This case pertains to a suit filed by CTR Manufacturing Industries Limited against Sergi Transformer Explosion Prevention Technologies Pvt. Ltd. for infringement of its patent IN202302 (suit patent) for “A system and method for preventing and/or detecting explosion and/or fire of electrical transformers”, with an application seeking an interim injunction restraining the latter from selling or advertising for sale products that infringed said patent. Sergi, denying any infringement, filed a counter-claim challenging the validity of the suit patent. The Single Judge of the Bombay High Court vide order dated 23rd October, 2015 found a prima facie case of infringement, and also held that all the pre-requisites for the grant of an interim injunction in favour of CTR existed. Accordingly, the court granted an interim injunction in favour of CTR, thus preventing Sergi from selling its Sergi 3000 product, as well as any other product that may infringe the suit patent pending the final disposal of the suit, effective from 23rd November 2015. The Court also held that CTR will be entitled to costs in accordance with the Bombay High Court (Original Side) Rules.

Subsequently, on an appeal by Sergi against the above order of the Single Judge, the Division Bench of the Bombay High Court while staying the order of the Single Judge listed the matter for adjudication on merits. However, the judgment of the Single Judge of the Bombay High Court dealt with certain general principles with respect to patents in respect of inventions with multiple integers and their infringement, which deserves due deference.

Factual Background

CTR originally filed a suit for infringement in 2010 before the Thane District Court, but the filing of a counter-claim challenging the validity of the patent by Sergi necessitated the transfer of the case to the Bombay High Court, under the proviso to Section 104 of the Patents Act, 1970 (Act). Sergi had earlier filed both pre- and post-grant oppositions to the suit patent, as well as a revocation application before the Intellectual Property Appellate Board. The suit patent covers a method of detecting (and preventing) transformer explosions through a device that combines a Differential Relay sensor, a Buchholz Relay, and a circuit breaker. Sergi claimed that its product, the Sergi 3000, was covered by its own patent, IN189089 (‘089 patent), and did not infringe the claim of the suit patent. However, Sergi argued that all three components of CTR’s patent were anticipated by prior art, and therefore the patent itself was granted in error. CTR argued that Sergi had ceased manufacturing products according to its ‘089 patent, and instead began manufacturing different products that infringed the suit patent. Further, CTR argued that its patent claims were non-obvious inasmuch as the arrangement of the three known components was inventive, and produced a new and improved result.

Decision of the Single Judge of the Bombay High Court

The Court pointed out that CTR’s patent would not be prima facie invalid merely because the components employed by its system were known in prior art. The Court held that in order for Sergi to succeed, it had to show that CTR’s combination of the three components was obviously noninventive, or “self-evident and plain”. The Court held that while the integers or components may be known, but they may be arranged or rearranged in some previously unknown and non-obvious manner to deliver a new or improved result. Further, the Court held that each of the integers must be essential and that if any one integer can be taken out without affecting the final result, it is not essential. Thus the Court held that it is not enough to merely state in the opposition that each of the integers was previously known; the opponents must show that the rearrangement of the integers is one that suggests itself for the defence to succeed. The Court also laid down the following general principles with respect to patents in respect of inventions with multiple integers and their infringement:

  • If a patent claim is overbroad, and for that reason, includes in the sweep of the case for infringement the defendant’s invention, i.e., by including every single non-essential and essential addition, then the patent may be prima facie invalid for want of novelty. No person can claim such a monopoly as would result in a bar to future improvements. If the patent is, on the other hand, so narrow that it excludes the addition of another essential integer, then there is no infringement.
  • Where a patent has been granted with a disclaimer on a particular integer, i.e., by saying it is not essential to his product, then the addition of that non-essential integer does not, per se, defeat the claim for infringement. It must be shown that the additional integer is essential, required and returns a result that is as or more efficient than that produced by the patent. Adding something superfluous to the essential integers does not defeat an infringement claim. It must be shown that what is added is also essential and that it satisfies the previous tests of interdependency, producing as good a result or a new and improved result.

The Court also clarified the relevance of the grant of a patent at the prima facie stage. Reconciling Roche v. Cipla with the observations in American Cyanamid v. Ethicon, the court held that a plaintiff would be entitled to rely on the grant of a patent as prima facie proof of validity, but the defendant would only be required to demonstrate (through scientific literature, expert evidence, etc.) the vulnerability of the patent, rather than its invalidity, to defeat an application for interim injunction. However, the fact that the plaintiff holds a valid patent would not automatically entail the grant of an injunction, just as a defendant’s claim that the validity of the patent would be challenged would not automatically entail the denial of an injunction. In both cases, the party must adduce evidence that demonstrates the prima facie validity or vulnerability of the patent, as the case may be.

The Court also held that in cases such as the instant case, the “pith and marrow” of the patented invention had to be examined. In the present situation, the court found this to be the manner in which the components of CTR’s system interacted with each other. The Court held that the addition by Sergi of any superfluous element would not defeat the charge of infringement. The Court also observed that it is not required, at the prima facie stage, to determine the impact of the Supreme Court’s judgment in Aloys Wobben v. Yogesh Mehra, and the court, therefore, did not address the question of whether Sergi could simultaneously sustain pre-grant opposition, post-grant opposition, revocation proceedings and a counter-claim challenging patent validity.

Having thus found an overwhelming prima facie case in CTR’s favour, the Court also held that the balance of convenience and other determinants for interim relief also lay with the plaintiff, thus justifying the grant of an interim injunction.

In light of these findings, the Single Judge ordered Sergi not to infringe the suit patent by making, using, offering for sale, or selling either the Sergi 3000 product or any other product that is identical or substantially similar to the patented system, pending the final disposal of the suit. The Court also restrained Sergi from circulating any literature, technical brochures, pamphlets, flyers, drawings, specifications or any other material that displays the patented system.

Appeal before the Division Bench of the Bombay High Court

Although the Single Judge’s order was issued on 23 October 2015, its operation was stayed until 23 November 2015 at the request of Sergi’s counsel. However, in the interim period, Sergi preferred an appeal against the order of the Single Judge before the Division Bench of the Bombay High Court on the following grounds:

(a) the suit filed by CTR is not maintainable;

(b) there is no infringement of the patent;

(c) the appellant has raised credible challenge to the subject patent.

Additionally, Sergi also submitted that CTR is guilty of suppression of material facts regarding the fact that Sergi had initiated post-grant opposition proceedings under Section 25(2) of the Act, which proceedings were still pending. In this regard, Sergi asserted that in view of the judgment of the Supreme Court in the case of Aloys Wobben v. Yogesh Mehra, the suit filed by CTR was not maintainable. Sergi also averred that this objection was not dealt with by the Single Judge in an appropriate manner.

In light of the above, the Division Bench of the Bombay High Court in its order dated 1st December, 2015 observed that the post-grant opposition proceeding against the suit patent initiated by Sergi before the Controller of Patents was pending and also observed that Sergi had raised substantial issues on merits and in law which deserve consideration. In light of the above, the Bench stayed the interim order passed by the Single Judge and also held that Sergi is entitled to continue to manufacture and deal in transformers and shall maintain account of the sale transaction of its transformers. Further, the Bench also directed the Controller of Patents to expeditiously dispose the post-grant opposition filed by Sergi against CTR with respect to the suit patent.. Sergi was directed to submit the account in respect of said sale transaction as and when directed in a sealed cover. It will be interesting to see as to the outcome of the adjudication of the substantial issues on merits and in law raised by Sergi.