Introduction
India’s patent landscape is undergoing a significant shift from a rigid, paperwork-heavy process to a more practical, contract-based approach for verifying ownership. Historically, Section 7(2) of the Patents Act1 forced companies to meet strict requirements to prove their right to file an application, often demanding specific assignment deeds that were difficult to obtain if an inventor had already left the organization. However, in the landmark case of Nippon Steel Corporation v. Controller of Patents (2025)2, the Delhi High Court clarified the legal standing of employment agreements as “proof of right.” This shift ensures that patent protection is based on the actual legal relationship between an employer and an employee, preventing administrative formalities from blocking the path of genuine innovation.
Can an Employment Agreement Constitute Valid “Proof of Right”?
The primary legal hurdle has long been the Patent Office’s refusal to accept an Employment Agreement as sufficient proof of ownership. Under Section 7(2), if an applicant is not the inventor, they must furnish “proof of the right” to apply. The Delhi High Court decisively ruled that a signed employment agreement constitutes such proof, noting that these documents clearly demonstrate the intent of the inventor to vest intellectual property rights in the employer as part of their contractual obligations. This is supported by the judicial rationale in NTT DoCoMo Inc. v. Controller of Patents (2022)3, where the Court emphasized that “proof of right” should not be an insurmountable obstacle, especially when international R&D standards and PCT applications already recognise the applicant’s standing.
The Impact of Inventor Demise and Contractual Precedence
A major point of contention arises when an inventor passes away before a patent is granted. Traditionally, the Controller of Patents insisted on a formal assignment from legal heirs under Section 6(1)(c). However, the Court clarified that Section 6(1)(b) takes precedence if rights were already assigned via an employment contract during the inventor’s lifetime. Since the rights were assigned to the employer under the internal IP regime, the company qualifies as an “assignee of the true inventor.” This follows the spirit of Enercon India Ltd. v. Aloys Wobben (2014)4, where the Supreme Court held that the underlying intention of the parties and their contractual relationship must take precedence over technicalities in IP disputes.
Distinguishing Between “Right to Apply” and “Assignment of Patent”
The Court identified a significant legal error in the Patent Office’s reliance on Section 68, which dictates formalities for the assignment of a granted patent. The Court held that the requirements for the “right to apply” (pre-grant) under Section 7(2) are distinct and require only prima facie evidence of entitlement. Applying the higher evidentiary standards of Section 68 at the filing stage was characterised as an “incorrect approach” that ignores industrial realities. This aligns with the bedrock principle established in Kailash v. Nanhku & Ors. (2005)5, which asserts that procedural laws are intended to subserve, and not subvert, the cause of justice. The Court emphasized that Section 7(2) should not be treated as a “blind reflex” that disqualifies applicants simply because a specific, formal deed is absent.
Conclusion
The Delhi High Court’s ruling marks a pivotal evolution in Indian IP jurisprudence by prioritizing substantive evidence over hyper-technical paperwork. By recognizing that valid employment agreements and internal corporate policies constitute legitimate evidence of a transfer of rights, the Court has aligned Indian law with global innovation standards. This shift significantly reduces the administrative burden on R&D-driven companies, ensuring they are no longer penalized for the absence of former employees or the complexities of probate law. Ultimately, this judgment reinforces the principle that “procedure is the handmaid of justice,” ensuring that the legal right to an invention is protected based on its contractual substance rather than mere administrative form.
Citations
Expositor(s): Adv. Archana Shukla, Srijan Sahay (Intern)
