[We bring to you a guest post by Prashant Reddy on the recent CTR v. Sergi patent case decided by the Bombay High Court. In this post, Prashant offers a lucid and detailed critique of Justice Gautam Patel’s judgment]
Justice Gautam Patel has recently issued an interim injunction in a long running patent infringement lawsuit between Indian company CTR Manufacturing Industries Ltd. (“CTR”) which is the owner of patent no. 202302 and the French company Sergi Transformer Explosion Prevention Technologies Pvt. Ltd. (“Sergi”) which was allegedly infringing CTR’s patent.
As is the case with all of Justice Patel’s judgments, this judgment has its fair share of witticisms – for example, “From great power comes great electricity” and then while referring to a chart put forth by the defendant, the judge states “The chart has deceptively bright but distinctly menacing arrows that point inexorably to nether regions. I took the chart on file, but with not much more enthusiasm than that with which Mr. Chagla tendered it”. However the true jewels of this judgment by Justice Patel are his liberal use of sub-headings, the provision of an index in the beginning of the judgment along with a chronology towards the end. Together these three writing aids make the reading of this 103 pages judgment a manageable if not pleasurable exercise. Left to me, I would ship Justice Patel to the National Judicial Academy so that he could share his writing skills with all the judges of India.
Enough about Justice Patel, let me now begin with the facts of the case, followed by a critique of the judgment, which in my opinion isn’t very convincing in its reasoning for granting an interim injunction to the plaintiff-patentee.
- About the Patent, the Parties & the Issues
Patent No. 202302 was granted to CTR for an invention titled “A system and method for preventing and/or detecting explosion and/or fire of electrical transformers”. As the title of the patent suggests, the patent had been granted for a technology which aims to prevent explosions in transformers. As explained in the judgment, transformers which are used to increase or decrease the voltage of electricity being transmitted through the power network are required to be cooled to prevent over-heating. Typically oil is used as a coolant. The oil which is supposed to act as a coolant may itself lead to explosions because of high energy short circuits or arcing in the grid – this sudden surge in power may superheat the oil, which in turn leads to gas accumulation and an increase in the pressure within the tank storing the oil leading to an explosion.
There are a couple of devices known in the art which are used to prevent such explosions. The first is the Buchholz Relay which was developed in 1921. This Relay basically detects the gas accumulation, due to overheating, by sensing the change in the oil pressure and triggers the protective circuit breaker that disconnects the power from the transformer. The Buchholz Relay can at times trigger false alarms due to air pockets which may push down oil pressure. The second device is a Differential Relay, an electrical device, which on sensing an imbalance between the input and output currents in the transformer, sends a signal to the control unit that then signals the circuit breaker. Unlike the Buchholz Relay which would detect the surge in current only post the pressure starting to build up in the transformer the Differential Relay could pre-emptively detect the increase in pressure since it depended only on measuring the input/output. Both these devices are known in the prior art and neither party denies this fact.
CTR’s ‘302 patent was supposedly the first time that somebody had combined both sensors in one device and the claimed invention appears to lie in this combination. I am not sure whether the claims available on the online file-wrapper are actually the final granted claims because there are multiple versions of the claims available on the online portal. From the version I accessed Claim 1 of the ‘302 patent claimed a device comprising both the Buchholz Relay and the Differential Relay – signals from both could trigger the circuit breakers. The second part of Claim 1, claims a control unit which on receiving signals from the Buchholz Relay, the Differential Relay and the Circuit Breaker, activates a mechanism to drain the coolant and inject nitrogen gas through a valve to reduce the temperature. Although all these integers of this patent were already known in the prior art, CTR was arguing that it was the first company to combine all these known integers in one device thereby creating a new invention. My lack of clarity in the exact outline of Claim 1 is partly due to the fact that the judgment never reproduces Claim 1 and in fact the judge has skipped any serious attempt at claim interpretation.
Sergi’s alleged infringement of CTR’s patent came to light when it was bidding for a tender put out by Delhi Transco Ltd (DTL). The procedural history of this case is terribly complicated. Let it suffice to say that the infringement lawsuit was filed by CTR on 15th February, 2010 before a District Court at Thane before transferring to the Bombay High Court and both parties subsequently ruthlessly sued each other until Justice Patel finally granted the interim injunction on October 23, 2015 – five years after the suit was filed – trail has not even started!
Justice Patel covers several issues in his long judgment but due to space constraints, I’m limiting myself to the following issues:
(i) The standards to be followed before the grant of an interim injunction: In most cases a plaintiff would have to prove the following three factors in its favour to secure an interim injunction: (i) A prima facie case; (ii) Balance of convenience & (iii) Irreparable injury. In order to determine whether the Plaintiff has a prima facie case, a judge is require to assess the strength of the Plaintiff’s claim based on the evidence before him – without the benefit of a trial to test the evidence. In a trademark infringement case, this would require comparing the marks in order to determine similarity or genericity of the marks in question – this is usually a simple affair that can be completed by a judge who has good eyesight. A patent infringement lawsuit however is quite different since it involves complex evidence that usually does not lend itself to a prima facie analysis because of the complexity of the technology involved. In order to assess issues like infringement and validity of the patent, the judge will necessarily have to fall back on expert evidence affidavits and basically conduct a mini-trial without the benefit of a cross-examination. Cognizant of these challenges, the House of Lords in the famous American Cyanamid v. Ethicon (1975) case had cautioned against judges conducting mini-trials in patent infringement cases at the interim stages. Instead, the House of Lords lowered the prima facie standard to that of a triable issue i.e. whether the Plaintiff had managed to establish that there was a serious question to be tried. Since the House of Lords held that patents could be presumed to be valid for the interim stage, the patentee only had to establish that a serious question of infringement was made out for the purpose of trial. If the Plaintiff could establish this, the Court would move on to assess the balance of convenience and irreparable injury before deciding the grant of an interim injunction. This way a judge avoids a mini-trial at the interim stage.
Although Justice Patel discusses the American Cyanamid judgment, in context of presuming the validity of the patent (and even this explanation is not entirely convincing), he misses out entirely on the distinction drawn by the House of Lords between the prima facie standard and triable standard. Instead he falls into the trap of conducting a mini-trial by trying to assess the probative value of expert witness affidavits on complex factual questions without the benefit of testing the evidence through a cross-examination of the experts in question. This prima facie standard which is followed by Justice Patel is best avoided in such complex cases.
I’m not sure whether the above issues were even articulated before Justice Patel – in any case, that ship has sailed and we have lost yet another opportunity for laying down proper standards to be followed at the interim stage. An alternative strategy put forth by Shamnad et. al. in this paper, is to do away entirely with the interim injunction in patent cases and instead proceed directly to an expedited trial. This strategy makes sense – especially when we see cases like the present one where it took the High Court 5 years to decide on the interim injunction.
(ii) Interpreting the claims: The starting point in a patent infringement lawsuit is an interpretation of the claims of the patent. The claims define the boundaries of the invention being protected by the patent. The proper way to do this would be to begin with a literal interpretation of the claims. In the West, there is substantial jurisprudence built on the usage of particular commonly used phrases in claim language. In this case however Justice Patel completely skips any discussion of the language of the claims when he describes CTR’s patent. In fact “Claim 1” isn’t even reproduced in the judgment or the annexures. Instead at para 19 he relies entirely on CTR’s favourable description of its own patent without actually referring to the text of the claims. The failure to clearly interpret the claims automatically leads to the rest of the judgment being suspect and in my opinion, this is in itself a ground to set aside Justice Patel’s judgment on appeal.
(iii) Combination patents and their validity under the law: The patent validity analysis is usually two-fold under Indian law. The first step is to analyse whether the subject matter of patent is “patent-eligible” and the second step is to analyse whether the invention is patentable i.e. is it novel, non-obvious and having industrial application?
The first step basically involves applying Section 3 of the Patents Act, which lists out a list of non-patentable subject matter. For this particular case, Section 3(f) of the Patents Act was relevant. This provision prohibits the claiming of “a mere arrangement or rearrangement or duplication of known devices each functioning independently of one another in a known way”. In this particular case, there was no dispute that all the integers (the Differential Relay, the Buchholz Relay and the Circuit Breaker) were known in the past – the question was whether these three devices were being used together for the first time in an interdependent manner. This is a purely factual issue and does not involve any legal analysis. If the defendant failed to establish these facts, Claim 1 will survive Section 3 and the analysis will then shift to whether the claimed arrangement between the 3 integers would have been obvious to a person skilled in the art.
In my opinion, Justice Patel fails to clearly demarcate the Section 3(f) analysis from the obviousness analysis. The result is a mish-mash where he conflates a Section 3 analysis with an obviousness analysis. In any case, the obviousness issue is a mixed question of law and fact and it necessarily requires an expert to testify from the point of view of a person skilled in the art. In his discussion from page 46 to 50, Justice Patel fails to link up his analysis of the expert witness testimony (earlier in the judgment) with his final conclusion that the arrangement of the three devices would in fact be obvious. Even just on the combination issue, I think the judge’s analysis fails to explain with enough clarity whether the three devices are actually working interdependently because once again the answer depends on expert opinion.
(iv) The test for patent infringement & the pith and marrow rule of patent construction: A patent infringement analysis is usually conducted by matching the “essential elements” of the claim with the infringing article. The simple reason for this is because the claims define the boundaries of what is being claimed by the patentee on the basis of its specification. Instead of analysing the “claims v. infringing article”, Indian judges often make the mistake of matching a patented article with the infringing article. Justice Patel also makes a passing remark to this same effect in para 54 even though he doesn’t really apply it.
I think the infringement analysis, which runs from paragraphs 54 to 58 and then again paragraph 73 to 76 is quite confusing. As I mentioned earlier, a judge should ideally give the Claims a literal interpretation and examine whether each element, as claimed is found in the infringing article. At times such an approach does not do justice to a case because the infringer may make slight changes to take its article out of the purview of a literal interpretation of the claims. In such a scenario, English judges have held that it is acceptable to adopt a purposive interpretation of claims by identifying the “pith and marrow” of the patent and analysing whether the defendant’s article consists of the “pith and marrow” of the patent. This approach has its hazards because it makes it difficult for competitors to ‘invent-around’ patents since most of the time they would rely only on the text of the claims rather than the “pith and marrow”, which is quite a subjective element. India should be careful while importing such concepts from English jurisprudence. Although Justice Patel does explain the history of the “pith and marrow” test in the English context, he doesn’t debate its suitability or otherwise in the Indian context. In this particular judgment, he simply dives into the “pith and marrow” test directly, without even attempting a literal interpretation of the claims. He ends with the conclusion that the defendant’s product’s Sergi 3000 is infringing the patent since it has all three integers. I don’t quite understand why Justice Patel could not arrive at this same conclusion using the “essential elements” rule.
(v) The Balance of Convenience & Irreparable Injury: After establishing that the plaintiff had a strong prima facie case in its favour, Justice Patel moves onto discussing the issues of balance of convenience and irreparable injury. Surprisingly, he completes the entire analysis in a mere 10 lines without really providing any analysis to back the conclusion that the balance of convenience lies in favour of the plaintiff. Instead Justice Patel appears to be overwhelmed by the fact that he has found a strong prima facie case in favour of the plaintiff. I don’t think that’s the correct approach – all three factors should be analysed independently, before deciding the grant of an interim injunction.
Similarly when it comes to analysing irreparable injury, Justice Patel comes to the sweeping conclusion that “it is difficult to see how CTR might be able to recoup its losses by a decree in damages; those losses are possibly beyond computation.” This is a most surprising conclusion. There are established methodologies to compute damages suffered by a patentee. For example, a judge could calculate the value of Sergi’s sales of the infringing article and disgorge the profits made by it in addition to interest etc. In fact, there are several cases where Indian judges who refuse interim injunctions, simply order the defendant to maintain accounts with the court for the duration of the trial so that the court can easily compute damages if it finds for the plaintiff on conclusion of the trial.
(vi)Expert witness affidavits: One of the many takeaways in this judgment is the probative value of expert witness affidavits. The Plaintiff had filed three expert witness affidavits – two of whom were professors at the College of Engineering, Pune and one of whom was a former Controller General of Patents. Justice Patel appeared to be convinced by all three expert affidavits filed by the Plaintiff and cites them approvingly. The Defendant’s expert witnesses however didn’t receive the same bonhomie from the judge and for good reason. The Defendant’s first expert witness, a patent agent, had apparently cited Wikipedia as an authority to back his technical conclusions! Referring to this citation, Justice Patel concludes “That is, I imagine, enough to tell us of the reliability of his opinion even prima facie”. The second witness apparently failed to address an important prior art document while coming to his conclusions. Ideally a witness should be allowed a chance to explain this during cross-examination before the court draws any conclusions and this is precisely the reason that judges should be careful of depending on expert witness affidavits before they have been tested during trial.
There are several other interesting issues in this judgment such as overlapping proceedings, the Gillette defence, costs etc. Notwithstanding, my disagreement with Justice Patel’s judgment on the law, there is no denying that he has reasoned his judgment well. Since this appears to be one of the first few patent cases that he has dealt with, I expect that he will only get better in future patent cases.