filing purposes. The Court also emphasized that six other patent applications involving the same set of inventors had previously been accepted on the basis of the very same declaration and Employer–Employee Agreement.
In light thereof, the High Court set aside the refusal order of the IPO, and directed fresh examination by the IPO without additional formalities. Procedural technicalities cannot defeat clear ownership via contracts, especially post-inventor's death.
Implications for Practice
The decision carries significant implications for legal and commercial practice. Employers—particularly in technology and manufacturing sectors— can now rely, with greater assurance, on standard employment agreements and internal IP policies to demonstrate proof of right, reducing the need for individualized assignment documents, which can be especially difficult to obtain when an inventor has passed away. This approach minimizes procedural delays and associated cost, as reflected in Nippon Steel’s earlier successful grants, and brings Indian patent practice closer to international norms. In turn, this alignment is likely to enhance confidence among global companies and encourage increased foreign investment in R&D.