In any patent infringement suit, Commercial Courts at the interim injunction application stage invariably focus on whether the defendant's product does or does not infringe the suit patent. In cases where the defendant raises a Section 107 defence, the court assesses whether the patents were vulnerable to revocation. In the latter case, the Court must consider whether the defendant has raised a credible challenge of vulnerability of the suit patent to revocation. However, in a recent case, the District Judge (Commercial), Patiala House Courts, passed an order on May 2, 2024, for vacating the interim injunction granted on December 20, 2023, in an ongoing infringement suit between Mold Tek Packaging Limited (plaintiff) and Pronton Plast Pack Pvt. Ltd. (respondent)[FAO (COMM) 114/2024] without examining these twin essential aspects.
Aggrieved by this order, the plaintiff/appellant preferred an appeal before the Delhi High Court, challenging the vacation of the interim injunction and seeking the continuance of the ad interim injunction as granted by the District Court's order dated December 20, 2023. The Appellate Court in this case only examined the correctness of the order dated May 2, 2024, passed by the District Judge under Order XXXIX, Rule 4 of the CPC. The High Court vivisected para 8 of the vacation order thoroughly and found many infirmities in the vacation order. First, there was no discussion or finding on infringement. Second, being a District Judge's observation that "an argument that the products of the respondent were dissimilar to the plaintiff can by itself, constitute "a valid credible defence" without examining the merits of the argument.
The High Court agreed with the contention of the appellant that, without considering either of these aspects, the learned District Judge should not have vacated the existing ad interim injunction dated December 20, 2023. The High Court, while clarifying the applicable principles related to infringement cases, found that the District Court had erred in understanding and applying them. Setting aside the order of the District Judge, the High Court observed that the District Court had not examined either of the two aspects which were required to be kept in mind while considering the respondent's application under Order XXXIX Rule 4 of the CPC.
Patents in the Infringement Dispute
In this dispute, two Indian patents, viz. IN4014173 for 'Tamperevident Leak Proof Pail Closure Systems' and IN2987244 for 'A Tamper Proof Lid Having Spout For Containers And Process For Its Manufacture' were involved. Both of these patents were held by Mold Tek. They pertain to a lid which covers a container used for the storage and transport of food items. The Appellant alleged that Pronton Plast Pack Pvt. Ltd. (the respondent) manufactured and sold lids that were infringing these patents.
Grant of Ex parte Injunction
The Commercial Court, recognising the potential infringement and the need to preserve the plaintiff's rights, granted the relief in the form of an ex parte injunction by an order dated December 20, 2023, which reads as follows:
"..........Prima facie, it is evident that defendant's products had constructional and functional features similar to that of plaintiff's patented products. Further, it seems that both these products in comparison had the same purpose. The essence of doctrine of equivalence is to preserve and protect the patented product. Hence, upon the facts and the circumstances of the case, a prima facie case has been made out in favour of the plaintiff and balance of convenience also lies in their favour and in the event, if defendant will not be restrained, it may cause injury to the business and goodwill of the plaintiff, hence, till the next date of hearing, the defendant or any person acting on their behalf is restrained from manufacturing, marketing, using or selling or offering for sale, importing in India, distributing, advertising, exporting and any other manner directly or indirectly dealing in any product namely plastic containers ......"
The respondent, instead of filing an appeal against the interim order for the grant of an injunction, preferred the application under Order XXXIX Rule 4 of the CPC for vacating the ad interim injunction. On May 2, 2024, the District Judge vacated this ad interim order, and the appellant preferred an appeal before the Delhi High Court.
Appeal Court Set Aside the Order of the District Judge
The Appeal Court in this case examined only the correctness of the order dated May 2, 2024, passed by the District Judge under Order XXXIX, Rule 4 of the CPC. The High Court vivisected para 8 of the vacation order thoroughly and found many infirmities in it.
Infirmities in the Impugned Judgment
The High Court expressed surprise over the District Judge's understanding of the statutory and legal position relating to the assessment of infringement. The High Court found fundamental errors in the evaluation of credible challenges to patent validity as well.
- No discussion or finding on infringement
The High Court perused the vacation order thoroughly and found that there is no discussion by the Lower Court regarding the aspect of infringement, which is the first aspect that the court is required to consider. The observation of the Commercial Court in para 12 of the impugned order that "the argument of the defendant that its products are dissimilar to the plaintiff" was by itself "a valid credible defence available to the defendant", according to the High Court, suffers, ex facie, from perversity in law.
The High Court expressed surprise and noted that "without examining the merits of the argument, we are unable to fathom how the learned Commercial Court found the argument to constitute a defence which was both "valid" and "credible". The High Court further observed that "the learned Commercial Court has contented itself with this observation, without examining, for itself, whether in fact the respondent's products were, or were not, infringing the suit patents IN'417 and IN'724".
b. No product-to-patent mapping done
The High Court noted that there was no exercise of mapping of the respondent's products to the appellant's suit patents by the Commercial Court in order to examine whether the case was in fact one of infringement. Additionally, the High Court expressed surprise and observed that "we are unable to understand the finding that the products of the defendant were 'dissimilar to the plaintiff'". The High Court clarified that the product of the defendant could not be compared with the plaintiff. It had either to be compared with the patented product of the plaintiff or the complete specifications of the suit patents. The High Court ruled that "if the learned Commercial Court was comparing the product of the defendant with the product of the plaintiff – as appears to be the case – it was seriously in error in law. The comparison has to be product-to-patent, not 'product-to-product'." In other words, the High Court stated that "Product-to-Patent Mapping" is a prerequisite for proving infringement.
c. Shifting of Burden of Proof
The High Court also questioned the observation of the Learned Commercial Court that, "as the appellant had, in its complete specifications in IN'417, pleaded that the subject matter of IN'417 was novel over its earlier patent IN'276, the onus was on the appellant to establish that it was novel". The High Court quipped that the learned Commercial Court seriously erred in this approach.
The High Court found that the Commercial Court had wrongly shifted the burden of proving novelty onto the appellant. The Court asserted that the legal position in any infringement suit is that the plaintiff must initially prove infringement. If the defendant raises a challenge to patent validity as a defence, they must substantiate it. The High Court pointed out that the Commercial Court made fundamental errors in understanding the statutory and legal position, particularly regarding the burden of proof.
d. On the evaluation of credible challenges to patent validity
The High Court found that there was no reference, anywhere in the impugned order, to IN 288127, which was referred against the suit patent IN'417. Similarly, in respect of the suit patent IN'724, the High Court found that the learned Commercial Court merely observes that "there is a prior art" in the form of the IN'276 (patent of the appellant) without carrying out any exercise of mapping the features of the respondent's product to the complete specifications of the said prior art IN'276.
The High Court found that the learned Commercial Court has regarded the very existence of a prior art in the form of IN'276 as sufficient to raise a credible challenge to the vulnerability of the suit patent IN'724. The assumption, according to the High Court, is obviously fallacious in law. The High Court held that, as such, the learned Commercial Court has not examined either of the two aspects which were required to be kept in mind while considering the respondent's application under Order XXXIX Rule 4 of the CPC.
Decision of the High Court
The High Court quashed and set aside the impugned order dated May 2, 2024, passed by the learned Commercial Court. The application under Order XXXIX Rule 4 of the CPC, which stood disposed, was, therefore, restored to the file of the learned Single Judge, for consideration de novo with a direction to consider the said applications uninfluenced by any observation in the said order.
Conclusion
The High Court in this case clarified that the lower court, which is seized with a patent infringement action, has ordinarily two aspects to consider. The first aspect is whether the defendant's product does or does not infringe the suit patent. In case the defendant raises a Section 107 defence, the second aspect that the Court must consider is whether the defendant has raised a credible challenge of vulnerability of the suit patent to revocation on one or more of the grounds envisaged in Section 64 of the Patents Act. The High Court further observed that the "credibility" of the challenge must be tested on the anvil of the previous decisions of the courts in India.
This case is essentially an endeavour by the Delhi High Court to lay down the principle to be followed by the lower courts while vacating an ad interim injunction in a patent infringement dispute. The High Court in this case examined only the correctness of the order dated May 2, 2024, passed under Order XXXIX, Rule 4 of the CPC. It was pointed out that the Commercial Court neither properly evaluated whether the respondent had raised a credible challenge under Section 107 of the Patents Act, nor carried out discussions or findings on the infringement, which, according to the High Court, is an essential requirement before vacating an injunction in a patent infringement suit.
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