Garware Wall Ropes Ltd v A.I. Chopra (2008)

Summary

“Being aggrieved by the order, below Exh. 4, dated 18.6.2007 in Civil Suit No.2/2007 (Garware Wall Ropes Limited...Versus...M/s A.I. Chopra & another), rejecting the application for grant of temporary injunction filed by the appellant/plaintiff, the present appeal was filed.” (para 2) “In Civil Appeal No.4762/2008 decided on 1.8.2008, the Hon’ble Supreme Court of India set aside the said judgment and remitted these appellate proceedings for fresh disposal in accordance with law and also indicated the questions to be decided.” (para 3) The questions were “Whether the products patented as GSWR and Spiral Lock Systems are allegedly in use and in fact being used for more than two decades ?” and “What is the scope and effect of Section 100 of the Patents Act, 1970 (as amended) and its impact in the present case ?” (para 3) “Respondent No.2 – Konkan Railway is a co-patentee with the appellant in respect of 240 patent.” “Respondent No.1 is a railway contractor.” It “set up a defence that Section 100 of the Patents Act grants complete protection for using the said patents for the work of railways, which is a department of the Central Government and such contracts are signed on behalf of the President of India which is an authority in favour of respondent No.1 as contemplated by Section 100 of the Act.” (para 4)

The Court held that “respondent No.1 has failed to prove by adequate pleadings and by affirmative evidence even prima facie that the patented products or process was known and used in India or elsewhere for two decades or so.” (para 14) It held that the words “‘merely of its own use’” in Section 47 “would not include use by any other person like contractor of railways and the meaning is strictly restricted to the direct use by any department of the Government or its servants in the performance/in the discharge of their duties.” (para 21) and that “Section 100 of the Act to my mind clearly shows that it contemplates a separate, clear and direct authority that too in writing from the Central Government” (para 24). “Admittedly, no such authorization in the instant case contemplated by Section 100 of the Act exists.” (para 24) “To sum up, the appellant has made out a case for grant of temporary injunction pending decision of the suit filed by it.” (para 27) “Appeal Against Order No.83/2007 is allowed.” “Issue temporary injunction against respondent No.1 in terms of prayer clause - (a) of the application (Exh.4) in Civil Suit No.2/2007. No order as to costs.” (para 28) On the request of respondent No.1, the Court found that “it would be proper to suspend this judgment till 31.01.2009.” (p 51)

What the court decided

1. The scheme for grant. “After considering the aforesaid scheme in the Act for granting patent it would be wrong to say that the patents are granted mechanically as a matter of course. On the contrary, it clearly appears that the claim has to undergo investigation by examiner who is expert in the particular field and then after passing the test as contemplated by the provisions of the Act and the Rules and even after inviting the objections from public at large by making publication of the claim, the controller is supposed to grant the patent and seal it.” (para 9)
2. Weight of a sealed patent. “The submission of Advocate Shri Manohar that mere registration or sealing of patent by default does not give any credence therefore does not appeal to me. Merely because there is no presumption in favour of a patent which is registered and sealed, one cannot jump to a conclusion that the fact of registration and sealing of patent should be ignored or that the Court should treat a registered and sealed patent valueless merely because a dispute has been raised by the contesting parties about the patent.” (para 9)
3. Revocation grounds pleaded as defences. “There is no dispute that respondent No.1 has not filed any counter claim in the suit claiming revocation of the patents.” (para 11) “Section 107 of the Patents Act provides for raising of defences in a suit for infringement and states that several grounds mentioned in Section 64 of the Act shall be available as grounds for defence in such suit.” “For me therefore there is no difficulty to come to a conclusion that respondent No.1 is not independently setting up the said defence seriously, but is merely trying to build up the said defence on the alleged admission of the plaintiff.” “The submissions made by Advocate Shri Manohar therefore inviting my attention to the various grounds under Section 64 of the Act in the absence of any pleadings in defence being set up cannot be considered. It is not possible to appreciate the same on the grounds or defences mentioned in Section 64 of the Act in the absence of any pleadings or adequate pleadings of a party.” (paras 11–12)
4. Documents first filed in appeal. “In the first place the documents which are filed in this Court for the first time are the research papers from European countries, probably downloaded from internet. But that by itself is no reason for me to ignore them. But then fact remains that there is no affidavit of any responsible person/expert by way of evidence to support those documents. The affidavit in support of the said documents and the contents thereof would have made those documents alive.” (para 13)
5. The defence of prior use. The affidavit of Shri Vaidya, reproduced by the Court, stated: “I hence state that all the elements and or features of the GSWR System are not disclosed in a single document.” (para 13) The Court held: “Respondent No.1 did not file any affidavit in rebuttal to these affidavits filed by Shri Telang and Shri Vaidya and merely preferred to rely on the said articles in the said research papers. In such a situation, therefore, I prefer to rely upon the affidavit evidence of Shri Telang and Shri Vaidya at this prima facie stage and taking overall view of the matter, I hold that respondent No.1 has failed to prove by adequate pleadings and by affirmative evidence even prima facie that the patented products or process was known and used in India or elsewhere for two decades or so. The defence that has been set up in the pleadings in the trial Court is perfunctory and casual.” (paras 13–14)
6. No opposition and no counter-claim. “There is no explanation whatsoever by respondent No.1 as to why respondent No.1 did not oppose the grant/sealing of the patent or prayed for revocation thereof earlier to the suit and even in the suit by filing a counter claim. This conduct in my opinion, clearly shows that respondent No.1 was not serious in raising the defence as required by law.” (para 15)
7. Improvements and the 2002 amendment. Respondent No.1 argued that “by amending Act No.38 of 2002, the terminology new and useful improvement which was occurring in the definition of invention inter alia stands removed meaning thereby that improvement is not the invention as per Section 2 (1) (j) of the Act.” (para 6) The Court held: “In the first place application was filed by the appellant on 15.3.2001, while the amendment by Act No.38 of 2002 came into force w.e.f. 20.5.2003 and therefore, even new and useful improvement was included in the definition of invention.” (para 16) “Perusal of the above definitions to my mind clearly show that involvement of technical advance as compared to the existing knowledge or having economic significance is an inventive step and consequently, even assuming that new and useful improvement was made in the Systems the same would be invention. There is material on record in the pleading in the plaint showing that the Systems have economic significance.” (paras 6, 16)
8. Sections 47, 48 and 156. “Perusal of the above two provisions clearly show that rights of the patentee under Section 48 of the Act are curtailed by provisions of Section 47 of the Act. But then careful reading of Section 47 of the Act shows that these rights are not curtailed in entirety even in respect of Government.” Section 156, as the Court quoted it, provides that “Subject to the other provisions contained in this Act, a patent shall have to all intents the like effect as against Government as it has against any person.” (para 18)
9. Government, and its own use. “The term Government is not defined under this Act. But Section 3 (23) of the General Clauses Act, 1897 defines the same” (para 19). “Section 47 of the Patents Act provides making of such machine or apparatus by the Government which means by the Central Government and the State Government. Then the same can also be made on behalf of the Government. But then this use both by or on behalf of the Government is followed by the words merely of its own use. It is noteworthy that all Sub-Sections of Section 47 i.e. (1) (2) (3) and (4) of the Act every time uses the terminology, namely, for the purpose ‘merely of its own use’.” (paras 19–20)
10. Merely of its own use. “Perusal of the above provisions show that the said terminology ‘merely of its own use’ has been deliberately used in Section 47 of the Act in contrast to the provisions of Sections 99 and 100 of the Patents Act, viz. for the purposes of Government, for the purposes of Central Government, State Government or Government undertaking. The words ‘merely of its own use’ have been utilized with a definite purpose and it cannot be said that the Parliament used different words in Sections 47, 99 and 100 of the Act for no reasons or for no intentions. In my opinion, all these words ‘merely of its own use’ would mean use for the purposes of the Government by any department of the Government and use by servants and agents of the Government in performance of their duties/in discharge of their duties assigned to them irrespective of who is benefited by such use. This would not include use by any other person like contractor of railways and the meaning is strictly restricted to the direct use by any department of the Government or its servants in the performance/in the discharge of their duties. This is all the more so, because for such use contemplated by Section 47 of the Act, no payment of royalty is at all contemplated to the patentee.” (para 21)
11. Obiter. Eminent domain and sovereign function. “In terms of the doctrine of ’eminent domain’ Parliament/Government is entitled to make a patent subject to such conditions as are to be found in Section 47 of the Act. In a similar manner a look at Sections 35 to 42 contained in Chapter VII of the Act will reveal that for the security and defence of India all rights of the patentees have been curtailed as the same is a sovereign function. No patentee can claim a right on a high pedestal than the Government performing sovereign function.” (para 21)
12. Purposes of Government under Chapter XVII. “It is, thus, clear from the above provisions of Sections 99 and 100 of the Act that by using the words ‘for the purposes of Government’ as against ‘merely of its own use’ in Section 47 of the Act, the use of inventions stands extended even to the Central Government, State Government or a Government undertaking. According to me, these provisions have been made in order that the patents can be utilized by Central Government, State Government for the purposes other than purely departmental in the discharge of duties or the sovereign functions but in accordance with the terms and conditions laid down in this Chapter XVII.” (para 22)
13. Third persons and payment. “Under these provisions even a third person i.e. contractor like respondent No.1 can be allowed to use the patent for the purposes of Government or Government undertakings. But then that is upon the agreement or licence given by the patentee to such third person and upon of-course the payment of royalty etc.. It is clear to me that the Central Government or State Government are not entitled to use a patent free of cost as already held by me for any other purposes than ‘merely of its own use’ i.e. for performing the Governmental functions by the Government servants or Government departments in performance of their duties or in the discharge of their duties.” (para 22)
14. The contrary interpretation. “For the above reasons,, therefore, if any other interpretation is put as contended by Advocate Shri Manohar, the net result would be that a patentee inventing a patent by utilization of huge money and manpower involving scientists, technocrats and technicians would be left high and dry and this would definitely be detrimental to the encouragement of scientific and technical advances in the country.” (para 23)
15. Written authorisation under section 100. Respondent No.1 argued that “the Agreements are signed by the railway authorities in the name of President of India is enough to show that there is a written authority in favour of respondent No.1, which is spoken of in Section 100 of the Act. To insist for a separate authority in writing is absurd.” (para 6) The Court held: “Perusal of Section 100 of the Act to my mind clearly shows that it contemplates a separate, clear and direct authority that too in writing from the Central Government and since the Central Government means its departments, the same can be given by the departments. Agreement signed by the Central Railway or its officer on behalf of President of India is for the purposes of the particular contract between the parties and it has nothing to do with the authority in writing spoken of in Section 100 of the Act. The authority can be given by the Central Government or its department under Section 100 of the Act since the Government would be required to look into the other requirements of Section 100 of the Act regarding licence from the patentee, compensation of royalty etc. and therefore, such authorization in writing cannot be said to be a mechanical act. I, therefore, do not accept the contention that the Agreement in the name of President of India signed by the officers of Railways can be a good substitute for authorization in writing contemplated by Section 100 (1) of the Act.” (paras 6, 24)
16. Procedure. Delay and laches. “The last submission regarding delay and latches also does not appeal to me.” “It is noteworthy that the infringement is still continuing and therefore, I think that the cause of action is continuing and there is neither any delay nor latches on the part of the appellant/plaintiff. Respondent No.1 has not stated that henceforth he would stop infringement. That is all the more a reason for me not to accept the said ground.” (para 25)
17. Procedure. Indian Railways as a party. “The submission that Indian Railways is not a party to the suit is liable to be rejected since no relief is being claimed against Indian Railways and at the most it could be said to be a proper party but not a necessary party.” (para 26)
18. Irreparable loss and balance of convenience. “No irreparable loss to the Indian Railways or respondent No.1 can be caused since respondent No.1 can get the licence from the appellant/patentee and continue to do his work, if so advised. Since the appellant is the patentee and the patents are in force, I do not think that the appellant can be deprived of the fruits of its patent by unauthorizedly allowing respondent No.1 to drain out its commercial profits. Hence, the balance of convenience is also in favour of the appellant.” (para 26)
19. Procedure. Suspension of the judgment. “In view of the fact that no temporary injunction is operating since the date of filing of the suit, it would be proper to suspend this judgment till 31.01.2009. This judgment is, therefore, suspended till 31.01.2009.” (p 51)

What the court did not decide

“Therefore, except for considering the defence that the patent was known and used for two decades or more, I refrain from considering the other defences in respect of which submissions were made by Advocate Shri Manohar.” (para 12)

Subsequent treatment

• Explained — In Chemtura Corporation v Union of India (2009) the Delhi High Court said of this case, where “the learned Single Judge of the Bombay High Court (Nagpur Bench) had occasion to interpret Section 47 of the Act”: “This Court understands Section 47 to not restrict the making of the device by the Government itself because the words used are ‘made by or on behalf’ of the Government. It is the end use that has to be for the Government or its department exclusively.” (para 53).
• Explained — In In re Exorbitant Pricing of Life Saving Patented Medicines (2026) the Kerala High Court, on the respondents’ reliance on this case, held that “it is necessary to notice the distinction, as observed by the Bombay High Court, between the provisions of Section 100 and Section 47 of the Act, which uses the words ‘merely of its own use’. The term ‘purposes of Government’ also includes the vending of articles made using the invention, as laid down under sub-sections (4) and (6) of Section 100” (para 28).