Rectifying Problematic Interim Injunctions: A Discussion on the Bombay High Court’s DB Decision in  Tri-Parulex v. CTR Manufacturing Industries

In perhaps a rare sighting, the Bombay High Court Division Bench’s recent order in Tri-Parulex Fire Protection System v. M/s. CTR Manufacturing Industries Private Limited (DB order) shows a lucid and crisp analysis of the three factors test for interim injunction in a patent related dispute. Readers will recall that unreasoned interim injunction orders have been discussed extensively on the blog (see here, here, here and here) wherein different authors have highlighted the risks associated with these unreasoned orders and the need for a cautious approach towards interim injunctions in technical patent disputes. This order, reversing the single judge’s order prior to it, demonstrates exactly what the cautious approach is/ should be, and what can be the implications of such orders for the affected party.

Slightly Longish Background

Since a majority of the DB order extensively discussed whether there is a prima facie case or not, it is pretty heavy on the facts and details associated with the invention. And in this case at least, this was fun because the facts of the case are really gripping and seem straight out of a corporate thriller! Both the parties Tri-Parulex (appellant) and CTR Manufacturing (respondent) are competitors and offer similar system for protecting electric transformers from catching fire. The present dispute between the parties arose out of Tri-Parulex’s entry against an invitation for tender by Adani Electricity Mumbai Ltd. for Nitrogen Injection Fire Prevention System (NIFPS). One of the technical specifications for this tender invitation was that NIFPS unit should include a system to automatically prevent transformers from catching fire and prescribed a series of signals for activation of the NIFPS. This series of signals should be generated from “differential relay, buchholz relay parallel with pressure relief valve or Rapid Pressure Rise Relay (RPRR) and circuit breaker(three integers) in any sequence in the control panel.

Interestingly, Tri-Parulex has a valid and subsisting patent (IN 301322) for a system and method for preventing electrical transformers from catching fire. However, it submitted a different entry to the above tender as presumably its patent does not use a differential relay. CTR Manufacturing alleged that the Tri-Parulex entry (which eventually got the tender) has infringed its registered patent (In 202302) that is on a specific sequence in which signals from the above three integers are provided- First, from differential relay, then from buchholz relay and third, by using the circuit breakers. CTR alleged that complete compliance with the mentioned technical specification was not achievable without infringing its patent. This is because, as per CTR, the moment a system operates in an auto prevention mode the differential relay, being an electrically operated relay, will operate faster than the buchholz relay, which is a mechanical relay and thus, the sequence will inadvertently be similar to the one employed in CTR’s patent. CTR further alleged that the technical drawing, explaining the operational logic of its NIFPS unit, was exactly similar to the logic or manner of operation of CTR Manufacturing’s patent.

Single Judge Order

An interim injunction was granted by the Single Judge, restraining Tri-Parulex from using, manufacturing or selling its system that protects transformers from catching fire and further restraining the appellant from circulating technical brochures/ specifications/ drawings that shows the impugned product. In its order, the Single Judge relied extensively on 2 points :-  1) The claims of the Tri-Parulex patent and the omission of differential relay for generation of a signal therein; 

2) The broad interpretation of the CTR patent, based on CTR’s above explanation on the interaction between automatic and mechanical relay.

Consequently, the Single Judge held that the moment Tri-Parulex offers a system that uses differential relay in combination with buchholz relay it infringes the CTR patent. It further held that Tri-Parulex’s claim that these three integers can operate in a different sequence requires a trial and leading of evidence.

 However, what the Single Judge order failed to appreciate is that the use of these three integers is a part of the prior art! And that CTR never claimed a monopoly on the use of these three integers. Tri-Parulex further alleged that the drawings submitted by the CTR to claim infringement was fabricated and the court did not pay any heed to this argument.

The DB Order

The DB differed extensively with the findings of the Single Judge and undertook a detailed assessment of whether there is a prima facie case for an infringement and then proceeded to reflect upon whose favor balance of convenience lies. At the outset of its assessment, it specifically observes “In our view, …, the learned Single Judge by the impugned order has granted a right much beyond what was granted by the patent itself to respondent.”

First, looking at the plaint, rejoinder, and claims of the CTR’s patent, the DB established that CTR has accepted that its patent is on a specific sequence in which the integers operate. Then, it investigated if there is only one way in which the three integers can operate, as claimed by CTR. For this the DB looked at the plaint, the written submissions, the affidavit of an expert filed by CTR, specifications for NIFPS by Adani and another tender for NIFPS and held that signals can be received in any sequence on the control panel and the system can be activated, even in the auto mode.

Prof. Basheer in his co-authored paper with Prakruti Gowda and Jay Saklecha here had foreshadowed the court succumbing to the highly technical jargon and the scope of patented subject matter. Can this be the case here as well? Well, it certainly looks like it.

I cannot help but think that whether the exhaustive analysis/ discussion of the pleadings and supporting documents can be seen as a mini-trial? The Supreme Court in the Anand Prasad Agarwalla case has cautioned against courts indulging in mini-trials at interim stages. However, considering that theoretically interim injunctions are supposed to be granted only in exceptional cases where all three factors are fulfilled. Yet here the single judge has passed an interim order without substantial finding on the prima facie case. In this case, I suppose conducting a thorough assessment of the documents and pleadings by the Division bench was the only way out and should not be seen as a mini trial.  

Moving on, one may ask if there is anything left for the actual trial then? This is where the next bit comes in. As pointed above, Tri-Parulex argued that CTR relied on a fabricated document to allege infringement of its patent. The DB criticized the Single Judge order for not taking cognizance of this allegation and observed that both the parties have submitted different impugned drawings and all the drawings submitted by the CTR have initials of one Somit Kumar except this one. Therefore, the court held that the onus lies on CTR to explain the source and the discrepancy, which presumably will be decided later in the trial.

After establishing that there was no prima facie case for an interim injunction here, the court observed that owing to the interim injunction Tri-Parulex will not be able to execute the orders it had from other entities. It further held that it won’t be able to bid for projects except where its patent is to be used and that such projects may not be available. The court noted that even the order that Tri-Parulex had from Adani Electricity Mumbai Ltd was canceled because of the interim injunction and was further disqualified from NIFPS owing to restrictions on the use of differential relay by the impugned order. Considering this, the court held that the balance of convenience lies in favor of Tri-Parulex. This is perhaps the biggest takeaway from the case according to me. Ideally, the Single Judge could have sought a security bond from Tri-Parulex against its prima facie finding on infringement. (This alternative has been discussed by Swaraj and I here.) Doing this would have also made sense since the Single Judge order expressly notes that Tri-Parulex’s argument on different ways to send signal requires a detailed discussion and posted it for the trial and thus there was a strong argument against the allegation of the infringement. However, the court instead passed the injunction order that inadvertently caused material damage to the trade of Tri-Parulex as evidenced above.

Thus, the case is a perfect example of what happens when hasty interim injunction orders are passed by the court and the impact that such orders have on the business of the affected party. While the order should be appreciated for rectifying the wrong, it should also serve as (another) example for future cases on why interim injunctions in technical patent disputes are a bad idea.

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