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Gujarat High Court · body

2019 DIGILAW 145 (GUJ)

Galatea Ltd v. Diyora and Bhanderi Corporation

2019-02-19

C.L.SONI

body2019
ORDER : 1. The defendant No.3 has filed the application dated 12.2.2019 under section 151 of Civil Procedure Code, 1908 (‘CPC’) seeking stay of the suit sine die till the disposal of the revocation petition filed by it and pending before Intellectual Property Appellate Board (`IPAB` for short). Such prayer is made mainly on the premise that before the suit for infringement of patent was filed by the plaintiff, the defendant no.3 filed the revocation petition before the IPAB and there is likelihood that the suit patent would be revoked, however if the suit is not stayed, the defendant No.3 may suffer irreparable loss which could not be compensated in terms of money and will suffer serious prejudice. 2. Learned senior advocate Mr. Saurabh Soparkar appearing with learned advocates Mr. Vinod Khurana, Mr. Rishabh Nieam and Mr. Manan Shah for the defendant No.3 submitted that indisputably, the defendant No.3 filed the revocation petition before the patent infringement suit was filed and in the suit, since the application for interim injunction filed by the plaintiff is rejected, the plaintiff will not be put to any prejudice if the suit does not proceed till decision is taken by IPAB on revocation petition of the defendant no.3. Mr. Soparkar submitted that under Section 64 of the Patent Act, 1970 (`the Act`), when choice/ option is given to the party interested either to file revocation petition before IPAB or to file counterclaim for revocation of patent in the suit for infringement and when before filing of the infringement suit, the defendant no.3 has already exercised its choice/option by filing revocation petition before IPAB, the suit should remain stayed, otherwise the defendant No.3 will be put to great prejudice, as its revocation petition will stand disposed of without adjudication and the very right of the defendant No.3 to get its revocation petition decided on merits will be denied to it. Mr. Soparkar submitted that since the IPAB is having expert members, it is competent to decide on patent issues and therefore it should be first allowed to decide revocation petition when it was filed at prior point of time than the infringement suit. Mr. Soparkar submitted that the counterclaim is considered to be independent suit and as held by Hon’ble Supreme Court in the case of Aloys Wobben and Ors. Vs. Yogesh Mehra and Ors. Mr. Soparkar submitted that the counterclaim is considered to be independent suit and as held by Hon’ble Supreme Court in the case of Aloys Wobben and Ors. Vs. Yogesh Mehra and Ors. reported in AIR 2014 SC 2210 , if revocation petition is filed first in point of time than the counterclaim in the infringement suit, the counterclaim could not be allowed to be proceeded and in the same logic, the infringement suit later on filed should not be allowed to be proceeded and is required to be stayed till the revocation petition is decided by the IPAB. Mr. Soparkar therefore urged to stay the proceedings of the suit till the revocation petition filed by the defendant No.3 is decided. 3. Learned senior advocate Mr. Neeraj Malhotra appearing with learned advocates Mr. Sandeep Grover, Mr. Dilip Rana, Mr. Pankhuri Bhardwaj and Mr. Kshitij Parashar submitted that in fact, there is no revocation petition of the defendant no.3 registered with the IPAB, as the plaintiff has still not been served with any notice of such petition by the office of IPAB. Mr. Malhotra submitted that just filing of the revocation petition and pendency thereof without registration could not be pressed as a ground to ask for stay of the suit. Mr. Malhotra submitted that otherwise also, it is not permissible to stay the suit under Section 151 of the Code on the principles of law settled that when specific provision is made in CPC for particular contingency or matter, the powers under section 151 of CPC are not to be exercised. Mr. Malhotra submitted that in CPC, since section 10 provides for stay of the suit, the application under section 151 filed by the defendant no.3 for stay of the suit is not maintainable. Mr. Malhotra submitted that the Act provides for right of the patentee to file suit for infringement of the patent and there is no provision in the Act to stay the proceeding of such suit, but rather it should be decided at the earliest. Mr. Mr. Malhotra submitted that the Act provides for right of the patentee to file suit for infringement of the patent and there is no provision in the Act to stay the proceeding of such suit, but rather it should be decided at the earliest. Mr. Malhotra submitted that in suit for infringement of patent, it is always open to the defendant to ask for revocation of the patent on counterclaim but, if he has already filed revocation petition before IPAB prior to infringement suit, it is he who is to be prevented as ruled by Hon’ble Supreme Court in the case of Aloys Wobben (supra) from proceeding with his counter claim, but there is no vice versa that since revocation petition was filed before filing infringement suit, the infringement suit should not proceed. Mr. Malhotra submitted that Hon’ble Supreme Court has time and again emphasized for early disposal of patent suits and it is not correct to say that if the suit is allowed to be proceeded before revocation petition is decided, the defendant will suffer serious prejudice or irreparable loss, as it is always open to the defendant to withdraw the revocation petition from IPAB and to ask for revocation of patent on counter claim. Mr. Malhotra submitted that unlike Section 124 of the Trademarks Act, which provides for stay of the trademarks suit, there is of provision for stay of the suit in the Act and therefore it could be said that the legislature does not intend that the proceedings of the suit should remain stayed till the revocation petition is decided by IPAB. Mr. Malhotra submitted that the High Court being superior forum and since the parties are always at liberty to examine expert witnesses for resolution of the complex issues, which may arise in the patent suit, it cannot be said that only the IPAB is technically expert to decide on the issues concerning the revocation of the patent. He therefore, urged to reject the application and requests the Court to immediately frame the issues in the suit and fix the time frame for recording of evidence for early decision in the suit. 4. He therefore, urged to reject the application and requests the Court to immediately frame the issues in the suit and fix the time frame for recording of evidence for early decision in the suit. 4. The Court, having heard learned advocates, finds that earlier when the Patent and Design Act, 1911 was in force, the remedy for revocation of the patent, as engrafted in provisions of Section 26 thereof, was available only before the High Court, either by way of filing revocation petition or on counterclaim in patent infringement suit. However, the said Act, in so far as it relates to patents, was repealed by the present Act, wherein Section 64 initially provided for revocation of the patent only on counterclaim in patent infringement suit. But, later on, by the patents (Amendment) Act 15 of 2015, Section 64 was amended so as to confer jurisdiction also to the IPAB in the matter of revocation of patent. Thus, when patent infringement suit is filed, there are two remedies/choices available to the defendant of the suit, one before IPAB and another before High Court on counter claim in the suit. In the case of Aloys Wodden (supra), the main contention was that the defendant in an ‘infringement suit’ having raised a ‘counter claim’ seeking revocation of a patent, the validity of such a challenge can be determined only at the hands of the High Court and the Appellate Board (IPAB) would thereafter cease to have the jurisdiction to adjudicate upon the validity of the patent. 5. In the case of Aloys Wobben (supra), Hon’ble Supreme Court has held and observed in para-10, 19 to 25 as under:- 10. Before we venture to deal with the submissions advanced at the hands of the learned counsel for the appellants, it is important to first analyze the options available for revocation of a patent under Section 64(1). In our considered view, Section 64(1) vests the liberty to raise a challenge to a patent in three different circumstances. Firstly, on a petition by "any person interested". Secondly, on a petition of the Central Government. In case of the above two options, the petition for revocation would lie before the "Appellate Board". Thirdly, by way of a "counter-claim" in a suit for infringement of a patent. The third option is adjudicable only by the jurisdictional High Court. Firstly, on a petition by "any person interested". Secondly, on a petition of the Central Government. In case of the above two options, the petition for revocation would lie before the "Appellate Board". Thirdly, by way of a "counter-claim" in a suit for infringement of a patent. The third option is adjudicable only by the jurisdictional High Court. In view of the mandate contained in the provisions of the Patents Act, the locus standi for revocation of a patent, is available to three different entities, namely, "any person interested", "the Central Government", and to a defendant in an "infringement suit" by way of a "counter-claim". Depending on the specific part of the provision relied on, such challenge is permissible before two different fora, i.e., the "Appellate Board", or the jurisdictional High Court. Our above determination emerges from a reading of Sections 64(1) and 104 of the Patents Act. 19. The defendant party to a suit for infringement, who seeks to repudiate the charge of infringement, is allowed to raise a "counter-claim", so as to enable him to raise a challenge, to the validity of the patent assigned to the author of the suit (under Section 64 of the Patents Act). This is so, because a "counterclaim" can be filed only by such person, against whom a suit for infringement has been filed (by the patent-holder). The grounds of such challenge have already been enumerated above. 20. A corrective mechanism is also available to "any person interested", to assail the grant of a patent under Section 64(1) of the Patents Act. This is in addition, to a similar remedy provided to "any person interested", under Section 25(2) of the Patents Act. In the above scenario, it is necessary to first appreciate the true purport of the words "any person interested". The term "person interested" has been defined in Section 2(1)(t) of the Patents Act. Unless the context otherwise requires, in terms of Section 2(1)(t) aforementioned, a "person interested" would be one who is? "engaged in, or in promoting, research in the same field as that to which the invention relates". Simply stated, a "person interested" would include a person who has a direct, present and tangible interest with a patent, and the grant of the patent, adversely affects his above rights. "engaged in, or in promoting, research in the same field as that to which the invention relates". Simply stated, a "person interested" would include a person who has a direct, present and tangible interest with a patent, and the grant of the patent, adversely affects his above rights. A "person interested" would include any individual who desires to make independent use of either the invention itself (which has been patented), or desires to exploit the process (which has been patented) in his individual production activity. Therefore, the term "any person interested" is not static. The same person, may not be a "person interested" when the grant of the concerned patent was published, and yet on account of his activities at a later point in time, he may assume such a character or disposition. It is, therefore, that Section 64 of the Patents Act additionally vests in "any person interested", the liberty to assail the grant of a patent, by seeking its revocation. The grounds of such challenge, have already been enumerated above. 21. Based on the two remedies contemplated under Section 64 of the Patents Act, the fifth contention of the learned counsel for the appellants was, that the use of the word "or" in Section 64(1) demonstrates, that the liberty granted to any person interested to file a "revocation petition", to challenge the grant of a patent to an individual, cannot be adopted simultaneously by the same person, i.e., firstly, by filing a "revocation petition", and at the same time, by filing a "counter-claim" in a suit for infringement. It is the submission of the learned counsel for the appellants, that the word "or" is clearly disjunctive, and cannot be read as conjunctive. The above remedies, expressed in Section 64(1) of the Patents Act, according to learned counsel, cannot be availed of by the same person, simultaneously. According to learned counsel, the concerned person must choose one of the above remedies. It is the pointed assertion of the learned counsel for the appellants, that in the present case the respondents, by assuming the position and posture of "any person interested", have filed "revocation petition(s)" to assail the same patent, which have at the same time been assailed by filing "counter-claims". The above "counter-claims" have been filed in response to the "infringement suit(s)", preferred by the appellant. The above "counter-claims" have been filed in response to the "infringement suit(s)", preferred by the appellant. It is the submission of the learned counsel for the appellants, that the respondents must choose only one, of the above remedies. The course of action adopted by the respondents, according to the learned counsel for the appellants, could lead to one finding in the "revocation petition", and a different finding in the "counter-claim". 22. We do not have the slightest hesitation in accepting the above contention (fifth in the series of contentions), that even though more than one remedies are available to the respondents in Section 64 of the Patents Act, the word "or" used therein separating the different remedies provided therein, would disentitle them, to avail of both the remedies, for the same purpose, simultaneously. On principle also, this would be the correct legal position. 23. Keeping in view the submissions advanced at the hands of the learned counsel for the appellants (as have been noticed in the foregoing paragraphs), the question which arises for determination is, that having chosen both the above remedies, which one of the two, should the respondents, be permitted to pursue. The answer to the above query, will, if possible, have to be determined from the provisions of the Patents Act itself. In this behalf we may at the outset record, that learned counsel for the rival parties, did not invite our attention to any provision from the Patents Act, which would provide a clear pointer, to the course to be adopted. Whilst it was undoubtedly submitted, on the one hand, that the choice should fall in favour of the superior forum. Details about the locus, in respect of other challenges have been narrated in paragraph 16 hereinabove. We may in the passing record, that the determination of the "counter-claim" would be with the superior forum, i.e., the jurisdictional High Court (Sections 64(1) and 104 of the Patents Act). The above submission was sought to be countered, on the other hand, by pointing out, that the opportunities provided by the legislature to assail the order(s) passed under the Patents Act, could not be reduced. In this behalf, it was submitted, that the remedies provided by the legislature, where a "revocation petition" is filed, were far in excess of the remedies, in case revocation was sought through a "counter-claim". In this behalf, it was submitted, that the remedies provided by the legislature, where a "revocation petition" is filed, were far in excess of the remedies, in case revocation was sought through a "counter-claim". The legitimate inference derived from the former submission, was thus equally legitimately, repudiated by the latter contention. Since no legitimate solution could emerge from the provisions of the Patents Act, it would be essential, to rely on known principles of law, to resolve the issue. We shall therefore attempt to resolve the issue, on accepted principles of law. 24. A "counter-claim" for all intents and purposes, must be understood as a suit, filed by one who is impleaded as a defendant. A "counter-claim" is essentially filed to obstruct the claim raised in a suit. A "counter-claim" is tried jointly, with the suit filed by the plaintiff, and has the same effect as a cross-suit. Therefore, for all intents and purposes a "counter-claim" is treated as a plaint, and is governed by the rules applicable to plaints. The court trying a suit, as well as, the "counter-claim", has to pronounce its judgment on the prayer(s) made in the suit, and also, those made in the "counter-claim". Since a "counter-claim" is of the nature of an independent suit, a "counter-claim" cannot be allowed to proceed, where the defendant has already instituted a suit against the plaintiff, on the same cause of action. The above conclusion is drawn on the basis of the accepted principle of law crystallized in Section 10 of the Code of Civil Procedure, 1908 (hereinafter referred to as, the CPC) read with Section 151 of the CPC. Both the above provisions are being extracted hereunder: "10. Stay of suit.- No Court shall proceed with the trial of any suit in which the matter in issue is also directly and substantially in issue in a previously instituted suit between the same parties, or between parties under whom they or any of them claim litigating under the same title where such suit is pending in the same or any other Court in India having jurisdiction to grant the relief claimed, or in any Court beyond the limits of India established or continued by the Central Government and having like jurisdiction, or before the Supreme Court. Explanation- The pendency of a suit in a foreign Court does not preclude the Courts in India from trying a suit founded on the same cause of action. 151. Saving of inherent powers of Court.- Nothing in this Code shall be deemed to limit or otherwise affect the inherent power of the Court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court." Therefore, where an issue is already pending adjudication between the same parties, in a Court having jurisdiction to adjudicate upon the same, a subsequently instituted suit on the same issue between the same parties, cannot be allowed to proceed. A similar question arises for consideration before this Court, in the present controversy. If the respondents in their capacity as "any person interested", had filed a "revocation petition" before the institution of an "infringement suit", they cannot be permitted to file a "counter-claim" on the same cause of action. The natural conclusion in the above situation would be, the validity of the grant of the patent would have to be determined in the "revocation petition". Therefore, in the above situation, while the "revocation petition" will have to be permitted to be pursued, the "counter-claim" cannot be permitted to be continued. Therefore, in the above eventuality, it is apparent that the situation would be resolved, in the same manner, as it would have been resolved in cross-suits filed by the rival parties, before different jurisdictional courts. In our considered view, the above conclusion is imperative for a harmonious interpretation of the relevant provisions of the Patents Act. 25. In cases where the "infringement suit(s)" was/were filed by the appellant herein (as plaintiff in the "infringement suit"), before the "revocation petition(s)" was/were filed by the respondents (as defendants in the "infringement suit"), the respondents had the right to file "counter-claim(s)" to seek revocation of the patent, under the strength and authority emerging from Section 64(1) of the Patents Act. Having once filed a "counter-claim", in response to the "infringement suit(s)", on the same analogy as has been recorded above, it would not be open to the respondents herein (the defendants in the "infringement suits") to file "revocation petition(s)", as they would likewise be barred by the rule of res judicata . Having once filed a "counter-claim", in response to the "infringement suit(s)", on the same analogy as has been recorded above, it would not be open to the respondents herein (the defendants in the "infringement suits") to file "revocation petition(s)", as they would likewise be barred by the rule of res judicata . As such, "revocation petitions" filed later in point of time, than the institution of the "infringement suit", would be unsustainable in law. In such cases, the prayer for revocation of the patent shall be adjudicated, while disposing of the "counterclaim" filed by the respondents. Therefore, in the above situation, while the "counter-claim" will have to be permitted to be pursued, the "revocation petition" cannot be permitted to be continued. 6. The Court finds that in above case, Hon’ble Supreme Court has considered and decided the question that the defendant in the patent infringement suit having chosen both the remedies, which one of the two, should he be permitted to pursue. Such question does not arise in the case on hand, as the defendant no.3 has not filed any counter claim in the present suit. Apart from it, Hon’ble Supreme Court in the case of Aloys Wobben (supra) has ruled on the right of the defendant that if the defendant has filed a revocation petition before institution of infringement suit, he cannot be permitted to file counter claim on the same cause of action and in such situation, while the revocation petition will have to be permitted to be pursued, the counter claim cannot be permitted to be continued; and in the case where, the infringement suit was filed before revocation petition was filed by the defendant, the defendant has right to file counter claim and having filed the counter claim, the revocation petition filed later in point of time would be unsustainable in law and the prayer for revocation of patent shall be adjudicated in counter claim and therefore in such situation, the revocation petition cannot be permitted to be continued. The above consideration would, either way, not apply to decide on the plaintiff’s right to proceed with his infringement suit. It appears to the Court that the plaintiff’s right to proceed with the infringement suit remains unhindered by filing of revocation petition by the defendant. The above consideration would, either way, not apply to decide on the plaintiff’s right to proceed with his infringement suit. It appears to the Court that the plaintiff’s right to proceed with the infringement suit remains unhindered by filing of revocation petition by the defendant. It is required to note that the legislature in its wisdom has not inserted any provision in the Act for stay of patent infringement suit, like the one it has made in section 124 of the Trade mark Act for stay of the Trade Mark suit, where the parties have gone for rectification of Register of Trade Mark etc. Absence of such specific provision in the Act shows that the legislature does not intend that filing and pendency of the revocation petition before IPAB will lead the Court to stay the proceedings of the infringement suit. There is one more provision needs to be referred, i.e. Section 85-A of the Bombay Tenancy and Agricultural Lands Act, 1948, which provides for stay of the proceedings of the civil suit, if the issue concerning tenancy right is raised in the suit, to call for finding on such issue from the tenancy authority. Therefore, from the provisions of Section 124 of the Trademarks Act and Section 85-A of the Tenancy Act, it appears that wherever the legislature has intended that the proceedings of the suit should remain stayed, it has made specific provision for such purpose, which is absent in the Act. Therefore, in absence of such specific provision, the Court is to proceed with the infringement suit irrespective of the pendency of the revocation petition before IPAB. In such view of the matter, the Court finds that filing of the revocation petition by the defendant No.3, though prior to filing the infringement suit, is no ground to stay the proceedings of the suit. 7. Learned senior advocate Mr. In such view of the matter, the Court finds that filing of the revocation petition by the defendant No.3, though prior to filing the infringement suit, is no ground to stay the proceedings of the suit. 7. Learned senior advocate Mr. Soparker however submitted that under section 151 of CPC, the Court has inherent powers to be exercised in given facts situation to meet the ends of justice, and exercise of such powers are called for to do complete justice in the matter, in as much as, if the suit is not stayed, the right given under the Act to get the revocation petition filed before the infringement suit, adjudicated by the IPAB under section 64 of the Act, will stand negated and remain only illusory, especially when the IPAB is technically competent with expert members to decide the issues on patent. The Court finds that in the scheme of the Act, the plaintiff cannot be denied of his right to proceed with the infringement suit in exercise of inherent powers of the Court. As regards the competency to decide on issues relating to patent, the Court finds that till the amendment was made in Section 64 in the year 2005, only the High Court was conferred with jurisdiction to decide the issue concerning the revocation of patent, which it has been deciding right from enactment of the Act of 1911. Simply because the IPAB has expert members is no ground to say that High Court should not proceed with infringement suit till revocation petition is decided by the IPAB. In any case, such contention would lose substance, as Hon’ble Supreme Court in the case of Aloys Wobben (supra) has held that if revocation petition is filed at later point of time than the counter claim, the revocation petition cannot be permitted to be pursued. 8. In above view of the matter, the Court finds that the defendant No.3 has failed to make out any case for stay of the proceedings of the present suit and therefore, the application moved by the defendant No.3 for stay of the proceedings of the suit is rejected.