Ajay Industrial Corporation v Shiro Kanao (1983)

Summary

“The appellant, Ajay Industrial Corporation, is a registered firm carrying on business in the manufacture and sale of reinforced plastic hose pipes. The respondent, Shiro Kanao, is a Japanese national” ... “He is the proprietor of two patents which have been registered with the Controller of Patents of India” ... “One bears patent No. 124526 granted on 19.12.1969 and relates to the ‘method and apparatus for continuously producing a spiralled tube of plastic resin’ and is the subject-matter of C. O. 2/74. The other patent No. 114519 granted on 6.12.1967 is in respect of ‘flexible plastic hose’ and is the subject-matter of C.O. 3/74.” The appellant’s applications “seeking the revocation of these patents granted in favour of the respondent are stated, at the Bar, to be the counter-offensive to a suit on behalf of the respondent seeking injunction and damages against the appellant” ... “The suit is said to be pending in a Court at Ahmedabad.” (p 2) “These applications have been rejected by the learned Judge and hence these appeals.” The respondent also objected “that the Delhi High Court has no jurisdiction to entertain these applications and that they ought to have been filed either in the Court at Ahmedabad where the suit filed by the respondent is pending or at Calcutta where the patents in question stand registered.” (p 3)

The Bench held that “Section 64 confers an independent right on any person interested in a patent or the Central Government to seek such revocation” (p 4) and that “Whether we go by the Full Bench (as we do and should) or by the earlier decisions of this court, the Delhi High Court has jurisdiction to entertain the appellant’s applications.” (p 6–7) On the process patent it held that “a ‘person interested’ within the meaning of Section 64 must be a person who has a direct, present and tangible commercial interest or public interest which is injured or affected by the continuance of the patent on the register” (p 9) and that “C.O. 2/74 was rightly dismissed.” (p 10) On the article patent it held that “the appellant has not discharged the onus that lay on it to establish that the respondent’s patent could not have been registered and, therefore, needs to be revoked.” (p 16) “In the result, both the appeals fails and are dismissed. We, however, make no order as to costs.” (p 17)

What the court decided

1. An independent remedy. “The revocation of a patent need not be sought for only by way of a counter-claim. Section 64 confers an independent right on any person interested in a patent or the Central Government to seek such revocation. Such an application can be made even when no suit for infringement is pending against the applicant. it can also be made where such a suit is pending. There is no statutory requirement that in a case where a suit for infringement is pending revocation of the patent can be sought for only by way of a counter-claim and not by way of a separate and independent application. Thus, the statutory provisions show that the remedy of seeking the revocation of a patent from a High Court is not correlated to the pendency of an action for infringement but is made available to any person who finds that his commercial interests are likely to be jeopardised or injured by the claims of the owner of a patent.” (p 4)
2. Place of registration and the suit. “It will not be possible to correlate the jurisdiction with the State in which the place of registration of the patent is situate for all registration of patent in India is done only at Calcutta and three or four other cities in India and the elaborate provisions in Section 2(i) will be totally superfluous if the intention was to confine jurisdiction to the four or five High Courts having jurisdiction over these cities.” “The plea of Sri Anoop Singh that an application under Section 64 should be filed only in the High Court at the place of registration with the exception that, in case there is a pending suit for infringement, the application may be filed also in the High Court having jurisdiction over the place where the suit is filed cannot, therefore, be accepted.” (p 4)
3. The Full Bench nexus test. Of “a Full Bench decision of this Court reported as Girdhari Lal v. Gian Chand Jain & Co. (AIR 1978 Del. 146)” (p 3), the Bench held: “On the ratio of the Full Bench, the application could be filed in the Calcutta High Court or any other High Court within whose jurisdiction the commercial interests of the applicant are affected by the enjoyment of the copyright by the registered proprietor. This would include not only the High Court having jurisdiction over a place in which a suit for infringement is filed but also that having jurisdiction over a place where the assessee carries on business and finds that his rights to carry on the business freely is sought to be restricted on account of the claim of someone else to a patent or design in respect of the goods dealt in by him.” It added that “the only solution that can avoid such multiple action against the proprietor of the patent (viz. to restrict jurisdiction only to the High Court with jurisdiction over the place of registration of the patent) is clearly not countenanced by the statute.” (p 3, 6)
4. Jurisdiction of the Delhi High Court. “For instance, to take the instant case itself, the applicant is facing an action for infringement only in Ahmedabad. But it is selling the same goods in Delhi as well and may face a similar action in respect thereof at any moment either in the form of a separate suit or even by way of an amendment to the existing suit. It may, therefore, be unrealistic to say that he has no cause of action arising in Delhi but has one only at Ahmedabad.” “Whether we go by the Full Bench (as we do and should) or by the earlier decisions of this court, the Delhi High Court has jurisdiction to entertain the appellant’s applications. The objections of Sri Anoop Singh as to lack of jurisdiction are, therefore, over ruled.” (p 6–7)
5. Meaning of person interested. “The statutory definition of a ‘person interested’ is not of much help to the appellant. It is only intended to bring within the scope of the definition persons engaged in research in particular filed and has no relevance to this case. We have, therefore, to fall back upon the general meaning of the expression. It is no doubt true that ‘person interested’ is an expression of broad amplitude and is perhaps wider than the expression ‘person aggrieved’ used in the Trade and Merchandise Marks Act, 1958 (Section 56) or the Copyright Act, (Section 50). But it has to be understood and interpreted in the context of Section 64 in the light of facts out of which the question arises and not in vacuum.” (p 8)
6. The mere user of machinery. “We do not say that a person who is not manufacturing or dealing in a patented machinery but is merely using it can never be said to be ‘interested’ in it so as to be entitled to seek its revocation. We only wish to say that, whether a user has an interest, for this purpose, will depend upon the facts and circumstances of each case and it cannot be laid down as a general proposition or an invariable rule that every person, merely because he uses certain machinery, will be entitled as of right to seek revocation of the patent obtained by the manufacturer in regard to such machiner.” “However, it is possible to conceive of circumstances where even a person who merely uses a certain machinery or device that is patented is made to face, or apprehends being made to face, charges of infringement for such user in which case certainly he will be entitled, in pure self defence, to seek revocation of the patent itself.” (p 9)
7. The test of interest. “In our opinion, a ‘person interested’ within the meaning of Section 64 must be a person who has a direct, present and tangible commercial interest or public interest which is injured or affected by the continuance of the patent on the register. We are unable to see any such interest in the present case, for the reasons already discussed.” (p 9)
8. Locus against the process patent. “In these circumstances, there is no issue between the parties regarding the method or apparatus used by the appellant for manufacturing the article (in respect of which no doubt there is an allegation of infringement) and it is difficult to see how the applicant can be said to be interested in the process patent so as to seek its revocation.” (p 8) Among the principles Graham J “had enunciated” and the Court of Appeal approved was that “The onus of establishing locus lies on the opponent or applicant for revocation.” The Bench held: “Applying these principles, we are not satisfied, on an examination of the facts of the present case that the applicant has established the existence or likelihood of a real prejudice to its present commercial interest in so far as the process patent is concerned. We are, therefore, of opinion that C.O. 2/74 was rightly dismissed.” (p 8–10)
9. Registration after search. “As pointed out by Sri Anoop Singh, registration of a patent is not granted for the asking. Sections 12 and 13 of the Act make provisions for searches to be made in respect of all patent applications and also for an investigation, if needed, to see whether the invention has been claimed or anticipated by publication in any specification filed in any earlier application. We are mentioning this merely to indicate that the existence of earlier patents, if any, in regard to the same article is not normally likely to be lost sight of, though we agree with the appellant that, merely because the respondent’s patent has been registered, it cannot be assumed that it embodies some new invention nor its revocation refused on that ground alone.” (p 13)
10. Articles ostensibly alike. “All these show that the article produced viz. flexible plastic hose pipe, though ostensibly alike, really varies from case to case on account of the different modes and methods by which a desired degree of rigidity and/or flexibility is achieved.” “It also shows that the manufacturing process or method is also relevant in coming to a conclusion as to whether the article ultimately produced is or is not the same as, or one similar to, the article for which the respondent has got the patent and that the learned Judge has not erred in taking this circumstance into account.” (p 14)
11. Onus on the applicant for revocation. “We may also point out that the onus is on an applicant for revocation to prove to the satisfaction of the court that the registration of the patent sought to be revoked was not called for. This is clear from the very nature of the proceedings and has also been emphasised in judicial decisions : see, Halsbury, 3rd Edn., vol 29, p. 106 and Hoechst v. Uniclim Laboratories, AIR 1969 Bom 26.” (p 14)
12. A challenge after long lapse. “The applicant is seeking, in 1974, the revocation of a patent granted as early as 1967. As pointed out by the Nagpur High Court in Bombay Aggarwal Co. v. Ramchand (AIR 1953 Nag. 155) relying on Canadian General Electric Co. v. Fade Radio (AIR 1930 P.C. 1), a patent should not be defeated after a along lapse of time when the challenge is based on oral testimony which is hard to check and which in this case is by persons who have no scientific knowledge of the intricacies involved.” (p 15)
13. Old principles and slight alterations. “It is not sufficient to say that an article involves nothing more than the application of old or known principles. It was observed in Lallubhai Chakubhai v. Chimanlal & Co. (AIR 1936 Bom. 99):” “A new and useful application of an old principle may be good subject-matter.” ... “A patentable combination is one in which the competent elements are so combined as to produce a new result or arrive at an old result in a batter or more expeditious or more economical manner.” “As pointed out by Cotton L.J. in Williams v. Nye (7 R.P.C. 62), ‘sometimes very slight alternations will produce very important results and there may be in these very slight alterations very great ingenuinity of the patents’.” (p 15)
14. The article patent. “In other words, the ‘invention’ addresses itself to defects in the existing addresses proceeds to set out devices for getting over these disadvantages. As pointed out by the Bombay decision earlier cited, the specification and claims have all to be read together and reasonably and benevolently construed. In the absence of any technical or expert evidence either indicating that these statements are wrong or that the article produced incorporates no new devices to get over these defects, it cannot be held that the patent embodies no new discovery or invention.” “For all these reasons, we have come to the conclusion that the appellant has not discharged the onus that lay on it to establish that the respondent’s patent could not have been registered and, therefore, needs to be revoked.” (p 16)
15. Procedure. Disposition. “In the result, both the appeals fails and are dismissed. We, however, make no order as to costs.” (p 17)

Subsequent treatment

• Followed — In Dr Reddy’s Laboratories v Controller of Patents (2022) the Delhi High Court recorded that the Full Bench ruling in Girdhari Lal Gupta “has also been followed by the ld. Division Bench of this Court in Ajay Industrial Corporation v. Shiro Kanao of Ibaraki City AIR 1983 Delhi 496” (para 78), and that “As per Ajay Industrial (supra) wherever the ‘commercial interest’ of the applicant is affected, a revocation could be filed in the concerned High Court.” (para 79)