Patent

Delhi High Court passes restraining orders in a declaratory patent lawsuit after the patent has already been revoked by IPAB!


Image from here.
In a recent 80 page order, Justice Manmohan Singh of the Delhi High Court has, probably unwittingly, passed restraining orders in the case of L.G. Electronics India Pvt. Ltd. v. Bharat Bhogilal Patel & Othrs after the patent in question was already revoked by the Intellectual Property Appellate Board (IPAB). The order can be accessed over here. An earlier order passed in this lawsuit was also rather surprising and I’ve blogged about that order over here
The patent in question was patent no. 189207, titled “A process of manufacturing engraved design articles on metals or non-metals”. This patent was revoked by the IPAB on the 12th day of June, 2012 (The order can be accessed over here). We had reported the decision on the blog on the 5th of July, 2012, over here. Legally India had linked up to our post on the very same day. The Delhi High Court pronounced its order on the 13th of July, 2012 i.e. almost 13 days after it had reopened from its summer vacations (close to a month after the IPAB pronounced its decision) and yet it appears that none of the counsels in the case bothered to report the decision of the IPAB to the Delhi High Court. Most IP lawyers usually track corresponding litigation, through ‘watching briefs’, before other forums or the same forum in order to keep themselves updated. Therefore although the revocation petition before the IPAB was not filed by L. G. Electronics, it is likely that L.G. was keeping an eye on the proceedings before the IPAB. In the circumstances, I fail to understand how the Delhi High Court was not informed of such an important decision of the IPAB which would render the entire proceedings before the Delhi High Court null and void. It is a pity that valuable judicial time has been splurged on this 80 pages when the patent was already revoked. 
In my view, the above error is not the only error in question. The other troubling error being, that the Delhi High Court has allowed the Plaintiffs in question to sue the Customs Commissioners in a civil law suit! Before explaining the error, let me briefly explain the relief sought for in this lawsuit. 
The cause of action for the present lawsuit was a show cause notice received by L.G. from the Customs Commissioners (under the IPR (Imported Goods) Enforcement Rules, 2007) with regard to potential infringement of patents held by Bharat Bhogilal Patel. In response to this notice, L.G. filed a suit for declaratory relief before the Delhi High Court. A declaratory lawsuit in a patent infringement case basically asks the court to adjudicate the point of whether a certain patent is being infringed. So far, so good. 
The twist in the tale comes when the Plaintiffs named 2 Customs Commissioners (Imports) as a Defendant No.2 and No. 3. This aspect gets even more twisty when Justice Manmohan Singh does not raise any objection to the inclusion of both these authorities as defendants in the lawsuit. 
The Customs Act, 1962 like most other legislations provides sovereign immunity to all government officers carrying out official duties under the legislation. More precisely Section 155 of the Customs Act, 1962 clearly states that no suit or other legal proceedings shall lie against the Central Government for any actions taken under this Act. In pertinent part, Section 155 states: 
“Protection of action taken under the Act. – (1) No suit, prosecution or other legal proceedings shall lie against the Central Government or any officer of the Government or a local authority for anything which is done, or intended to be done in good faith, in pursuance of this Act or the rules or regulations. 
(2) No proceeding other than a suit shall be commenced against the Central Government or any officer of the Government or a local authority for anything purporting to be done in pursuance of this Act without giving the Central Government or such officer a month’s previous notice in writing of the intended proceeding and of the cause thereof, or after the expiration of three months from the accrual of such cause.” 
In my understanding the above clause expressly bars civil suits against Customs Officers and this clause was reason enough for the Delhi High Court to throw out the lawsuit in question. In my opinion, the only relief that can be sought by a person aggrieved by an order of the Customs Commissioners is to either an appeal to the customs tribunals established under the Customs Act, 1962 or to take recourse under Article 226 and 227 of the Constitution (a legislation superior to the Customs Act, 1962) and file a writ petition before a High Court. In both these circumstances the aggrieved person is challenging the decision of the statutory body on the grounds that it has not been issued as per the law. In fact in an identical proceeding, where Ericsson had initiated legal proceedings before the Customs Commissioner, the defendant had filed a writ petition before the Delhi High Court under Article 226 of the Constitution. 
I am at a complete failure to understand as to how an experienced court like the Delhi High Court has passed any order in such case. Was it because the judgment was delivered on 13th Friday? Just a case of bad luck? 
Further, this must be the only order in a patent lawsuit where there is no discussion on the patent claims or whether there is indeed any infringement of the patent. How does a Court pass a 80 page order in a suit for declaration of non-infringement of a patent, without in fact analysing the point of non-infringement? Well, I’ll let you read the judgment to answer that question for yourself. There are several more interesting aspects to this present case which I will cover in a subsequent post.
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).

16 comments.

  1. AvatarAnonymous

    The post is completely mischievous and fails to answer as to how the validity of the patent is a material fact when the issue in the suit is regarding the power of the Custom Authorities to adjudicate on claims of Patent infringement.
    Even if the IPAB were to hold that the Patent was validly granted, that would still not validate the actions of the Custom Authorities.
    The pronouncement of the judgment by the IPAB has no material bearing on the interpretation or the validity of the Custom Rules. The Plaintiff did not seek any declaration that the Plaintiff is not infringing the Patent of the Defendant No.1.

    Reply
  2. AvatarPrashant Reddy

    Accusing me of being mischievous under the guise of anonymity? People in glass houses throwing stones?

    In any case read the prayers once again, of course the plaintiff has asked for declaratory relief. See prayer (c). Besides the judgement itself records that the suit has been filed under Section 104 of the Patent Act, 1970. I’ve extracted the relevant paragraph over here:

    “In view of the above said facts stated in the plaint, there is no dispute that the jurisdiction to determine the aspect of infringement of the patent lies with the civil court under Section 104 of the Patent Act, 1970.”

    Cheers,
    Prashant

    Reply
  3. AvatarAnonymous

    Mr. Reddy before becoming so rude…. you have to apply your mind and then speak…… offcourse no one is doubting that the civil court vests with the jurisdiction to determine the patent claims…….. but the same shall be determined once the civil court is called upon to answer the claims in the form of suit for infringement….. The same can be preferred by patent owner who is Mr. Bhogilal and not by LG and thus the court cannot proceed to determine the same at the behest of the LG….. The case before the High Court was a case involving the declaratory relief that the acts of the customs can be declared as void and non est and all other reliefs are consequential reliefs… There is a complete conceptual lack of understanding………… Once the same is alerted to you…….. ppl who do not know the law and respect the spirit of the law starts screaming…….. Please read the order in the light of proceeding pending before the court…… There is no waste of time as the revocation of patent does not mitigate the abuse of the process of the law perpetuated by the customs and actions of the customs were beyond jurisdiction…….

    Reply
  4. AvatarSachin

    The court had reserved the judgment on 3.06.2012, before the IPAB vide order dated 12.06.2012 revoked the impugned patent. Therefore, there was no occasion for this fact to be brought on record.
    Moreover, the suit was not for declaring the impugned trade mark as invalid nor there is any such prayer in the suit. The court was also not supposed to decide the issue of invalidity of the impugned patent.
    The issue before the court was whether filing of complaint with the customs alleging infringement of patent leading to suspension of imports amounted to groundless threat and to declare them as such. LG had further prayed that the Order of the customs suspending/interdicting goods wrt patent matters be declared void ab initio and in breach of the provisions of The Patent Act, 1970, The Customs Act, 1962 and The Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007.
    The court has held in patent infringement cases, customs is merely an “implementing” authority and not an “adjudicating” authority.

    Reply
  5. AvatarPrashant Reddy

    @ Anon – 11:54 (AM):

    Ignoring the ‘rude’ comment and ‘application of the mind’ comment, I would like to point out the fallacies in your argument. A suit for non-declaration, as per S. 105 of the Patents Act, will obviously have to establish that the product or process in question does not infringe the patent in question. And of course LG could have made out such a case.

    On what other basis is a civil court going to decide a suit for declaration of non-infringement of patent.

    Why should Bharat Patel be restrained from issuing threats to L.G. if the latter cannot demonstrate that it is not infringing Patel’s patent?

    As for a declaration against the Customs Officers, I’ve already explained in my post, such suits are not maintainable thanks to Section 155 of the Customs Act, 1962. L.G’s only remedy was to appeal to a writ court and I’m still not quite clear on why they did not opt for this rather straightforward route.

    So before you start pointing fingers at others, I strongly recommend you brush up on your law.

    Cheers,
    Prashant

    Reply
  6. AvatarPrashant Reddy

    Hi Sachin,

    Thanks for your comment. I’ve replied point-wise to the issues raised by you:

    (i) It is routine for lawyers to bring to notice of the Court latest judgments, even after the Court has reserved the matter for orders. It happens in every court including the Delhi High Court. When a patent has been declared invalid by the tribunal such a decision should have definitely been brought to the notice of the Court. I can understand if the judgment was delivered on the first day after the summer vacation but this judgment was delivered 13 days after the summer vacations. In my opinion therefore there was ample opportunity for the Court to be informed of the IPAB’s ruling.

    (ii) Regarding your second point on the suit not being aimed at declaring the impugned trade mark (I think you mean patent) as invalid, I agree that there is no such prayer. But the suit does ask for the following prayer:

    “An order of permanent injunction restraining the Defendant No.1 from issuing any further groundless threats to the Plaintiff by way of issuance of any circulars, communications or complaints before the Defendants or any other authority.”

    This is a remedy which can be sought only under Section 105 of the Patents Act and not under Section 34 of the Specific Relief Act. In suits for a declaration of groundless threat, the court has to first determine non-infringement and in cases on non-infringement the court necessarily has to conduct an analysis of the claims. If you don’t believe me, you can read other decisions of any other patent court.

    (iii) About the relief being claimed against the Customs Commissioners, I’ve already discussed in the post how these suits are not maintainable due to S. 155 of the Customs Act, 1962. L.G. should have just filed a writ – plain and simple. Or alternatively, they could have appealed to CESTAT.

    (iv) As for the distinction between implementation and adjudication, I can understand L.G.’s concerns. Even I’m in favour of Customs being only an implementing agency and not an adjudication agency but unfortunately that is not the law. The law is crystal clear on Customs having adjudicatory powers.

    Cheers,
    Prashant

    Reply
  7. AvatarAnonymous

    I have brushed up but the thing is that if you answer for the sake of answering then none can help u…… u dont understand as well as dont want to understand thats a problem….. The suit was for groundless threats wherein Bhogilal was not approaching the civil court and not for declaring non infringement….. thats your misreading as you tend to misread the law….. groundless threat actions presupposes that there is no infringement action pending……. May god help those who dont know what they are saying

    Reply
  8. AvatarPrashant Reddy

    HI Sachin,

    In continuance of my comment above, a slight correction, the above suit appears to have been filed under Section 106 and not Section 105. I draw your attention to Section 106(2) which states as follows:

    (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.

    Clearly the above provision requires an analysis of the claims in question. In fact you should read this decision of the the P&H High Court which we had blogged about a long time ago: http://spicyipindia.blogspot.in/2009/12/ss105-and-106-of-patents-act_21.html

    Cheers,
    Prashant

    Reply
  9. AvatarPrashant Reddy

    @ Anon (7:55):

    You are right, the suit was filed under Section 106 but as I explained to Sachin in the above comment, even this provision requires the court to conduct an analysis of the claims to determine infringement. On what basis is the court to grant the relief prayed for by the plaintiff? Your word or god’s word? Since god is clearly not helping me answer this question, I think you should help me answer this question.

    The only difference between S. 105 & 106 is the fact that the ’cause of action’ is different. Otherwise they are substantially similar petitions.

    Cheers,
    Prashant

    Reply
  10. AvatarAnonymous

    As I said u don’t understand and don’t want to understand too. That’s wat I can say for u Mr. Reddy. I can answer ir further by elaborating but its impossible to tell the law to a person who keeps on finding lame excuses let’s see if the court takes the same approach as u say by misreading the sections.

    Reply
  11. AvatarPrashant Reddy

    @ Anon: 9:31 – You still have not explained how the Court was supposed to make a determination that the threat to sue was indeed groundless without even looking at the patent claim.

    We can discuss my ‘lameness’ later – you first need to answer the question that I raised above.

    Cheers,
    Prashant

    Reply
  12. AvatarAnonymous

    groundless threats can be said to be occuring when there when a person does not approach the right forum where the jurisdiction is vested by the statute and approaches the forum which does not have the jursidiction… if the court finds such jurisdiction error and also finds that the right forum is somewhere else…. then court can straightaway come to finding of groundless threat as the same is termed as abuse of law in the eyes of law……… in those cases the court need not determine the aspect of infringement which shall be taken care by the court hearing the infringement suit……. I hope now it is clear…… I can debate for days with u…….. but unfortunate part is that you will not understand….. I have said this on prior basis as the answer in your mind would be ready and u will again quote some misleading provision in order to justify the stand which interpretation does not exist in law…. The cause of action is distinct for different reasons and not for the reasons stated by you…….. section 105 is declaration as to non infringement and section 106 is groundless threat….. the court invoked later and rightly so… this will go endless………. you will keep on quoting wrong provisions under which the case was not based and keep on arguing lamely……thats y i say by quoting bible that may god help those who do not what they are doing and saying….

    Reply
  13. AvatarPrashant Reddy

    Once again you skirt the main issue.

    First of all this suit could not be filed against Customs – that is quite obvious from a reading of Section 155 of the Customs Act. The appropriate remedy for L.G. was to challenge the orders of the Customs either before the customs tribunal or the High Court under Article 226.

    Moving on to the declaration of groundless threats, you have to agree with me that the declaration has to be on the basis of some logic or reason. Its not like you can quote the Bible before the judge. At the end of the day the judge has to be convinced that the threat is indeed groundless.

    In the case of a threat of a potential patent infringement proceeding the only way to convince a judge that the threat is groundless is by explaining to the judge that the plaintiff’s product does not infringe the patent claims. For this there actually has to be a discussion on the patent claims. Justice Manmohan Singh’s judgement is bereft of any such analysis.

    Cheers,
    Prashant

    Reply
  14. AvatarAnonymous

    as i said there is difficult to teach anyone…… u have a limited playground where u will be passing the ball one way or other……. If I answer one point……. then u will jump to another……. This is due to the reason that u r not aware of the law and also attempts to be messiah when u know nothing….. Once caught on one point immediately switch over to another……… As I said u do not know the meaning of groundless threat which as per English law is of widest amplitude and raising the issue in an abuse which can be covered in the same conveniently not deciding it further…… Mr. Reddy’s analysis is based on his no knowledge of law and English precedents and is also based on his attitude to criticize without any basis……. Thank u anyways for your judgment anyways Mr. Reddy

    Reply
  15. AvatarPrashant Reddy

    @ Anon – Let’s just face it – you have no answers to my question. I ask you once again – on what grounds is a court to declare a threat groundless? There has to be some logic behind declaring the threat groundless right?

    And to repeat my answer, the only way the court can hold a threat as being groundless in a patent law suit is to analyze the claims and determine whether or not the patent claims are infringed.

    Prashant

    Reply

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