Just like any other area of law, the law of concealment of material facts has a huge impact on interim decisions and final outcome of any case. In this post, we shall examine some of the important facets of law on concealment as revealed in several Intellectual Property matters.
One of the prime examples of impact of concealment of material facts in a Patent infringement litigation is the Chemtura case. In this matter, Chemtura Corporation (Plaintiff) was granted a patent (Indian Patent No. 213608) on “Side bearing Pad” in India, for which they also held an equivalent US patent (US Patent No.7083165).
The Plaintiff filed a patent infringement suit against Union of India (Defendant) before Delhi High Court for infringing its patent. The Defendants filed a revocation petition against the subject patent before IPAB. It was alleged that the Plaintiff had withheld information and misled the IPO by not submitting the prosecution details and documents generated by the European Patent Office (EPO) and United States Patent & Trademarks Office (USPTO), respectively.
The Delhi High Court observed that due to prima facie, non-compliance of Section 8 by the Plaintiff, the ground for revocation as contained in Section 64(1)(m) was prima facie attracted and went on to vacate an interim injunction in this matter.
While in subsequent decisions in several cases including the famous case of Koninklijke Phillips Electronics vs. Maj. (Retd.) Sukesh Behl & Anr., the Court went on to clarify that the concealment must be deliberate and must pertain to material facts (Willfulness and Material Information test), the position adopted by several Courts and tribunals time and again focuses on the importance of full disclosure by the parties.
There are numerous instances in trademarks law where Plaintiff has been denied relief of injunction solely on the ground of concealment of facts such as details of defendant’s trademark registrations, use by the defendant or knowledge of defendant’s use or other rights.
In Columbia Sportswear Company vs Harish Footwear & Anr, the Delhi High Court, while refusing to grant an interim injunction, found the Plaintiff guilty of concealment of disclaimers pertaining to its trademark registrations as well as on account of active concealment of the fact that the Defendant’s trademark application was “Pending” on the date of the suit and not “abandoned” as disclosed in the suit.
In Micolube India Ltd. vs Maggon Auto Centre And Anr., the Court not only agreed with the Defendants that when a party comes to court for an infringement action, then it is duty bound to conduct a search to ascertain as to whether the defendants have any registration in respect of the trade mark in question but also casted a duty on the plaintiff to state clearly as to whether the defendants have or do not have a trade mark registration in respect of the mark in question and in respect of the impugned goods and services. The Court observed that in case of failure to discharge such duties, the plaintiff cannot be let off by accepting its plea of feigned ignorance. The Court also observed that if the Plaintiff was ignorant of the registration of the trade mark in favor of the, it was its duty to have informed itself by conducting a search and thereafter placing the full facts before the court.
One of the more important aspects of such concealment or non-disclosure is whether it amounts to fraud and in one of the civil cases, the Supreme Court laid down the law pertaining to this issue. In S.P Chengalvaraya Naidu vs Jagannath, the Supreme Court held that a judgment or decree obtained by playing fraud on the court is a nullity and non est in the eyes of law. Such a judgment/decree by the first court or by the highest court has to be treated as a nullity by every court, whether superior or inferior. It can be challenged in any court even in collateral proceedings. The Court observed that “a fraud is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a deception in order to gain by another's loss. It is a cheating intended to get an advantage….….A litigant, who approaches the court, is bound to produce all the documents executed by him which are relevant to the litigation. If he withholds a vital document in order to gain advantage on the other side then he would be guilty of playing fraud on the court as well as on the opposite party”.
The decision of Delhi High Court in Clinique Laboratories Llc & Anr. vs Gufic Limited & Anr. is rather one of the rare cases on the other side of the issue of non-disclosure or concealment, where the Court rather went on to pass an injunction while to some extent appreciating that the Plaintiff disclosed the Defendant’s trademark registration in the Plaint itself and confirmed an ex-parte injunction granted by it in a full reasoned decision on interim injunction. In this case, the Plaintiff has filed rectification petition against the Defendant’s registrations and while the case mainly revolved around the issue whether an interim injunction could be granted while the main suit is stayed due to pendency of rectification action, the Delhi High Court granted an injunction against the Defendant and it was quite appreciated by the Court that the Plaintiff approached the Court with full disclosure of facts including the defendant’s registration which was within the knowledge of the Plaintiff and the fact that the Plaintiff had initiated rectification proceedings against such registration.
While high stakes are involved in the interim stage of proceedings and specifically interim injunctions and ex-parte injunctions, it is imperative to keep in mind that any orders and injunctions obtained without a full disclosure of facts are rather short lived and always hold against the litigant once the concealment is brought to the Court’s notice. It is therefore always advisable to follow best practices of full disclosure, also keeping in mind the long-term chances of success in a trial.