SC Rules Against Multiple Proceedings In Challenging Patents

The recent ruling by the Supreme Court of India lays down clear guidelines on the course of action to be followed in patent litigation to avoid multiplicity of proceedings

In a recent case, the Supreme court was required to consider whether a patent could be challenged through multiple proceedings i.e. by way of an opposition, revocation and/or counter claim in infringement proceedings or whether the right to challenge a patent should exhaust with only one of the options available. More specifically, if the Defendant in an "infringement suit" files a "counter-claim" seeking revocation of a patent as a defense, is he precluded from pursuing the same relief in a revocation action. The counter claim in an infringement action is obviously filed at the High Court (where infringement proceedings are pending). In such a case, does the Intellectual Property Appellate Board (IPAB) cease to have the jurisdiction to adjudicate upon the validity of the patent considering a higher forum is hearing the same subject matter? The question becomes important considering under the current system, where a patent can be challenged through multiple proceedings i.e. by way of an opposition, revocation and/or counter claim in infringement proceedings instituted simultaneously or at different points in time.

Facts of the case

The Appellant's case was that Dr. Aloys Wobben (Dr. Aloys) is a scientist-engineer who had to his credit several inventions in the field of wind turbine generators, and wind energy converters. The appellant claimed to be owner of approximately 2,700 patents (in more than 60 countries) out of which about 100 patents were in India. Wobben Properties GmbH, (Wobben) through an assignment agreement dated 05th January, 2012, had acquired the right, title and interest in all the Indian registered designs and patents (including the pending registrations), belonging to Dr. Aloys. Wobben is engaged in the manufacture of wind-turbines and claims to be among top three manufacturers in the world. The aforesaid manufacturing process is carried out by Wobben under the name of Enercon GmbH (Enercon). The appellant claims that its manufacturing process is carried out in about 27 countries. In India, Enercon had been carrying on the aforesaid manufacturing process, through a joint venture partnership with Yogesh Mehra and Ajay Mehra, (Mehra) carrying out business in the name of Enercon India Limited (EIL).

EIL was formed in 1994 as a joint venture, between Enercon and Mehra. According to the Enercon, the licences to use technical know-how were given to EIL through license agreements executed between the parties from time to time, and the last such agreement was executed on September 29, 2006, which was terminated by Enercon, on December 8, 2008, due to non-fulfilment of the obligations contained in the said agreement.

According to Enercon, despite the termination of all agreements, Mehra continued the use of Enercon Patents belonging to Enercon without due authority.

EIL filed 19 "revocation petitions" before the Intellectual Property Appellate Board (IPAB) under Section 64(1) of the Patents Act, 1970, in January 2009. Aggrieved by EIL action, Wobben/Enercon filed a number of "patent infringement suits". In all, 10 "patent infringement suits" were filed after EIL had already instituted 19 "revocation petitions", before the IPAB. EIL in the above suits filed "counter-claims" as defense in response to some of the "infringement suits".

The main contentions put forward by Enercon were

1. that where a "counter-claim" is instituted in response to a suit for infringement of a patent in the High Court, there can be no further proceeding in the "revocation petition" filed before the "IPAB" and it would make no difference, whether such proceedings had been instituted prior to, or after the filing of the suit forinfringement.
2. that the jurisdiction of a High Court to decide a "Counter-claim" for revocation, was exclusive, and could not be taken away, by initiating proceedings simultaneously, before the "IPAB" and that the proceedings before the High Court in furtherance of the "counter-claim", would negate all similar proceedings against the same patent, on the same grounds, before the subordinate forum (the "IPAB"), for the simple reason, that the inferior forum would have to make way for the superior forum.
3. that the jurisdiction vested with the High Court, to decide a "counter-claim" seeking revocation of a patent in a suit for infringement, could not be taken away by an independent petition for revocation, of the same patent, and on the same grounds, pending before the "IPAB". That the "IPAB" was only an administrative tribunal, which was neither superior to the High Court nor vested with a coequal status (as that of the High Court). Accordingly it was submitted, that the determination by the "IPAB" which could even otherwise be corrected by the High Court (in an appropriate case, through writ proceeding) could not be allowed to derail the plea of revocation raised through the "counter-claim", before the High Court.
4. that once a "counter-claim" for revocation was instituted, the High Court alone would be vested with the charge for determining the merits of the plea of revocation. It was asserted that once a "counter-claim"had been filed in a suit for infringement, the same was liable to be transferred to the High Court for determination. Overall, the plea of the Appellant was that there cannot be multiple proceedings ongoing before different forums on the same point of law dealing with the same subject matter. And that the High Court being a superior forum, once the proceedings have been initiated at the High Court in whichever way, the same should be transferred from any lower court or administrative body to the High Court irrespective of whether such proceedings were filed before or after the proceedings filed at the High Court.

Doctrine of res-judicata

Basically allows for the stay of certain proceedings on the grounds that the same issues, under the same title and parties are pending before another Court. The doctrine is summarised under Section 10 of the Civil Procedure Code of India which applies to civil suits and also Section 124 of the Trademarks Act which requires trial courts to stay all proceedings in an infringement suit if in case the trademark itself is challenged before the Appellate Board. However, the Indian Patents Act, 1970 does not have a provision in this respect and therefore the doctrine did not apply.

Multiple options available to challenge validity of a Patent

As per provisions of the Indian Patent Act, a patent can be annulled:

1. By way of an opposition against registration of a patent. This can be filed either at the stage of pre-grant or post-grant. A pre-grant opposition can be filed "by anyone" in response to publication of a patent (before grant) on grounds prescribed under Section 25(1) of the Indian Patent Act;
2. By way of an opposition against a granted patent. A post-grant opposition can be filed by "any person interested" under Section 25(2) of the Patent Act within one year of the publication of the grant of patent in the official gazette;
3. By filing revocation proceedings under Section 64 of the Patents Act before the Intellectual Property Appellate Board (IPAB) challenging registration of the patent; and
4. As a defense in the counterclaim in infringement proceedings before the High Court.

As the main contentions advanced by the learned counsel for the Enercon, emerge from Section 64 of the Patents Act, in order to address this, the Court made an endeavour to examine the controversy and the wording of Section 64 of the Patent Act which governs the circumstances for revoking a granted patent and provides grounds on which a revocation of a granted patent could be sought.

As per Section 64 (1) of the Patent Act, "Revocation of patents which leads, Subject to the provisions contained in this Act, a patent, whether granted before or after the commencement of this Act, may, be revoked on a petition of any person interested or of the Central Government by the Appellate Board or on a counter-claim in a suit for infringement of the patent by the High Court on any of the following grounds".

Therefore, as per the wordings of the Section 64(1) of the Patent Act, a Patent can be revoked either on an application made before the Appellate board or on a counter-claim in a suit for infringement. In the present case, the court observed that the words with which the legislature has prefaced Section 64, necessarily leads to the inference that the provisions contained in Section 64 are subservient to all other provisions contained in the Patents Act. The court accepted Enercon's contention that the use of the word "or" in Section 64(1) demonstrated 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. The Court stated that even though more than one remedy is available to the Respondents under Section 64 of the Patents Act, the word "or" used therein separating the different remedies provided therein, would disentitle them, to avail both the remedies, for the same purpose, simultaneously.

Finally, the Supreme Court culled out the following principles of law based upon the factual matrix of the case -

1. If "any person interested" initiated pos-grant opposition proceedings under Section 25(2), the same would eclipse all similar rights available to the very same person under Section 64(1) of the Patents Act. This would include the right to file a "revocation petition" as "any person interested" and, the right to seek the revocation of a patent as a Defendant through a "counter-claim" in a suit for patent infringement.
2. If a "revocation petition" is filed by "any person interested" under Section 64(1), prior to the institution of an "infringement suit" against him, he would be disentitled in law from seeking the revocation of the patent (on the basis where of an "infringement suit" has been filed against him) through a "counter-claim".
3. Wherein response to an "infringement suit", the Defendant has already sought the revocation of a patent (on the basis whereof the "infringement suit" has been filed) 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".

This is a welcome decision and would considerably reduce the multiple challenges mounted by parties in different forums thus delaying the final outcome. The ruling has laid down clear guidelines on the course of action to be followed in patent litigation to avoid multiplicity of proceedings.

Disclaimer - The views expressed in this article are the personal views of the author and are purely informative in nature.