Yesterday, the Delhi High Court in Sukesh Behl V. Koninklijke Phillips Electronics (Division Bench. Maj. Behl Vs Philips-DB1-DHC 7.11.2014) passed a significant decision with regard to Section 8 of the Patent Act 1970. It ruled that a patentee’s non compliance with Section 8 of the Patent Act will not lead to an automatic revocation of its patent under Section 64(1)(m). As per the decision, it is necessary to check whether the omission to disclose information under Section 8 was deliberate/intentional or whether it was a mere clerical/bona fide error. Such a determination would impact the finding for/against revocation under Section 64(1)(m).
Gopika has covered the Single Judge decision here. Prashant has blogged about Section 8 and the famous Chemtura case here and here. The cases of Chemtura, Tata Chemicals and Allergan had taken a hard line stance with respect to Section 8.
As Shamnad pointed out earlier, this shows that the court has taken Section 8 closer to the inequitable conduct defence used in the US. It also suggests that India is not ‘anti patent’ but pro patentee as well. This decision, along with the recent Enercon case (here and here), where the Supreme Court streamlined patent revocation proceedings in order to tackle multiplicity and delays, sends out a single that Indian courts are attempting to increase efficiency as well as dispel the notion of India being ‘anti IP’. As Shamnad hopes, the USTR should take note of such judgements too, before concluding that India is anti MNC and anti IP.
Relevant provisions
Section 8 read with Rule 12 states that an applicant must file a statement furnishing details of any patent application being prosecuted by him in a foreign country in respect of the same or substantially same invention. This statement must be filed along with his application for a patent or within six months from the date of filing the application. The applicant must also undertake to supply such information upto the date of grant of the patent.
Section 64(1)(m) of the Act lays down “(m) that the applicant for the patent has failed to disclose to the Controller the information required by section 8 or has furnished information which in any material particular was false to his knowledge” as a ground for revocation of patent.
Section 8 read with Section 64(1)(m), therefore, endeavours to foster honest and forthright disclosures by the patent applicant (who is in the best position to know all the information/documents surrounding his invention).
Facts
In 2012, the plaintiff (respondent) filed a suit for permanent injunction restraining the defendant (appellant) from infringing its patent No. 218255 (“method for converting information words to modulated signal”). In its written statement, the defendant denied the allegation of infringement and also sought to revoke the plaintiff’s patent. On the issue of revocation, the defendant submitted that the plaintiff had not complied with Section 8 of Patent Act, 1970 read with Rule 12 of the Patent Rules 2003 and hence its patent should be revoked under Section 64(1)(m). Thereafter, in 2012, the Patent Attorney for the plaintiff informed the Patent Office that certain details regarding foreign filings were not submitted during the prosecution of Patent No.218255 and requested the Patent Office to take on record a list of corresponding foreign applications. The reasons for not submitting these filings were recorded in an affidavit where it was stated that:
“we received an updated status list of corresponding applications for three pages with the second page printed on the back of the first page. [..] I say that inadvertently my paralegal assisting me missed out the information in relation to corresponding foreign applications that was printed in the reverse of the first pages forwarded to us by the patentee/applicant.”
The plaintiff stated that this was an inadvertent omission and later it was contended that the filings omitted were not material to the patent.
The defendant argued: first, non compliance with Section 8 of the Patents Act (which is mandatory provision) should result in automatic revocation of the patent under Section 64(1)(m) and second, the letter sent by the plaintiff’s attorney amounts to an admission of suppression of vital information, in contravention of Section 8, and hence a decree of revocation should be passed in their favour as per Order XII Rule 6 of the CPC.
The Single Judge ruled that while the plaintiff had contravened Section 8 by not disclosing the foreign filings, however, there was no admission as to whether this was a result of deliberate or willful suppression by the Plaintiff. This was held to be a matter of evidence to be taken up at trail.
Division Bench
Non compliance with Section 8
Applying the rule of ‘literal interpretation’, the court held that Section 8 uses the word ‘shall’ and is therefore a mandatory provision. After examining the affidavit filed by the plaintiff’s Patent Attorney, the court held that there was no failure on part of the plaintiff to comply with Section 8(1)(b) i.e. an undertaking to furnish details of foreign applications upto the date of grant of the patent. The affidavit showed that the plaintiff had submitted details of foreign applications to the Indian Patent Office in 1999, 2002 and 2004 (the patent was granted in 2008). However, some details contained in the foreign applications filed on 31.08.2004 were omitted for the reasons explained by the Patent Attorney in his affidavit (as mentioned above). This being the case, the court held that it cannot be concluded that the plaintiff failed to comply with the mandatory provisions of Section 8. However, the court held that the information provided was incomplete, and whether this omission was material or intentional would have to be decided in trial, based on evidence.
No automatic revocation under Section 64
Rejecting that revocation automatically applies, the court held that Section 64 uses the word ‘may’ which indicates that the provision is directory and also leads to the presumption that the power to revoke a patent is discretionary. As part of this discretion, the court would have to check whether the omission under Section 8 was deliberate/intentional or whether it was a clerical/bona fide error. Therefore, the defendant’s argument that since Section 8 is mandatory and its non compliance is a ground for revocation under Section 64(1)(m), the word ‘may’ in Section 64(1) should be read as ‘shall’, was rejected by the court.
The court also distinguished the Chemtura Corporations case since Chemtura dealt with the vacation of an interim injunction and was a prima facie finding.
Order XII Rule 6
The court ruled that the aim of Order XII Rule 6 of the CPC was to ensure speedy justice to the extent of clear, unambiguous, unconditional and unequivocal admissions. It was held that the affidavit did not amount to an unequivocal admission by the plaintiff and hence a decree under Order XII Rule 6 was denied.
Inequitable Conduct in the US
By bringing concepts of ‘deliberate/intentional/material’ omissions, the court has taken Section 8 closer to the inequitable conduct defense used in the US.
Inequitable conduct is a defence a party accused of infringement (defendant) can raise in a patent litigation in the US. This defence stems from the doctrine of ‘unclean hands’, a principle of equity. In order for this defense to be successful, the defendant must show that the patent applicant has breached a ‘duty of candor and good faith’ by misrepresenting or suppressing information submitted to the Patent Office. Inequitable conduct is decided on two grounds: materiality (whether the information suppressed was material) and intention. (See e.g., Ferring B.V. v. Barr Labs., Inc., 437 F.3d 1181, 1186 (Fed. Cir. 2006); Halliburton Co. v. Schlumberger Tech. Corp., 925 F.2d 1435, 1439 (Fed. Cir. 1991). If successfully pleaded, the patent can be rendered unenforceable, the Patent Attorney may be suspended for breach of duty of candor and good faith, the plaintiff can be ordered to pay the attorney fees for the opposing party and other such penalties (See eg., Evident Corp. v. Church & Dwight Co., 399 F.3d 1310, 1315 (Fed. Cir. 2005)). Given the harsh penalties, this defence has come under attack in the US.
Many have argued that the inequitable conduct defense has ‘crippled patent litigation’; has lead to over submission of disclosures thereby over burdening the patent office; and that there exists unpredictability over the meaning/standards of ‘materiality’ and ‘intent’. Therefore, calls have been made for clearer guidelines.
Many thanks to Ankit Sahni for the Hat tip!
Dear Aparajita:
First, I think that we should not be too worried on what US think-tanks/ Govt thinks about it and rather think that we should be more focused on how our law is being interpreted.
The more odd/ worrisome part is the interpretation of ‘may’ in context of S.64(1). If the apparent interpretation is accepted, then every ground u/s 64 would become an optional ground to revoke a patent.
Also, what has concerned me is that the current decision seems to bring in an intent/ mens rea type of requirement for this particular requirement of S.8. In my reading, there is no ‘intent’ requirement for S.8 information.
Taking either of above problems forward, a Judge (hypothetically) could stop revocation of patent even if there is a fine case for obviousness since he thinks he MAY revoke the patent.
I still am not clear of how / where does the Patentee and Judge get the support for the intent part of argument being canvassed in this case.
A similar interpretation of the term “may” in S. 64 was also previously done in F. Hoffman La Roche’s case (2012). As correctly pointed out above, such an interpretation makes every ground under S. 64 an optional ground for revocation, not merely non-compliance of S. 8.
Hi Sandeep,
I agree that there is no “intent requirement in S8. In fact the IPAB, in one of its decisions clearly emphasized this aspect when allergan tried to argue intent.
With regard to non-compliance of Section 8, the IPAB noted that the applicant had failed to inform the Controller regarding refusal of corresponding EU patent and various stages of prosecution in the US counterpart patents (non-final rejections etc.). Curiously, Allergan tried to argue that Therasense like inequitable conduct standards should be set for Section 8. In Therasense, Inc. vs. Becton, Dickinson and Co (Fed. Cir. 2011) an en banc decision, the Federal Circuit held that inequitable conduct must be shown with clear and convincing evidence and that there was intent to withhold or misrepresent information and that the information was material. However, the IPAB reasoned that our law does not make any qualification regarding the failure to disclose nor does it say that the failure to furnish the S.8 details must be deliberate and willful.
https://spicyipweb.wpcomstaging.com/2013/09/ipab-revocation-of-allergans-combigan.html
It remains to be seen how S8 is applied in future cases …