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2011 DIGILAW 1106 (DEL)

Kingtech Electronics (India) Pvt. Ltd. v. Union Of India

2011-12-19

VIPIN SANGHI

body2011
ORDER : Vipin Sanghi 1. I have heard learned counsel for the parties on the aspect of grant of stay of the impugned communication dated 30.03.2011, whereby the Deputy Commissioner of Customs has suspended the clearance of the goods of the petitioners covered vide a Bill of Entry No. 2979282 dated 16.03.2011 by placing reliance on Rule 7 (1) (a) of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. The said rules provides that 'where the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, based on the notice given by the right holder has a reason to believe that the imported goods are suspected to be goods infringing intellectual property rights, he shall suspend the clearance of the goods.' 2. The Government of India being conscious of the complexity involved in the matter and determination of competing claims of, inter alia, patent issued a circular dated 29.10.2007, wherein it was, inter alia, observed: While it is difficult for Customs officers to determine Copyright and Trade Marks infringements at the border based on available data/inputs, it may not be so in the case of the other three violations, unless the offences have already been established by a judicial pronouncement in India and the Customs is called upon or required to merely implement such order. In other words, extreme caution needs to be exercised at the time of determination of infringement of these three intellectual property rights. 3. The petitioner imported a consignment of mobile phone instruments which is covered by the aforesaid Bill of Entry. Respondent No. 4 objected to the said import by the petitioner on the ground of infringement of its patent by filing an application before the Commissioner of Customs. It is informed that this application runs into about 12,000 pages. Since respondent No. 4 claims to have obtained registration of patent, the Deputy Commissioner of Customs has passed the aforesaid order dated 30.03.2011. The relevant part of this order reads as follows: M/s. Telefonaktiebolagat LM Ericsson [PUBL], Sweden has registered their five Intellectual Property Rights as given in Annexure I at this Commissionerate under Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. The relevant part of this order reads as follows: M/s. Telefonaktiebolagat LM Ericsson [PUBL], Sweden has registered their five Intellectual Property Rights as given in Annexure I at this Commissionerate under Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. The right owner has stated that 18 models listed in Annexure-II, of G'Five brand of mobile phones infringes their intellectual property rights and has requested for the suspension of the consignments of above mentioned models of G'Five brand of phones in accordance with IPR (Imported Goods) Enforcement Rules, 2007. Since the above said consignment contains models as listed in Annexure-II, clearance of the goods is suspended in terms of Rules 7(1)(a) of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. 4. A perusal of Rule 7, as extracted above, shows that an order may be passed by the Deputy Commissioner or the Assistant Commissioner of Customs, as the case may be, only upon having a reason to believe that the imported goods are suspected to be goods infringing intellectual property rights. The impugned order, prima-facie, does not disclose on what basis the Deputy Commissioner of Customs has entertained the 'reason to believe' that the goods in question infringed the patent claimed by the respondent No. 4. 5. Learned senior counsel for the petitioner has also placed reliance on the order dated 30.11.2011 passed in I.A. No. 19079/2011 in CS(OS) No. 2982/2011, which also deals with the aforesaid rule and notifications dated 29.10.2007. The Court in this interim order has observed: 21. In case clause 4 of the notification dated 29.10.2007 is read in a meaningful manner, it becomes clear that as far as the case of other three violations, i.e., Patents, Design and Geographical Indications, are concerned, unless the offences have already been established by a judicial pronouncement in India, the custom department cannot take action contrary to clause 4 of the notification. 22. Mere reading of clause 4 makes it clear that as far as three violations, i.e., Patents, Design and Geographical Indications, are concerned, the defendants 2 and 3 are merely implementing agencies to enforce the orders, if passed by the Court in favour of the party pertaining to above mentioned three subjects and the custom department would be entitled to enforce the same. 23. x x x x x x x x x 24. 23. x x x x x x x x x 24. No doubt, unless the Court passes the order in favour of the patentee, thereby restraining the plaintiff from infringing the impugned patents, then under these circumstances, in order to implement the order of the court, the defendant No.2 can take action as provided under Clause 4 of notification dated 29.10.2007. 25. In the absence of that, even the complaint, if any, filed by the patentee is to be treated contrary to the Clause 4 of the notification issued by Government of India and any order passed contrary to that would be without any jurisdiction. 6. Mr. Sudhir Chandra, learned senior counsel for the petitioner, submits that the registration of a patent does not lead to any presumption for its validity. He has drawn my attention to various provisions of the Customs Act and in particular, to Sections 104 and 105 thereof. He submits that u/s 115, the Court which is confronted with a dispute regarding patents may appoint scientific advisors. 7. The impugned order does not show any application of mind by the Deputy Commissioner of Customs to the claim made by respondent No. 4 with regard to the alleged infringement of its patent by the petitioner or the validity thereof. Respondent No. 4 has not approached a competent Court to assert its claim to patent and, on that basis, to seek an injunction against release of the petitioner's consignment. 8. In view of the aforesaid position, I stay the operation of the impugned order. The respondents should release the consignment of the petitioner. However, the same may not be released for a period of ten days to enable the respondent No. 4 to approach the Civil Court to seek appropriate remedy. 9. No observation made by me in this order shall prejudice the case of either party before the Civil Court. 10. The application stands disposed of. W.P.(C) 6878/2011 11. Counter-affidavit be filed by the respondent authorities within four weeks. Rejoinder thereto, if any, be filed before the next date. List on 06.03.2012. Order Dasti under the signature of the Court Master.