Patent Infringement

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Introduction

The patent rights are the exclusive rights of the inventor over the invention that he made using his intellect. When there is a violation of such rights it is termed as patent infringement. In other words, if any person without authorization uses the rights conferred to the inventor it constitutes patent infringement. Sections 104 -114 of The Patents Act, 1970 (the ‘Act’) deals with the infringement of patent.

The patent law does not clearly state about the acts and omissions which constitute patent infringement. Like infringement of a patent must not merely be possible or even likely consequence of performing the invention disclosed by the prior disclosure; it must be necessarily entailed.[1]  Further, following acts when committed without the consent of the inventor shall amount to patent infringement:

  • Making
  • Using
  • Offering for sale
  • Selling
  • Importing

Any patented product without the permission of the inventor upon whom the right was conferred for such invention.

The infringement can be caused by

  • Using the patented process;
  • Or using, offering for sale, selling or importing the product directly obtained by that process.

Types of Infringement

Infringement can be caused by various means which can be further divided into three sub categories:

Direct Infringement

Direct infringement is the selling, marketing, or making any commercial use of a patented product or any product substantially close to a patented product. When these acts are done without the authorization of the inventor, it amounts to direct infringement of the patent. The infringement test that prior disclosure of subject matter and if performed will result in infringement of patent.[2]

Indirect Infringement

The infringement when done through third party or an indirect source is known as indirect infringement. Indirect infringement is done by the contribution of another or when a person induces someone to infringe knowingly. This may also lead to ‘contributory infringement.’

Intention is not necessary in infringement. The person infringing a patented product or the process or both is referred to as an infringer.

Exception to Infringement

There are certain acts which constitute exceptions[3] to patent infringement:

  • Experimental and Research: the bonafide use of any patent invention for the purpose of research, experiment, or teaching and instructing is not infringement.
  • Parallel importation by Government: the government for its own use can import any Article produced by patented invention or any patented process can be used by Government for its sole purpose. Also, the Government can import any medicine, drug, for the distribution in hospitals, dispensaries, maintained or notified by the government.[4]

“It is also permitted to make, construct, use, sell or import a patented invention solely for the uses reasonably related to the development and submission of information required under any law for the time being in force, in India, or in a country other than India, that regulates the manufacture, construction, use, sale or import of any product. All such acts, if within the bounds as created above, cannot be challenged as infringing the rights of the patentee.”[5]

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The Appropriate Authority

According to the Act, a suit against infringement for the first time is filed before the district court. In case during the proceedings of the suit, the defendant files a counter-claim against revocation of the patent, then the suit, along with the counter-claim, will be transferred to the High Court. The original jurisdiction lies in the high Court of Delhi, Bombay, Calcutta and Madras, where the infringement action lies within their pecuniary jurisdiction. This means that the High Courts can be directly approached in case the pecuniary jurisdiction is satisfied.

The doctrine of Equivalents and Doctrine of Colorable Variation

The patent infringement can be determined on two basis:

  • literal infringement and Doctrine of Equivalents
  • Doctrine of colorable variation

The literal infringement means that there is almost identical correspondence to the each and every element mentioned in the claim. When the case is such, that any part of the impugned invention performs, processes or makes any action substantially with same function in the same way to achieve the same result can be said to infringe the patent right. This Approach to identify the infringement is known as Doctrine of Equivalents. Therefore, when there are same functions performed by the impugned device in the same way which give the same result then this amounts to determination of patent infringement. The Court can adjudge the patent infringement on the ground of equivalent doctrine even if the infringing device does not fall in the literal scope of the patent claim.

An infringement analysis determines whether doctrine of equivalent can be applicable or not. There are few steps involved in determining the same:

  • To interpret and understand the language of the claim i.e. to read the claim in its literal terms.
  • Compare the claims and then determine if there is any infringement
  • If there is no literal infringement then verify and construe the scope of claim under the doctrine of equivalents.

Doctrine of Colorable Variation

This doctrine deals with the determination of infringement in cases where there is a slight modification in the infringing invention or process or the product but substantially the essential feature and the results are same to that of the patented invention.

In a case[6] the invention patented were sound-reproducing instruments for phonographs. Size and dimensions of the invention were the essence of the patent application. The controversy arose when a radio loudspeaker was manufactured by the defendant. The patent holder claimed that the defendant violated his patent rights. The defendant’s machine was similar in shape but was smaller in dimension and it was contended it constituted doctrine of colorable alteration. The Court rejected the contention of the patent holder on the grounds that the size and matter can be the essence of the patent but there are other aspects also to look into like functions of the invention.[7]

Declaration of Non Infringement

After filing of the application of patent the next step is publication and thereafter, any person may institute a suit for a declaration of non-infringement.[8] There are two essentials:

  1. He had in writing, asked the patentee or licensee to acknowledge that the processed used by him or the invention made did not infringe the patent; and
  2. That the patentee or licensee refused or neglected to grant such acknowledgment.

Reliefs in Suits for Infringement

The Act provides for exclusive and sole right on the invention.  In case of infringement, the patentee has to right to file a civil suit. There can be no infringement suit unless the patent is granted. The reliefs given under the Act are not exhaustive and the Courts may give reliefs such as:

  1. An injunction
  2. Damages or account of profits

Injunction

An injunction is a specific forbidding order from the Court for the continuance of a wrongful act or any wrong that might happen in future. An injunction is preventive, prohibitive or restrictive relief to refrain someone from doing an act. The Courts do not provide injunction when approached with bad faith, suppressed facts.[9]

Injunctions can be of two types:

  • Permanent Injunction
  • Temporary injunction

Permanent injunction is relief that restrains a party to continue an act forever. The order is granted by the civil court on the basis of merits after the trial concludes. This remedy is governed under Sec. 38-42 of The Special Relief Act, 1963.

Temporary injunction is also known as interim injunction that restrains a party to commit any act temporarily. This remedy is provided under Order 39 of the Code of Civil Procedure. Temporary injunction can be granted at any stage of the suit or until the disposal of suit.

In the suit of infringement a party can plead for injunction[10] during the case by proving that:

  1. A prima facie case is made out;
  2. Balance of convenience is in favor of the person pleading the injunction;
  3. If the Court does not provide the injunction then it will result in irreparable damage.[11]

When the validity of patent is still pending, the Court generally refuses the temporary injunction until the dispute is resolved. The Court refused the temporary infringement due to the validity of patent was challenged.[12] The Court may also refuse to decide upon the validity of the patent while deciding upon the interlocutory order of injunction.[13]

It is also to be noted that the plaintiff in a patent case must show a prima facie case of infringement and further that the balance of convenience and inconvenience is in his favor. Where the alleged infringement is not novel and the patent has not yet been exploited no interlocutory injunction can be granted.[14]

In a landmark case in F. Hoffmann-La Roche Ltd. & Anr. Vs. Cipla Limited[15] there was conflict of public interest. The plaintiff filed a suit praying for permanent injunction restraining defendant from infringing its patent in respect of anti-cancer drug “Tarceva.” The case acquired significance for the very reason that it was the first case in which the court considered the aspect of “pricing” of the drug in deciding an interim injunction. The Court laid down several principles such as : (i) In patent infringement actions, the courts should follow the approach indicated in American Cyanamid case, by applying all factors; (ii) the courts should follow a rule of caution, and not always presume that patents are valid, especially if the defendant challenges it; and (iii) the standard applicable for a defendant challenging the patent is whether it is a genuine one, as opposed to a vexatious defense. The court was of the opinion that as between the two competing public interests, i.e. the public interest in granting an injunction to the patentee, as opposed to the public interest in access to a life saving drug for the people, the balance has to be tilted in favor of the latter. In appeal, the higher court held that no prima facie case was made out. However, the Court directed Cipla not export drugs where the patentee has patents during pendency of an appeal.

The Courts, many a times have taken very different approach in deciding the cases of interim injunction but have concluded that matters relating to intellectual property rights like trademarks, copyrights and patents should be decided as early it is possible by the trial Court.[16]

Damages

The civil suits always provide for remedy and not punishments and fines. The damages provided in the suits are monetary damages. The direction to either award damages or direct the defendant to render accounts of profits can be directed by the Courts. These remedies are alternative in nature and not concurrent.

Relief of Damages: An award of damages suffered by the patentee is restituted by the defendant. It mainly focuses on the losses that are suffered by patentee as compensation.

Accounts of Profits: Accounts of profits deals with the undue advantage of making profits by the defendant irrespective of the losses suffered by the patentee. This remedy is to prevent the unjust enrichment of the defendant by using the patentee’s invention.

The Supreme Court of India has laid down the following guidelines to determine infringement of a patent in Biswanath Prasad Radhey Shyam v. Hindustan Metal Industries[17]:

  1. Read the description and then the claims;
  2. Find out what is the prior art;
  3. What is the improvement over the prior art;
  4. List the broad features of the improvement;
  5. Compare the said broad features with the defendant’s process or apparatus; and
  6. If the defendant’s process or apparatus is either identical or comes within the scope of the plaintiff’s process or apparatus, there is an infringement.

Anton Pillar Order

It is an order granting the right to enter into the premises of the defendant, without prior warning, and collect the evidence, inspect documents and remove the wrongful goods and material from the possession of the defendant.

 The first time this order was given in EMI Limited v. Pandit[18] but it gained popularity from the case of Anton Pillar KG V. Manufacturing process[19] which  laid down that if:

  1. A strong prima facie case is made out and compelling evidence can establish the same by enforcing such order;
  2. There is serious and actual damage to the plaintiff;
  3. It is also established that the necessary and relevant evidence are in possession of the defendant and it can be perceived that those evidence could be destroyed.

then such orders can be made.

In National Garments v. National Apparels[20] case, the Court granted the interlocutory order and said that in extreme urgent cases the interlocutory order can be passed before the full hearing of the processdings. Anton pillar order is similar to ex-parte interlocutory order.

Groundless Threats of Infringement Proceedings

Section 106[21] specifically talks about the reliefs that can be provided by courts for groundless threats of Infringement Proceedings. Where any person, threatens any other person to circulate, advertise or communicate, either in oral or in writing, with proceeding of infringement of patent, then the aggrieved person may bring a suit.

Following reliefs can be granted by the court:

  1. A declaration to the effect that the threats are unjustifiable;
  2. An injunction against the continuance of such threats; and
  3. Such damages, if any, as he has sustained thereby.

Right of Exclusive Licensee

Exclusive licensee is a person who has right to use the patented invention against everybody and the patentee. Therefore, exclusive licensee can use the invention and exploit it like a patentee. He owns this right against all including patentee. Like patentee, the exclusive licensee has the right to file a suit for infringement. The exclusive licensee gets damages, just like the patentee would get on the basis of the profit earned by the defendant or the loss suffered by the exclusive licensee as the case may be. . In case the patentee does not join as a plaintiff he will be added as defendant.[22] However, the original patentee is protected from paying any damages to the exclusive licensee until he is added as a defendant and takes part in the proceedings

Defenses in Suits of Infringement

Sec 107 provides for the defenses available in the suit of infringement.[23] It includes the following:

  1. Grounds available in Section 64: Section 64 deals with the revocation of the patents. Therefore, all the grounds mentioned in section 64 can be used for revocation of the patent can also be used as a defense in the suit of infringement.
  2. The other defense is that by the making, using, importation, use or distribution of any machine, apparatus of other article or by the using of any process or by the importation, use or distribution or 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.

Section 107 of the Act expressly empowers the defendant to raise every ground as mentioned in section 64 of the Act on which a patent could be revoked, even if the notice of opposition was not given.[24]

Intellectual Property Appellate Board

The amendment made in 2002 in the Patents Act laid down the establishment of Intellectual Property Appellate Board (“IPAB“). This forum is a specialized forum constituted by the Central Government to hear matters related to appeals against the decisions of the Registrar under the Trade Marks Act, 1999 and the Geographical Indications of Goods (Registration and Protection) Act, 1999.

Prior to 2007, the High Courts had the power to deal with infringement and invalidity of patent suits but now IPAB is empowered to decide appeals against the decisions, orders or directions made by the Controller of Patents.

Jurisdiction and Limitation

The IPAB has its headquarters at Chennai and has sittings at Chennai, Mumbai, Delhi, Kolkata and Ahemdabad. The limitation period to file an appeal against the decision of the Controller is three months from the date of such decision, order or direction. The IPAB also has appellate jurisdiction against the decision of the Controller or Central Government of India in matters specified under Section 117A of the Act.

Exception

The Orders passed by the Central Government relating to inventions for defense purposes, including directions of secrecy in respect of such inventions,  revocation if the patent is contrary or prejudicial to public interest, or if it pertains to atomic energy are exempted from purview of appeal to the IPAB.

Transfer of pending proceedings to IPAB: The IPAB is the sole authority to exercise the powers and adjudicate proceedings arising from an appeal against an order or decision of the Controller. All the cases pertaining to revocation of patent, other than a counter-claim in a suit for infringement, and rectification of register pending before the Indian High Courts shall be transferred to IPAB.

In case of a counter-claim in a suit for infringement, the Indian High Courts continue to be the competent authority to adjudicate on the matter. The IPAB also has exclusive jurisdiction on matters related to revocation of patent and rectification of register. The IPAB in its sole discretion may either proceed with the appeals afresh or from the stage where the proceedings were transferred to it.

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[1] SmithKline Beecham Plc’s (Paratoxetine Methanesulfonate) Patent [2006] RPC 10.

[2] General Tire & Rubber Co. v. Firestone Tyre & Rubber Co. Ltd, [1972] RPC 457.

[3] Bayer Intellectual Property Gmbh v. Alembic Pharmaceuticals Ltd., CS(OS) (COMM) 1592/ 2016.

[4] The Patents Act, 1970, No. 39, Acts of Parliament, 1970 (India), § 47.

[5] The Patents Act, 1970, No. 39, Acts of Parliament, 1970 (India), § 107.

[6] Lektophone Corp. v. The Rola Co., 282 U.S. 168 (1930).

[7] Lektophone Corp. v. Western Electric Co., (D. C.) 20 F.(2d) 150.

[8] The Patents Act, 1970, No. 39, Acts of Parliament, 1970 (India), § 105.

[9] Bucyrus Europe Ltd. v. Vulcan Industries, 2005 (1) CHN 106.

[10] Dalpat v. Prahlad, AIR 1993 SC 276.

[11] Mandali Ranganna v. T. Ramchandra, 2008 (8) SCALE 277.

[12] Novartis AG v. Mehar Pharma, 2005(30) PTC (Bom).

[13] Schneider Electric Industries SA v. Telemecanique & Controls (I) Ltd., 2000 (20) PTC 620 (Del).

[14] Hindustan Lever Limited v. Godrej Soaps Limited, AIR 1996 Cal 367.

[15] F. Hoffmann-La Roche Ltd. v. Cipla Ltd., 2008 (37) PTC 71 (Del.).

[16] Shree Vardhman Rice & Gen Mills v. Amar Singh Chawalwala, MANU/SC/1680/2009.

[17] Biswanath Prasad Radhey Shyam v. Hindustan Metal Industries, AIR 1982 SC 1444.

[18] EMI Ltd v. Pandit, [1975] 1 w.l.r. 302.

[19] Anton Pillar KG v. Manufactuing Process Ltd., [1976] Ch. 55 (C.A.).

[20] National Garments Kaloor v. National Apparels Ernakulum, AIR 1990 Ker 119.

[21] The Patents Act, 1970, No. 39, Acts of Parliament, 1970 (India), § 106.

[22] The Patents Act, 1970, No. 39, Acts of Parliament, 1970 (India), § 109.

[23] Bayer Corporation v. Union of India, 2010 (43) PTC 12 (Del).

[24] Cadila Pharmaceuticals Ltd. v. Instacare Laboratories Pvt. Ltd., 2001(21) PTC 472 (Guj).