SS.105 and 106 of the Patents Act

The Ram Kumar dual SIM case has been discussed extensively on SpicyIP; a judgment was delivered by the Punjab and Haryana High Court this August involving Ram Kumar’s patent in which a declaratory judgment was sought by Micromax Informatics Ltd. under Section 105 of the Patents Act, 1970.

The brief background leading to the case is as follows:
1. Ram Kumar has a patent (214388) on a dual SIM technology which allows the user to use both the SIM cards simultaneously

2. He made a representation to the Chief Commissioner of Customs, Chennai and Chairperson of the Central Board of Excise and Customs to seize dual SIM phones which infringe his patent. This application was made under the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. Consequently, the mobile phones of Samsung and Spice were seized; however, they were released due to Ram Kumar’s inability to furnish bank guarantee.

3. Apprehending future seizures of similar nature, a suit for declaratory judgment under Sections 105 and 106 of the Patents Act, 1970 was filed by Micromax mobiles at the District Court of Gurgaon, along with an application under Order 39, rules 1 and 2 of the Code of Civil Procedure to restrain Ram Kumar or anyone acting on his behalf from adopting any measure to prevent or hinder the import, sale and use of the dual SIM card phones models or from threatening Micromax by circulars, advertisements or by other means of communications.

4. The District Judge ruled in favour of Micromax (Plaintiff/Respondent) stating that their mobiles phones did not infringe Ram Kumar’s patent, also allowing their application under Order 39.

5. Ram Kumar (Appellant/Defendant) filed an appeal before the P&H High Court against the ruling of the District Judge.

In the appeal, the appellant contended that the District Judge’s observations on the validity of the patent were unwarranted since such analysis is beyond the scope of a suit for declaration sought under Section 105 of the Patents Act.

Let’s read relevant portions of Section 105 and 106 of the Act together to understand the limitations on the scope of the Court’s enquiry under the said provisions. Sub-section 3 of Section 105, which deals with power of a Court to make declaration as to non-infringement of the Act reads thus:

“The validity of a claim of the specification of a patent shall not be called in question in a suit for a declaration brought by virtue of this section, and accordingly the making or refusal of such a declaration in the case of a patent shall not be deemed to imply that the patent is valid or invalid.”

Section 106 reads thus:
Power of court to grant relief in cases of groundless threats of infringement proceedings.-(1) Where any person (whether entitled to or interested in a patent or an application for patent or not) threatens any other person by circulars or advertisements or by communications, oral or in writing addressed to that or any other person, with proceedings for infringement of a patent, any person aggrieved thereby may bring a suit against him praying for the following relief’s, that is to say:
a. a declaration to the effect that the threats are unjustifiable;
b. an injunction against the continuance of the threats; and
c. such damages, if any, as he has sustained thereby.

(2) Unless in such suit the defendant proves that the acts in respect of which the proceedings were threatened constitute or, if done, would constitute, an infringement of a patent or of rights arising from the publication of a complete specification in respect of a claim of the specification not shown by the plaintiff to be invalid, the court may grant to the plaintiff all or any of the reliefs prayed for.

Upon a combined reading of the two sections, what is borne out is:

1. The Court under Section 105 shall not comment on the validity of a patent. Further, the provision clarifies that a ruling under Section 105 is not meant to suggest anything about the validity or otherwise of the patent.
2. Under Section 106 where the Plaintiff (in a suit under s.106) may seek restraint on a patentee from issuing groundless threats to the Plaintiff, the burden is on the defendant in the proceeding i.e. patentee, to show that a claim which the Plaintiff has not alleged as invalid, has been or would be infringed by an act of the Plaintiff. If this requirement is not fulfilled by the patentee/defendant, then the Plaintiff is entitled to all the reliefs claimed under the Section.

Therefore, putting Sections 105 and 106 together, one may say that the non-patentee may allege invalidity of the patent to support his claims of non-infringement; however, the Court may consider such observations only in so far as they help the Court decide on non-infringement of the patent. Be that as it may, this does not, rather, should not have the effect of questioning the validity of the patent.

Coming back to the Appellant’s contentions that the District Judge’s ruling is defective on account of its observations on the patent’s validity, the Court countered that since S.106 allows the non-patentee to question the validity of the patent, it was inevitable for the District Judge to discuss the same. Further, since Section 105 states that a ruling under the section does not imply about the validity of the patent, even if the district Judge did make observations on validity, it would not have effect.

The Appellant’s second contention was that the Respondent Micromax was not a person aggrieved under Section 106 since it hadn’t received threats from the Appellant. To this, the Court pointed out that since the Appellant had made an application to the Customs Commissioner to seize all phones which violated his patent, it was natural for the Respondent to seek relief under Sections 105 and 106. Also, the Court reproduced the text of the reply sent by the Appellant’s counsel in response to a communication from the Respondent. The relevant portion of the reply reads thus:

…to refrain from importing any mobiles phones having plurality of sim sockets (including those specified in your notice) without his consent, failing which you qualify yourself as an infringer of our Client’s Registered Patent technology. Such import cannot be considered as a lawful business activity carried on by you. Our client states that if you still insist to proceed further with your unlawful acts, our Client has no other option but to initiate appropriate legal action against you for infringement at your cost and you will be solely liable for all consequence arising there from,

The Court was of the opinion that the above reproduced reply was sufficient cause for the Respondent to seek remedy under Section 106. Also, since the Appellant had not clarified that he had no intentions of proceeding against the Respondent, it only bolstered the Respondent’s case.

The Court then compared the specification of the Appellant’s patent with the features of the imported products of the Respondent. The Court observed that the Respondent’s product did not have a provision for two bluetooth devices nor did it provide for two active voice paths, both of which are essential elements of the Appellant’s patent. The only common feature was the presence of a socket for the extra SIM card, which was not sufficient to establish infringement of the Appellant’s patent.

On these grounds, the appeal was dismissed.

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