Yesterday, the Supreme Court rendered a significant decision in the Enercon patent litigation. The court addressed the issue of multiplicity of proceedings in patent cases with regard to opposition, invalidation and revocation. The judgement goes a long way in streamlining the procedural aspects of patent cases.
A patent can be annulled in three ways – either by way of an opposition (pre or post grant), through a revocation proceeding before the IPAB or by way of a counter-claim in an infringement suit before the HC. An opposition is usually the first in time. Section 25(2) provides a post grant opposition mechanism whereby ‘any person interested’ can oppose a granted patent within one year of date of publication of grant. If the opposition fails or no notice of opposition is provided within one year, the patent crystallizes. After this if the patent has to be annulled, Section 64 provides two options- a revocation petition before the IPAB or a counter-claim in an infringement suit before a HC.
In the present case, the court clearly held that the remedies available under Section 64 i.e. filing a revocation petition before the IPAB or a counter-claim in an infringement suit before the HC, were not conjunctive and a choice would have to be made between the two. As held – “Based on the two remedies contemplated under Section 64 of the Patents Act, the fifth contention of the learned counsel for the appellants was, that the use of the word “or” in Section 64(1) demonstrates, that the liberty granted to any person interested to file a “revocation petition”, to challenge the grant of a patent to an individual, cannot be adopted simultaneously by the same person, i.e., firstly, by filing a “revocation petition”, and at the same time, by filing a “counter-claim” in a suit for infringement […] According to learned counsel, the concerned person must choose one of the above remedies. […]. We do not have the slightest hesitation in accepting the above contention (fifth in the series of contentions), that even though more than one remedies are available to the respondents in Section 64 of the Patents Act, the word “or” used therein separating the different remedies provided therein, would disentitle them, to avail of both the remedies, for the same purpose, simultaneously. On principle also, this would be the correct legal position.” Moreover, the court held that due to the opening words of Section 64 – “Subject to the provisions contained in this Act..” the provisions contained in Section 64 were subservient to other provisions of the Act. Therefore, “If any proceedings have been initiated by “any person interested”, under Section 25(2) of the Patents Act, the same will eclipse the right of the same person to file a “revocation petition” under Section 64(1) of the Patents Act. And also, to invoke the right granted under Section 64(1) of the Patents Act, to file a “counter-claim” (in response to an “infringement suit”, to seek the revocation of a patent)”
In case both forums (the IPAB for revocation and HC as a counter-claim) have already been approached the Supreme Court laid down the following rules – i) If a revocation petition is filed before the filing of a counter-claim in an infringement suit, the defendant will be disentitled to seek revocation of the patent in the infringement suit through a counter-claim. ii) If revocation of a patent has already been sought in an infringement suit through a counter-claim, the defendant will not be able to file a revocation petition before the IPAB. The court based its reasoning on settled principles of law as the Patent Act provided no clear answers to this issue. The court stated that a counter-claim is essentially a suit filed by the defendant and for all intents and purposes has to be treated like a plaint. Since a counter-claim is an independent suit, it cannot be allowed to proceed, where the defendant has already initiated action in another forum, on the same cause of action (Section 10 and 151 CPC). Therefore, prior proceedings stand.
The Enercon dispute magnifies the issue of multiplicity of proceedings in patent cases. Enercon India Limited, filed 23 revocation petitions before the IPAB under Section 64(1) of the Patents Act, 1970. Thereafter, Aloys Wobben filed 10 patent infringement suits before the HC to which Enercon India Ltd filed counter-claims seeking invalidation of the patents. The prayer(s) made in the revocation petitions and the counter-claims were the same. Even though some revocation petitions have been settled by the IPAB, the same issues were being re-agitated by Enercon before the HC. In the present case, the court held “Having consented to one of the available remedies postulated under law, it would not be open to either of the consenting parties, to seek redressal from a forum in addition to the consented forum. We, therefore hereby affirm, that the consent order passed by the High Court on 1.9.2010, being on the subject of procedure, and being before a forum which had the statutory jurisdiction to deal with the same, was fully justified in the facts and circumstances of the present case” .
Both parties are represented by leading law firms – Enercon India Ltd. is represented by Lakshmi Kumaran & Sreedharan and Aloys Wobben by Anand and Anand.
However, many questions arise. As per the judegement when a defendant is sued for infringement, if he has initiated revocation proceedings before the IPAB, he will not be allowed to file a counter-claim. So, should the HC wait till the revocation proceedings are completed? What happens if after considering Section 107 (the grounds listed under Section 64 can be used by the defendant as defenses in an infringement action, even without a counter-claim) the HC grants an injunction but later the IPAB revokes the patent?
(Many thanks to Shamnad sir for his inputs)