Recently, the Delhi High Court delivered an important decision that clarified the jurisdiction of High Courts post the enactment of the Tribunal Reforms Act, 2021 (TRA), which dissolved the IPAB (Intellectual Property Appellate Board). As Praharsh noted in our weekly review, the question debated in this judgment was whether after the dissolution of the IPAB, a party could approach any High Court with revocation applications (under Section 64 of the Patents Act, 1970) and appeals (under Section 117A of the Patents Act) and if that is not the case, how is the jurisdiction to be determined for such applications?
With the enactment of the TRA, the jurisdiction in respect of appeals and revocation petitions under the Patents Act was transferred back to High Courts. However, this transfer left open the question of whether all High Courts can entertain revocation petitions and appeals and what parameters are to be used for determining whether a certain High Court has jurisdiction or not.
Background
The Delhi High Court joined three matters, two of which, ThyssenKrupp Rothe Erde Germany GmBH v. The Controller of Patents and Dr. Reddy’s Laboratories Limited & Anr v. The Controller of Patents concerned revocation applications under Section 64, and a third matter, Elta Systems Ltd. v. The Controller of Patents concerned an appeal under Section 117A.
In the ThyssenKrupp case, ThyssenKrupp filed a revocation petition in the Delhi High Court under Section 64 against a patent granted in favour of IMO Holding GmbH by the Chennai Patent Office. ThyssenKrupp had earlier filed a revocation petition in the IPAB but upon the enactment of the TRA, filed a revocation petition in the Delhi High Court. IMO filed an interim application against the same seeking a rejection of the petition on the ground of lack of jurisdiction. Here, since Thyssenkrupp had already filed a revocation petition before the IPAB, this decision ruled that the same stood transferred to the Madras High Court and the Delhi High Court could not have jurisdiction.
In the Dr. Reddy’s case, a revocation application was filed under Section 64 against a patent granted in favour of Boehringer Ingelheim International GmbH. Boehringer’s patent application was filed in 2006 and granted in 2015 by the Delhi Patent Office, against which Dr. Reddy’s filed a revocation petition in 2021 in the Delhi High Court. After the filing of the revocation petition, Boehringer filed an infringement suit against Dr. Reddy’s in the Himachal Pradesh High Court and was granted an interim injunction in its favour. Boehringer also filed an interim application that sought a stay on the revocation petition given the pending adjudication before the Himachal Pradesh High Court and a preliminary objection against the maintainability of the revocation petition. Here, the Court decided that the petition was maintainable as the revocation suit was filed before the conclusion of the infringement suit filed by Boehringer.
In the Elta Systems case, Elta filed an appeal under Section 117A of the Patents Act against an order by the assistant controller of patents of the Delhi Patent Office that refused grant of patent against Elta’s application. Elta had filed its patent application in the Mumbai Patent Office, however, through the internal allocation mechanism adopted by the office of the CGPDTM (Controller General of Patents, Designs & Trade Marks) the application was marked for examination at the Delhi Patent Office. Upon rejection of the application, an appeal was filed by Elta in the Delhi High Court. The Court determined the issue to be whether the appeal would be maintainable before the Delhi High Court or at the High Court of Bombay. Here, the Delhi High Court ruled that since the appropriate office, in this case, would be the Mumbai Patent Office as the patent application originated here, the appeal would lie before the Bombay High Court, even though the examination was undertaken by the Delhi Patent Office.
Court’s Reasoning
Patent Revocation Petitions Under Section 64
After considering the arguments of the parties that deliberated on the meanings of ‘appropriate office’, ‘High Court’, and ‘interested person’ as captured in the Patents Act and Patents Rules 2003, in determining which High Court would have the jurisdiction the Court reasoned that the place where the ‘cause of action’ arises for filing a revocation petition would play the leading role in identifying jurisdiction. The Court noted that the dynamic effect of a patent grant can be seen nationwide and hence a petitioner can file a revocation petition in any High Court. Citing the Supreme Court’s judgment in Kusum Ingots & Alloys Ltd. v. Union of India and Nawal Kishor Sharma v. Union of India, the Court reiterated that the cause of action represents a bundle of material facts which needs to be proved for there to be a right to sue.
Stating that a revocation petition under Section 64 can be filed wherever the effect of the patent is felt, the Court noted that illustratively and non-exhaustively that ‘cause of action’ for patent revocation petitions could arise at a place where the patent application if filed, where it is granted, where a patentee resides or carries on business, where the suit for infringement has been filed, etc.
Thus, the Court reiterated that the High Court having jurisdiction in case of revocation petitions would have to be decided on the basis of both the static effect (grant of patent and its continuation) and the dynamic effect (the existence of exclusionary monopoly rights) of the grant of the patent.
Appeals Against Orders by the Patent Office Under Section 117A
The High Court noted that the ‘appropriate office’ as captured in Section 2(1)(r) and Section 74 of the Patents Act and under Rule 4 of the Patents Rules would be the most crucial determinant of the jurisdiction of a High Court for appeals under Section 117A. The Court identified the ‘appropriate office’ with respect to a patent application would be the one in which the patent application originates. The same would continue to be the ‘appropriate office’ despite the internal allocation mechanism adopted by the CGPDTM for administrative convenience, wherein the application may be examined by a controller in a different patent office. The Court noted that “even after the enactment of the TRA, appeals under Section 117A challenging the order or direction of the Patent Office would lie before the High Court having territorial jurisdiction over the appropriate office from where the patent application originates and which is the situs of the said application.”
Breaking Down the Judgment
Of importance, is that the order notes the impact of the static and dynamic effect of grant of patents and how that would play into identifying the ‘cause of action’, albeit without adequate explanation. There is recognition that ‘cause of action’ with respect to revocation petitions may arise across the country due to the dynamic effect of patent grants. By leveraging ‘cause of action’ as captured under Section 20 of the Civil Procedure Code, and tying it to the dynamic effect the Court moves a little further away from the existing standards of identifying territorial jurisdiction. As noted by Eashan Ghosh in his analysis of the judgment here, in delving into the dynamic effect, the Court actually dilutes the requirement for territorial jurisdiction when it comes to revocation petitions. Indeed by allowing ‘persons aggrieved’ to extend their grievance to other territories through this interpretation, the order produces a certain level of ambiguity with regard to territorial jurisdiction in patent disputes. This can potentially allow for increased forum shopping, wherein plaintiffs choose to get their case heard in favourable jurisdictions across the country by citing the dynamic effect of patent grants – which may ultimately go against public policy and potentially lead to unnecessary harassment of defendants.
With appeals, the judgment clearly lays down that jurisdiction of the appellate forum is tied to the patent office that examines the relevant application, and the internal mechanism adopted by the CGPDTM would not affect the same. This reiterates what is captured in Rule 28(6) of the Patent Rules, which creates the deeming fiction that attaches patent applications to the office it originates from, thus clearing up any questions that may have persisted with respect to this.
Thank you for the insightful post Namratha. There are a few things that I would like to point out:
1. The post says that “by leveraging ‘cause of action’ as captured under Section 20 of the Civil Procedure Code, and tying it to the dynamic effect the Court moves a little further away from the existing standards of identifying territorial jurisdiction” / “the Court actually dilutes the requirement for territorial jurisdiction when it comes to revocation petitions”. However, you do not tell what the ‘existing standard of identifying territorial jurisdiction’ is. This seems to be the precise question before the Court in this case after the enactment of the Tribunal Reforms Act, 2021. Also, ‘dilution’ is a relative term. For that it first needs to be identified as to what the benchmark is. If you are referring to IPAB as the existing standard, there is no coming back for it. And if you are referring to the scenario prior to IPAB, then that is precisely what the Court seems to have done. It has clarified that position existing prior to IPAB would continue after the abolition of the IPAB.
2. From this very point the second issue comes. The post seems to suggest that the court has ‘introduced’ the concept of ‘cause of action’ and ‘dynamic effect’ which were hitherto alien to revocation petitions. You say that “Court actually dilutes the requirement for territorial jurisdiction when it comes to revocation petitions.” On the other hand, the judgment seems to suggest that the Court (Single Judge) is following Girdhari Lal v. K. Gian Chand (Full Bench) and Ajay Industrial Corp. v. Shiro Kanao (Division Bench) [2nd one given in the context of patent revocation petitions only].
3. The post says that Court is reading ‘cause of action’ as captured in section 20 into revocation petitions. From a reading of the judgment in question it seems that it did not use ‘cause of action’ as contained in Section 20. The Court has followed Girdhari Lal judgment which explicitly says that the determination of jurisdiction has been made “independently of the applicability of the provisions of the CPC.”
4. While you point out the shortfalls in the arrangement affirmed in the judgment, there is no solution to those problems. Does the revocation applicant needs to always go to the place where the patent is granted or where else can she go?
5. An infringement suit is governed by the very same principles and the problems that you have pointed out are squarely applicable there as well (deliberately not elaborating on this for brevity). What makes a ‘patentee’ in the capacity of Defendant in the revocations so special that the same becomes “unnecessary harassment”?
Why should a person, having manufacturing facility in Himachal, be asked to go to wherever the patent is granted or the patentee’s place of residences for filing revocation when she can be sued of infringement of patent in Himachal.
6. You say that the order produces “a certain level of ambiguity when regard to territorial jurisdiction in patent dispute” but don’t elaborate on what those are. The order literally has an illustrative list of places where cause of action can arise as the earlier part of the post itself acknowledges. ‘Ambiguity’ and ‘expanding the scope’ [which seems to be your argument in the post] cannot be used synonymously. It is not like there was rock solid clarity after the abolition of the IPAB and the order messed it up.
7. The post says that the order allows “persons aggrieved to extend their grievance to other territories” but do not shed light on what are ‘other territories’. Does it mean places that have no bearing to the dispute? The order does not allow revocation to be filed to such places. Does it mean places where some relevant / pertinent fact has arisen? How can a Court having jurisdiction over such place be excluded.