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Title BAJAJ AUTO LTD. Vs. T.V.S. MOTOR COMPANY LTD. - A Case Study.
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Article by anoop kumar
Category Law Students
Content

INTRODUCTION.

The case involves the issues of patent infringement by the defendant and the damages for the same. But the case, further, touches upon the controversy regarding justification of the threats issued by the defendant of the same case. The case was filed before the Madras High Court in 2007.

The plaintiffs in (Bajaj Auto Ltd), along with the state of Maharashtra alleged the defendants (T.V.S. Motor Company Ltd.) of infringement of the patents of the plaintiffs, which concerns the invention of the technology of improved internal combustion engine. The remedy sought by the plaintiffs is that of permanent injunction1 for prohibiting the defendants from:

  1. using the technology or invention described in the patents of the plaintiffs; and

  2. preventing them from marketing, selling offering for sale or exporting 2/3 wheelers (including the proposed 125cc TVS FLAME motorcycle) that contain the disputed internal combustion engine or product that infringe the patent. They also claim damages for infringement of the patent.

 

The suit was pending. Meanwhile, the plaintiffs brought application before the same court seeking temporary injunction against the defendant for the same relief, which was sought in the suit for the permanent injunction. The application was filed for preventing the infringement of the patent till the pendency of the suit.

The defendants in the case filed a suit in the court2 for preventing the plaintiffs from issuing threats that the plaintiffs are infringing the defendants’ patent, through various mediums to and thereby interfering with the launch of their product (TVS FLAME) by the plaintiffs.

The suit was pending before the court. Meanwhile, the defendants filed an application for preventing the defendants, till the suit is pending, from issuing threats and thereby interfering with the launch of their product.

The case study deals with the substantive aspect of the suit in light of the provisions of the Patents Act, 1970. Moreover, the study also includes various tests evolved by the Supreme Court in the case.

The importance of the case is that, in the recent decision of the Hon’ble Supreme Court, the focus has been laid down on the quick disposal of the temporary injunction and direction to the Madras High Court for quickly disposing off the matter.

 

BRIEF FACTS OF THE CASE.

The facts of the case go through the various stages:

 

  1. Bajaj’s patent. Bajaj Auto Limited (the appellant) claimed that it was granted patent titled “An Improved Internal combustion engine working on four stroke principle” with a priority date of 16th July 20023. The patent was granted on 7th July, 2005.

Features of the invention are:

  • Small displacement engine as reflected by a cylinder bore diameter between 45 mm and 70 mm.
  • Combustion of lean air fuel mixtures;
  • Using a pair of spark plugs to ignite the air fuel mixture at a predetermined instant.
  1. What was the Patent all about? The subject-matter of the patent, the invention by the applicants called DTS-i Technology was relating to the use of twin spark plugs for efficient combustion of lean air fuel mixture in small bore ranging from 45 mm to 70 mm internal combustion engine working on 4 stroke principle.

 

  1. Tests of Patentability. According to the applicants, their invention was patentable because it qualified the tests of novelty, non-obviousness and industrial application. Following were the grounds on which the applicants corroborated their claim:

  • The use of two spark plugs in large bore engines or in high performance or racing bikes was known in the Automobile industry. But the invention of the appellant was not known in the industry.

  • The applicants claim that the need to have more than one spark plug was never thought necessary in small bore non-racing engines. Even if it was felt so, no advantages of a dual spark plug were observed. The invention of the applicant was on the application of twin plugs in small bore engine with positive merits of improved fuel efficiency and emission characteristics. In case of the small-bore engines using twin spark plugs, those engines were not lean burn.

  • In the first eight months of the that financial year, “DTS-i Technology” accounted to 54.25% share of Bajaj two wheelers. Applicants claimed that they spent considerable amount in marketing and advertising and received appreciation through out the world as recipients of various world awards and the product is of economic advantage of the country.

 

  1. TVS launches FLAME- the Bone of Contention. The Respondents, (M/s. TVS Motor Company Limited) announced to launch motor bikes of 125-CC on 14th December 2007 under the trade mark 'FLAME'. The motorcycle was powered with a lean burn internal combustion engine having a twin spark plug configuration, which according to the Bajaj Auto Ltd., infringes its patent.

Therefore, before the launch of motor bikes, the applicants brought the suit before the court to protect their patent.

 

  1. TVS files suit under section 105 and 106 of the Patents Act, 1970. In October, 2007, the respondent filed the suit before the Madras High Court4, alleging that the statement made by the applicant constituted a groundless threat.

They learnt that the respondent has also filed a suit for defamation against the applicant in the Bombay High Court.

 

  1. Application for revocation of the applicant’s patent. The applicant also came to know that only 7 days before the launch of the proposed 125-CC motorcycle, the respondent filed an application for revocation of applicant's patent before Indian Patents Appellate Board (“IPAB”)5.

 

  1. Launch of the disputed bike. The respondents, later in the month of December of 2007, launched the bikes without making any change into that.

 

PLEADINGS BY THE PARTIES.

The applicants submitted their affidavit and made various contentions regarding the validity of their patent. The respondents then filed the counter-affidavit, denying the charges of infringement against them. They challenged the validity of the applicant’s claim by raising various grounds. The contents of the affidavit of the respondent in their suit were regarded as the reply of the respondents in their counter-affidavit in the case.

 

  1. Pleadings by the appellants. Following were the pleadings made by the applicants in their affidavit:

    1. The patent granted to the applicant is valid and subsisting;

    2. The respondents can not save its skin by claiming that it is using 3 valves in the engine since the number of valves is not an essential feature of the applicant's invention;

    3. The specifications of the respondent’s TVS Flame have the similarities with the patenting technology of the applicant;

    4. Grant of injunction is essential to protect the statutory right of monopoly conferred on the applicant by virtue of the patent. Otherwise, its use by the respondent would severely prejudice the statutory right apart from damaging the reputation and goodwill, which cannot be compensated in pecuniary terms;

    5. The damage caused by the infringing act, will have telling effect on the market share loss, relative position in the industry, impact on competitiveness, impact on industry rankings etc. of the applicant, which cannot be measured in terms of money; and

    6. The applicants have launched its motorbike with effect from the year 2003 and steadily increased the sale in these long four years, whereas the respondents have launched “FLAME” only on 14.12.2007 and they have not sold the said motorbike on an extensive scale and therefore.

 

  1. Pleadings by the respondents. Following were pleaded by the respondents in their counter-affidavit:

    1. Applicants has unjustly threatened and defamed the respondent to secure illicit market advantage for its product over that of the respondent, instead of moving the Court to seek justice;

    2. There are inherent and explicit contradictions in the stand of the applicant as it is seen in the various documents relied upon by the applicant for protection of its patent;

    3. The use of two spark plugs in an Internal Combustion (IC) engine with three valves was a prior art and therefore, the applicant cannot seek patent for the use of two spark plugs in an IC engine, and in order to avoid the said situation, the applicant has resorted to an art of deception by introducing a limitation of bore size to the US Honda patent with full knowledge that US Honda patent did not have any such limitation;

    4. By filing an application for revocation of patent given to the applicant, the respondent has questioned the very validity of the applicant's patent on several grounds;

    5. The respondent has filed an application for revocation of the applicant's patent before the IPAB, Chennai even on 24th August 2007. The very validity of the patent of the applicant, being in question, the applicant is not entitled for any injunction;

    6. Even in the event of applicant succeeding in the suit, it can be compensated in terms of money;

    7. The US Honda Patent No. 4534322 dated 13th July, 1985 had been in the public knowledge for over 20 years. Arrangement of installation of two spark plugs in the respondent’s cylinder was exactly as per the arrangement in the said Honda Patent, which expired earlier;

    8. The construction of three valve configuration and their working, in the engine was protected by patent granted to AVL. The respondent was entitled to use the same as it was licensed to the respondent;

    9. While the applicant's claim is two spark plugs with two valves, the respondent's arrangement is two spark plugs with three valves;

    10. The claim of the applicant that it invented a spark plug centric engine comprising two spark plugs, which resulted in lean air fuel mixture is not an invention due to various reasons.

      1. The applicant conceded use of two spark plugs in small bore engine exists.

      2. The applicant attempted to confuse the functioning of IC engine and particularly that of the spark plugs. In the functioning of the four-stroke IC engine, which involves “intake stroke, compression stroke, power stroke and exhaust stroke”, the spark plug comes in not to cause lean air fuel mixture, but to burn it.

      3. IC engine is common for automobiles, two wheelers, three wheelers and four wheelers and also for aeronautics. Hence, the earlier use of two spark plugs in large bore IC engines denies the applicant from claiming protection over its patent.

    11. The licence given to the respondent is distinct and different from that of the applicant's patent;

    12. The third valve in the three-valve arrangement of the respondent is not mere ornamental. The applicant has not chosen to challenge the licence granted in India in respect of the three valve arrangement of AVL despite the fact that even on 3rd September 2007, the respondent has disclosed that its, three valve arrangement, founded on AVL patent. In the absence of challenge to AVL patent, it is open to the respondent to use the arrangement with the AVL patent;

    13. The applicant changed from plug centric description to valve centric description from the specification of the year 2003 and the amended specification of the year 2004. The said change by the applicant was due to the existence of Honda US patent No. 4534322, wherein the Honda was using three valve systems. The change was effected by the applicant only to distinguish from that of the Honda.

 

To sum up the arguments forwarded by the respondents, following were the grounds used by the respondents to challenge the patent of the applicants:

  1. The concept of two spark plugs being prior art: The respondent places reliance on various published papers to substantiate its claim6. They also plead that the use of twin spark plugs in lean burn engines is known as US Patent No. 5320075 titled “Internal Combustion Engine with Dual Ignition for a lean burn”.

  2. Use of two spark plugs in engines with narrow bore size of 45mm-70mm being prior art: The respondent has also referred to Takegawa Cylinder heads and Honda Bros, NC 25E. Kawasaki KZ 1000 SI and Kawasaki KZ 1000 SI have the configuration of two valves per cylinder with twin plugs, cylinder bore size is 69.4mm. Honda NT 400, as per the specification stated in the advertisement, contains 2 cylinders with each cylinder has a bore size of 64mm with 2 spark plugs per cylinder.

  3. The third valve arrangement of the respondent is protected by patent licensed to it by AVL List GMBH: According to the respondent, the spark plugs in the engine in its vehicle “FLAME” are arranged in a different way in comparison to what is claimed by the applicant's patent.

The respondent also refers to various provisions of Patent Act, 1970 to state that there is no infringement of a patent unless each and every one of the claimed elements was present in the article, which is alleged to infringe the patent and further, such element also act in relation to one another in the manner claimed, and according to the respondent, its product is different from that of the applicant and therefore its product does not infringe the patent of the applicant by explaining the technical reasons.

  1. Reply affidavit by the applicants.

The applicant filed reply affidavit stating following things:

  • There is no deviation or difference between the final complete specification and the amended specification.

  • Even in the year of 2005 and till now the Honda has not launched motorbikes with small bore engines having twin spark plugs for combustion of lean burn air fuel mixtures and Honda Patent 322 is neither in respect of small bore engine nor it teaches twin plugs in efficient combustion of lean mixture and the applicant has not concealed the Honda Patent 4534522.

  • In TVS FLAME the third valve has no role to play in driving cycle condition and it is only ornamental (but respondents reiterated that all the 3 valves in the respondent engine are open and functioning at all times).

  • The applicant's objection is only in respect of respondent using of small bore 4 stroke engines involving twin spark plugs for improved combustion of lean fuel air mixture.

  • The technical papers relied on by the respondent are not relatable to the invention of the applicant.

    1. In respect of the Takegawa cylinder head kits, they are tuning kits, used for improving power and' torque and are not used for lean burn.

    2. Honda Shadow has the large 1100-CC capacity.

    3. The NT 400 Bros is a powerful 400-CC bike producing 37 BHP which has the output of 800-CC Maruti 800 car indicating that NT 400 runs on rich mixtures which is completely different from small bore engines operating with lean air fuel mixture and teachings of applicant's patent.

  • AVL List GmbH, Austria from whom the respondent claims the right as licensee, was granted patent for 3 valve system and was not in respect of twin spark plugs in small bore engine operating with lean burn air fuel mixtures.

  • The basis of the invention of the applicant is that it was designed based on chemical correct ratio of air fuel for complete reaction of oxygen and fuel with the aim of concentration on fuel economy and such invention has never been in use throughout the world before the invention of the applicant.

  • The applicants have spent huge expenditure not only for research and development but also incurred advertising expenditure in respect of “DTS-i Technology”. The complete specification was submitted on 07.07.2003, within the time stipulated under the Patents Act.

  • The applicant's product was welcomed world wide and many awards have been given. Therefore, the applicant has established marketing of the new products based on invention which has been duly patented in accordance with law.

  • The respondent did not oppose the patent either before or after grant of the patent within a reasonable time. But they have filed a revocation petition on 24th August 2007, before IPAB seeking to revoke the applicant's patent and within six days thereafter, announced the introduction of various products including 125-CC motorcycle called 'FLAME', which shows the ulterior motive of the respondent.

  • By the time the collaboration stated to have been entered by the respondent with the AVL List GMBH, the applicant's technology in “DTS-i” has been widely successful throughout the world.

  • The Honda group which is the leader in the automotives themselves have made it clear on 20th July 2005 that twin spark plugs will be the success in future stating that the new innovation with the engine called 100-CC to 125-CC class will lead to improved combustion efficiency and the innovative process will improve the fuel economy by 13% compared to the level on 2005. Thus, by declaration of the Honda itself it is admitted that its product relate to higher CC large bore engine and not similar to the product of applicant's.

  • Mere filing application for revocation of applicant's patent itself cannot result in the presumption that the patent granted to the applicant is invalid especially at the interim application stage7.

  • The applicant had marketed the patented product even in the year 2003 and since then, the invention has been proved to be world worthy. The applicant has also made a prima facie case about the validity of the patent and the applicant cannot be made to suffer the complexity of the trial and wait for a long period8.

  • The balance of convenience in granting an order of injunction is in favour of the applicant because the patent itself is for a period of 20 years and after expiry of the said period, everybody has the right to use the same and therefore, the loss which would be caused to the applicant in the event of not granting injunction, if the plaintiff succeeds in the suit cannot be compensated in terms of money9.

  • The interpretation of specifications must be based on the knowledge of the skilled persons in that field using the common general knowledge existing at the time of specifications which is the relevant time10. The interpretation must be purposive in nature11. If two interpretations of specifications are possible, the interpretation which validates the patent has to be adopted12.

 

  1. Further pleadings of the Respondents.

Following were pleaded by the Respondents in response of the further pleadings by the applicants:

 

  • As per Section 10 of the Patents Act which speaks about the specifications, complete specification must meet the original claim made by a patentee and that should be taken as the scope of intention. There is remarkable variation between the provisional specification, complete specification and amended specification made by the applicant in respect of its alleged invention. The applicant has given in the provisional specification as valve centric and switched over to plug centric in the complete specification and there is no mention about the lean burn air fuel mixture or two valves except mentioning about the twin spark plugs. In the amended specification of 2004, once again the applicant has gone back to valve centric instead of spark plug centric. However, in the affidavit filed in support of the application for injunction, the applicant has chosen to explain about the spark plug centric and therefore, different stands have been taken by the applicant at different points of time and it is not known as to what is the patent of the applicant. In the amended specification, the applicant has chosen to refer to two valves because the applicant has come to know that two spark plugs were already available in the market and it is only to get over the same, deliberately, the applicant has switched over to two valve system once again. If, in the amended specification, there is no nexus with the complete specification, it is to be deemed that the complete specification has been surrendered.

  • A reference to the provisional specification of the applicant shows decreased emission, decreased fuel consumption and good drivability and the same can never be treated as invention.

  • While deciding about the infringement of patent, the patentee property should be construed and it must be compared with the defendant's product.

  • Section 13(4) makes it clear that there is no warrant about the validity of the patent, and therefore, the grant of patent itself cannot be deemed to be a prima facia case on the side of the patentee and it is the duty of the patentee to prove the prima facie case as any other case of application for injunction.

  • Even assuming that the applicant has a patent, there is no infringement for the reason that the claim of the applicant is two valve engines and the claim of the respondent is three valve engines and two spark plugs were already used in Honda and therefore it cannot be said to be the invention of the applicant.

  • The diameter of 45 mm. x 70 mm. of cylinder is not newly invented by the applicant, because the Honda diameter is not restricted to any limitation.

  • M/s. T.V.S. Motor Company Ltd., has entered into a collaboration agreement with AVL List GMBH which is an international company known for development of engines in 2000, whereas the applicant Bajaj Auto Limited has filed its first application one year afterwards and AVL List GMBH has obtained a patent for four stroke combustion engine with at least two inlet valves in 2000 in Austria and the same has not been challenged by anyone including the applicant.

  • If an order of injunction is granted against the respondent which is a reputed organisation, it will create a slur on the moral conduct of the respondent and it is immaterial that injunction is granted only for three months, six months or one year, because it would impute the reputation of the respondent organisation.

  • As far as contention of the applicant that “the respondent has never objected to the specification made by the applicant is concerned”, under Section 25 of the Patents Act, the question of either pre-grant, post-grant or revocation will not arise for revocation of the patent of the applicant and it can be made only when the respondent is affected13.

  • Once an application under Section 64 of the Patents Act is filed for revocation of the patent, which includes the fact that the patent of the applicant herein is not real invention, the complete specification is not a new one and it was popularly known and the complete specification does not sufficiently or fairly describe the invention, and when false suggestion is made, a presumption should be drawn that the patentee cannot have a prima facie right over the patent.

 

JUDGMENT AND ITS ANALYSIS:

The learned single judge, after considering the submissions of both parties and considering various facets of the case came to the conclusion.

The court relied upon the principles in granting interlocutory injunction including any patent action. The principles are:

  • The plaintiff must prove prima facie case that the patent is valid and infringed;

  • Balance of convenience is in favour of plaintiff; and

  • Irreparable loss that may be caused to the plaintiff by not granting an order of injunction.

 

  1. Prima Facie Case.

The court also analysed the argument of the applicants that after the amendment in Section 48 of the Patents Act, 1970, it should be treated that once a patentee files a suit for infringement based on the patent granted to him, it should be prima facie presumed to be valid until the same is revoked or set aside in the manner known to law either by revocation under any one of the grounds under Section 64 of the Patents Act, 1970 or in any other manner.

 

After amendment with effect from 20.05.2003, Section 48 stands as on date is as follows:

Section 48. Rights of patentees.-Subject to the other provisions contained in this Act and the conditions specified in Section 47, a patent granted under this Act shall confer upon the patentee-

(a) where the subject-matter of the patent is a product, the exclusive right to prevent third parties, who do not have his consent, from the act of making, using, offering for sale, selling or importing for those purposes that produce in India;

(b) where the subject-matter of the patent is a process, the exclusive right to prevent third parties, who do not have his consent, from the act of using that process, and from the act of using, offering for sale, selling or importing for those purposes the product obtained directly by that process in India.

 

Difference between position before the amendment and after the amendment is that before the amendment, the patentee was conferred an exclusive right to use himself or through agents or through licencees and also to exercise or sell or distribute the inventions in India. After amendment, the patentee has an exclusive right to prevent third parties from using or selling etc.

 

  • Analysis of Section 13(4).

The court considered the argument of the respondent that the section 13(4) of the Patents Act, 1970 states that the validity of patent is not warranted is in relation to the examination of application for patent and search for anticipation made by the examiner regarding previous publication and prior claim. Further, its looked into what was held by the Hon'ble Supreme Court in Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries 14, in the following words:

It is noteworthy that the grant and sealing of the patent, or the decision rendered by the Controller in the case of opposition, does not guarantee the validity of the patent, which can be challenged before the High Court on various grounds in revocation or infringement proceedings. It is pertinent to note that this position, viz., the validity of a patent is not guaranteed by the grant, is now expressly provided in Section 13(4) of the Patents Act, 1970. In the light of this principle, Mr. Mehta's argument that there is a presumption in favour of the validity of the patent cannot be accepted.

The court observed that by virtue of the amended provision of Section 48, even though no presumption of the validity of the patent can be drawn, certainly the patent obtained after the amendment has more significance. However, the onus of proving prima facie case about the validity of the patent and its infringement is still on the plaintiff as it has not been amended by the amendment.

Thus, the court accepted that the onus of proving prima facie case was upon the applicants. Therefore, it further proceeds on the basis of the materials available to decide the triple test of an interim injunction (prima facie case; balance of convenience; and inadequacy of compensation).

 

  • Whether the invention is subject matter of Patent:

The term “invention” is defined under Section 2(ja) of Patents Act, 1970 as, follows:

Section 2(ja). “Inventive step” means a feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art.

An “inventive step” must be relating to an invention involving technical advance or having economic significance or both along with a necessary factor that such invention should make it “not obvious to a person skilled in the art”. The principle objections raised the respondent, are that the applicant does not know about their invention, since different stands have been taken by the applicant in provisional specification, complete specification and amended specification made by the applicant.

Therefore the court referred to all the specifications.

 

  • Provisional Specification.

Under the provisional specification submitted by the applicant on 16th July 2002, the applicant has said that its invention relates to improvement in the combustion characteristics of a single cylinder internal combustion engine working on 4 stroke principle. They have explained various disadvantages of engines provided with two valves with a spark plug and the location of spark plug tip. The provisional specification also states, how the provision of two spark plugs permits use of a leaner mixture helping saving of fuel without affecting performance.

 

  • Complete Specification.

Under the complete specification submitted by the applicant on 7th July 2003, the applicant specifically explains that its invention is relating to small displacement engines of cubic capacity ranging from 75 to 250 CC preferably 100 to 200 CC per cylinder employed. The concept of 2 spark plugs which was available in the provisional specification is also explained in detail in the complete specification.

 

  • Amended Specification.

In the amended specification dated 8th November 2004, the applicant makes it clear that the invention particularly relates to small displacement engines. The applicant has also referred to about the Honda patent in existence and explained as to how the specification of the applicant is in contrast to the same.

The activity of the 2 spark plug has also been explained in the amended specification along with the research conducted on 5th November 2004. The emission values have been tested with statutorily applicable Indian Driving Cycle on Chassis dynamometer.

 

The main contention of the learned senior counsel for the respondent was that the applicant, in its specification, is not certain about its invention. In the provisional specification the claim of the applicant was spark plug centered while in the complete specification it has become valve centered and ultimately in the amended specification it is stated as spark plug centered. In the amended specification the applicant, for the first time, described the diameter of cylinder bore as ranging from 45 mm to 70 mm which was not available in the previous specifications.

Even though in the provisional specification the applicant has not specifically explained the diameter of the cylinder, they have explained that the invention, particularly relates to engine prime mover for operation of 2 and 3 wheeled vehicles. In the further specifications, the applicants have explained various aspects of the invention.

The Respondents have referred to the description of US Patent regarding Honda, while explaining about the disadvantages of a 3 valve engine. A final claim cannot be invalidated merely, because it gives more construction than what was available earlier during the time of provisional specification. The court relied upon the judgment of Patent Exploitation Ld. v. Siemens Berothers & Co. Ltd,15and Sandow Ld. v. Szalay.16

 

The next aspect which was considered relates to the product of the applicant, which has been patented and its value.

Ever since the date of provisional specification (16th July 2002) and even after the applicant has introduced the product (Bajaj Pulsar motor cycle) in market in, the respondent has not raised objection at any point of time. Further the applicant has that from 2003 to 2008, the share of “DTS-i Technology” is increasing tremendously.

Thus conclusion can be drawn that prima facie the product of the applicant for which the patent was granted as invention has found a special place in the market.

On the other hand, the respondent, who has not objected to the product of the applicant ever since the year the patent application was made, has chosen to file a revocation petition before the IPAB, challenging the patent granted to the applicant for the first time on 24th August 2007. Immediately within six days from the date of filing of the revocation petition, the respondent has chosen to introduce its products, including “FLAME”, which was not taken as a bona fide conduct on the part of the respondent.

 

The patent granted to the applicant relates back to the date of application (16th July 2002) or in any event from the date of introduction of the product by the applicant, (Bajaj Pulsar “DTS-i Technology”), which was in the year 2003 and the same is valid for a period of 20 years as per the provisions of the Patents Act, 1970. The court referred to the amendment introduced by Act 38 of 2002. The court also relied upon the judgment of K. Ramu v. Adyar Ananda Bhavan Muthulakshmi Bhavan17, regarding the validity of the patent granted.

 

  • Presumption of Validity of Patent.

Mere filing of such application, presumption should not be drawn against the validity of patent, while it is true that the grant of patent itself will not certify the validity of the same. When a revocation petition is filed under anyone of the grounds stated in Under Section 64 of the Patents Act, the same can be operative only after a final decision is rendered by the authority competent to decide the same. In the meantime, it cannot be said that the patent validly granted should be presumed to be suspicious.

Considering that a patent has been in existence for more than 5 years, the patentee must be treated as actual user and presumption of its validity is thus inferred18.

 

  • Question of infringement.

As far as the question of infringement is concerned, it is was crystal clear that except the use of three valves, the product which has been attempted to be marketed by the respondent was prima facie similar to the applicant's patented product.

The applicant has stated that the third valve which has been included by the respondent in its product is only cosmetic in nature. Further both the applicant's patent as well as the respondent's TVS “FLAME” motor-cycle are relating to internal combustion engine, working on 4 stroke principle with the diameter of bore ranging from 45 mm to 70 mm, two spark plugs for lean burn, etc.

Further applicant's specific statement that the third valve used by the respondent has no material effect on the applicant's invention is a matter of evidence, which can be decided only after full-fledged trial19.

 

  • Defence of Variant

Defence of variant must be real and essential to the features and purpose of plaintiff's product. The court took into consideration the test for variant raised in Improver Corporation and Ors. v. Remington Consumer Products Ltd. and Ors20. These tests laid down the purposive construction of language rather than literal construction. If the issue was whether a feature embodied in an alleged infringement which fell outside the primary, literal or a contextual meaning of a descriptive word or phrase in the claim (“a variant”) was nevertheless within its language as properly interpreted, the court should ask itself the following three questions:

    1. Does the variant have a material effect upon the way the invention works? If yes, the variant is outside the claim. If no –

    2. Would this (i.e. that the variant had no material effect) have been obvious at the date of publication of the patent- to a reader skilled in the art. If no, the variant is outside the claim. If yes –

    3. Would the reader skilled in the art nevertheless have understood from the language of the claim that the patentee intended that strict compliance with the primary meaning was an essential requirement of the invention. If yes, the variant is outside the claim.

 

  • Pith and Marrow Test.

Through several decisions, it has evolved that for the purpose of deciding the novel features of an invention that constitute “pith and marrow” of it, a purposive construction has to be given. The question in each case is: whether persons with practical knowledge and experience of the kind of work in which the invention was intended to be used, would understand that strict compliance with a particular descriptive word or phrase appearing in a claim was intended by the patentee to be an essential requirement of the invention so that any variant would fall outside the monopoly claimed, even though it could have no material effect upon the way the invention worked21.

The court further relied upon the decision of Division Bench of Delhi High Court in Raj Prakash v. Mangat Ram Choudhary and Ors., in which it was held that the effect of the grant of a patent is quid pro quo. Quid is the knowledge disclosed to the public and quo is the monopoly granted for the term of the patent. A patent once granted confers on the patentee the exclusive privilege of making, selling and using the invention throughout India and of authorising others so to do. The patented article or (where there is a process) the process, has to be compared with the infringing article or process to find out whether the patent has been infringed. This is the simplest way and indeed the only sure way to find out whether there is piracy. Some trifling or unessential variation has to be ignored.

 

Therefore, the court was satisfied on the point that the applicant made out a prima facie case for injunction against the respondent.

 

  1. Balance of convenience.

. The last and final test regarding the grant of interim injunction is about the payment of damages, whether the same can compensate the parties while granting or not granting an interlocutory order of injunction.

The use of the patent by the applicant and the respondent was considered by the court, while deciding the balance of convenience. In cases where the use of the applicant's patent is recent in origin or the patentee has not even used or commenced to release its product, then such patentee is not entitled for the grant of injunction.

In the judgment of Metro Plastic Industries (Regd.) v. Galaxy Footwear, Delhi22, the full bench of Delhi High Court has considered Niky Tasha India Private Ltd. v. Faridabad Gas Gadgets Private Ltd.23. Ultimately, the Full Bench of the Delhi High Court has not accepted both the above decisions.

Use of a patent for two years cannot be said to be sufficiently old24. But in the present case, the applicant's patent was in use from 2003, (nearly five years) and it cannot be said that the applicant's use of the patented product is of recent in nature. The court also relied upon the test of balance of convenience, which was explained by the Court of Appeal in Corruplast Ltd. v. George Harrison (Agencies) Ltd.25, and held that after it became clear that the applicant is in the market and its patent is for a limited period and it is in a crucial stage of development, the respondent cannot be permitted to interfere, especially when the defendant is a strong competitor to the plaintiff.

The respondent who claims he to be a licensor of AVL products has not even marketed its product. On the face of the validity of the patent, prima facie proved by the applicant, certainly, the applicant is entitled to prevent any competition and that is the test of balance of convenience as laid down by the English Court.

When a person challenges the validity of patent, the onus is on him to prove against its validity. The triable issue against patent on behalf of the respondent that the specifications in various stages differ and therefore, the applicant itself is not aware of its invention was found by the court as incorrect.

Thus, the second aspect of grant of interim injunction-, the balance of convenience was held in favour of the applicant for granting an order of injunction.

 

  1. Payment of damages.

The last and final test regarding the grant of interim injunction was whether the payment of damages can compensate the parties while granting or not granting an interlocutory order of injunction.

The test is as to whether the plaintiff should be made to face the adverse effect of competition. A contention was raised by the learned Counsel for the respondent that the applicant is capable of being ascertained with an amount of calculated damages, with reasonable certainty. If the applicant succeeds in the suit, since the amount of applicant's sales will be known and the sales in the previous year can be taken into consideration for the purpose of measurement of damages to be quantified on royalty basis. The court rejected this contention26.

The further plea of the respondent that the patent given to the applicant was “obvious”, since the components explained by the applicant are known to the entire world and there is no specialty in the invention of the applicant. The same was not accepted. The court considered the case Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries27 in that regard.

The court found that novelty was in existence in the patent and the same was registered under the Patents Act with priority date and the enablement of novelty was proved by the applicant by marketing the product in such large extent and also without objection fairly for long 5 years. Further, the product of the applicant was not held to be “obvious”.

 

DECISION OF THE COURT

After considering the pleadings and various facets of the case, the learned single judge held that the concepts of prima facie case, balance of convenience and inadequacy of damages was in favour of the applicant. The grant of injunction was in favour of the applicant.

Thus, the interim injunction was granted in favour of the applicant.

 

APPEAL AND JUDGMENT

The interim order was challenged before the Division Bench of the Madras HighCourt, where the appeal was allowed.

The appeal finally went before the honourable Supreme Court (Markandey Katju and Ashok Kumar Ganguly JJ.), through the Special Leave Petition. In the matter before it, the Supreme Court criticized the pendency of the matters relating to the intellectual properties, even at interlocutory stage. The suit for the permanent injunction was also pending before the court.

Quashing the order granting the interim injunction to applicants, the Court held the Respondents entitled to sell its product in the market, but maintaining an accurate record of all India and export sales. The Court appointed a receiver for the same.

The Court also directed the learned single judge to decide the suit of permanent injunction and directed the Respondents to file written statement in the suit.

 

ANALYSIS OF THE CASE.

The case is of utmost importance in the Indian Patent regime. The case has included several tests, evolved in earlier cases. These tests were considered significant in deciding the liabilities of the parties, one who seeks to establish the infringement of its patent and one who seeks to challenge the validity of the patent in question.

The learned single judge of the Madras High Court has duly applied the various tests in previous cases to decide the matter. The court has given the right decision to protect the intellectual property of the applicants. Had the interim injunction been denied to the applicant, its market goodwill would have come at stake.

But, in my view, the decision of the Supreme Court, quashing the interim injunction granted to the applicants, is not satisfactory. The applicants who strained their nerves to get their invention patented deserve the protection of their patent so as to exclude the others from using the same in unauthorized manner.

Also, it has been proved in the Madras High Court that the applicants own the patent and also all the ingredients of a valid invention to be patented. Allowing the respondents to sell their product during the pandency of the suit, will significantly curtail the market share of the applicants.

BIBLIOGRAPHY.

Text.

  1. Full text judgment of the case Bajaj Auto Ltd. vs. T.V.S. Motor Company Ltd.

  2. The Patents Act, 1970.

 URLs.

http://www.scribd.com/doc/3032291/Bajaj-Auto-vs-TVS-Auto.

http://www.judis.nic.in/supremecourt/helddis3.aspx

 

1Under section 108 of the Patents Act, 1970.

2Under section 106 of the Patents Act, 1970.

3Indian Patent No. 195904.

4 under Sections 105 and 106 of the Patents Act, 1970.

5 under Section 64 of the Patents Act, 1970.

6 Indian Patent Number 678 dated 17.07.2001 titled “Spark Ignition Four-Cycle Engine”, apart from Harish Chandra, a critical study of the dual versus single plug system in S.I. Engines, SAE technical paper to substantiate its stand of prior publication etc.

7 Relying upon judgment of K. Ramu v. Adyar Ananda Bhavan Muthulakshmi Bhavan 2007 (34) PTC 689.

8 Relying upon the judgment of Telemecanigue & Controls (I) Limited v. Scheneider Electric Industries SA and Monsanto Company v. Starlffer Chemical Company 1984 FSR 574.

9 Relying upon the judgment of Lord Buckley in Corruplast Limited v. George Harrison (Agencies) Ltd. 1978 (25) RPC 761.

10 Relying upon the judgment in Lubrizol Corporation and Anr. v. Esso Petroleum Co. Ltd. and Ors. 1998 RPC 727.

11 As held in Catnic Component Ltd. and Anr. v. Hill & Smith Ltd. 1982 RPC 183 and Kastner v. Rizla Ltd. and Anr. 1985 RPC 585 and the judgment in Sandow Ld. v. Szalaly 1906 RPC 6, Patent Exploitation, Ld. v. Siemens Brothers & Co. Ltd. 1903 RPC 225 and Muto Industrial Company Limited's Application 1978 RPC 70.

12 Relying upon the judgment in William Needham and James Kite v. Johnson and Co., 1884 RPC 49. The applicant further relied upon the judgment in Consolidated Car Heating Company v. Came 1903 (20) RPC 745, Raj Prakash v. Mangat Ram Choudhary and Ors., William Needham and James Kite v. Johnson and Co. 1884 RPC 49 and Improver Corporation and Ors. v. Remington Consumer Products Ltd. and Ors. 1990 FSR 181 regarding variation claimed by the respondent.

13 The respondents rely upon Section 13(4) of the Patents Act, 1970 (in respect of examination and invention done and that it does not warrant any validity of patent) and also rely upon the judgment in Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries,

14 AIR 1982 SC 1444.

15 1903 RPC 225.

16 1906 RPC 6, wherein it was held in that the provisional specification is to ascertain and describe the nature of invention while the complete specification may also explain in what manner the invention is to be carried out in execution and therefore, either in a complete specification or amended specification, if an explanation is made to a provisional explanation, it cannot be said as if the patentee has abandoned a part of his claim.

 

17 2007 (34) PTC 689. wherein it was held by S. Rajeswaran, J. that when issuance of a patent right is an admitted fact and the same is valid for a period of 20 years, the plaintiff is deemed to have discharged its initial responsibility of proving that they are protected by the certificate issued by the competent authorities under the Patents Act and therefore, it should be presumed to be a prima facie case on the strength of the certificate.

18 The court relied on the judgment of a Division Bench of Delhi High Court in Telemecanique & Controls (I) Ltd. v. Schneider Electric Industries SA 2002 (24) PTC 632 (Del) and observed “Applying the said yardstick in the present case, it is not in dispute that from 2003 till date the applicant has been marketing its products, which has been patented with "DTS-i Technology" and the same has obtained a significant place in the market, since the number of products sold by the applicant throughout the world in these years is steadily increasing and the same has not been denied with any material and therefore, certainly the applicant has proved the prima facie case in its favour”.

19 The court relied upon judgment of English Court in Court of Appeal in William Needham and James Kite v. Johnson and Co. 1884 JRPC 49, in which referring to the variant aspect, the Court has held as follows: “….If they have used that combination, and also something added to it, that combination remaining a necessary part of their machine, but the addition to it being an improvement, and if they have used that, but without acknowledgement, that is to say, without acknowledgement that they are only using an improvement, that would be an infringement, no doubt”.

20 1990 FSR 181.

21 Relied upon the view of House of Lords in Catnic Components Ltd. and Anr. v. Hill & Smith Ltd. 1982 RPC 183.

22 AIR 2000 Del. 177 FB.

23 AIR 1985 Delhi 136 wherein it was held that on the strength of a recent design, the plaintiff can claim absolute restrain against everyone else from carrying on his business unless and until the plaintiff's design is cancelled in appropriate proceedings by the competent court of law and Another. The court also relied upon the Division Bench judgment of the Calcutta High Court in Rotomac Pens Ltd. v. Milap Chand & Co. IPLR 1999 April, 149, wherein the Division Bench of the Calcutta High Court while dealing with the Designs Act has held, comparing the Indian and English laws on the subject that Section 53 of the Designs Act gives statutory right to a registered owner to sue for protection of his exclusive right, finally held that even if a registered design is of recent in nature, Section 53 of Designs Act confers a power on the proprietor to restrain others unlike in UK.

24 Bilcare Limited v. Supreme Industries Ltd. 2007 (34) PTC 444 (Del).

25 1978 RPC 761.

26Relied upon judgment of Court of Appeal in Netlon v. Bridport-Gundry Ltd. 1979 FSR 530.

 

27AIR 1982 SC 1444, wherein the Supreme Court that under Section 13(4) of the Patents Act, 1970, the validity of a patent is not guaranteed and the same can be challenged. While dealing about the concept of "inventive step" the Supreme Court held that it is a mixed question of law and fact to decide about the novelty or subject matter. It also explained the concept of "obvious" and held that a patented invention may be a combination of different matters already known, but it must be something more than a mere workshop improvement.


 


ANOOP KUMAR,

1st Year LL.M.,

NALSAR UNIVERSITY OF LAW, HYDERABAD

 

 
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