Continuing in our series of posts highlighting the inequity of interim injunctions in patent cases, here’s a guest post from Saahil Dama. Saahil is a student at National Law University, Jodhpur. He is currently in the fourth year and is pursuing Intellectual Property Law Honours at the University.
Interrogating Interim Injunctions: The Difficulty in Getting Vacations
By Saahil Dama
In furtherance of our I-3 series, I’ll be writing a short post on the case of Microsoft Corporation v. Dhiren Gopal and Ors., [2010 (42) PTC 1 (Del)]. We’ve discussed this post before in the context of forum shopping.
Though the ex parte order passed in this case was subsequently stayed and the injunction was modified by the Division Bench, the judgement is still pertinent in describing the difficulties that defendants face in getting injunctions vacated.
For the brief facts, Microsoft Corporation filed four suits against four different defendants, alleging that the defendants had infringed Microsoft’s software copyright by using pirated/illegally-copied software at their offices and workplaces. Microsoft argued that issuing notices would defeat the very purpose of filing the suits since it would give the defendants sufficient opportunity to delete the pirated software from their computer systems and that would make the suits infructuous. Hence notices were not issued and an ex parte injunction restraining the defendants from using the software was passed by the single judge of the Delhi High Court.
However, while passing the ex parte injunction, several problems in vacating such injunctions were observed. This judgement highlighted the hardship such injunctions cause for defendants. The judge stated – ‘There is no gain saying that once an ex-parte injunction is granted by the Court, getting an ex-parte injunction vacated or a decision on the application on merits by the court becomes a Herculean task for the other party. Granting of ex-parte injunction along with appointment of Local Commissioner has become a routine process and deciding of applications under Order 39 Rules 1 and 2 CPC on merits after hearing the parties in such cases is a rare phenomenon. All kinds of excuses are used to seek adjournments once a party gets ex parte injunction.’
The court also took cognizance of the lobby of right-holders who oppose the transfer of original jurisdiction from the High Court to the District Court since it is easier to get ex-parte injunctions in the High Court. ‘Once you get ex-parte injunction,’ the court noted, ‘the application on merits is invariably not allowed to be decided in time and the party having ex-parte injunction starts evading arguments on merits on one or the other ground. This results in those cases (of alleged copyright infringement) where computes are sealed, adopting a blackmailing tactics by the plaintiff and the defendants, in order to restart their business and lessen their losses, start succumbing to the pressure.’
When seen holistically, ex parte injunctions present an extremely dismal picture for defendants. Firstly, the defendant is not heard by the court when the injunction is granted and is still made to bear the brunt of the order. Further, the hearing of the case on merits is delayed as the party in whose favour the injunction is granted seeks excuses for delaying hearing. Even getting the order vacated proves to be a painstaking and time-consuming process. This puts the defendant in a rather compromising position, since while all this is happening, his business is likely to be severely affected if not shut altogether. As a result, he would be compelled to settle on unfair terms, which only exacerbates the situation for him.
This judgement highlighted a pressing concern for defendants when an injunction is passed at their detriment. While laws exist on paper to prevent the defendant from unjustly suffering under the injunction, their practical implementation has been a problem. Cases such as Vifor are classic examples of this, where the injunction hasn’t been vacated even after almost four years! Such misuse of law must be prevented to protect the defendants from bleeding dry without even being heard.
The court also acknowledged the fact that when suits are filed in a city where the defendants are not situated, the fact that they have to travel all the way to the other city becomes a source of harassment for the defendants. As a result, in several cases where ex-parte injunctions are granted (specifically in copyright infringement cases), the suits are never contested.