Employment Agreement Entered Between Assignee & Deceased Inventor Is Acceptable To Comply With ‘Proof Of The Right’ Under Section 7(2) Patents Act: Delhi High Court

​The Bench of Justice Tejas Karia observed, “Therefore, Employment Agreement entered between the Employer (assignee) and Employee (inventor), which is duly signed by the deceased inventor, is an acceptable document to comply with the requirement of ‘proof of the right’ under Section 7(2) of the Act. Accordingly, the observation in the Impugned Order that the EE Agreement cannot constitute valid ‘proof of the right’ or assignment for the Subject Application due to its generic nature, inherent ambiguity, and non-compliance with the mandatory requirements prescribed under Sections 6(1)(b), 7(2), and 68 of the Act is not correct…The EE Agreement bears the duly executed signature of the deceased inventor, Mr. Sano and has been further attested by a guarantor, thereby lending additional legal sanctity to the document. When construed harmoniously with the accompanying declarations, the EE Agreement sufficiently establishes and addresses the ownership of IPR vested thereunder.”

Advocate Debashish Banerjee appeared on behalf of the Appellant, whereas CGSC Nidhi Raman appeared for the Respondent.

Facts of the case

The Appellant filed a patent application listing four inventors, but because one inventor, Mr. Sano, had passed away, they sought to establish their "proof of right" under Section 7(2) of the Act by submitting company’s "Basic Regulations" and an Employer-Employee Agreement asserting that all employee-conceived inventions were automatically assigned to the firm. Despite the Appellant providing these documents, responding to a First Examination Report, attending a hearing, and submitting post-hearing written arguments with supporting affidavits, the Respondent ultimately issued an Impugned Order refusing the application.

The refusal was based on the finding that the Appellant failed to satisfy the legal requirements of Sections 6(1)(b) and 6(1)(c) of the Act, as the evidence provided was deemed insufficient to establish the transfer of rights from the deceased inventor. Being aggrieved, an appeal was filed under Section 117A of the Act against the Impugned Order passed by the Respondent in a patent application.

Contention of the Parties

The Appellant argued that they established their "proof of right" under Section 7(2) of the Act by submitting a declaration of their corporate policy alongside an employment agreement (EE Agreement) signed by the deceased inventor. They maintained that these documents collectively proved that all intellectual property created during employment automatically vested in the company. To support this, the Appellant pointed out that the Respondent had previously granted six other patents involving the same inventors and the same set of documents. They further contended that Section 6(1)(c), which concerns legal representatives of the deceased, did not apply because the rights had already transferred to the company via contract under Section 6(1)(b) before the inventor’s death.

In response, the Respondent argued that the Appellant failed to disclose Mr Sano’s death until the late stages of the proceedings and never provided a death certificate. They asserted that the Employer-Employee Agreement was too general and lacked a specific IPR transfer clause for this particular invention, rendering it invalid as a "proof of right." The Respondent maintained that in the absence of a signed assignment deed, the Appellant was required under Section 6(1)(c) to produce an assignment from Mr. Sano’s legal heirs. Ultimately, the Respondent concluded that the application was rightly rejected because the Appellant did not satisfy the strict statutory requirements for proving the legal transfer of invention rights.

Observations of the Court

The main issue for the consideration of the Court was whether the EE Agreement and the Declaration would be sufficient to establish ‘proof of right’ under Section 7 of the Act.

It was held, “As per Section 6 of the Act if the assignee files the application, Section 7(2) of the Act requires the applicant to provide ‘proof of the right’ to make the application within the prescribed period. Section 6(1)(b) of the Act does not bar the assignee from filing the Employment Agreement entered between the Employer (assignee) and Employee (inventor) to comply with the requirement of ‘proof of the right’ under Section 7(2) of the Act.”

The Court also observed, “Procedural laws are intended to subserve, and not to subvert, the cause of justice. Procedural laws are an instrument that facilitates rather than obstructs adjudication. In the present case, the non‑compliance with a procedural requirement is not frustrating.”

Conclusion

The Court said that the reasons provided in the Impugned Order were not sustainable, hence, liable to be set aside.

Accordingly, the Court allowed the appeal and set aside the impugned order. Further, the Court directed the Respondent to examine the application.

Cause Title: Nippon Steel Corporation v. The Controller of Patents [Neutral Citation: 2025:KHC:50803]

Appearances:

Appellant: Advocates Debashish Banerjee, Vaishali Joshi and Tanveer Malhotra

Respondent: CGSC Nidhi Raman, Advocates Om Ram and Mayank Sansanwal

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