Guala Closures SpA v AGI Greenpac Ltd (2024)

Summary

“The present suit has been filed by the Plaintiff – Guala Closures SPA seeking inter alia enforcement of patent rights under the Patents Act, 1970” ... “and permanent injunction restraining the infringement of Indian Patent No. 349522” (para 2). “The patent is titled ‘Tamper-Evident Closure with Tear Off Seal’ and was granted on 19th October, 2020 in India.” (para 3) “The Defendants launched a new range of closures called ’the Voila Closure,’ which according to the Plaintiff infringes the Plaintiff’s patent. The Defendant also has a patent granted i.e., IN326637 for its closure” (para 8). “The emphasis of the submissions has been on the question of infringement. No submissions have been made on the question of validity of the patent. Thus, the present order on the interim injunction application is being passed on the issue of infringement only.” (para 38)

The Court held that “Claim construction is generally the first and foremost exercise carried out in adjudicating patent infringement suits” (para 40) and that “The inventive feature of claim 1 is emphasised in the ‘characterized’ portion of the claim.” (para 45) Comparing the closures, it found that “the second tear off seal of the Plaintiff’s closure disconnects the cap from the container. But the second tear off seal in the Defendants’ closure separates the cap from the lower sleeve.” (para 55) “Accordingly, it is observed that the claimed elements of the independent claim 1 of the suit patent do not map on to the Defendants’ closure.” (para 56) “Therefore, in light of the foregoing analysis, the triple test for grant of injunction is not met, and the balance of convenience strongly favours the Defendants.” (para 67) “The prayer for interim injunction is rejected. However, the Defendants shall file statement of accounts periodically i.e., every 6 months by way of an affidavit, of a duly authorized and competent official.” (para 68)

What the court decided

1. Claim construction first. “Claim construction is generally the first and foremost exercise carried out in adjudicating patent infringement suits, especially when confronted with products like tamper-evident closures which are based on mechanical features.” “Once the scope of the claims is clarified, questions regarding infringement and invalidity often find swift resolution. Therefore, it has been highlighted that patentees must navigate a delicate balance, as they have to assert their claim in such a way that the Claim is broad enough to cover infringement while not excessively broad to avoid coverage by prior art.” (para 40)
2. The claim construction brief. “As per Rule 2(c) of the High Court of Delhi Rules Governing Patent Suits, which defines ‘Claim construction brief’, claim construction can be understood to be the process of breaking down the construction of each of the terms contained in the Claims, their meaning thereof, as also the overall scope and effect of all the Claims relied upon.” (para 41)
3. The characterising clause. “The inventive feature of claim 1 is emphasised in the ‘characterized’ portion of the claim. This position is also admitted by the Plaintiff in paragraph 14 of the Plaint” (para 45) “Whenever the expression ‘characterised’ is used in a claim it is meant to describe the invention. Such characterisation forms the crux of the invention.” (paras 45–46)
4. The pre-characterising portion. Of Virgin Atlantic Airways Limited v Premium Aircraft Interiors UK Limited, the Court recorded that “the UK Court of Appeal held that the pre-characterising portion of a patent claim typically provides background information or context, setting the stage for the invention by describing elements that may already exist in the prior art.” “On the other hand, the characterizing portion of the patent claim delineates the specific features or aspects of the invention that distinguish it from prior art or existing technologies. These features represent the core of the invention and are responsible for its novelty and inventive step.” (para 47)
5. The two steps of infringement. After reproducing F. Hoffmann-La Roche Ltd. & Anr v. Cipla Ltd “(2015 SCC OnLine Del 13619)”, the Court held: “In view of the above, it is seen that for establishing infringement both steps have to be satisfied i.e., construing the claims and the infringing product to be within the scope of the claims as construed.” (para 48)
6. Expert affidavits. “Both parties have filed their expert affidavits. However, at this stage, unless the said experts are cross-examined, the Court is unable to rely upon the said expert affidavits, owing to the nature of the product involved. Since this is only at a prima facie stage, the Court is primarily going by the Plaintiff’s suit patent and the Defendants’ product – closure, which is an assured and correct way of assessing infringement of the patent.” (para 50)
7. The second tear-off seals. “This is thus a very basic structural difference between the patented closure of the Plaintiffs and the Defendant’s closure. The characterisation also further shows that the purpose of the second tear off seal in the Plaintiff’s patent is different from that in the Defendants’ product.” (para 55) “The above-mentioned differences between the Plaintiff’s and the Defendants’ closures are fundamental considering the manner in which the claims are worded. Further, in view of the claim construction above, it is observed that the characterisation and purpose itself, of the suit patent, is different from the Defendants’ closure. Accordingly, it is observed that the claimed elements of the independent claim 1 of the suit patent do not map on to the Defendants’ closure.” (paras 55–56)
8. Tamper-evident closures as such. “It is an admitted fact that tamper evident closures are well known in the market. There could be different methods of using tamper proof seals. A monopoly cannot be claimed on manufacture and sale of tamper proof seals per se. It is only on the patented tamper proof seal that a monopoly can be claimed.” (para 56)
9. The defendants’ own patent. “Furthermore, the fact that the Plaintiff’s patent was cited as the prior art in the examination report of the corresponding EPO application of the Defendants, and the same was granted after overcoming the objections in itself demonstrates the differences in both the closures. It is however made clear that though the Defendant also has a patent, the present analysis is restricted to the Plaintiff’s patent IN'522 and the Defendants’ closure.” (para 57)
10. Improvement or a non-infringing product. “Hence, the Defendants’ product incorporates genuine technical advancements that differentiate it from the suit patent and prima facie, the Defendants product cannot be termed as merely an improvement over the Plaintiff’s basic patent, but a non-infringing product.” (paras 58–59)
11. What infringement requires. “For infringement to be established it is required that a Plaintiff must demonstrate that the Defendant’s product/closure falls within the scope of the claims of the Plaintiff’s patent are present in the Defendant’s product, and that the Defendant’s product operates in the same way as the patented invention.” (para 63) “Since the main characterisation lies in the second tear off seal, the function, purpose, and the mechanism of the suit patent being completely different, at this stage, the Court is, prima facie, unable to conclude that the Defendants’ product infringes the Plaintiff’s patent.” (paras 63, 65)
12. Balance of convenience and irreparable harm. “Moreover, the balance of convenience heavily favours the Defendants on account of their substantial sales and market presence.” (para 66) “Additionally, no irreparable harm is demonstrated, as the Defendants’ closure does not directly compete with the Plaintiff’s patented closure. At best, considering the priority of the Plaintiff’s patent basis the priority date of the suit patent, the Plaintiff may be entitled to royalty payments for any use of their patented technology by the Defendants, if after trial it is established that the Defendant’s product is infringing.” (paras 66–67)
13. Procedure. Accounts. “The prayer for interim injunction is rejected. However, the Defendants shall file statement of accounts periodically i.e., every 6 months by way of an affidavit, of a duly authorized and competent official. For the past manufacture till 30th June 2024, the affidavit of sales both in terms of value and quantity shall be filed by 15th July 2024. Going forward, the accounts shall be furnished every six months, until the disposal of the suit.” (para 68)

What the court did not decide

Of the plaintiff’s contention that the defendants’ product is an improvement on the suit patent, the Court held that “the same also can only be demonstrated by a full trial” (para 67), and it clarified that “the findings of the present judgment are prima facie in nature and solely for the purposes of adjudicating the application for interim injunction. The above findings shall not affect the final disposal of the suit post-trial.” (para 70)

Subsequent treatment

• Followed — In Jay Switches India Pvt Ltd v Sandhar Technologies Ltd (2024) the Delhi High Court quoted this judgment’s statements that claim construction is “the first and foremost exercise carried out in adjudicating patent infringement suits” and that “Whenever the expression ‘characterised’ is used in a claim it is meant to describe the invention” (paras 23, 25).