International Control Automation Finance v. Controller of Patents & Designs
1993-09-24
A.N.Ray
body1993
DigiLaw.ai
JUDGMENT Ajay Nath Ray, J. 1. THIS application is made under Section 71 of the Patents Act, 1970 by three petitioners. 2. THAT Section contains the power of the High Court to rectify the Register of Patents in certain cases and the first sub-section of the said Section is important for our purposes. The same is set out below:- "71. Rectification of register by High Court – (1) The High Court may on the application of any person aggrieved – (a) by the absence or omission from the register of any entry; or (b) by any entry made in the register without sufficient cause; or (c) by any entry wrongly remaining in the register; or (d) by any error or defect in any entry in the register; make such order for the making, variation or deletion, of any entry therein as it may think fit." The reason why the petitioners call for a rectification of the register on the ground of errors contained in it is as follows. During the period 1983-1986 the third petitioner became entitled to nine several patents which were duly entered in the register in its favour. 3. ON the 5th March, 1991 two successive assignments took place in regard to eight out of the said nine patents. The first assignment was granted for all nine by the third petitioner to the second. The second assignment on the same date for eight out of the nine patents was again granted in its turn by the second petitioner to the first. 4. THE assignments were all made by Deed and therefore in writing and no question of their invalidity in that regard thereto arises. On the 12th February, 1992 the second petitioner applied for registration of the documents of assignment granted in its favour by the third petitioner as required by Section 68 of the Patents Act, 1970. The said Section is reproduced below :- "68.
On the 12th February, 1992 the second petitioner applied for registration of the documents of assignment granted in its favour by the third petitioner as required by Section 68 of the Patents Act, 1970. The said Section is reproduced below :- "68. Assignments, etc., not to be valid unless in writing and registered--An assignment of a patent or of a share in a patent, a mortgage, licence or the creation of any other interest in a patent shall not be valid unless the same were in writing and the agreement between the parties concerned is reduced to the form of a document embodying all the terms and conditions governing their rights and obligations and the application for registration of such document is filed in the prescribed manner with the Controller within six months from the commencement of this Act or the execution of the document, whichever is later or within such further period not exceeding six months in the aggregate as the Controller on application made in the prescribed manner allows: Provided that the document shall, when registered, have effect from the date of its extrusion." 5. ON the next day i.e. 13th February, 1992 the second petitioner applied for recording by registration of its title in respect of the nine patents in the register. This is required by Section 69, the first-sub-section of which is set out below: "69. Registration of assignments, transmissions etc. – (1) Where any person becomes entitled by assignment, transmission or operation of law to a patent or to a share in a patent or becomes entitled as a mortgagee, licensee or otherwise to any other interest in a patent, he shall apply in writing in the prescribed manner to the Controller for the registration of his title or, as the case may be, of notice of his interest in the register." 6. THE two notices to be sent to the registry upon assignment were thus sent by the second petitioner, the first notice being intended for registration of the Deed of Assignment and the second being intended for bringing the name of the second petitioner on record in the register.
THE two notices to be sent to the registry upon assignment were thus sent by the second petitioner, the first notice being intended for registration of the Deed of Assignment and the second being intended for bringing the name of the second petitioner on record in the register. This double notice is the usual course in the matter of assignment of patents so that the office can keep both a record of the primary documents causing change of title, as well as a register which gives the up- to-date position of the title holders in regard to the patent at one glance. THE two way recording is parallel to accounting by cash book and ledger. Since on the 5th March, 1991 the first petitioner had become the ultimate assignee for eight patents, they also sent similar notices as the second petitioner to the registry on the basis of their Deeds of Assignment and their obtaining of title but those were sent on the 17th February, 1992 and 21st February, 1992 respectively in regard to Sections 68 and 69. 7. IN May, 1992 notices were issued from the registry intimating the recording of the name of the second petitioner in place of the third in regard to all the nine patents. 8. IF both the assignments on the 5th March, 1991 are valid in law. which is the contention of the three petitioners before me, then the recording of the name of the second petitioner as proprietor of the patents might appear to the casual observer to be a false entry on the register, which, however, might have been caused to be made entirely bona fide through mistakes for which there is neither any motive nor any culpability. Section 119 provides that a false entry in the register if caused to be made might lead to penal results. The said Section is reproduced below:- "119. Falsification of entries in register, etc.--If any person makes, or causes to be made, a false entry in any register kept under this Act, or a writing falsely purporting to be a copy of an entry in such a register, or produces or tenders, or causes to be produced or tendered, in evidence any such writing knowing the entry or writing to be false, he shall be punishable with imprisonment for a term which may extend to two years, or with fine or with both." 9.
IN fact show cause notices were issued on the 8th July, 1992 to the second petitioner to which they gave replies on the 27th July, 1992. How those will be dealt with later on is no part of the present application which is concerned only with the rectification of the second petitioner's name. This is an appropriate place to point out that the present application is neither for the bringing of the first petitioner's name on record as proprietor of the 8 patents, which again will be looked after by the Controller in accordance with law on the basis of the notices and documents forwarded as said earlier by the first petitioner on 17.2.92 and 21.2.92. 10. MR. Mukherji appearing for the Controller of Patents pointed out that the whole thing has been brought about through no fault of the Controller but through actions taken entirely by the petitioners on their own. MR. Mukherji is quite right in that regard. Mr. Mukherji further pointed out Section 70 of the Patents Act and said that because of the wording of that Section there is a fundamental objection to this application. He said that on a true construction of the said words it should be held that on 5th March, 1991 the second petitioner had no right to re-assign to the first since their name had not already been brought on the register. According to Mr. Mukherji such a power of assignment would arise upon and only upon the perfection of the title being attained by alterations of the register in favour of the assignee. 11. SECTION 70 of the Patents Act, reads as follows:- "70. Power of registered grantee or proprietor to deal with patent--Subject to the provisions contained in this Act relating to co-ownership of patents and subject also to any rights vested in any other person of which notice is entered in the register, the person or persons registered as grantee or proprietor of a patent shall have power to assign, grant licences under, or otherwise deal with, the patent and to give effectual receipts for any consideration for any such assignment, licence or dealing: Provided that any equities in respect of the patent may be enforced in like manner as in respect of any other movable property." 12. WITH respect, I am unable to accept Mr. Mukherji's contention.
WITH respect, I am unable to accept Mr. Mukherji's contention. The first part of Section 70 gives a power of assignment to those whose names are already on the register. The said part of the section however does not specifically use any words of limitation limiting the class of possible assignors only to the registered proprietors. In other words the first part does not mention that the registered proprietors and the registered proprietors alone can assign. Such words of limitation were advisedly not used. The proviso to the 70th Section says that the enforcement of equitable rights in patents can be continued to be made notwithstanding the first part of Section 70 in the same manner as in regard to other movable properties. 13. THE word "enforcement", in my opinion, refers not merely to enforcement by way of a proceeding in a Court, but all enforcements, including those in private dealings without intervention of Court. 14. THUS if the second petitioner obtained equitable rights to the 9 patents on 5.3.91, even before perfection of their title by registration of their name, they could assign such equitable interest forthwith and even on the very same day to any other party and this is exactly what they did in favour of the first petitioner in regard to 8 out of the 9 patents. It does not fall for consideration in this matter, what the effect would have been in case there were other contesting parties claiming assignment rights from the 2nd petitioner taken bona fide for consideration without notice of the assignment made to the first. In such cases problems of defeasance of equitable rights might have arisen. All that is necessary to appreciate in the facts of this case is that both the second petitioner and the first became good equitable owners of the patents, and such equitable rights were immediately perfect on 5th March, 1991, in so far as the equitable nature of those rights was concerned. 15. TO speak accurately, which is what we must, the notices sent by the 2nd petitioner and the first were both rightly sent. They had become legal owners successively on the register.
15. TO speak accurately, which is what we must, the notices sent by the 2nd petitioner and the first were both rightly sent. They had become legal owners successively on the register. It was no false entry that the 2nd petitioner caused to be made in that register and if the Controller of Patents had taken into consideration the notices sent by the 2nd petitioner and the notices sent by the first petitioner at the same time he would have reached the conclusion that the correct procedure is to rectify the name of the third in favour of the second for 9 patents and then again to rectify in favour of the first for 8 out of the said 9 patents. 16. THE matter need not be left to the Controller since an application for rectification has been made to Court. That such a rectification is to be made now to record the valid ownership of 8 patents by the first petitioner beyond dispute. I would therefore allow the prayers of the petitioner not for any error or defect of any entry in the register because there never was any error or defect in the strict sense of the term but I would allow the application under Section 71(1)(b) that sufficient cause no longer exists for continuation of the second petitoner's name in regard to the right patents. There shall accordingly be orders in terms of prayers (a) and (b). The Controller of Patents is largely without blame in this matter as it cannot be expected that he would take all four notices of February, 1992 together and deal with them in the manner indicated above without the parties bringing to his notice the connection between those notices. As such the Controller shall be paid the costs of this application by the petitioners which is assessed at 200 G.Ms. even though they succeed in this matter. 17. IT is clarified that since only 8 out of 9 patents were re-assigned, the notice of which a copy is annexed at page 41 of the petition remains valid as that is in respect of the 9th unreassigned patent. 18. ALL parties and others concerned to act on a signed Xerox copy of the dictated order on the usual undertakings.