Infringement of Patent- Part II

June 12th, 20112:20 pm @    

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(The following article has been divided into two parts. Part I deals with basics of patent and its infringement. Part II explains the infringement with specific sections of Indian Patent Act,1970. Click here for Part I)

Infringement of Patent under various sections of Indian Patents Act, 1970

Section 104- Jurisdiction

Patent infringementA suit for infringement has to be filed in a district court having jurisdiction to try the suit, the jurisdiction is governed by the CPC [Civil Procedure Code] and the cause of action must have arisen in a place within the jurisdiction of the court where the suit is to be filed. Where the defendant counter-claims revocation of the patent the suit along with the counter claim will be transferred to the High Court. No suit for a declaration under section 105 [Power of court to make declaration as to non-infringement] or for any relief under section 106 [Power of court to grant relief in cases of groundless threats infringement proceeding of ] or for infringement of a patent shall be instituted in any court inferior to a district court having jurisdiction to try the suit but suit for counter-claim for revocation of the patent along with the counter-claim, shall be transferred to the High Court for decision.
Once the law suit has been filed by the Plaintiff, if the defendant counter-claims for revocation of plaintiff’s patent, the suit along with the counter claim is transferred from District Court to the High Court because District Court does not have jurisdiction to try revocation of patent case.

Section 105- Power of court to make declaration as to non-infringement

At any time after the publication of grant of patent any person may institute a suit for a declaration that the use by him of any process, or the making, use or sale of any article by him does not or would not constitute an infringement of a claim of a patent against the patentee or the holder of an exclusive license under the patent, notwithstanding that no assertion to the contrary has been made by the patentee or the licensee, if it is shown

(1)    that the plaintiff has applied in writing to the patentee or exclusive licensee for a written acknowledgement to the effect of the declaration claimed and has furnished him with full particulars in writing of the process or article in question and

(2)    that the patentee or licensee has refused or neglected to give such an acknowledgement.

This provision is notwithstanding anything contained in section 34 of the Specific Relief Act, 1963. The costs of all parties in a suit for a declaration brought should be paid by the plaintiff unless decided by the court otherwise for special reasons.

Section 106- Power of court to grant relief in cases of groundless threats of infringement proceedings

Where any person threatens any other person by circulars or advertisements or by communications, oral or writing addressed to any other person with proceedings for infringement of a patent, any person aggrieved thereby may bring a suit against him praying for the following reliefs

(1)    declaration to the effect that the threats are unjustifiable

(2)    an injunction against the continuance of the threats and

(3)     such damages, if any as he has sustained thereby

Section 107- Defenses etc in suits for infringement

(1) In any suit for infringement of a patent, every ground on which it may be revoked under section 64 shall be available as a ground for defense.

(2) In any suit for infringement of a patent by the making, using or importation of any machine, apparatus or other article or by the using of any process or by the importation, use or distribution of any medicine or drug, it shall be a ground for defense that such making, using, importation or distribution is in accordance with any one or more of the conditions specified in section 47.

According to the above sections in any suit for infringement of a patent, every ground on which the patent may be revoked under Section 64 shall be available as ground for defense

Cadila Pharmaceuticals Ltd v. Instacare Laboratories Pvt Ltd.[1]

The Gujarat High Court observed that sec 107 expressly empowered a defendant to defend any suit for infringement of a patent. Every ground on which a patent could be revoked under sec 64 was available as a ground of defense. Though the defendant had chosen not to give notice of opposition under sec 25 of the act or to apply for revocation under sec 64 of the act, he still had the right to defend his action on any ground on which the patent could be revoked under sec 64 of the Act.

Section 108- Reliefs in suits for infringement

The reliefs which a court may grant in any suit for infringement include an injunction (subject to such terms, if any, as the court thinks fit) and, at the option of the plaintiff either damages or an account of profits.

The relief which a court may grant in any suit for infringement and passing off:
(1) The relief which a court may grant in any suit for infringement or for passing off includes injunction (subject to such terms, if any, as the court thinks fit) and at the option of the plaintiff’s either damages or an accounts of profits, together with a without any order for the delivery up of the infringing labels and marks for destruction or erasers.
(2) Notwithstanding anything contained in sub-section (1) , the court shall not grant relief by way of damages or an account or profit in any case-
(a) where in a suit for infringement of a trade mark, the infringement complained of is in relation to a certification of trade mark; or
(b) where in a suit for infringement the defendants satisfies the court:
(i) That at the time of commenced to use the trade mark complained of in the suit, he was unaware and has no reasonable ground for believing that the trade mark of the plaintiff was a registered user by way of permitted use ; and
(ii) That when he became aware of the existence and nature of the plaintiff’s right in the trademark, he forthwith ceased to used the trade mark in relation to goods in respect of which it was Registered;

Types Of Relief

The type of relief to which a plaintiff is entitled are –
(1) An injunction restraining further use of the infringing mark.
(2) Damages or an account of profits.
(3) An order for delivery-up of infringing labels and marks for destruction or erasure.

The plaintiff is entitled to the above relief both in an infringing and passing of action.

Reliefs not exhaustive

The language of the section 105 indicates that the relief’s mentioned in section 105 are not exhaustive. The expression used is, “the relief includes…”

Grant of relief is discretionary

The Grant of relief is discretionary, the use of expression may indicate it is not mandatory for the court of grant to relief, but the discretion has to judicially exercise but not in the sense of a prerogative which can be applied arbitrarily.

Injunction

An injunction is a judicial process or order restraining a person from continuing with wrongful act. the general rules governing the grants of injunction are contained in section 36 to 42 of the Indian Specific Relief Act, 1963 and Order XXXIX Rules 1 & 2 and section 151 ( Inherent power of the Court) of the code of civil procedure, 1908.

Injunction may be the following types :-

(a) Anton piller order
(b) Mareva injunction
(c) Interlocutory injunction
(d) Perpetual injunction.
These are explained below:

Anton piller order

These are ex parte order to inspect defendant’s premises. A court may grant such an order to the plaintiff where there is a possibility of a defendants destroying or disposing of the incriminating material. Pass such an order if for inspection of the premises of the defendants.

An ex parte order means an order passed on the application of the plaintiff without giving the defendants a notice of the application. Such a notice would enable the defendant to temper with the evidence of his infringement; hence ex parte order.

The three condition requisite for making and order are;

(1) there must be a strong prima facie case in favour of the plaintiff.
(2) Such an order if not granted will cause irreparable damage to the applicant for injunction.
(3) There must be clear evidence that the defendants have in their possession incriminating documents or things and there is real a real possibility that they may destroy such material if any notice of application is served.

Mareva injunction

In such an order the court has power to freeze defendant’s assets where there exists a probability of the assets being dissipated or canceled so as to make a judgment against him worthless and un-enforceable.

Interlocutory injunction

This form of injunction is the commonly sought and most often granted from of injunction. The interlocutory injunction it an order restraining the defendants from continuance of the acts which amount to infringement.

An interlocutory / interim injunction may be granted ex parte that is without notice in cases of urgency. Such ex parte injunction is however granted for a limited period only.

The plaintiff is seeking an ex parte interim injunction has to discharge the duty of making full disclosure to the court of all facts which are material to the exercise of the court’s discretion whether or not to grant the relief.

Grant of interim / interlocutory injunction is discretionary, the plaintiff or the applicant cannot claim it as a matter of right to have an ex parte order granted in his favour.

Perpetual injunction

Perpetual injunction is an order restraining the defendants totally, for all times to comes, from doing any act which infringes the right of the proprietor of the trade mark. Perpetual injunction is generally granted when the suit is finally decided. Perpetual injunction usually follows when the grant of interim injunction against infringement was granted at the beginning of the suit. It can be granted also in cases where no interim injunction was granted.

Damages Accounts Of Profits

The plaintiff if an action for infringement may be granted either damages or an account of profits but not both. In an account of profit the infringer is required to give up ill-gotten gains in favour of the plaintiff whose right he has infringed.

In case of damages the defendants has to compensate the plaintiff. The damages may even be more than monetary profits reaped by the defendants by the misuse of the plaintiff’s mark.

The quantum of damages awarded is determined by the quantum of loss actually sustained by the plaintiff which was the natural and direct consequence of the unlawful acts of the defendants. Speculative and unproven damages are also not considered and determining the quantum of damages.

In calculating the amount of profits, the damages suffered by the plaintiff is immaterial. The accounts of profit, is made on the basis of actual profit, the defendants has made out of the sale of infringing goods

Section 109- Right of exclusive licensee to take proceedings against infringement

Exclusive licensee is a legal person who has been granted a license or a permission to use patent to the exclusion of all others, including the patentee. Sometimes, special rights attach to these types of licensees, for instance exclusive licensee is entitled to commence proceedings for infringement in his own right, without the permission of the owner or licensor. Exclusive licensee can also prevent the patentee himself from using the patented invention.

(1) The holder of an exclusive license shall have the like right as the patentee to institute a suit in respect of any infringement of the patent. In awarding damages or an account of profits or granting any other relief in any such suit, the court shall take into consideration any loss suffered or likely to be suffered by the exclusive licensee or, the profits earned by means of the infringement so far as it constitutes an infringement of the rights of the exclusive licensee as such.

(2) In any suit for infringement of a patent by an exclusive licensee, if the patentee does not join as plaintiff, he is added as a defendant, but a patentee so added as defendant shall not be liable for any costs unless he enters an appearance and takes part in the proceedings

Acts Which Do Not Amount To Infringement- 107-A

There are also certain acts which do not amount to infringement which includes: any act of making, constructing, using, selling or importing a patented invention solely for was reasonably related to the development and submission of information required under any law in India or in any other country that regulates the making, constructing, using, selling or importing.

Importation of patented products by any person from a person who is duly authorized under the law to produce and sell or distribute the product is not to be considered as infringement of patent rights.

Section 104A -Burden of Proof

Lastly in any suit for infringement of a process patent the court may direct the defendant to prove that the process used by him to obtain the identical product is different from patented process

Provided (1) subject matter of the patent is a process for obtaining a new product.

(2)there is substantial likelihood that the identical product is made by the process.

The patentee is however to prove that the product of defendant is identical to the product directly obtained by the patented process.

The court shall not require any party to disclose any manufacturing or commercial secrets.

Period of Limitation:

The period of limitation for instituting a suit for Patent infringement is there years from the date of infringement.

Conclusion

There has been a dramatic change in the Patent Law system across the world since its origin and embodiment in law system across the world since its origin and embodiment in law centuries ago. Not only the form of patent has become more refined; but also that the entire process of registration of patents has witnessed a commendable change. As a result of the recent move towards globalization, the procedure for obtaining patents has also shifted towards centralized systems which aim at saving time and related costs. At the same time, with the emerging areas of new patents are more onerous and tremendously accelerated the evolution and growth of patent law (both nationally and internationally) and has led to international initiatives towards forming an international patent convention which support centralized application for all nations in the world. This shall certainly save time and costs and lead to a utopian regime for registration and grant of patent rights, its protection and Lawful exploitation.

(Click here for Part I of this article)


[1] 2001 PTC 42, p 478 (Guj)

Picture courtesy- worldlawdirect.com

 

Article by MightyLaws’s Regular Author-

Richa Shrivastava

Student, Amity Law School, Lucknow.

 

Article by

Richa Shrivastava is a student from Amity Law School, Lucknow pursuing BA.LLB (Hons.). She is also the Student Coordinator of Moot Court committee of her college.

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