India: Enercon Patent Litigation

Last Updated: 21 July 2012
Article by Abhai Pandey

Patent Litigation in India has grown considerably, especially in the pharmaceutical sector, since the amendment of the Patent Act in 2005. The product patent regime in the field of drugs, food and chemicals has led many Indian firms to enforce or oppose the patents. In general the awareness about patents and its commercial exploitation is being increasingly used as a potent tool in competitive strategy formulated by many companies. As a result, an increased number of patent disputes are landing in courts. The courts are playing a very important role in ultimately resolving the disputes and interpreting the law. Lately, the Indian patent litigation space saw a hotly contested dispute over granted patents between a German company and its Indian arm. The case is important from the point of view that it addresses some very pertinent standards of Patent law.

ENERCON PATENT LITIGATION

On a petition by Enercon (India) Ltd, the Intellectual Property Appellate Board (the Board) revoked twelve (12) out of the nineteen (19) patents registered by Enercon in India.

Enercon was one of the first wind turbine manufacturers to develop the Indian market. The subsidiary Enercon (India) Ltd. (EIL) was set up at Mumbai in 1994 as a joint venture between Yogesh Mehra and the Enercon founder Dr. Aloys Wobben. The dispute over strategic differences in business strategy arising in 2005 led to conferring of general powers on Yogesh Mehra in 2007 by the EIL Board for all business activities. Apparently due to this development Enercon terminated the license agreement with EIL at the end of 2008 citing serious breaches of contract. Yogesh Mehra intensified the conflict in 2009 by having EIL initiate patent revocation proceedings before the IPAB in Chennai.

In addition to the decision on revocation petitions, the litigation maze has in its fold a decision of Madras High Court and Delhi High Court.

Revocation

The Board's decisions are important from the point of view of determination on some principal concepts of patent law, which till now were indistinct such as the standard of 'obviousness' or 'lack of inventive step' significant from the aspect of patent prosecution.

Inventive Step - One of the grounds for revocation of a patent is that if the invention claimed through the claims in the complete specification is obvious or does not involve any inventive step having regard to what was publicly known or used in India OR what was published in India or elsewhere before the priority date of the claim (S 64(1)(f)). Under the Indian patent regime 'inventive step' means a feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art (S 2(1)(ja)).

The Board on this core issue referred to Halsbury Laws of England to ascertain the test of 'inventive step'. The test is to ask the question that 'was it for practical purposes obvious to the skilled worker, in the field concerned, in the state of knowledge existing at the date of the patent to be found in the literature then available to him, that he should or would make the invention the subject of the claim concerned'. This may be reworded as – would a non-inventive mind have thought of the alleged invention? If the answer is 'no' then the invention is non-obvious and patentable but then the test is incomplete without the determination of the state of existing knowledge or common general knowledge and the notional person skilled in the art, as both would give substratum to the test of inventive step thereby determining obviousness or lack of inventive step.

Common General Knowledge - The Board's approach on the question - whether a common knowledge on the date of the patentee's claim would amount to anticipation by way of public knowledge affecting the inventive step - began with the understanding that the Common General Knowledge (CGK) is the background of technical knowledge or common knowledge available to all in a particular trade for further research by those engaged in the art. The Board thus concluded that CGK is the information, which at the date of the impugned patent is known and accepted without question by those who are engaged in the art to which the alleged invention relates. The Board also viewed that CGK on the subject may not be available or found in a prior document, but may be available in the country for a long time which every skilled worker in that field is expected to know and that such knowledge is sufficient to invalidate a patent.

Person Skilled in the Art - The interconnected inquiry into who is the 'notional person skilled in the art' makes known that persons with practical knowledge and experience of the kind of work in which the invention is to be used, is the notional person skilled in the relevant art and such person reads the specification with the common general knowledge of the same. He is unimaginative and has no inventive capacity. The Board also, importantly, said that a 'notional person skilled in the art' is essentially a legal construct and not a mere lowest common order of all the persons engaged in the art at a particular time.

Obviousness - IPAB relied heavily on foreign precedents to judge the obviousness of the inventions in this patent dispute. It assessed obviousness as deducted in Windsurfing versus Tabur Marine and in Pozzoli versus BDMO. In the context of revocation of patent granted to Aloy Wobbens, the Board took the following steps: -

[1] "Who is the notional person skilled in the art in this field of wind power installation technology?"

[2] "Identify the inventive concept of the claim in question"

[3] "Identify, if any, the differences existing between the matters cited as forming state of the art and the inventive concept of the claim or the claim as construed".

[4] "Ask whether, when viewed without any knowledge of the alleged invention as claimed, do those differences constitute steps which would have been obvious to the person skilled in the art or do they require any degree of invention?"

In the face of cited foreign patents forming common general knowledge, the Board held that a person skilled in the art could arrive at the inventions as claimed in the claims of the impugned patents, hence the invention cannot be said to have any inventive step Thus the Board's analysis and the findings based on the assertion as above made clear of the lack of inventive step as claimed in the impugned patent and that the invention claimed is obvious to any skilled person in the art.

Madras High Court

Aloy Wobben (petitioner) invoked the writ jurisdiction of the Court for issuance of a writ of Certiorari (Judicial Review) quashing the orders passed by Intellectual Property Appellate Board (the Board) in petitioner's various miscellaneous petitions (MP) filed in all the Original Revocation Applications (ORA) by Enercon (India) Ltd (respondent). The Board had disposed all the MPs directing the registry to list the ORAs on a day-to-day basis.

The miscellaneous petitions challenged the maintainability of the ORAs on the ground that the respondent lacks competence to file revocation petitions. The petitioner, relying on specific Articles from the Articles of Association had contended that the Board resolution does not authorize Yogesh Mehra to do so. Moreover, a proceeding before Company Law Board (CLB) alleging oppression and mismanagement is pending with an interim order by CLB to maintain status quo with respect to all issues. The respondent countered, stressing that Yogesh Mehra has been duly authorized to defend and institute suits and proceedings on behalf of the company and has the requisite locus standi to file and institute the revocation proceedings on behalf of the respondent. The Board finally disposed the MPs after a discussing the factual and legal position and observing ways in which the matter could be disposed of. The Board finally decided to hear the revocation applications against which the petitioner went to High Court with a writ.

The petitioner argued on the perversity of the Board's decision taking a three-pronged approach – (1) the Board has mixed the concepts of locus standi and the person interested (2) No urgency to hear the respondent's ORAs when such applications filed in 2006 are still pending before the Board, and (3) The proceeding before CLB is separate and will not affect the Board's proceeding. Respondent's counter inter alia relied on apex court's decision in M/s Fomento Resorts and Hotels Ltd Vs Gustavo Ranato Da Cruz Pinto & Ors [1985 2 SCC 152] to contend that the question of locus standi could be discussed as one among the several issues when there is a possibility of appeal rather than disposing the case on only one issue.

The Court upheld the decision the Board taking into account the cited Apex Court's decision and concluded, while dismissing the writ petition, that there is no ground for interference.

The Intellectual Property Appellate Board while hearing the revocation petition took the Company's Board Resolution authorizing Yogesh Mehra to sign the pleadings fully empowered to do so. It declined to look into the validity, legality and propriety of the same citing absence of any judgment or an order of a competent court.

Delhi High Court

Dr. Aloy Wobben (Plaintiff) filed a suit complaining infringement of his patents by Yogesh Mehra (Defendant) and preferred an interlocutory application to restrain the defendant from pressing his application for revocation of plaintiff's patents [Dr Aloys Wobben Vs Shri Yogesh Mehra & Ors IA No. 12638/2010 in CS (OS) No 1963/2009; Delhi High Court]. The defendant sought cancellation of the patent as a counter-claim in the Written Statement to the Plaint besides already petitioning for revocation of the plaintiff's patent before Intellectual Property Appellate Board (IPAB).

The plaintiff argued that the defendant's approach in pursuing parallel and concurrent remedies is in defiance of the Doctrine of Election as he has already availed his statutory right of invoking revocation of the patent before IPAB i.e. elected his remedy and cannot urge the same as a defence in the infringement suit. The plaintiff argued further that it is imperative to direct the defendant to either withdraw the revocation applications or not pursue them during the pendency of the suit as the proceeding before IPAB would unnecessarily hamper progress of the suit. To this, the defendant contended that directions of the nature as raised by the plaintiff is not within the purview of the jurisdiction of this Court and that the canon cannot oust statutory remedies which can only be waived consciously.

The Court said that the patent law, in commensurate with the absence of presumption of validity, allows patents to be challenged at various stages. The cancellation or revocation of patents under section 117G of the Patents Act is one such independent remedy to the Board. In addition, in the event of a suit, the defendant can, besides contending non-infringement, also counter claim and seek revocation under section 107. The Court reasoned the rejection of the application saying that the relief cannot be granted because the remedies though seemingly overlapping may not be necessarily availed simultaneously. For instance a third party sued for infringement may prefer an application before the Board for cancellation or revocation. If his application before the Board is held to be not maintainable, or alternatively, he is asked not to raise the ground of cancellation in his written statement, his defence would be seriously prejudiced and therefore it would be contrary to statute and also against public policy to hold that there cannot be a pursuance of an independent statutory remedy.

Appeal Against Revocation

Dr Aloy Wobben (petitioner) appealed against patent revocation orders of the Intellectual Property Appellate Board at Madras High Court and Delhi High Court. The Delhi High Court was petitioned against three patent revocation orders of the Board by invoking the writ jurisdiction but later the petitioner sought to withdraw the writ petitions on issues of maintainability. The Court granted the petitioner's prayer to withdraw the writ petition with liberty to proceed in a court of competent jurisdiction but not without imposing heavy costs on account of valuable judicial time being wasted in hearing the matter. The appeal in Madras High Court is currently pending.

In the past the Indian patent litigation scene was rife with pharmaceutical patent disputes over section 3(d) of the Act, however this patent dispute traversing forums does show considerably on the Indian patent law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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