An extract from The Intellectual Property Review, 9th Edition

Enforcement of rights

i Possible venues for enforcement

The Indian judiciary is essentially a three-tier system with approximately 600 district courts hearing cases in the first instance, 24 high courts, and the Supreme Court at the apex. The Supreme Court is the court of final appeal and sits in Delhi. High courts are the highest judicial bodies in a state and have superintendence over all courts and tribunals within their territorial jurisdiction.

District courts generally have an unlimited pecuniary jurisdiction on the civil side. However, the Delhi, Bombay, Calcutta, Madras, Shimla, and Jammu and Kashmir. High Courts also have a first instance jurisdiction where IP disputes above a certain pecuniary level can be entertained directly by the High Court. For instance, the Delhi High Court can currently entertain fresh IP suits, as the court of first instance, if the suit value is more than US$150,000.

High courts also exercise writ jurisdiction, invoked for the violation of fundamental rights and other legal rights of citizens and non-citizens alike. Writs are issued by courts against public bodies and writ jurisdiction can be directly invoked against decisions of various IP registries such as the Patent Office, Trademarks Registry etc., when there is a violation of principles of natural justice or other principles enshrined in the Constitution. Moreover, appeals may lie before the writ court against the final decision of the IPAB, which is the first appellate authority against the orders of the IP registries (except in copyright matters, where the first appellate body is the Copyright Board).

ii Requirements for jurisdiction and venue

Jurisdiction may depend upon the relevant territory of the court, and the pecuniary value and subject matter of the dispute. Each of these determinants are independently considered for a court to assume jurisdiction.

Under the Code of Civil Procedure, an Indian court would have jurisdiction over a matter if the alleged infringement took place or the cause of action arose within its territorial jurisdiction, or if the defendant or any of the defendants actually and voluntarily resides, carries on business, or personally works for gain, within its territorial jurisdiction. The location of the plaintiff is not a consideration. In Sholay Media Entertainment Ltd v. Yogesh Patel, the Division Bench of the Delhi High Court held that even an infinitesimal fraction of a cause of action will confer jurisdiction.

However, in an action for infringement of a registered trademark or for infringement of copyright, the civil court within whose jurisdiction the claimant actually and voluntarily resides, or carries on business or personally works for gain, also has jurisdiction.

In Bristol-Myers Squibb Company and another v. VC Bhutada and others, the Delhi High Court held that to determine that a defendant 'carries on business', the plaintiff has to prima facie show through facts enumerated in the plaint that there is an apprehension of 'offer for sale', which gives rise to a cause of action. The veracity of the apprehension cannot be challenged at the preliminary stage and would have to be determined at trial.

In cases where the validity of the registration of an intellectual property right is disputed, Indian courts will have jurisdiction only if the registration is granted in India. It would therefore not be possible to question the validity of a registration of an intellectual property right granted in a foreign jurisdiction before an Indian court.

However, it would be possible for a foreign entity to challenge the validity or registration of an intellectual property right granted in India. Further, even if rectification proceedings instituted by a defendant in a foreign court are pending, these will not preclude an Indian court from granting interlocutory relief in favour of the claimant in trademark matters.

Moreover, to increase the efficiency and speed of trial in IP disputes, the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act 2015 categorised IP disputes as commercial disputes and modified procedural law to expedite and manage their timeline. The Act directed the creation of commercial divisions within high courts and currently, the Delhi and Bombay High Courts have set up commercial divisions to manage IP suits.

Additionally, to avoid multiplicity of proceedings, the Supreme Court has held that a party who has already sought revocation of a patent before the IPAB is precluded from filing a counterclaim challenging the validity of the same patent in a suit for infringement of the patent.

Additionally, Section 104 of the Patents Act 1970 and Section 22(4) of the Designs Act provide that if the defendant has challenged the validity of the patent through a counterclaim and challenged the validity of a design by way of a defence in a patent and design infringement suit respectively, then such suits are liable be transferred to the High Court for adjudication.

iii Obtaining relevant evidence of infringement and discoveryAnton Piller orders

A party in a civil suit may move the court for an Anton Piller order if it seeks detention, preservation or inspection of any property that is the subject matter of the suit. When allowing an application of this nature, the court may authorise any person to enter the property and take samples that may be necessary for the purpose of obtaining full information or evidence. Thus, in a civil action for infringement, the court commissioner can be appointed ex parte to visit the defendant's premises, search and seize the infringing goods. These goods may either be taken into custody or left on trust with the defendants after they are sealed.

Usually, the court appoints a commissioner, who may be a lawyer or a member or employee of the court, to carry out the directions of the court in an Anton Piller order. Commissioners may also be appointed for a scientific investigation or for making local investigations that the court may find necessary.

A court commissioner is given wide powers while conducting an investigation, is 'an extended arm and agent of the Court' and is 'effectively the eyes and ears of the Court'.

John Doe orders

Great care is taken when actions are instituted against parties that run small concerns in markets where numerous parties are engaged in selling counterfeit goods or other specimens of trademark, copyright or design infringement. This is because often such parties work in tandem and in close proximity with one another and if trying to obtain the precise details and identities of one such party leads to suspicion in a market, the entire market of infringers would disappear before the action is even instituted.

Hence, Indian courts also issue orders against unidentified parties or 'John Does'. This has proved extremely useful in anti-counterfeiting actions and actions against copyright and broadcast piracy. Once the defendants have been identified, the court allows the plaintiff to formally include them into the suit.

Norwich Pharmacal orders

A Norwich Pharmacal order may be sought from Indian courts after proceedings have commenced, seeking information or documentation from a third party that may be in a position to assist the court in the IP suit.

In Souza Cruz SA v. NK Jain, the Delhi High Court directed the Commissioner of Customs and Excise at Hyderabad to disclose the complete details of infringing cigarettes being exported to Ukraine. This order has been followed in Shaw Wallace v. Gemini Traders, where the customs and excise authorities were directed to disclose details of infringing whisky moving from one state to another in violation of a court order.

In Bridgestone Corporation v. Tolins Tyres Pvt Ltd, the court directed the Public Information Officer at Land Customs Port, Bihar to produce records pertaining to the export of tires by the defendants.

Discovery

Discovery is possible only after legal proceedings have commenced. Under the provisions of Order XI Rules 1 and 2 of the Code of Civil Procedure 1908, discovery can be by interrogatories, delivered with the leave of the court, for the examination of the opposite parties. So long as interrogatories are relevant, they can be allowed.

iv Trial decision-maker

The trial decision-maker varies depending on the forum where the proceedings are pending. In the district courts, the evidence led by the parties is recorded by the presiding judge. In the High Court, however, the evidence is recorded either before a joint registrar (who is basically a junior or subordinate judge), or the parties may opt to request the court to appoint court commissioners to record evidence to expedite the process. In the latter, the High Court appoints judicial officers (local commissioners), typically retired judges, to record depositions of the witnesses of the parties. The local commissioner can then fix consecutive dates for the cross-examination of witnesses and this ensures that foreign witnesses do not have to repeatedly travel to India for depositions, and evidence can be recorded in a short span of time. Court commissioners are 'an extended arm and agent of the Court' and 'effectively the eyes and ears of the Court'.

Section 115 of the Patents Act 1970 also provides that in any suit for infringement or other proceedings under the Act, the court may appoint an independent scientific adviser to assist the court or to inquire and report upon any such question of fact or opinion that does not involve a question of interpretation of law, as it may formulate for the purpose.

v Structure of the trial

The presentation of evidence at the trial is governed by the provisions of the Indian Evidence Act 1872. Traditionally, evidence at a trial is given orally in the form of statements of witnesses or on the basis of documents in cases where the witness producing the documents is not authorised or required to give oral evidence. Third parties such as consumers or dealers, who are desirable witnesses, are rarely willing to give evidence in a court.

Evidence is given on the issues framed by the court with the help of both parties, after the admission and denial of documents. When the issues are framed, it is indicated whether the onus of proof of a particular issue lies with the plaintiff or the defendant and preparation for the trial commences accordingly.

Expert evidence is allowed in patent and copyright infringement cases or others that involve a complex aspect of intellectual property; for example, to explain the ambit of satellite broadcasting rights.

A trial may often take years if there are numerous witnesses. Therefore, cases in which there are only two or three witnesses on either side have a better chance of early disposal.

The statements of a witness given in a judicial proceeding or before any person authorised by law to take the same, can be used in a subsequent judicial proceeding between the same parties or their representatives or at a later stage of the same proceeding in certain circumstances.

vi Infringement

The Patents Act 1970 is silent on what qualifies as an infringement of a patent. Section 48, however, vests certain exclusive rights upon the patentee or his or her agent. Violation of the rights conferred on the patentee under the Act would therefore constitute infringement. In a patent infringement suit, the court assesses both the liability of the defendant as well as the quantum of damages. In most patent infringement cases, the defendant institutes a counterclaim challenging the validity of the suit patent, which must also be determined by the court in the same trial. In other words, Indian courts are empowered to decide issues of invalidity in infringement actions. In an infringement suit, the defendant may raise the issue of validity of a patent in two ways:

  1. as its defence to the plaintiff's claim of infringement; or
  2. by instituting a counterclaim challenging the validity of the patent.
Literal infringement

The first step in patent infringement assessment requires determination of the rights conferred by the patent. For this, the court engages in claim construction, namely an exercise that involves understanding the 'scope and meaning of the [patent] claims including its terms'. To construe a patent claim, the court first reads it as 'ordinary English sentences without incorporating into them extracts from the body of the specification or changing their meaning by reference to the language used in the body of the specification'. The Delhi High Court in the Roche case relied upon Edward H Philips v. AWH Corporation and observed that to read patent claims differently from their ordinary and general meaning would be 'unjust to the public, as well as would be an evasion of the law'. The court further held that only when there is a doubt as to meaning a patent claim, could reference be made to the patent specification as the patent specification may then 'aid in solving or ascertaining the true intent and meaning of the language employed in the claims'. Elaborating further, the court held that if claim terms still remain ambiguous, reference could also be made to the prosecution history of the patent, inventor testimony, dictionaries and treaties. It clarified that extrinsic evidence such as inventor testimony, dictionaries and treaties would have lesser weight as compared to intrinsic evidence such as prosecution history.

The infringement analysis then proceeds with a comparison of the elements of the claim and the elements of the alleged infringer's product or process. If the alleged infringer's product or process is covered by the claims as construed, infringement is established.

To understand whether an infringement is present in a particular case the guidelines that the court follows are:

  1. read the claims first and if there is an ambiguity, then read the description and complete specification;
  2. if there is still an ambiguity, then reference could be made to both intrinsic and extrinsic evidence;
  3. find out what constitutes prior art;
  4. find out what improvement is present in the patent claimed to be infringed, over the prior art;
  5. list the broad features of the improvement (pith and marrow of the claims);
  6. compare those broad features with the defendant's process or apparatus; and
  7. if the defendant's process or apparatus is either identical or comes within the scope of the plaintiff's process or apparatus, there is infringement.
Contributory infringement

The concept of contributory infringement has not been incorporated in the statute and therefore each person or entity taking part in an act of infringement is individually liable. However, a court, if it deems fit in a particular case, may import the common law principles of vicarious liability, abetment and contributory infringement into a patent infringement dispute to impute liability to indirect or contributing infringers.

Doctrine of equivalents

Indian courts recognise the doctrine of equivalents. In an infringement suit before the Bombay High Court, the doctrine of equivalents was discussed to settle the dispute that related to infringement of a patent for tamper-proof locks. This doctrine was also recognised by the Madras High Court in Mariappan v. AR Safiullah and others, in which it was held that a person is guilty of infringement if he or she makes what is, in substance, the equivalent of the patented article. The Delhi High Court, in Raj Parkash v. Mangat Ram and others held that:

[U]nessential features in an infringing article or process are of no account. If the infringing goods are made with the same object in view which is attained by the patented article, then a minor variation does not mean that there is no piracy. A person is guilty of infringement if he makes what is in substance the equivalent of the patented article. Some trifling or unessential variation has to be ignored.
vii Defences

The defendant in a patent infringement suit can argue that the patent is invalid since it lacks novelty, is obvious or is not capable of industrial application. India also specifically bars the patentability of a new form of a known substance.

The alleged infringer can also argue that the patentee failed to disclose corresponding applications filed in foreign jurisdictions for the same and substantially the same invention. In Maj (Retd) Sukesh Behl and another v. Koninklijke Philips Electronics, the Delhi High Court has clarified that such non-disclosure must be material and intentional. The Roche decision has further stated that if the patentee has substantially complied with the requirement of disclosure of foreign applications, then this defence would fail. However, the courts have usually taken a strong view against suppression of material facts. Thus, it is better to reveal too much detail than too little.

The defendant's acts are for the purposes of developing and submitting information to a regulatory body for acquiring marketing approval.

Common law defences such as laches and estoppel are also available.

While the Indian statute provides a detailed mechanism for the grant of a compulsory licence, the ability of an infringer to obtain a compulsory licence is not a defence for infringement.

viii Time to first-level decision

The time span for obtaining a decree in suit for infringement of a patent is approximately 24 to 36 months.

ix RemediesReliefs in a suit for infringement of patent

Section 108 of the Patents Act 1970 provides that the reliefs a court may grant in any suit for infringement include an injunction subject to such terms as the court sees fit, as well as either damages or an account of profits. In addition to this, the court may also order that goods that are found to be infringing and implements used in creating the infringing goods shall be seized, forfeited or destroyed, as the court deems fit under the circumstances of the case without payment of any compensation.

Damages and compensation

In suits for trademark infringement and patent infringement, a plaintiff is entitled to seek damages or an account of profits.

In a suit for copyright infringement, the claimant may be entitled to damages, accounts and even conversion damages (unless the defendant establishes that they were not aware and had no reasonable grounds to believe that copyright was being violated).

A trend of awarding damages has been particularly observed in cases pertaining to software piracy. In the case of Microsoft Corporation v. Amritbir Singh and another. the plaintiff was awarded damages of 3 million rupees against the defendants for infringement of the copyright subsisting in the software programs of the plaintiff.

In Bridgestone Corporation v. Tolins Tyres Pvt Ltd the court directed the defendants who were manufacturing and exporting infringing Bridestone tyres abroad to pay the plaintiff 3 million rupees and also to pay 500,000 rupees to legal aid. In Sugen v. KV Prakash while disposing of a contempt application, the court directed the defendants to pay 2 million rupees to a cancer research organisation in Madras.

In Super Cassettes Industries Private Limited v. HRCN Cable Network, CS (Comm) 48 of 2015, the Delhi High Court granted damages worth approximately 1,620,000 rupees along with attorney and court fees against a broadcaster for unauthorised broadcasting of copyrighted films.

Interim injunctions

Interim injunctions or temporary injunctions are sought in every suit for a permanent injunction in an intellectual property case, because of the length of time a case takes to get to trial. While ex parte interim injunctions are granted by courts in the normal course in some jurisdictions in India, there are courts that tend to be wary of granting this relief. The greatest number of ex parte interim injunctions are known to have been granted by the Delhi High Court.

Courts have the power to grant Mareva injunctions, but they are rarely given in intellectual property cases. The application for a Mareva injunction is naturally heard ex parte, as is an Anton Piller application.

Ad interim injunctions are granted in cases where there is prima facie proof of infringement and the balance of convenience is found to be in favour of the plaintiff owing to irreparable injury that is likely to follow if an ad interim injunction is not granted. The courts are increasingly influenced by the English decision in American Cyanamid v. Ethicon and are paying less attention to the strength of the plaintiff's case and more attention to the balance of convenience.

When an interim injunction is ordered against a party, settlement negotiations become extremely determinant of how the dispute may be finally settled. Anti-counterfeiting actions have proved to be very successful in cases where ad interim injunctions have been issued against defendant infringers as the likelihood of a settlement as provided for by the Code of Civil Procedure 1906, increases tremendously. This reduces the lifespan of an anti-counterfeiting action by more than half as infringing defendants are reluctant to take the matter to trial.

Delivery up of infringing material

Infringing goods, and particularly those that have been seized under an Anton Piller order, are considered case property during the suit and if the suit goes to trial, they are liable to be forfeited or destroyed. Claimants usually ask for delivery of infringing goods and in matters in which disputes are settled outside court it is usual for the claimant to seek the destruction of the infringing goods as a part of the standard settlement terms. Alternatively, infringing materials such as labels and packaging may also be destroyed, and goods may be returned or donated to charitable organisations.

Certificate of contested validity and other reliefs

A successful claimant in a patent, design or trademark proceeding is entitled to a certificate of validity, which may assist substantially in subsequent proceedings not only to establish validity, but also to obtain increased costs.

The court has the power to direct a defendant to change their corporate name or to publish an apology. The court can also order the defendant to disclose the name of their suppliers and customers.

When an appeal is preferred, the court has the power to grant a stay, depending upon the circumstances of each case.

x Appellate reviewHierarchy of courts

In India, a suit for infringement of trademark, copyright or patents can be filed in a court not lower than a district court. The exceptions to this are the High Courts of Delhi, Calcutta, Madras, Bombay, Shimla, and Jammu and Kashmir, which are courts having original side jurisdiction. Appeals from orders of the district court are heard by the corresponding High court having appropriate territorial jurisdiction. Similarly, an appeal against an order passed by a single judge of a high court having original side jurisdiction will therefore lie with a division bench of the same high court comprising two judges. The decisions in such appeals can be challenged up to the Supreme Court of India subject to grant of special leave by the apex court.

Appeals to the Supreme Court do not have to be based on a final determination of the law suit by a lower Court. The Supreme Court is empowered under Article 136 of the Constitution of India to entertain appeals arising from any stage of a lower court proceeding.

Standards for appeal

The Supreme Court has held in an appeal against the exercise of discretion by the single judge that the appellate court will not interfere with the exercise of discretion of the court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, capriciously or perversely, or where the court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. An appeal against exercise of discretion is said to be an appeal on principle. The appellate court will not reassess the material facts and seek to reach a different conclusion different if the one reached by the court was reasonable on the material facts. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a different conclusion.

Introduction of new evidence

The Code of Civil Procedure 1908 permits a party to file additional evidence at an appellate stage in certain circumstances and subject to obtaining leave from the appellate court.

xi Alternatives to litigation

Section 89 of the Code of Civil Procedure, 1908 provides mechanisms for alternative dispute resolution (ADR) and stipulates that where it appears to the court that there exist elements of a settlement that may be acceptable to the parties, the court shall formulate the terms of settlement and give them to the parties for their observations, and after receiving the observation of the parties, the court may reformulate the terms of a possible settlement and refer the same for:

  1. arbitration;
  2. conciliation;
  3. judicial settlement including settlement through Lok Adalat; or
  4. mediation.

In India, the most common form of ADR is mediation, which has been used to great effect, especially in trademark and copyright disputes before the Delhi High Court.

Apart from the above modes of settlement of a dispute, the Delhi High Court has also introduced 'pre-suit mediation', which enables prospective litigants to have matters referred to mediation before the suit is instituted. This mechanism has been extremely successful in resolving disputes.