India: The Spark-Plug Blaze: Injunction Order On TVS Revoked

Last Updated: 28 May 2009

TVS and Bajaj, both being players in the automobile industry and manufacturers of two wheelers appeared to Court with respect to the use of technology relating to Patent No.195904 held by Bajaj, which held the exclusive right to prevent third parties from making, using, offering for sale, selling or importing for those purposes 'An improved internal combustion engine working on a four stroke principle' for a period of 20 years beginning 16.07.2002 C.S.No.1111 of 2007, had been moved by Bajaj to obtain an order of permanent injunction restraining TVS from causing any infringement to their Patent in contention as also a preliminary decree rendering accounts of TVS' profits in the sale of 125 cc 'FLAME' motorcycle and claimed a sum of Rs.10,50,000/- as damages for the alleged infringement. They also prayed for destruction of all the infringing copies and articles including vehicles containing engines that infringed Bajaj's Patent.

The Madras High Court passed an order in Bajaj Auto Ltd. v. TVS Motor Co. Ltd. (O.A.No.1272 of 2007 in C.S.No.979 of 2007) whereby TVS prayed for an order of interim injunction restraining Bajaj from in any way interfering with the manufacturing and marketing of their products using an Internal Combustion (IC) engine with 3 valves and 2 spark plugs pending the disposal of C.S.No.979 of 2007. The same was rejected. Another application (O.A.No.1357 of 2007) was also filed challenging the order passed restraining TVS from infringing Bajaj's technology described in the Patent in contention pending disposal of C.S.No.1111 of 2007. The present Original Side Appeals (M/s. TVS Motor Company Limited Versus M/s. Bajaj Auto Limited (O.S.A.Nos.91 & 92 of 2008)) addressed the common order that dealt with these applications.

Bajaj, vide the affidavit filed in support of O.A.No.1357 of 2007, described the nature of the invention and differentiated the same from earlier known inventions in the field. Describing the technology using two spark plugs for efficient burning of lean air fuel mixture in a small bore engine (bore size between 45 mm and 70 mm), they claimed that the invention is directed to improve the combustion of lean fuel mixture for improved fuel efficiency by using a pair of spark plugs to ignite the air fuel mixture.

TVS however contraverted the contention stating that the use of two spark plugs in an IC engine was a prior art for which no patent could have been applied for and that Bajaj had resorted to a deceptive method by introducing a limitation of bore size to the US Honda patent which did not have any such limitation. They stated that the US Honda Patent No.4534322 which provides for use of two spark plugs but did not restrict the bore size specification. In this light they stated that Bajaj was not entitled for the equitable relief of injunction as prayed for in the application, in view of the argument of twin spark plugs being in public knowledge after the expiry of the 20 years period of US Honda Patent No.4534322, dated 13.08.1985. TVS in its arguments specifically denied Bajaj's contention that the third valve in TVS's engine was a cosmetic one and contended that the said valve had its own specific functions in the operation of its IC engine for better combustion efficiency and therefore the alleged infringement of Bajaj's patent was unacceptable. Further TVS pointed out that what was claimed in the complete specification varies with what was claimed in the application filed in support of the injunction and that Bajaj could not be permitted to improve the functions as mentioned in the complete specification by making any statement in the affidavit filed in Court. With respect to the shift in Bajaj's claim with respect to the two plugs centric description of 2003 to two valves centric description of 2004 was claimed to be due to the existing discovery of 1985 US Honda patent and hence according to TVS, Bajaj could never be permitted to shift its claim once again to twin spark plugs centric description to its so called invention. Further, reliance was placed upon Indian Patent application No.678/MUM/2001 filed by Honda in July 2001 in support of its stand that plurality of ignition plugs to four stroke engine with an intake valve and an exhaust valve to achieve reduction of fuel cost was a known factor in the automobile industry.

Comparing the inventions, the Counsel for TVS cited several precedents to substantiate his arguments. Further, referring to the provisions contained in the Patents Act, it was pointed out that the International Search Report which was passed on to Bajaj, they thereafter came forward with its amended Patent application in 2004, in which the claim was two valves centric as against twin plugs centric as claimed in the provisional specification made in 2002. TVS arguing on technical grounds, stated that the complete specification of Honda was made 1 year before Bajaj's application for patent and that the same was open to challenge on many grounds in TVS's application for revocation under Section 64 of the Patents Act and therefore a prima facie case was made out for a triable issue to cancel the said patent.

In the course of argument, a reference to TVS' technical collaboration with AVL Austria was also looked into, in the light of which the alleged infringement was denied. Further, they drew the Court's attention to the order of the Hon'ble Supreme Court dated 03.03.2008, passed in M/s Shand Pipe Industries Ltd. v. Hind Mosaic Cement Works & Ors. [C.S.No.1759 of 2008] in support of his stand whereby having regard to the provision contained in Section 13(4) read with Sections 47 and 48 of the Patents Act especially by taking note of the effect of the counter affidavit, the Hon'ble Supreme Court interfered with the order of injunction granted in favour of the party who already had the patent in its possession and while setting aside the order of the Division Bench, the Hon'ble Supreme Court remitted the matter back to make an analysis of the scheme of the provisions under the Patents Act and its effect on a registered patent. TVS hence averred that the facts pleaded by TVS vis-a-vis the patent granted in favour of Bajaj, there existed every possibility of TVS succeeding in its application for revocation of the patent and therefore the injunction being granted in favour of Bajaj being set aside.

Contraverting to the grounds raised by TVS, Bajaj contended that in order to show that Bajaj' patent was invalid in law, it was the bounden duty of TVS to show that there was a prior art with reference to the patent granted in their favour. Further, he highlighted that it was essential to examine as to how the industry looked at the product patented and what the patent taught. Further, it was pressed that the construction of a validated patent must be accepted and that what must be looked at in a prior art the pith and marrow and not compare the complete and provisional specification for that purpose. Citing several precedents, to substantiate its stand, the Counsel for Bajaj also examined a magazine report viz., 'Techno Treat' to depict a comparative study of Bajaj's product with Honda patent and as to how the industry perceived their invention. They also contended that Bajaj had studied and differentiated Honda' patent from theirs before the Controller and availed of S. 57 allowing to incorporate necessary amendments to the claim for better understanding of the invention. Making further technical assertions, it was stated that stated that the teaching of prior art not being the same, the injunction granted cannot be found fault with. On the question of balance of convenience, Bajaj contended that their product came into the market three years prior to TVS's product and that it had already achieved commercial success, having gained recognition and captured 50% of the market as compared to TVS' bike which was yet to be launched. Further noting that TVS had already launched a single spark-plug bike, they stated that TVS's business was not affected and therefore no irreparable hardship would be caused by the grant of the injunction. This was responded by TVS stating that a strong prima facie case needed to be established, to which they added that Bajaj's patent did not refer to any bore size (in comparison to the Honda patent) and therefore TVS's stand based on prior art was well founded.

The Court examining the substantive provisions involved in the case considered the rival submissions of the parties and took note of the uncontroverted facts. Discussing the nature of the inventions involved, while revisiting the contentions raised by either party, the Court opined that with respect to the US Honda patent's background and object of invention there was existent a ground available for TVS to consider in its application for revocation pending before the Appellate Tribunal. Further they stated that a prima facie conclusion was inevitable and that there was considerable force in TVS' claim in contending that Bajaj' patent suffered from the vice of prior art and obviousness. The Court also noted that in as much as Section 107 of the Patents Act enables TVS in a suit for infringement of a patent to rely upon every ground on which it may be revoked under Section 64 as a ground of defence for Bajaj, the parties could work out their remedy in the suit as well.

The Court considered analytical literature available regarding the present issue to differentiate the inventions in dispute, and summarized the following settled principles:

  1. The validity of a patent can be challenged in a suit on various grounds of revocation as set out under Sections 64 and 107 of the Patents Act.
  2. For the grant of interim injunction in a patent matter, the prima facie validity of the patent should be shown and also the prima facie infringement should be proved apart from the availability of balance of convenience and irreparable loss.
  3. If the patent is a new one, mere challenge at the Bar would be quite sufficient for the refusal of an interim injunction as compared to a fairly old patent.
  4. Even in IPR cases, apart from prima facie case, balance of connivance and irreparable injury, the mere registration of the patent alone would not be sufficient and the Court must look at the whole case i.e. the strength of the case of the plaintiff and the strength of the defendant.
  5. Irrespective of the examination and investigation made under Sections 12 and 13 of the Patents Act, no presumption can be drawn as to the validity of the patent and whether the application for revocation of patent is pending and when serious controversy exist as regards the existence of an invention based on prior art, the Court should be slow in granting the injunction
  6. There can be no infringement if the opponent has proved the same result by a different combination of different elements.
  7. The general rule in regard to the construction of the validity of a patent is, that construction which makes it valid should be preferred rather than the construction which rendered it invalid
  8. Patent specification should intend to be read by a person skilled in the relevant art but their construction is for the Court and to do so it is necessary for the Court to be informed as to the meaning of the technical words and phrases and what was the common general knowledge i.e., the knowledge that the notional skilled man would have
  9. In construing an allegation of infringement, what is to be seen is whether the alleged infringement has taken the substance of the invention ignoring the fact as to omission of certain parts or addition of certain parts.
  10. While analyzing a claimed invention, it is relevant to examine as to whether the invention requires independent thought, ingenuity and skill, producing in a distinctive form a more efficient result and there by converting a comparatively defective apparatus into a efficient and useful one which, taken as a whole, is novel.
  11. Though the grant of patent by itself does not guarantee its validity, it should be given some weight and significance while considering the question of prima facie case and it is always open to the defendant to question the validity of the patent.
  12. Though the claimed invention may consist of known factors, known integers i.e. if by combination of such known integers if a new use has been discovered that should be construed to have displayed inventive steps by way of ingenuity and skill.

Further, looking at the provisional and complete specifications of AVL's patent with respect to which TVS had entered into an agreement, the Court noted that TVS was an exclusive licensee. They also considered the photographs placed on record, the Court opined that the third valve involved was not merely a cosmetic one. Stating that the Courts opinion being prima facie at the present stage, operation of Sections 64, 104-A and 107 of the Patents Act were stated to have to be independent application at the appropriate stage of the respective proceedings. The Court also laid down that in situations where an application for revocation of a patent of the Respondent is pending before the Appellate Tribunal and when such an application has been preferred on the ground of existence of a prior art, obviousness and other formidable grounds as provided under Section 64 of the Patent's Act, the Court should not grant injunction in such cases. In the light of the special facts and circumstances of the case, the grant of interim injunction was not held to be sustainable. The Court further stated that on the question of the application of the doctrine of pith and marrow of the claim, what is stated is that the novel feature which is claimed to be essential would constitute the pith and marrow and that if the novel feature in the invention If the pith and marrow of Bajaj and TVS were distinctively identifiable there was absolutely no scope for grant of injunction as was done by the learned Single Judge. The Court also disregarded that existence of a question of balance of convenience or irreparable loss and held that Bajaj was not entitled for an injunction and discontinued the injunction as granted by the learned Single Judge.

© Lex Orbis 2009

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