Hindustan Lever Ltd v Godrej Soaps Ltd (1996)

Summary

“This hearing arises out of an application for temporary injunction filed on behalf of the plaintiff.” (para 1) The plaintiff claimed that “the composition of the said bathing soap ‘VIGIL’ was within the raoge of all or some of the claims of Patent No. 170171 of the petitioner which stands sealed and granted.” (para 4) Respondent No. 1 contended that “a substance obtained by a mere admixture is not an invention within the meaning of Section 3(e) of the Patents Act, 1970”, that it “has challenged the order passed by the Deputy Controller of Patents, Bombay by filing an appeal being Misc. Petition No. 24 of 1993 in the Bombay High Court” (para 11), and “that the impugned Patent of the petitioner has been sealed recently.” (para 12) On appeal from the interim orders the Division Bench held: “We, therefore, allow this appeal and set aside the orders under appeal.” (para 21) The Supreme Court then requested “the learned trial Judge to dispose of the original petition within three months from today.” (para 22) For the plaintiff, counsel “has heavily relied upon the principles laid down in American Cyanamid Company v. Ethicon Ltd.” (para 26)

The Court held that the Supreme Court’s dictum in Bishwanath Prasad Radhey Shyam “clearly spells out the law in India on the point and the ratio of the decision in American Cyanamid case” ... “cannot govern the field here.” (para 63) Of the defence, it held that “the basic pattern in the composition of the two are more or less the same, though the percentage are not identical” and that “the plea of Gillette defence can be considered in this case as it has been properly pleaded in this case.” (para 68) On balance of convenience, “It is obvious that the patent has not yet been exploited by the petitioner.” (para 69) “In view of the above discussions, this court holds that there is no case for granting interlocutory injunction in this case. The petition for temporary injunction is accordingly dismissed on contest.” (para 71)

What the court decided

1. The interlocutory test in patent cases. “The principles upon which an interlocutory injunction may be granted in a patent case are the same as in a case under the provisions of Order 39, Rules 1 and 2 of the Civil Procedure Code, though interim injunction restraining the defendant from infringing a patent does not come strictly within this scope of Order 39. The plaintiff in a patent case must show a prima facie case of an infringement and further that the balance of convenience and inconvenience is in his favour. In patent cases the onus of showing a prima facie case justifying the grant of an injunction is a heavy one and it is comparatively easy for the respondent to establish a defence sufficient to prevent the grant of such an injunction.” (para 23)
2. The new-patent practice and American Cyanamid. “But right from Smith v. Grigg Ltd., (1924 (1) KB 655), there was a practice that if a patent was new, a mere challenge at the bar would be quite sufficient for refusal of temporary injunction, but if the patent was sufficiently old and had been worked out, then the Court would for the purpose of temporary injunction presume the patent to be a valid one. This view as affirmed in a Division Bench decision of this Court in Boots Pure Drug Co. (India) Ltd.’s case, 52 CWN 253 (supra). But this view received a jolt for the first time in the American Cyanamid case, (1975) RPC 513 (supra).” “But even, the English Courts after about 8 years of the decision in this case (American Cyanamid case) have held that the Court will not allow the American Cyanamid approach to become by over-rigid application an engine of oppression.” (para 59)
3. The Indian law. “The term -- ’exclusive privilege’ has been changed into ’exclusive right’ in S. 48 of the Act of 1970.” (para 60) Of the Division Bench in Niky Tasha, the Court set out its view that “When the design is of recent date, as in this case, no injunction should be granted. More so, when there is a serious question as to the validity of the design to be tried in that suit and an application for cancellation has been made” (para 61), and held that “A Division Bench of this Court in Boots Pure Drug Co. case, 52 CWN 253 (supra) also took the similar view in 1947.” (paras 60–62)
4. Grant and prima facie validity. “The Apex Court of our land in Bishwanalh Prasad Radhey Shyam” ... “at para 33, has held that there is no presumption in favour of the validity of a patent by ’the mere grant or sealing of the patent, This is now expressly provided in Section 13(4) of the Act of 1970.” (para 62) “This dictum of the Apex Court of our land clearly spells out the law in India on the point and the ratio of the decision in American Cyanamid case” ... “cannot govern the field here. Therefore, the contention of Mr. G. Chakraborty that the grant of patent in favour of his client shows prima facie validity of the patent cannot be entertained.” (paras 62–63)
5. The defendant’s case on infringement. “The most striking thing with respect to the case of the respondent No. 1 is that they have not come with a chemical analysis report showing the composition of VIGIL Soap. They have chosen to rely upon the Gillette plea indirectly. At the core of the plea is the stand that the alleged infringement was not novel at the date of the patent. Thus there is an implied stand that even if there is an infringement, temporary injunction cannot be granted due to the Gillette plea..” (para 67)
6. The Gillette defence. The Court cited “Narayanan in his treatise on ‘Patent Law’ 2nd Edn.” for the observation: “This kind of defence has not so far been considered by High Courts in India. But there is no reason why such a defence will not be considered when properly pleaded.” (para 67) Comparing the plaintiff’s patent with “U.S. Patent No. 2438169 patented on 23-3-1948” (para 68), it held: “from a plain look at the comparative table it appears that the basic pattern in the composition of the two are more or less the same, though the percentage are not identical. But a mere arrangement or rearrangement of known devices each functioning independently of one another in a known way is not prima facie an invention under Section 3 of the Patent Act, 1970. So the plea of Gillette defence can be considered in this case as it has been properly pleaded in this case.” (paras 67–68)
7. Balance of convenience. “It is obvious that the patent has not yet been exploited by the petitioner. So there is no question of loss of employment or fall in revenue of the plaintiff-company.” “But it is clear that in Para 39 of the plaint it has been averred that the damage suffered by the petitioner can be provisionally quantified. The implied presumption is that there is some basis for assessment of the damages though the exact figure cannot be arrived at the stage. So it cannot be said that the balance of convenience is definitely in favour of granting interlocutory injunction.” (para 69)
8. Procedure. Forum non conveniens. “At this stage, when this Court is considering the question of granting interlocutory injunction, it is useless to raise the plea of forum inconvenience for staying this proceeding. Certainly the respondent No. 2 can raise the plea at the appropriate stage. If this plea is entertained at this stage, then there will be no chance of complying with the direction of the apex Court. Moreover, this plea could be raised before the apex Court but that was not raised.” (para 70)
9. Procedure. Disposition. “In view of the above discussions, this court holds that there is no case for granting interlocutory injunction in this case. The petition for temporary injunction is accordingly dismissed on contest. But this cannot prevent this Court from passing an order directing the respondents to keep monthly accounts of the sales of VIGIL Soap and to furnish the same in court and also give a copy to the plaintiff an every quarter till the disposal of this suit.” (para 71)

What the court did not decide

“In the circumstances, it will not be proper to go into the prima facie merits of the plea of forum inconveniens in this case.” (para 70)

Subsequent treatment

• Followed — In Standipack v Oswal Trading Co (1999) the Delhi High Court recorded that “The Calcutta High court also in Hindustan Lever Ltd. Vs. Godrej Soaps Ltd. & Others; has held that the American Cynamid principle does not govern the field of law in India” (para 20).
• Followed — In Merck Sharp and Dohme Corporation v Glenmark Pharmaceuticals (2015) the Division Bench of the Delhi High Court held that the principle that grant raises no presumption of validity “applies equally to interim hearings” and “has been made explicit in cases across the country”, including “the Calcutta High Court in Hindustan Level Limited v. Godrej Soaps Limited and Ors., AIR 1996 Cal 367.” (para 37)