Lending an ‘Indian perspective’ to Enercon GmBH’s propaganda in the German Press


The Enercon patent dispute is fast acquiring political overtones, atleast in Germany, with sections of the German Press reporting that German legislators have started making enquiries with the federal government on the Enercon dispute. In addition, the same newspapers have been attributing the voiding of Enercon GmBH’s patents to possible corruption in the Indian system. Of course this comes along with the rider that there is no evidence of the same. I wonder who has been spreading these rumours, especially when they don’t have any evidence of the same? This is in addition to other reports, that we had blogged about, where Enercon GmBH’s counsel made a statement to the Wind Power Monthly, that the IPAB had decided the issue on the basis of ‘national interest’. As per the one order with us, this appears to be a gross misrepresentation of IPAB’s actual order, which voided the patent on the basis of prior art.

Given the fact that Enercon GmBH has sought to misrepresent the matter in the German Press, under the cloak of nationalist rhetoric, it is vital for us to clarify certain points from the ‘Indian perspective’ by examining Enercon GmBH’s legal strategy and pointing out to the rather obvious mistakes on their behalf.
(Please note: Enercon GmBh and Dr. Aloys Wobbens are used interchangeably in this post)

(i) Why didn’t Enercon GmBH challenge the constitutionality of the IPAB?

The revocation petitions by Enercon India were filed in January 2009. In May of 2010, a Constitutional Bench the Supreme Court of India pronounced its judgment in the landmark NCLT case, which was subsequently used as the basis of the present PIL filed by Shamnad against the IPAB. The Supreme Court judgment was reported widely in the press, blogs and law reporters. If Enercon GmBH had 23 of its patents under challenge before a tribunal whose composition was similar to that of the NCLT, why didn’t it even bother to challenge the tribunal? If anybody has had a look at the PIL challenging the IPAB, it is based entirely on the NCLT case and didn’t require much imagination.

(ii) Why didn’t Enercon GmBH cross-examine the expert witnesses put forth by Enercon India?

I don’t know how trials work in Germany but here in India in order to prove a fact during a trial, it is mandatory that evidence be led on the point and such evidence can be led through only witnesses. In the case of patent trials this usually means an expert witness. In the present case i.e. the one Order made available to us, Enercon India presented two expert witnesses 1. Mr. Arun Kashikar & 2. Mr. Rajashekhar S. Talikoti. Now, in a trial, the best way to disprove what a witness is saying is to cross-examine the witness on the stand with the intention of getting the witness to make an admission which contradicts the witness’s main testimony. Of course this would require asking the Court for permission to cross-examine him. The IPAB has been vested with the power to allow for cross-examination under Section 92 of the Trade Marks Act, 1999. Enercon GmBH however, shockingly did not ask for the cross-examination of the EIL’s witnesses! It is completely understandable that the petitioner i.e. Enercon India ltd. (EIL) did not press for cross-examination of Enercon GmBH’s witnesses since they were most probably in a hurry to have the final arguments concluded before S. Chandrashekaran the Technical Member of the IPAB retired as scheduled in December. But what could have been Enercon GmBH’s possible reason for not cross-examining the opposite side’s expert witnesses? They were in no hurry for the matter to be adjudicated, if anything their cross-examination would have possibly stretched until such time that the Technical Member had retired from the Bench, thereby paralysing the entire adjudication process until the government replaced the retired member. Regardless of the time-factor, it is simply unbelievable for Enercon GmBH to not have cross-examined witnesses in such a high-stakes matter. Read this for more on the value of cross-examination.

(iii) Why didn’t Enercon GmBH request for a stay of the IPAB proceedings on the grounds of res- subjudice?

The principle of res-subjudice, enshrined in Section 10 of the CPC, basically states that when similar issues between the same parties are at issue in two different suits then one of the suits will need to be stayed. There are several precedents on the point. It obviously does not make any sense for the matter to proceed in two different courts since both forums may reach different conclusions and it would be a waste of judicial time. I am not sure if Section 10 of the CPC applies to the revocation petition but the general principle should hold in any litigation. Going on to the facts at hand…..

When Enercon GmBH filed its counter-statement to EIL’s, 23 revocation petitions it also filed miscellaneous petitions (MP) questioning the locus standi of Yogesh Mehra to sign the revocation petitions on behalf of EIL. The reasons for filing this MP have already been discussed in this earlier post. To briefly summarize, EIL claimed that a board resolution had authorized the Managing Director, Mr. Mehra, to sign revocation petitions against Enercon GmBH, which incidentally was the majority share-holder in EIL. Now, it is prima facie ridiculous to believe that the majority share-holders would have ever supported a board resolution that authorized the revocation of its own patents. Enercon GmBH therefore decided to challenge the very signing of the revocation petitions by Mehra and asked for this issue to be decided as a preliminary issue. The IPAB rejected this request to decide it as a preliminary issue, through an order dated the 27th of July, 2010. (recently, made available on the IPAB website) The Madras High Court rejected an appeal against this Order (previous post over here) and Enercon GmBH preferred an appeal to the Supreme Court on the matter, which it later withdrew on the 26th of November, 2010. The legality of the signing of the revocation petitions was therefore to be decided along with the main issues. When the IPAB finally decided the issue it very rightly decided that it was not the authority to decide the legality of the Board Resolution authorizing the signature and since the Board resolution had not yet been struck down it would proceed to hear the matter.

The question over here is why did Enercon GmBh pray for the revocation petitions to be set aside instead of taking the more logical argument that the legality of the Board Resolution was res sub-judice before the CLB and hence could not be decided by the IPAB. The logical prayer would have been to ask for a stay on the revocation trials until the CLB decided the validity of the contentious Board Resolution. Instead Enercon GmBH went ahead with the over-ambitious agenda of dismissing the petitions themselves. A stay on the IPAB proceeding until the CLB decided the legality of the Board Resolution may have saved Enercon GmBh from having its own subsidiary revoking its patents.

(iv) Did Enercon GmBH mislead the IPAB?

Order No. 243 of 2010 of the IPAB records the fact that Enercon GmBH kept delaying the proceedings on the grounds that it required more time to file its evidence affidavits. The original revocation petitions were filed before the IPAB in January, 2009. Ideally Enercon GmBH should have filed its reply and evidence within 2 months. However it was granted time until February, 2010 to file its replies to the revocation petition and subsequently requested more time to prepare its evidence which was filed only on the 11th of October, 2010 i.e. almost 22 months after the original revocation petitions were filed by EIL. Most importantly the IPAB points out in its order that although the expert affidavits were submitted to it only on the 11th of October, 2010, they were dated and notarized on the 9th of September, 2010 i.e. an entire month before they were actually submitted! If it can be established that Enercon GmBH, deliberately mislead the court, in order to delay the matter, the company could be held liable for either perjury or contempt of court. It must be remembered that Enercon GmBH had an interest in delaying the matter since the Technical Member was due for retirement in December, 2010.

(v) Why did the IPAB hear the disputes with such speed?

Another common allegation being bandied about against the IPAB, ironically, is the speed with which it decided the matter i.e. arguments were heard in October and the 12 judgments delivered by the first week of December. There is however a completely plausible explanation for this. It must be remembered that the petitions were filed in January, 2009 and the replies were filed in February, 2010, thereby giving the IPAB more than enough time to study the matter and there is no rule barring the IPAB from starting to write the orders before oral arguments were delivered. The oral arguments after all are based on the written pleadings. The most compelling reasons however were the fact that the IPAB was under instructions from the Madras High Court to conclude the matter within a span of three months. I extract the pertinent part of the order: The Tribunal is requested to take up the Original Revocation Application along with the miscellaneous petition and hear and dispose of the same preferably within a period of three months from the date of receipt of a copy of this order.

This order of the HC was passed on 7th of September and the IPAB pronounced its order on the 2nd of December i.e. within three months. Another point that needs to be kept in mind is that the Technical Member was retiring in December and was therefore required to decide the matters before he gave up office. It is also wrong to suggest that only the Enercon matters were fast-tracked, the IPAB website indicates that other patent matters too were fast-tracked.

(vi) But Enercon GmBH’s patents have been held valid in more advanced jurisdictions like the E.U., U.S. & Japan…..

This is the most nonsensical of arguments against the IPAB decisions to void the patents. Just because a patent has been granted does not mean it cannot be revoked and this is the position worldwide. Besides the true test of a patent’s strength is exposed only in an adversarial judicial setting, where two parties are opposing each other and not in an administrative setting of the patent office. It’s widely acknowledged that patent examinations in most patent offices, the USPTO included, are of poor quality. This is exactly the reason that the E.U. and India allow for pre-grant and post-grant opposition. To the best of my knowledge none of the patents voided by the IPAB were tested in any other jurisdiction through an adversarial proceeding.

Conclusion: I hope this lends some perspective to the German propaganda being spread by Enercon GmBH.
Prashant Reddy

Prashant Reddy

T. Prashant Reddy graduated from the National Law School of India University, Bangalore, with a B.A.LLB (Hons.) degree in 2008. He later graduated with a LLM degree (Law, Science & Technology) from the Stanford Law School in 2013. Prashant has worked with law firms in Delhi and in academia in India and Singapore. He is also co-author of the book Create, Copy, Disrupt: India's Intellectual Property Dilemmas (OUP).

10 comments.

  1. Avataraliasgard

    Dont know why but the post seems to be a knee jerk reaction to the Enercon Propaganda. The post would have made sense if supported by the analysis of all the decisions issued by the IPAB.

    The reason why Enercon didnt challenge the constitutionality of IPAB or their strategy to delay the proceedings does little to disparage Enercon’s allegation of corruption.

    Reply
  2. AvatarPrashant Reddy

    @aliasgard – I’m guessing you missed out on the title of the post? It was meant to counter the propaganda.

    I’m not exactly sure on what you meant by saying that I was not able to disparage Enercon’s allegation of corruption.

    My simple agenda was to establish that Enercon cannot claim injustice when it is guilty of so many errors on its part. It was give a fair opportunity but failed to utilize it.

    Cheers,
    Prashant

    Reply
  3. Avataraliasgard

    Dear Prashant,

    As i said earlier, the post would have been better if it included the analysis of the various decisions passed by IPAB invalidating their patents.

    Aliasgar

    Reply
  4. AvatarAnonymous

    The fact is most of the patents which are revoked by Chandrasekar as Technical Member of IPAB were granted by himself as the Controller of Patents.

    Regarding res-subjudice, refer to Mr.Bhat order of 6th Dec 2010. 2011 (45) PTC 200 (Del). Any comments on this order.

    Reply
  5. AvatarPrashant Reddy

    Regarding Justice Bhat’s order, the plaintiffs for some reason tried to argue the ‘Doctrine of Election’, which in my opinion is applicable only in cases where there is privity of contract between two parties. It cannot apply to cases where there is no privity of contract.

    Enercon GmBH never pleaded res sub-judice before Justice Bhat.

    As for Chandrashekharan being the Controller who granted the Enercon GmBH patents, can you provide us with any evidence of the same? Maybe a scanned copy of the Patent Certificate?

    Cheers,
    Prashant

    Reply
  6. AvatarAnonymous

    Hi

    I think you may be wrong about the applicability of the doctrine of election. Read the two decisions quoted in Justice Bhat’s decision which you reoirted itself- National Insurance Company Vs. Mastan abd Andhra Pradesh Financial Corporation v.Gar Re-rolling Mills

    Reply
  7. AvatarPrashant Reddy

    Hi,

    If I’m wrong, please feel free to point it out. We always like to encourage a debate on the blog.

    Looking forward to your comments.

    And what about Chandrashekharan granting the patents? Have you managed to get any evidence on that.

    Warm regards,
    Prashant

    Reply
  8. AvatarAnonymous

    Hello Prashant,

    My recent visit to Spicy IP has been quite educational. I liked that the blog is so receptive to opinions and info from readers. Therefore I am taking the liberty to draw your attention to another dispute reported in Economic Times on 28th April http://economictimes.indiatimes.com/opinion/policy/should-government-support-davids/articleshow/8104813.cms , which seems to have escaped the attention of Spicy IP.
    This dispute uncovers some contentious aspects of our IP debate – indigenous innovation in software and respect for Indian IP abroad (Germany …). I hope your blog discusses the finer points of the dispute and breaks it down for us lay readers.

    Reply

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