Chemtura Corporation v Union of India (2009)

Summary

The plaintiff's invention "is directed to a side bearing pad assembly for absorbing and cushioning compression forces." (para 5) Its patent No.213608 was "granted on January 9, 2008 by the Controller of Patents" (para 1). It pleaded that "in view of Section 11-A (7) of the Act, the Plaintiff was entitled to claim damages on account of infringement of its patent, from the earliest date of publication of the subject application i.e. 19th July 2003." (para 10) "The specific case of Defendants 2, 3 and 4 is that the Plaintiff (a) obtained the patent on a false suggestion or representation and (b) failed to disclose to the Controller of Patents the information in terms of Section 8 of the Act." (para 21) "The issue that arises for consideration is whether the Plaintiff has made out a case for grant of an injunction" (para 32)

The Court held that "in view of the prima facie non-compliance by the Plaintiff with the requirement of Sections 8 (1)(b) and 8(2) of the Act, the ground for revocation as contained in Section 64 (1) (m) is prima facie attracted." (para 49) It found that "Section 47 (1) would bar the Plaintiff from seeking to prevent Defendants 2 to 4 from making the subject device since it is going to be manufactured and supplied only to the Railways for its own use." (para 53) and that "the balance of convenience is not in favour of grant of an interim injunction as prayed for by the Plaintiff." (para 55) "Accordingly the interim injunction granted by this Court on May 27th 2009 stands vacated and the prayer by the plaintiff for the grant of an interim injunction is rejected." (para 56)

What the court decided

1. The credible challenge. The defendants contended that "The mere fact that Section 48 of the Act has been amended in 2002, does not grant any higher protection to the patent. Once the defendant is able to raise a credible challenge to the validity of the patent then injunction must be refused." (para 33) Applying the Division Bench decision in F.Hoffmann- LA Roche Limited v. Cipla Limited, the Court framed the question: "In other words, the question is whether the defendants have 'put forth a substantial question of invalidity to show that the claims at issue are vulnerable'?" (paras 33–35)
2. The undertaking under section 8(1)(b). "Therefore this did not hinge on the Controller asking for particulars but the applicant keeping the Controller informed 'from time to time'. The expression 'time to time' meant a periodicity of furnishing information akin to updating the Controller on the current status of the applications filed in other countries. It is not, as suggested by the learned Senior counsel for the Plaintiff, a mere furnishing of information whether the application is pending or dismissed." (para 37)
3. The object of the disclosure. "Given that the national phase application is itself a part of the scheme of filing patent claims internationally in terms of the PCT, the submission that the Controller will be deluged with paperwork if he were to be kept informed of all developments in such applications, is clearly one of desperation. The very function of the Controller is to ensure that a patent is granted in keeping in view the current knowledge of the closest prior art relevant to the subject device or process. This is being statutorily facilitated by requiring the applicant to keep the Controller updated of all developments in the pending applications in other countries made for the same patent. Given this object of the provision there can be no two opinions that the disclosure has to be a periodic one and giving full particulars." (para 38)
4. The Controller's requirement under section 8(2). "That requirement is mandatory as has been further emphasised by the wording of Section 64(1) (j)" (para 40) and "The obtaining of a patent, 'on a false suggestion or representation' is a further ground of revocation under Section 64 (1) (m)." (para 40) "The word 'including' only means that the Plaintiff has to additionally furnish the search and the examination report where applications have been allowed." (para 43) "The filing of the international search report in June 2001 was not in compliance with the above requirement." (paras 40, 43–44)
5. Whether the omission was material. On the submission made by reference to Halsbury's Laws of England, the Court held: "Section 64 (1) (j) and (m) indicate to the contrary. Further under Section 43 (1) (b) a patent can be granted only when the application has been found not to be contrary to any provision of the Act. It cannot be said that the omission to comply with the requirement of Section 8 (2) was not serious enough to affect the decision of the Controller to grant the patent to the Plaintiff." (para 45)
6. The amended section 48 and validity. "The amended Section 48, however, does not in any manner change the position as regards the validity of the patent itself. It would still be vulnerable to challenge in terms of Section 13 (4) read with Sections 64 and 107 of the Act. A similar conclusion has been arrived at in Bajaj Auto Ltd. v. TVS Motor Company Ltd." (paras 47–48)
7. The prima facie finding. "This Court holds that for the aforementioned reasons, in view of the prima facie non-compliance by the Plaintiff with the requirement of Sections 8 (1)(b) and 8(2) of the Act, the ground for revocation as contained in Section 64 (1) (m) is prima facie attracted." (para 49)
8. Section 47, a condition of grant. "Therefore, the right under Section 48 is a qualified right." (para 51) "This is an implied condition of the grant of patent. In the circumstances, if the government through the Ministry of Railways has itself supplied the drawings to the prospective suppliers and asked them to supply side bearing pads in conformity with those drawings, it cannot possibly be said that there is an infringement by either the Railways or its contractor of the patent." (para 52) "The Plaintiff, by participating in such tender, must be taken to have consented to the use of its patent by both the Railways as well as any supplier of the Railways to whom the contract for supply was to be awarded." (paras 51–52)
9. Sections 47 and 156 read together. "A harmonious reading of Sections 47 and 156 of the Act would indicate that the object is not to involve the Government or its department or a contractor acting on its behalf in any litigation involving infringement of patent when the product or process in question is for the 'own use' of the government." "This is a price that the patent holder pays for getting a sizeable chunk of the contract, in this case 95%, which is virtually a monopoly." (para 52)
10. Making on behalf of Government. Of Garware Wall Ropes Limited v. A.I. Chopra, where "the learned Single Judge of the Bombay High Court (Nagpur Bench) had occasion to interpret Section 47 of the Act", the Court said: "This Court understands Section 47 to not restrict the making of the device by the Government itself because the words used are 'made by or on behalf' of the Government. It is the end use that has to be for the Government or its department exclusively." (para 53)
11. Authorities distinguished. "K. Ramu v. Adyar Ananda Bhavan 2007 (34) PTC 689 (Mad), did not deal with the question of non-compliance with Section 8 and consequently the patent being rendered vulnerable to revocation under Section 64 (1) (m) of the Act." "Likewise, in Telemecanique & Controls (I) Ltd. although the injunction was granted on merits, the Court acknowledged that the mere grant of patent will not by itself ensure the grant of an injunction in favour of the patent holder. Significantly, the Division Bench emphasised that the patent holder would have to show that the patent had been worked." Of Mariappan: "The decision in Mariappan is also distinguishable on facts." (para 46)
12. Balance of convenience. "By refusing an injunction, while still imposing conditions on the Defendants 2, 3 and 4 to maintain accounts, the Court would be ensuring that in the event of the Plaintiff succeeding, it will be compensated even as regards the 5% quantity. In the above circumstances, the balance of convenience is not in favour of grant of an interim injunction as prayed for by the Plaintiff." (para 55)
13. Procedure. Accounts in place of an injunction. "However, it is directed that Defendants 2, 3 and 4 will each file affidavits of undertaking in this Court within two weeks undertaking that they will, during the pendency of the present suit, keep complete accounts of the manufacture, sale and supply of the subject device and file in this Court such accounts, duly certified by their auditors at the end of every three months, with advance copies to the Plaintiff." (para 56)
14. Procedure. A prima facie opinion. "Yet, it needs to be clarified that this opinion is only a prima facie one formed at the pre-trial stage and is not intended to influence either the final outcome of the suit or any other proceedings involving the parties in any other forum, including the IPAB" ("Intellectual Property Appellate Board"). (para 57)

What the court did not decide

"This Court does not find it necessary to examine in a greater detail whether the other grounds for revocation, including those spelt out in Sections 64 (1) (h) or (j), are attracted. In the considered view of the Court, that would require evidence to be led. The Court is also, therefore, not examining whether the subject patent is vulnerable on the grounds of lack of inventive step and obviousness or non-working of the patent." (para 49)

Subsequent treatment

• Explained — In Cipla v F Hoffmann-La Roche (2015) the Division Bench described section 8 as the area "which appears to have become the single most problematic area of patent practice in India in recent times following the decision of this Court reported as (2009) 41 PTC 260 (Del) Chemtura Corporation v Union of India, which laid down a strict threshold of disclosure and also warns that inadequacy of disclosure would be a ground to seek revocation of a patent" (para 20).