The Supreme Court, in T.V.S. Motor Company Limited v. Bajaj Auto Limited, [Civil Appeal Number 6309 of 2009], held that all the matters related to Intellectual Property Rights (hereinafter referred to as “IPR”) should proceed on a day-to-day basis and the final decision should be given within four months of the day the suit was filed.
FACTS
In this case, two suits were involved. The first one involved Bajaj Auto Limited (hereinafter referred to as the “Plaintiff”) initiating a suit before the Hon’ble Madras High Court (hereinafter referred to as “High Court”)against T.V.S. Motor Company Limited (hereinafter referred to as the “Defendant”) under Section 108 of the Patents Act, 1970 (hereinafter referred to as “Patents Act”), which provides that a Court may issue an injunction subject to certain restrictions if any, as the Court deems appropriate, as well as damages or an account of profits.
The foregoing suit was filed in order to secure a permanent injunction preventing the Defendant from utilizing the Plaintiff’s patented 125-CC Flame engine. The Defendant’s Controlled Combustion Variable Timing Intelligent (hereinafter referred to as the “CCVT-i”) technology, which was employed in the 125 – CC Flame engine, was claimed by the Plaintiff to be a duplicate of its Digital Twin Spark Ignition (hereinafter referred to as the “DTS-i”) technology.
With the exception of the three-valve component in the product, it was prima facie similar to the Plaintiff’s patented product. The Plaintiff had thus, claimed damages for patent infringement.
While this suit was pending, the Plaintiff prayed for an order of temporary injunction. Whereas, on the other hand, the Defendant initiated a subsequent suit under Section 106 of the Patents Act before the High Court, claiming that the Plaintiff was making “groundless threats of patent infringement.”
The High Court allowed the Plaintiff’s prayer for an interim injunction and barred the Defendant from completing current orders or creating fresh models for the duration of the injunction.
In response to the above, the Defendant requested the repealing of the said injunction order. The Madras High Court Division Bench consented to this and later repealed it, and thus, the Plaintiff filed the present appeal before the Supreme Court, against the decision of the High Court.
ISSUES BEFORE THE SUPREME COURT
- Whether the Defendant infringed upon the patent of the Plaintiff?
- Whether improvements made to the patented technology can be used without infringing the original patent?
CONTENTION OF THE PARTIES
The Plaintiff claimed that the patented technology was a novel innovation that fell under the ambit of ‘an inventive step’. Thus, the Plaintiff claimed that since the patented technology was not a prior art, the injunction could be sustained. It was also claimed that Plaintiff’s invention was introduced in the market three years before the Defendant’s product became commercially successful.
While, the Defendant, contended that the technology used in the Plaintiff’s product was prior art, as it was used earlier in a US Honda Patent and the patent ought not to have been issued to the Plaintiff in the first place itself.
In addition to this, the Defendant submitted that the Plaintiff’s claim was for two spark plugs with two valves, and Defendant’s design featured two spark plugs with three valves for which it held a license. The Defendant also claimed that the Plaintiff’s invention was not new and novel and that the validity of the patent could be challenged.
DECISIONS AND FINDINGS
The interim order passed by the Ld. Single Judge of the High Court was quashed by the Supreme Court and it was held that Defendant have the right to sell their product and can continue selling on the condition that they maintain a proper record of India and export sales, a receiver was also appointed for this purpose.
The decision was based on the fact that patent infringement is considered to occur when there are no improvements and the exact design or technique is copied. However, in this case, improvements were made by the Defendants.
Further, it was observed by the Supreme Court that in situations where there is an infringement of a patent, copyright, or trademark, the parties always proceed with the purpose of obtaining an interim injunction, which is not a healthy practice and this should not be the case.
The Supreme Court of India criticized the present practice of Courts in trademark, copyright, and patent cases. Various principles were provided to the subordinate Courts and Tribunals to be followed during the trial of trademark, copyright, and patent disputes, which were as follows:
1. The validity of a patent can be contested in a suit under Sections 64 and 107 of the Patents Act on numerous grounds of revocation.
2. In order to get an interim injunction in a patent case, the patent’s prima facie validity and prima facie infringement must be proved, in addition to the existence of a balance of convenience and irreparable loss.
3. In the case of a new patent, a single challenge at the Bar would be sufficient to prevent an interim injunction from being granted.
4. Even in IPR cases, apart from the prima facie case, the balance of convenience, and irreparable harm, the mere registration of the patent is insufficient, and the Court must consider the entire case, including the strength of the Plaintiff’s case and the strength of the Defendant’s argument.
5. No presumption can be formed as to the validity of the patent and if the application for revocation of the patent is pending, and when serious doubt exists as to the existence of an invention based on prior art, the Court should be hesitant in granting the injunction.
The Supreme Court further referred to the case of Shree Vardhman Rice and General Mills v. Amar Singh Chawalwala [2009 SCC OnLine Del 1690], matters connected to IPR were to be decided expeditiously by the Trial Court rather than enduring the long process of granting and refusing injunctions.
AMLEGALS REMARKS
The Supreme Court’s observations in the present case have broadened the ambit of trademark, patent, and copyright infringement, as it was held that matters concerning IPR are of significant importance and should be resolved quickly.
The Supreme Court also laid down the guidelines for the subordinate Courts, one of which was that IPR disputes should be heard on a daily basis and resolved within four months and that this Order would have to be carefully and punctually followed by all the subordinate Courts as well as the Tribunal.
If the above guidelines are implemented strictly in all Courts, all IPR cases would be decided on a priority basis, which would prevent unnecessary injunctions, thus overcoming judicial delays.
On a concluding note, the present judgment was a positive step towards the speedy redressal of IPR disputes, thereby boosting the confidence of the proprietors in IPR laws.
– Team AMLEGALS assisted by Ms. Rishita Agarwal (Intern)
For any queries or feedback, please feel free to get in touch with mridusha.guha@amlegals.com or falak.sawlani@amlegals.com.
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