India: Multiplicity Of Proceedings In Patent Disputes

Last Updated: 12 February 2015
Article by Jaya Moorjani

Introduction

Patent disputes in India often involve multiple proceedings in different jurisdictions. The same patent may form the subject matter of opposition proceedings before the Controller, revocation proceedings before the Intellectual Property Appellate Board ("IPAB"), patent infringement suit filed by the patent holder in a district court and a counter claim filed by the defendant before the High Court, seeking revocation of the patent. In patent disputes, the stakeholders are usually large corporate with deep pockets who exploit the statutory provisions and deliberately launch multiple proceedings, wasting the precious time of the already overburdened legal system. In a welcome development, the Supreme Court of India has rationalized the procedure for revocation of patents in India by delivering a judgement that bars opponents from challenging the validity of patents before multiple forums simultaneously. It has held in the case Dr. Alloys Wobben and Another v. Yogesh Mehra and Others1that revocation of a patent can be sought either by filing a revocation petition before the IPAB or by filing a counter claim in a patent infringement suit before the High Court – the opponent cannot exercise both the options.

1. Background

Under the Patents Act, 1970 ("Act"), the validity of a patent may be challenged in the following manner:

  1. Through a pre-grant opposition under Section 25(1)2
  2. Through a post-grant opposition under Section 25(2)3
  3. Through a revocation petition filed before IPAB under Section 64(1)4
  4. Through a counter claim before the High Court filed in a suit for infringement of the patent, also under Section 64(1)

Often, an interested party challenges the validity of a patent by filing a revocation petition before the IPAB. When the same party is made a defendant in a patent infringement suit, it also files a counter claim before the High Court, seeking revocation of the patent. This gives rise to two separate and parallel revocation proceedings before two different forums. In the case cited above, the Supreme Court dealt with this problem and provided a solution which is examined in this bulletin.

2. Facts of the case

Dr. Alloys Wobben ("Appellant") filed a suit against Enercon India Ltd., Yogesh Mehra and Ajay Mehra, ("Respondents"). The Appellant was a scientific engineer in the field of wind turbine generators and wind energy convertors, owning 100 patents in India and had been carrying on business incorporating the patented processes under the name Enercon GmbH ("Enercon"). In India, he had a joint venture partnership with M/s Yogesh Mehra and Ajay Mehra through a joint venture company called Enercon India Limited ("EIL"), formed in 1994. The licences to use the technical know-how were granted by Enercon through written intellectual property licence agreements with EIL. However, the last license agreement dated September 29, 2006 was terminated by the Appellant on December 8, 2008, due to non-fulfilment of obligations by the Respondents. The Appellant contended that even after the termination of the agreements, the Respondents continued to use the patents, without any authority. This gave rise to a dispute between the two parties. The Respondents filed 23 revocation petitions before the IPAB in 2009, 2010 and 2011, praying for revocation of the Appellant's patents. The Appellant filed 19 patent infringement suits against the Respondents before the Delhi High Court. In response, the Respondents also filed counter-claims in some of the infringement suits, seeking revocation of the Appellant's patents. The question which arose was which of the two forums (IPAB or the High Court), should continue with the revocation proceedings. Although the High Court had passed a consent order whereby all patent disputes were to be consolidated before the High Court, yet the Respondents continued to pursue the revocation petitions before the IPAB. Eventually, the litigation reached the SC for determination of the correct course of action to be followed by the Respondents.

3. Contentions

The Appellant raised the following points before the Supreme Court:

  1. Where a counter-claim is filed in response to an infringement suit in the High Court, there can be no further proceedings in the revocation petition filed before the IPAB, irrespective of whether such proceedings were instituted before or after the filing of the infringement suit.
  2. If the Respondents had filed a revocation petition before the institution of an infringement suit, they cannot file any counter-claim for the same cause of action, since counter-claim is also an independent suit.
  3. The jurisdiction of a High Court to decide a counter-claim for revocation of patent is exclusive and could not be taken away by initiating parallel proceedings simultaneously before the IPAB. If any revocation petition is filed before IPAB and then any counter-claim is also filed before the High Court for the same patent on the same grounds, the case will have to be transferred to the High Court for determination. The inferior forum (IPAB) will have to make way for the superior forum (the High Court). Hence, the proceedings before the High Court would negate all similar proceedings against the same patent before the IPAB.
  4. There was a consent order passed by the Delhi High Court on September 1, 2010, wherein, the Respondents had agreed that the suits and counter-claims pending between the parties would be consolidated and heard by the High Court itself. Yet, the Respondents had continued to pursue their revocation petitions before the IPAB.

4. Judgement

The Supreme Court determined the issues as follows:

  1. If "any person interested" has filed proceedings under Section 25(2) of the Act (i.e. post grant opposition), the same would eclipse all similar rights available to the very same person under Section 64(1) of the Act. This would include the right to file a "revocation petition" in the capacity of "any person interested" (under Section 64(1) of the Act), as also, the right to seek the revocation of a patent in the capacity of a defendant through a "counter-claim" (also under Section 64(1) of the Act). This was because Section 64 is prefaced by the words "Subject to the provisions contained in this Act,....." and not by the words, "Without prejudice to the provisions contained in this Act.....", or "Notwithstanding the provisions contained in this Act...". The words with which the legislature has prefaced Section 64, necessarily lead to the inference, that the provisions contained in Section 64 are subservient to all the other provisions contained in the Patents Act.
  2. If a revocation petition is filed by "any person interested" in exercise of the liberty vested in him under Section 64(1) of the Act, prior to the institution of an infringement suit against him, he would be disentitled in law from seeking the revocation of the patent giving rise to the infringement suit, through a counter-claim. This denial of the remedy available by way of a "counter-claim" under Section 64(1) of the Act is based on the principle of res judicata crystallized in Section 10, read with Section 151 of the Code of Civil Procedure, 1908. 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 (by way of revocation proceedings before the IPAB) on the same cause of action.
  3. Where in response to an infringement suit, the defendant has already sought the revocation of the patent in question through a counter-claim, the defendant cannot thereafter, in his capacity as "any person interested" assail the concerned patent, by way of a revocation petition before the IPAB. This denial of remedy available by way of a revocation petition under Section 64(1) of the Patents Act, is also based on the same principle of law, i.e. res judicata.
  4. It would be convenient for the parties concerned as well as the adjudicatory authorities, if they agree to resolve their disputes before a singular adjudicatory authority. Having consented to one of the available remedies postulated under law (by way of the consent order passed by the Delhi High Court on September 1, 2010), it would not be open to either of the consenting parties, to seek redressal from a forum in addition to the consented forum. Therefore, the revocation of patents in the instant case should be decided by the Delhi High Court, in view of the consent order passed by it.

Conclusion

While the Supreme Court decision is welcome since it has streamlined the patent revocation procedures, it has left a few questions unanswered. According to the judgement, when a suit for infringement is filed against a party that has already initiated revocation proceedings before the IPAB, that party cannot challenge the patent through a counter-claim. Does this mean that proceedings before the High Court shall continue unabated, notwithstanding the fact that the validity of the patent itself is under challenge before the IPAB? What will happen if the High Court grants an injunction but later, the IPAB revokes the patent? Unlike the Trademarks Act, 1999, the Act5 does not expressly provide for stay of the infringement suit in the event the validity of the patent in question is challenged in the suit. Although this point was raised before the Supreme Court, it refused to deal with it on the ground that the point was raised only because the Appellants did not desire parallel proceedings and the Court had already given its decision on the issue of parallel proceedings.

Footnotes

1 Judgment of Hon'ble SC in civil appeal no. 6718 of 2013 decided on June 2, 2014

2 According to Section 25(1), any person may oppose a patent application after its publication but before the grant of patent

3 According to Section 25(2), any interested person may oppose a patent within one year of the grant of patent

4 According to Section 64(1), any interested person or the Central Govt. may seek revocation of patent by way of a revocation petition filed with IPAB or by filing counter-claim with High Court

5 The Patents Act, 1970

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