In this article, Sankalp Jain who is currently pursuing M.A. IN BUSINESS LAWS, from NUJS, Kolkata, discusses Patent enforcement through courts in India.

Patent enforcement through courts in India

The word ‘Patent’ is used to denote a set of exclusive rights to be used or monetized in regards to an invention. Patent is a grant made by the governmental authority to an inventor, assigning and confirming him the exclusive right to make, use and sells his invention for a term of 20 years. Patent is granted if the invention is new and beneficial. Patents are jurisdictional rights and are therefore restricted to a nation that allows the patent. The use or exploitation of a patent may be affected due to a conflict with other laws of countries which have not awarded the patent. The law relating to recognition and enforcement of patent rights in India is mainly governed by the Patents Act 1970(‘the Act’) and the rules issued under the Act. The Act has been substantially amended by the Patents (Amendment) Act 2005 in order to bring the Indian patent regime into line with the Agreement on Trade-Related Aspects of Intellectual Property Rights 1994 (TRIPs). The Indian Patents (Amendment) Act, 2005 provided for the launch of product patents in India and heralded the beginning of a new patent regime aimed at protecting the intellectual property rights of patent holders.

Sources of development of Patent Law

India has developed a patent law regime with application of various sources of law i.e. by adoption of principles of international law, enacting the principles laid down through global best practices in IPR and through ongoing refinement of domestic statutory laws and judicial decisions. Court decisions are a relevant source of patent law in India. Indian courts also rely on decisions of both European and US courts as sources of patent law.

In recent years, Indian courts have decided on a number of substantive patent law issues including,

• Infringement (Merck Sharpe and Dohme Corporation v Glenmark (CS(OS) 586/2013 judgment dated 7 October 2015); F Hoffman La Roche v Cipla Ltd. (RFA(OS) 92/2012, judgment dated 27 November 2015));
• Patentability (Novartis v Union of India ((2013) 6 SCC 1); Merck Sharpe and Dohme Corporation v Glenmark (supra); F. Hoffman La Roche v Cipla Ltd. (supra));
• Fair, reasonable and non-discriminatory licensing (Telefonaktiebolaget LM Ericsson v Intex Technologies (Cs(Os) No.1045/2014, judgment dated 13 March 2015);
• Telefonaktiebolaget LM Ericsson v M/s Best IT World (India) Pvt Ltd (iBall)). (CS (OS) 2501/2015, judgment dated 2 September 2015)).

International treaties/conventions

India is a signatory in the following international treaties:

• India ratified TRIPS in 1995.
• India ratified WIPO Paris Convention for the Protection of Industrial Property 1883 on 7 December 1998.
• India ratified Patent Cooperation Treaty on 7 December 1998.
• India ratified Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure 1977 on 17 December 2001.
• On 18 February 1994, India ratified Convention on Biological Diversity 1992.
• On May 25, 1990, India ratified Washington Treaty on Intellectual Property in Respect of Integrated Circuits 1989

In case of a conflict in the application of different sources of law, the order of priority is as follows,

National statutory law.

The law made by the Indian Parliament or the state legislatures is considered binding law and is the main source in the case of conflict between sources.

Judicial pronouncements.

Decisions passed in India through various Courts i.e. High Courts and Supreme Court of India.

International treaties.

Provisions of international treaties or conventions cannot be applied directly by courts. Domestic legislation influenced by the outcome of these international conventions gives effect to these conventions based on laws passed by the Indian Parliament or the state legislatures. However, in certain unique situations, where there is no statutory guidance, courts draw reference and are inclined to the direct application of international conventions.

Enforcement of Patents

In India, there are four dispute resolution machinery and their scope of jurisdiction with respect to patent disputes is as under:

Indian Patent Office (IPO)

The IPO examines patent applications and grants them if they conform to Indian patent laws. It also maintains records of renewal and working of patents. The IPO participates in resolving disputes related to grant of patents and post-grant oppositions. The key administrative functions of the IPO include formulating and implementing rules and procedures.

IP Appellate Board (IPAB)

In April 2007, the IPAB became operational to hear patent related disputes in the country. It is equivalent to the Indian High courts. It hears revocation proceedings and the appeals arising out of decisions of the controller of patents. The IPAB has technical and legal experts to handle IP matters.

District courts and High courts

The Indian district courts are the first judicial machinery (adjudicating body) which can hear cases concerning patent infringement in the form of suits. The Indian High courts hear and decide upon the appeals arising out of the decisions of the district courts.

Supreme Court

The Supreme Court of India hears and decides appeals against the decisions of the IPAB and the High Courts. Since, Supreme Court is the highest court of appeal, the decision of Supreme Court is final and is not appealable.

Civil proceedings

• Patent infringement is the unauthorized manufacturing, using, offering for sale, selling any patented invention within India, or importing into India of any patented invention during the term of a patent.
• Patent infringement proceedings take the form of a civil suit instituted before a civil court exercising its original jurisdiction. A patent holder can start civil proceedings when seeking to enforce its rights.  No Criminal proceedings for patent infringement cannot be instituted under the Patents Act 1970.
• Under the Patents Act 1970, the District Court is the court of first line for patent infringement actions. Patent infringement disputes in India starts with a suit that a plaintiff files in the District Court, which is followed by a reply to the suit by the defendant. Subsequently, a hearing is held in the District Court, taking into consideration evidences, scientific experts testimony, statements of the witness etc. After considering the defenses put by defendants the District Court decides the dispute and awards the damages or prescribes the penalties, provided the infringement is found. If any of the plaintiff and the defendant are not satisfied, they can approach the High Court and further to the Supreme Court.

Injunction

An injunction is an equitable remedy in the form of a court order, whereby a party is required to do, or to refrain from doing, certain acts. An injunction may be preliminary or permanent. A preliminary injunction is a provisional remedy granted to restrain activity of a defendant on a temporary basis until the Court can make a final decision after trial and a permanent injunction is one which is granted after the trial. Preliminary (temporary or interim) injunction and permanent injunction are provided under Order 39, Rule 1-2 of Code of Civil Procedure, 1908.

For the court to order an injunction, the plaintiff has to fulfil the following criteria,

1. Establish his case only at a prima facie level, i.e., the plaintiff has to show that he has potential to succeed and that his claim is not vexatious;
2. Demonstrate irreparable injury if a temporary injunction is not granted; and
3. Demonstrate that the balance of convenience is in favor of the plaintiff (i.e. the plaintiff will be more disadvantaged because of the non-grant of the injunction that the defendant will be disadvantaged because of the grant of one).

Permanent injunction is granted only after the trial when the Court concludes that the defendant’s product infringes the patent of the plaintiff.

Judicial process of the Court.

1. Concerned parties, plaintiff and defendant, are notified in advance of the judicial rights and the judicial obligations they shall comply with during lawsuits.
2. Before the trial begins, the parties are required to exchange the evidence. When the plaintiff accuses the defendant of infringement, the plaintiff is responsible for providing the proof. During the trial, parties concerned are required to verify and cross-examine disputed facts and evidence. If the defendant is accused of infringing a process patent, then reversal of burden of proof is implemented. Therefore, the party who is accused of infringement is responsible for providing evidence for the manufacturing process of such product.
3. Either of the plaintiff and the defendant may appeal to the Appellate board against the decision of the Controller and other matters within 3 months from the date of the decision.
4. The plaintiff should bring the suit in the court within 3 years from the date of infringement (being the limitation period). The limitation period for the suit starts from the date of infringing act and not from the date of the grant of the patent.

Section 77 of the Patents Act, 1970 confers powers of a Civil Court on the Controller General of Patents, Designs and Trade Marks (‘Patent Controller’) in following matters:

1. The Patent Controller can summon and enforce the attendance of any person and examine him on oath;
2. Every party is entitled to know the nature of his opponent’s case. The Patent Controller can direct and obtain the documents from plaintiff for handing it to defendant or vice versa;
3. The Patent Controller can receive evidence on affidavits from the plaintiff or defendant;
4. During the proceeding of suit some people are exempted from appearing in person. In such circumstances, the Patent Controller is empowered to issue Commissions for the examination of witnesses or documents;
5. The Patent Controller can award costs which are reasonable with regard to all the circumstances of the case;
6. The Patent Controller can be requested to review his decision. This can be done by filling form 24 along with prescribed fee within one month from the date of decision;
7. The Patent Controller can set aside an order passed in absence of any party at the hearing. However, the affected party should make a request to set aside an order. This can be done by filing form 24 along with the prescribed fee within one month from the date of communication; and
8. The Patent Controller also has the power of taking oral evidence. He may also allow any party to be cross-examined on the contents of his affidavit. The Patent Controller may also accept documentary evidence unaccompanied by an affidavit.

Time Frame

Indian courts, specifically the High Court of Delhi, have appreciated the idea of fast-track litigation in intellectual property matters. Expedited litigation is becoming increasingly common in patent litigation in light of the relatively lower chances of obtaining an interim injunction, as well as the limited term of exclusivity available under the patent regime. It is expected that the full trial of an infringement suit can be easily concluded within two or three years from the institution.

Several cases in which intellectual property cases have been disposed of within a few months, including:

• Bajaj Auto Limited v TVS Motor Company Limited (2009) (2009 (41) PTC 398 (SC), where the Supreme Court directed the lower court to dispose of the suit within two and a half months from the date of the order.
• F Hoffmann-La Roche Ltd, & Anr v Cipla Limited (2009), where the court direction was to conclude the trial as expeditiously as possible.
• B Braun v Rishi Baid (2010) (2009 (40) PTC 193 (Del)), where the court direction was to dispose of the suit within four months, and the court set up a schedule to that effect.

The courts have developed a speedy process under which they set out a timeline for the submission of evidence and to proceed with the matter towards final arguments within about 18 months of the institution of a claim. This ensures that the interests of the parties are balanced, as the lawsuit is decided quickly and effectively and the defendant is not prevented from carrying on activities during the pendency of the suit.

New Development/alternatives

• The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act 2015 (‘CC Act’) has been enacted by the Indian Parliament to hear commercial disputes, including IPR disputes related to patents. It provides for a separate division in High Courts to deal with commercial matters (including intellectual property disputes), and unique procedures will be followed for these matters.
• Patent enforcement actions are subject to the regular rules on litigation before civil courts. The civil courts have exclusive jurisdiction to hear and decide issues concerning patent infringement. However, the IPO and the IPAB have jurisdiction to decide on issues of patent invalidity.
• Prior to the CC Act, the lawsuits involving commercial disputes were being tried by the regular Civil Courts and judges taking up all civil cases. The Commercial Courts have been formed to address the concerns related to pendency of law suits and slow disposal of commercial matters which include disputes related to intellectual property rights (IPRs).
• Under the CC Act, the IPR’s would include unregistered and registered trademarks, patents, copyright, geographical indications, designs, domain names and semiconductor integrated circuits.  The Commercial Courts will have jurisdiction to try all suits and applications pertaining to commercial disputes of a specified value (subject matter of which is not less than INR 10 million (approx. USD 160,000) or such higher value as may be notified by the Central government).
• The CC Act provides for the establishment of Commercial Courts by the State government (total 29 states).  The territories where the High Court acts as the court of first instance e.g. Delhi, Chennai, Mumbai, Kolkata and J&K commercial division will be established at the High courts.
• Further, the Commercial Appellate Division will be constituted to hear appeals from the Commercial Courts/Commercial Division.  The CC Act requires that all concerned suits and applications qualifying the specified value pending in a Civil Court/High Court be transferred to the Commercial Division. The CC Act has created special Commercial Courts with an objective of speedy and effective resolution of commercial disputes and also brought amendments into the Civil Procedure Code (CPC) of India to speed up the trial process for such disputes.

The below amendments, in particular, are aimed at controlling undue delays and simplifying the procedures resultantly curbing the practice of seeking adjournment of hearing without any tangible basis.

Strict time lines have been provided for the following activities

• Arguments to be concluded within six months from the date of first case management hearing;
• Written arguments to be submitted before four weeks of the oral hearing following revised written arguments, if any post oral hearing within one week.
• Judgement to be pronounced within 90 days of the conclusion of arguments;
• Recording of evidence on a day to day basis;
• Six month period for disposal of appeals;
• No Adjournments permitted on account of appearing advocate not being present.

Global Best practices

Case management hearing – A mandatory meeting will be arranged by the Court between the parties to decide upon a timeline for most important stages in a proceeding such as the recording of evidence, instituting written arguments. The court is further authorized to pass a wide variety of orders at such case management hearings to ensure the smooth and effective disposal of the suit.

Disclosure of documents – The CC Act has provided detailed procedures regarding discovery, disclosure, inspection, admission and denial of documents. These procedures will reduce the current practice of denials of even basic pleadings and documents or further having the pleadings amended at any stage and without proper reasons.

Summary Judgements –  For summary disposal of cases, elaborate procedures have been laid down. Any party can request for such summary judgment at any stage prior to framing of issues. The CC Act follows the principles of natural justice and requires both parties to provide their individual explanations including documentary evidence as to why a summary judgment should or should not be passed.

Costs Issues – The CC Act empowers payment of costs against the defaulting party in case of procedural delays in the suit. The guidelines reflecting the manner of determination of costs payable by one party to the other have been clearly laid down. The CC Act has specifically provided that “legal fees” and “fees and expenses of witnesses” are to be taken into consideration while awarding costs to the successful party. Thus, bringing in the principle of real costs to be imposed on the party.

The CC Act would require the four High Courts (Delhi, Bombay, Kolkata, Chennai) that hear the majority of IP cases, exercising original jurisdiction or acting as a court of first instance, to designate benches to hear commercial matters.  The old cases that do not fall within the specified value, that is INR 10 million (approx US $ 147,000), will be transferred to district court unless of course the Plaintiff amends the prayer and pays the additional court fees (of approx. US $ 1350) to take advantage of the new procedure.

Summary

The effectiveness of procedures for enforcement of patents is more than ensuring that intellectual property rights are revered. The obligations under the TRIPS Agreement are now being widely implemented in national legislations of the member states of the WTO. Most countries implement various procedures and remedies for intellectual property enforcement. However, intellectual property right owners, especially multinational companies which make huge investments in research and development, innovation, constantly demand further government-led efforts for strengthening intellectual property right protection. Developing countries like India are facing increased pressure from developed countries to increase their efforts on the enforcement of IPR. India needs to improve its enforcement record to a level that potential innovators believe that the public will respect their IPRs whether voluntarily or for fear of official enforcement. However, there are existing challenges which India needs to navigate, with regard to enforcement, the major problem being judicial delays. There is an inadequacy of the enforcement machinery resulting in slow judicial process.

To strengthen the enforcement and litigation system powerful, it is proposed that India should implement a progressive court driven IP litigation system. The objective is to ensure that IP disputes can be dealt with in a sophisticated way using a variety of procedural tools; the legal costs involved can significantly be well reduced and that the disputes can well be adjudged with a reasonable time frame (less than a year). Although establishment of commercial courts is a boon and seeks to expedite the resolution of IP disputes, there is still a big backlog of large cases and full implementation is a challenge. Irrespective of the complexity or the nature of the case, this system can ensure effective adjudication of IP disputes which can be handled by experts with appropriate fairness and justice.

References

1. http://www.ipindia.nic.in
2. The Patents Act, 1970, No. 39, Acts of Parliament, 1970 (India).
3. Bajaj v. TVS, Supreme Court, Sep. 16, 2009; TVS v. Bajaj, Madras High Court, May 18, 2009; Bajaj v. TVS, Madras High Court, Feb. 16, 2008
4. Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015.