TVS Motor Company Limited v Bajaj Auto Limited (2009)

Summary

“Both the Appellant and the Respondent are in the automobile field and are manufacturing two wheelers of their own brands. The dispute involved in this litigation pertains to the patent right of the Respondent bearing Patent No.195904 of 16.07.2002, granted by the Patent Office with its sealing dated 07.07.2005.” (para 4) The Respondent stated “that it invented an unique technology of using two spark plugs for efficient burning of lean air fuel mixture in a small bore engine (bore size between 45 mm and 70 mm)” (para 6) and claimed that “the 125 cc engine in the Appellant’s product ‘FLAME’ infringes the Respondent’s patent No.195904” (para 8). “By a common order dated 16.02.2008” “the learned Judge while granting interim injunction as prayed for by the Respondent in O.A.No.1357 of 2007 in C.S.No.1111 of 2007, dismissed the application of the Appellant in O.A.No.1272 of 2007 in C.S.No.979 of 2007.” (para 3) Among the uncontroverted facts, “On 13.08.2004, the International Search Report came to be made which stated that the claimed invention cannot be considered novel or cannot be considered of involving inventive step when the document is taken alone in the light of the US Honda Patent No.4534322 A1 (MATSUDA) dated 13.08.1985”, and “The Appellant has filed his application for revocation of Respondent’s patent No.195904 before the Intellectual Property Appellate Tribunal, Chennai on 24.08.2007.” (para 49)

The Bench held that “there is considerable force in the claim of the Appellant in contending that the patent of the Respondent suffers from the vice of prior art and obviousness” (para 63), and that “the Appellant’s contention as regards the validity of the patent is a matter for detailed investigation in the main suit as well as in the application for revocation pending before the Appellate Tribunal.” (para 70) On infringement it held that “the point of emphasis in the description of the product of the Appellant as well as the Respondent differ considerably notwithstanding the use of twin spark plug in both the technologies” (para 68) and approved “the stand of the Appellant that the third valve is not merely a cosmetic one.” (para 73) “even while holding that the claim of valid patent at the instance of the Respondent can be prima facie accepted, the alleged infringement as against the Appellant cannot be held to have been made out at the instance of the Respondent. Therefore, there is no case made out for grant of interim injunction.” (para 85) “Both the appeals stand allowed for the reasons stated herein and the impugned common order of the learned Single Judge dated 16.02.2008, passed in O.A.No.1357 of 2007 in C.S.No.1111 of 2007 is set aside and the application in O.A.No.1272 of 2007 in C.S.No.979 of 2007 stands allowed. There will be no orders as to Costs.” (para 86)

What the court decided

1. Amended specification and prior art. “after the filing of initial specification dated 16.07.2002, as well as the amended complete specification on 07.07.2003, the International Search Report dated 13.08.2004, came to be issued pointing out that the claimed invention cannot be considered novel or involving inventive step in the light of the US Patent No.4534322 A1 and that thereafter making a specific reference to the said US patent, the Respondent came forward with its amended final complete specification dated 08.11.2004, giving more thrust to the provision of two valves even while referring to the twin plugs configuration which apparently appeared to have persuaded the Controller to grant the patent and sealing on 07.07.2005.” (para 62) “If such a prima facie conclusion is inevitable, we are constrained to state that there is considerable force in the claim of the Appellant in contending that the patent of the Respondent suffers from the vice of prior art and obviousness.” (para 63) “the US Honda Patent having twin plugs configuration, without specific reference to the bore size with three valve provision granted on 13.08.1985, would certainly militate against the claim of the Respondent based on its patent dated 16.07.2002, sealed on 07.07.2005 in Patent No.195904.” (paras 62–64)
2. Revocation grounds as a defence. “In all fairness, it would be appropriate for the parties to workout their remedies in the application for revocation pending before the Appellate Tribunal filed at the instance of the Appellant in order to ascertain whether or not the grounds raised in the said application would render the already granted patent in favour of the Respondent invalid. In as much as Section 107 of the Patents Act enable the Appellant in a suit for infringement of a patent to rely upon every ground on which it may be revoked under Section 64 as a ground of defence for the defendant, the parties can work out their remedy in the suit as well.” (para 64)
3. Principles from the authorities. “When we refer to the various decisions relied upon by the learned senior counsel for the respective parties the following principles emerge viz.,” including that “For the grant of interim injunction in a patent matter, the prima facie validity of the patent should be shown and also the prima facie infringement should be proved apart from the availability of balance of convenience and irreparable loss”, that “If the patent is a new one, mere challenge at the Bar would be quite sufficient for the refusal of an interim injunction as compared to a fairly old patent”, that “Irrespective of the examination and investigation made under Sections 12 and 13 of the Patents Act, no presumption can be drawn as to the validity of the patent and whether the application for revocation of patent is pending and when serious controversy exist as regards the existence of an invention based on prior art, the Court should be slow in granting the injunction”, that “In construing an allegation of infringement, what is to be seen is whether the alleged infringement has taken the substance of the invention ignoring the fact as to omission of certain parts or addition of certain parts”, and that “Though the grant of patent by itself does not guarantee its validity, it should be given some weight and significance while considering the question of prima facie case and it is always open to the defendant to question the validity of the patent.” (para 69)
4. Validity left to the trial. “By applying the above settled principles deduced from the decisions of both English as well as Indian cases, we find that the Appellant’s contention as regards the validity of the patent is a matter for detailed investigation in the main suit as well as in the application for revocation pending before the Appellate Tribunal.” (para 70) “at the threshold we are not inclined even prima facie to state that the validity of the patent is doubtful.” (paras 70–71)
5. Recognition of a granted patent. “the technical advance which had not so far fallen in public domain in an industrial application and which was not obvious before its pronouncement, such technical advance though may be miniscule in nature could still be recognised as an invention and once it gets the seal of approval of the Patent Authority by way of grant of patent, the same will have to be given its due recognition.” “In the same manner, the Appellant as a Licensee of Patent No.196636 dated 25.05.2000, with date of sealing on 08.11.2006, in respect of its invention of four stroke internal combustion engine with at least two inlet valve and one exhaust valve also with twin plug configuration is entitled to be recognised on its own merits with equal protection of the Patents Act in particular Section 48.” (para 74)
6. The two engines compared. “while the Respondent’s patented product of an improved internal combustion engine is by virtue of the functioning of two spark plugs due to its ideal location and the point of ignition in a lean burn operation, the product of the Appellant though also with the provision of twin spark plugs, the internal combustion was due to the receipt of air fuel mixture by the two intake valves (one providing swirl action and another tumble action)” (para 67). “Viewed in that respect also we are convinced that the alleged infringement of the Respondent’s patent cannot be prima facie accepted.” (paras 67–68)
7. The third valve. The materials “sufficiently demonstrate that the internal combustion process in the Appellant product was not exclusively dependent on the twin plug operation but was based on the three valve configuration in Patent No.196636 dated 25.05.2000. If such a conclusion can be arrived at even prima facie, we are convinced that the stand of the Appellant is well justified. We therefore approve the stand of the Appellant that the third valve is not merely a cosmetic one.” (para 73)
8. A different combination of elements. Applying William Needham and James Kite Vs. Johnson and Co., that “there can be no infringement if one has produced the same results by a different combination of different elements”, the Bench held: “it will have to be necessarily held that the allegation of infringement based on the Respondent’s patent No.195904 dated 16.07.2002 by itself cannot form the basis for the alleged infringement.” “the teachings of the Respondent’s invention of its Patent No.195904 dated 16.07.2002 has been distinctively distinguished by the teaching of the patent No.196636 dated 25.05.2000, which supports the alleged infringed product of the Appellant and therefore the grant of injunction by the learned Single Judge cannot be sustained.” (para 80)
9. The skilled reader. “As far as the preposition that the patent specifications are intended to be read by persons skilled in the relevant art, we have found that there is at least one article by an enlightened student of Intellectual Property Law of I.I.T. Kharagpur” and “we are quite convinced that even going by the independent opinion of a person in the concerned field of art there is no scope to restrain the Appellant by way of grant of interim injunction.” (para 81)
10. Pith and marrow. “As far as the application of the concept of pith and marrow of the claim, what is stated is that novel feature which is claimed to be essential would constitute the pith and marrow.” “While the acclaimed novel feature of the Respondent’s product is twin plug operation resulting in improved internal combustion, the acclaimed novel feature in the Appellant’s product is in the operation of two intake valves with one exhaust valve providing a combination of swirl and tumble operation of lean and rich air fuel mixture in its internal combustion process of course with the aid of twin plugs. If the pith and marrow of the Respondent and the Appellant are distinctively identifiable there is absolutely no scope for grant of injunction as has been done by the learned Single Judge.” (para 82)
11. The age of the patent. “As far as the ratio laid down to the effect that if a patent is a new one, the Court are to be slow in granting interim injunction, we find that in the case on hand, the Respondent’s patent No.195904 came to be granted/sealed on 07.07.2005 and the launching of the Appellant’s vehicle 125 cc ‘FLAME’ was scheduled in the month of December, 2007.” “In such circumstances, while it cannot be held that the Respondent’s patent No.195904 was too old, while at the same time the fact that the Appellant was also supported with a valid patent as a licencee, the grant of injunction does not call for in the facts and circumstances of this case.” (para 78)
12. A pending revocation application. “Further applying the well laid down principle that when application for revocation of a patent of the Respondent is pending before the Appellate Tribunal and when such an application has been preferred on the ground of existence of a prior art, obviousness and other formidable grounds as provided under Section 64 of the Patent’s Act, the Court should not grant injunction in such cases. We hold that in the special facts and circumstances of the case, grant of interim injunction cannot be sustained.” “The allegation of the Appellant that the Respondent secured the patent by making a deceptive statement about the bore size of the Honda Patent, requires a detailed investigation. Further it will have to be stated that such an allegation of the Appellant cannot be rejected as baseless or made without any substance.” (para 79)
13. Validity and infringement distinguished. “Therefore, while on the one hand the Respondent’s patent having been granted is to be accepted prima facie as a valid one, in the same breath, it will have to be held that merely because such a valid patent is existing in favour of the Respondent, that by itself, it cannot be held that the Respondent has made out a strong prima facie case of infringement as against the Appellant.” (para 84) “Therefore, there is no case made out for grant of interim injunction.” (paras 84–85)
14. Disposition. “In the light of our above conclusion, the question of balance of convenience or irreparable loss does not come into play. Having regard to our above conclusion, we hold that the Respondent is not entitled for an injunction as applied for and the injunction granted by the learned Single Judge cannot therefore be continued.” “There will be no orders as to Costs. All the M.Ps. are closed.” (para 86)

What the court did not decide

“Our conclusion being prima facie for the purpose of dealing with an Interlocutory Application of the Appellant as well as the Respondent, the parties will have to workout their remedies in the revocation application of the Appellant before the Appellate Tribunal and also while contesting the main suit on merits at the time of its final hearing independent of whatever stated in this Judgment. Operation of Sections 64, 104-A and 107 of the Patents Act will have to be independently applied at the appropriate stage of the respective proceedings.” (para 75) The Bench added that “the learned Judge or the Tribunal, as the case may be, may decide the Suit or the Revocation Application on its own merits uninfluenced by whatever stated in this Judgment and may decide the case at an early date.” (para 85)

Subsequent treatment

• Appealed — Bajaj’s appeal from this order in O.S.A. No. 92 of 2008, Civil Appeal No. 6309 of 2009, Bajaj Auto v TVS Motor Company (2009), was disposed of by the Supreme Court on 16 September 2009 “without going into the merits of the controversy” (para 11); the Supreme Court directed that “The learned Single Judge shall decide the suit without being influenced by this order or by any observations made in the impugned order of the Division Bench or in the order of the learned Single Judge granting temporary injunction in favour of the appellant herein.” (para 14)
• Explained — In F Hoffmann-La Roche v Cipla (2012) the Delhi High Court, holding that “the approach laid down in Catnic is not alien to the Indian context”, cited Bajaj Auto v TVS Motor Company (2008) as a case “where Catnic case has been relied upon by the Madras High Court and same has been confirmed by the Division Bench while deciding the appeal on 18.5.2009” (para 239).