JUDGMENT C.M. Nayar, J.
(1) Plaintiffs have filed the present suit for permanent injunction in this Court against the defendants to desist forthwith from using, in any manner whatsoever, the casing, design/construction described and claimed by the plaintiff in its Indian Patent No. 164857 dated 12th May, 1987.
(2) I.A.NO. 1069/92, under Order 39 Rules I and2C.P.C. has been filed in the suit for an Ex par lead interim injunction order.. This Court on January 31,1992, restrained the defendant from using, in any manner, whatsoever the casing, design/construction similar or deceptively similar to the casing/design/construction of the plaintiff in its Indian Patent No. 164857 dated May 12, 1987.
(3) I.A.NO. 1992 of 92 under Order 39 Rule 4 read with Section 151 Civil Procedure Code . has been filed by the defendant for vacating the ex parte ad interim order made in favor of the plaintiffs and for declaring the patent as invalid. for the reasons as specified in the said application. Both the applications raise common questions of law and they can be disposed of by this order.
(4) The brief facts of the case are that the 1st plaintiff is a West German Company) incorporated under the laws applicable in West Germany and has places of registration in Berlin and Ludwigs burg and its office at Beeskowdam, 3-11,D-1000 Berlin 37 and D- 7190 Ludwigs burg, Osterholzallee 140. The 2nd plaintiff is a company incorporated under the Indian Companies Act, having its registered office and factory in 30 (C) 2nd Phase, Pecnya, Bangalore 560 058. It is further alleged that the said plaintiff is engaged in the manufacture of Electronic Telephone Exchange connectors such as connection boxes, junction box casings, protection plugs etc. and supplying the same to Mahanagar qH3 Telephone Nigams. The 2nd plaintiff is a joint venture company with the 1st plaintiff, receiving the technical collaboration and know-how from the 1st plaintiff. The plaint further states that the 1st plaintiff is regularly and constantly engaged in research and development for effecting improvements in the technology and state - of - the - art products. One of the important developments, made by the 1st plaintiff, is in the field of casing (boxes) to receive terminal connectors for cable cores in the telecommunications engineering. One such casing developed by the 1st plaintiff forms the basis and subject of Indian Patent No.164857 of 12th May, 1987. The same was granted to the lst plaintiff by the office of Controller of Patents.Government of India and the patent has been sealed and entered in the register of the Patent office, Calcutta. The plaintiffs contend that the said patent is valid arid subsisting and the 1st plaintiff is the original grantee of the patent. The order in this regard was issued on January 25, 1990, by the Patent office, which specified the product of the plaintiffs. The relevant portion of the same may be reproduced as follows: "NO.164857 of 12.5.1987 Whereas Krone Aktiengeselischaft, of Beeskowdamm 3-11, D-1000 Berlin 37, West Germany, a West German Company, have declared that they are in possession of an invention for a casing, particularly a junction-box casing for telecommunications engineering and that they are the assignee(s) of the true and first inventor thereof and that they are entitled to a patent for the said invention, having regard to the provisions of the Patent Act, 1970 arid that there is no objection to the grant of a patent to them; And whereas they have by an application requested that a patent may be granted to them for the said invention; And whereas they have by and in their complete specification particularly described and ascertained the nature of the said invention and the manner in which the same is to be performed; Now these presents that the above said applicants (including their legal representative (s) and assignee(s) or any of them) shall, subject to the provisions of the Patents Act, 1970 and the conditions specified in section 47 of the said Act, and to the conditions and provisions specified by any other law for the time being in force, have the exclusive privilege of making, using, exercising, selling or distributing their casing, particularly a junction box casing for telecommunications engineering."
(5) The defendant is a private Ltd. company having its registered office at 4A/ 4384, Ansari Road, Daryaganj, New Delhi, and is manufacturing cases, such as junction boxes usable in telecommunication industry. The first plaintiff alleged that upon close examination of the junction boxes, manufactured by the defendant, the 1st plaintiff found the same to be an embodiment of all the essential features of the invention of the 1st plaintiff sealed and patent granted to them. The defendant, according to them, has infringed the 1st plaintiffs patent fraudulently and openly and the present suit has been filed to injunct them from doing the same. The infringement particulars are specified in paragraph 9 of the plaint and the same is reproduced as follows: "INFRINGEMENT particulars- The 1st plaintiff states that the essential particulars of the infringement are as follows: The defendant's box contains upper and lower guide elements inter- posed between the base and the cover of the opposite sides thereof. Each element is connected by means of a pin and a pin guide. The pin guides are directed towards a rear wall of the base and are inclined at an acute angle with respect to the lower base surface. So the cover is uniformly pressed against the case during the closure to provide a uniform sealing between the cover and the base. The above features are identical to and exactly the same as claimed in the patent granted to the 1st plaintiff and protected by the same."
(6) The plaintiffs have further submitted that on coming to know of the illegal acts of the defendant, the attorneys of the 1st plaintiff, under instructions, caused a warning notice dated April 24, 1991, to be issued to the defendant, which has been duly received. The defendant has failed and neglected to take any action as demanded in the said notice and has deliberately kept quite for the obvious reasons that all its actions are wrong and illegal and it is not in a position to refute the allegations made in the notice.
(7) Notice of the application for interim injunction was served on the defendant and he has appeared in the Court and has moved a further application, which is I.A.No. 1922 of 92 under Order 39 Rule 4 Civil Procedure Code . for declaration to the effect that the patent granted to plaintiff no.1, is clearly invalid. The grounds of invalidity, which are sought to be raised in 'the said application, may be reproduced as follows: "A)That the patent was wrongfully obtained by the plaintiff No.1 as the invention, so far as claimed in any claim of the complete specification, was not new having regard to what was publicly known and publicly used in india before the priority date of the claim and having regard to what was published in India and elsewhere. Thus, the patent is liable to be revoked under section 64(1)(e) of the Patents Act, 1970 (hereinafter referred to as the Act), and (b) That the patent was obtained on false suggestion or representation and is invalid under section 64(1)(j) of the Act."
(8) The defendant has also reiterated that there is prima facie good case in his favor and since the plaintiff No.1 has clearly sold the subject products, covered by the said patent to India in substantial quantities, prior to the priority date of the patent to India. The balance of convenience is in favor of the defendant and the suit having been considerably delayed, the injunction application is liable to be dismissed by this Court.
(9) Learned counsel for the applicant in I.A. 1069/92 has argued that the defendant has not filed any written statement and he has not yet given any defense to the plaint, filed by the plaintiffs. The plea of public use/public knowledge is a matter of fact,which need to be determined at trial and the interim injunction passed by this Court is liable to be confirmed. He has further submitted that the prior sale to a Government agency is covered by the provisions of Section 64(2)(a) read with Section 64(3) of the Patents Act, 1970, hereinafter referred to as the Act,and the plea taken by the defendant in this regard . has no basis, either on facts or in law. It may be relevant to reproduce the following provisions of law, as contained in the Act, which are applicable to the present case:
2.Definitions and interpretation- (1) In this Act, unless the context otherwise requires,- (w) "priority date" has the meaning assigned to it by Section 11; II. Priority dates of claims of a complete specification-(l)Thereshall be a priority date for each claim of a complete specification. (2) Where a complete specification is filed in pursuance of a single application accompanied by- (a) a provisional specification; or (b) a specification which is treated by virtue of a direction under sub section (3) of Section 9 as a provisional specification and the claim is fairly based on the matter disclosed in the specification referred to in clause (a) or clause (b), the priority date of that claim shall be the date of the filing of the relevant specification." (3). ....
48.Rights of patentees- (1) Subject to the other provisions contained in this Act, a patent granted before the commencement of this. Act,shall confer on the patentee the exclusive right by himself, his agents or licensees to make, use, exercise, sell or distribute the invention in India. (2) Subject to the other provisions contained in this Act and the conditions specified in Section 47, a patent granted after the commencement of this Act shall confer upon the patentee: (a) where the patent is for an article or substance, the exclusive right by himself, his agents or licensees to make, use, exercise, sell or distribute such article or substance in India; (b) where a patent is for a method or process of manufacturing an article or substance, the exclusive right by himself, his agents or licensees to use or exercise the method or process in India. 64. Revocation of patents- (1) Subject to the provisions contained in this Act, a patent, whether granted before or after the commencement of this Act, may, on the petition of any person interested or of the Central Government or on a counter-claim in a suit for infringement of the patent,be revoked by the High Court on any of the following grounds, that is to say,- (e)that the invention so far as claimed in p73any claim of the complete specification is not new, having regard to what was publicly known or publicly used in India before the priority date of the claim or to what was published in India or elsewhere in any of the documents referred to in Section 13. Provided that in relation to patents granted under the Indian Patents and Designs Act, 1911 (2 of 1911), this, clause shall have effect as if the words "or elsewhere" had been omitted: .(f) that the invention so far as claimed in any claim of the complete specification is obvious or does not involve any inventive step, having regard to what was publicly known or publicly used in india or what was published in India or elsewhere before the priority date of the claim: Provided that in relation to patents granted under the Indian Patents and Designs Act, 1911 (2 1911), this clause shall have effect as if the words "or elsewhere" had been omitted; (j)that the patent was obtained on a false suggestion or representation; (L)that the invention so far as claimed in any claim of the complete specification was secretly used in India, otherwise than as mentioned in sub-section 3 before the priority date of the claim; (2)For the purposes of clauses (e) and (f) of sub-section (1),- (a)no account shall be taken of secret use; and (b)where the patent is for a process or for a product as made by a process described or claimed,the importation into India of the product made abroad by that process shall constitute knowledge or use in India of the invention on the date of the importation, except where such importation has been for the purpose of reasonable trial or experiment only. (3) For the purpose of clause (L) of sub-section (1) no account shall be taken of any use of the invention- (a) for the purpose of reasonable trial or experiment only; or (b) by the Government or by any person authorised by the Government or by a Government undertaking, in consequence of the applicant for the patent or any person from whom he derives title having communicated or disclosed the invention .directly or indirectly to the Government or person authorised as aforesaid or to the Government undertaking."
(10) Mr. Pravin Anand,who has appeared for the defendant has argued in support oi his application that the patent was wrongly obtained by the plaintiffs, as the invention was not new having regard to what was publicly known and publicly used in india before the priority date of claim and having regard to what was published in India and elsewhere. The patent is, therefore, liable to be revoked under Section 64(1)(fc) of the Act. He has further reiterated that plaintiff No.1 itself sold junction box cases for telecommunication engineering of the type described in patent prior to 12th May, 1987 to several parties in India and such parties imported the said junction box cases into India prior to the priority date i.e. 12th May, 1987 and in fact installed them in India. Therefore, he contends that plaintiff no.1 sold the subject matter of patent prior to the priority date in substantial quantities in this country and concealed this fact from the patent office,while prosecuting its patent application for the said junction box and the same has to be declared invalid. He has referred to the communication dated 21st February, 1992, from Telecommunications Consultants India Ltd., to show that the product of the plaintiffs was purchased by them on 1st July, 1986 and a copy of the purchase order was also attached to this letter. Reference is also made to the communication from the same company dated 4th March, 1992, which gives further details of installation of the product of the plaintiffs at different places prior to the priority date etc. It has accordingly been contended that there have been sales by the plaintiffs prior to 12thMay, 1987 and the relevant documents have been placed on record. Learned counsel contends that the sales are commercial transactions to an agency of the Government of India and even a single sale is good enough to invalidate the patent, which has already been granted to the plaintiff No.1. The defendant has further filed photographs to support the contention that the product of the plaintiff no. I has already been displayed at different places. The same is not hidden from the public gaze. Reference has been made to the following paragraph no. 5.76 from Terrell on the Law of Patents:
"MEANS of knowledge by prior sale A single sale not in confidence and before the priority date of the patent, of an article which discloses the invention, is sufficient to invalidate the patent. It is not necessary that the public can at the date of the use ascertain the constituents of the prior use. In Bristol-Myers Co.'sAppn.Lord Cross held:"it is to my mind,moresatisfactory to hold that if a man by selling the article in question puts it out of his power to prevent a purchaser from discovering, if and when he can, the presence in it of the substance in question he has made a 'non-secret' use of the substance whatever be his own state of mind and whether or not analysis is, in the existing state of knowledge, possible. In view of the view expressed above the old cases must be read with care and some are of doubtful authority."
Paragraph 964 from 'Patent Law' by P. Narayanan (Second Edition) may also be cited in this regard:
"PRIOR sale- The law as to prior user is that if the article has been manufactured and sold, that gives the means .of knowledge to the purchaser, and that is enough to establish prior user. It is not necessary to show that the knowledge had been acquired by some individual, or that there is a high probability that it had in fact been acquired. When an article is manufactured and sold, and, from inspection of it, it is possible for the vendee to ascertain its component elements, or the main principles of its construction, then there has been publication by prior user. If the requisite information could have been obtained by a member of the public by analysis that is sufficient to preclude anybody from obtaining a subsequent valid patent."
(11) The case of Carpenter v.Smith as reported in Hayward's Patent Cases (volume 3) page 746, amply described the definition of public use and the same may be reproduced as follows: "PI think what is meant by "public use and exercise" is this: A man is entitled to a patent for a new invention,and if his invention is new and useful, he shall not be prejudiced by any man having invented that before, and not made any use of it, because the mere speculations of ingenious men, which may be fruitful of a great variety of inventions, if they are not brought into actual use, ought not to stand in the way of other men equally ingenious, who may afterwards make the same inventions and apply them. A great many patents have been taken out, for example upon suggestions made in a very celebrated work by the Marquis of Worcester.and many patents have been derived from hints and speculations by that ingenious author. But yet, as he never acted on them, as he never brought out any machines whatsoever, those patents are good.So that the meaning of "public use" is this- that a man shall not, by his own private invention, which he keeps locked up in his own breast, or in his own desk, and never communicates it, take away the right that another man has to a patent for the same invention. ...Now "public use" means this- that the use of it shall not be secret, but public...-Therefore, if a man invents a thing for his own use, whether he sells it or not- if he invents a lock and puts it on his own gate,and has used it for a dozen years, that is a public use of it."
(12) Reference is also made to the case of Boyce v. Morris Motors Ld. Reports of Patent, Design and Trade Mark Cases Vol-XLIV page 105, to explain the concept of public prioruser,which maybe sufficient to invalidate the patent. The following paragraph may be cited in this regard: "IN my judgment that is not anticipation, that is not prior user sufficient to invalidate the plaintiffs Patent; and I would add this too, that so far as I can see, there was no public user at all. It was suggested that it was a public user because these cars were being driven on the public highway. To my mind that will not do at all. The case of Carpenter v. Smith was referred to, where there had been certain sales of a certain lock, and it appeared that the lock had been placed upon a gate which opened on to a public highway, and it was left there,and anybody who wished to go through the gate had an opportunity of examining the lock and seeing all about it. But here, the mere fact that these cars were driven on the public highway did not give anybody the opportunity of stopping the car and asking to have a look into the top of the radiator and see what was there.To my mind, there was no greater public user of this invention because the cars were driven upon a public highway, than if the cars had been driven upon a private testing ground of Messers Rolls-Royee."
(13) The House of Lords in Bristol-Myers Company (Johnson's) Application (1975) R.P.C. page 127 dealt with the case of prior user. The following passages may be reproduced to illustrate the facts of the case: "PA patent application, relating to the antibiotic ampicillin trihydrate was opposed on grounds including prior user, and the following facts were established. Prior to the date of the particular claim for the product, the opponents had made several batches of ampicillin trihydrate, sufficient for at least 10,000 medicinal doses, but without recognising that it was the trihydrate form. They blended the trihydrate batches with other batches of ampicillin and sold the blend to the public. It was not possible to detect by analysis the presence of the trihydrate in the blend. They relief upon this sale as establishing prior user,and not upon the manufacture in their factory. The proceedings came before the Court of Appeal from the Patents Appeal Tribunal and the Divisional Court. The Court of Appeal held that there had been prior use of ampicillin trihydrate although such use had been in a sense, fortuitous; and that the use had not been secret because there had been no deliberate attempt to conceal it. The applicants appealed to the House of Lords. They contended that the 'supposed prior use had been accidental, merely temporary and de- minimis. They further contended that even if there had been prior use, such use was secret, because no one was aware of it, and that they were thus entitled to the protection of section 14(3) of the Act."
(14) The majority decision on the facts of the case reiterated that the test of secrecy was subjective, the user had not been secret because the vendor had put it out of his power to prevent the purchaser from discovering, if and when he could, the presence in the blend of the trihydrate, irrespective of the vendor's own state of mind and of the possibility of analysis in the existing state of knowledge. The prior user had not been secret because there had been no intention to conceal the composition of what was sold.
(15) It has further been contended that where the patent is recent one and has not been established and there is a dispute as to validity, a Court will not, as a rule, interfere by granting an interlocutory injunction. The case of Smith v.Grigg Ltd. as reported in Reports of Patent, Designs, and Trade Mark Cases (vol XLI) page 149 has been cited to support this proposition.
(16) Reference is made to the judgment of this Court in Ram Narain Kher v. M/s Ambassador Industries, New Delhi and another . The relevant law stated in paragraph 23 reads as follows: "THE Court will be reluctant to grant an interim injunction if the defendants dispute the validity of the grant. Kerr on Injunctions 6th Edition page 320 has remarked that if the patent is new and its validity has not been established in a judicial proceeding till then, and if it is endeavored to be shown that the patent ought not to have been granted, the court will not interfere by issuing a temporary injunction, (see also V. Manioka Thevar v. Star Plough Works, Melur, )" (17) Counsel for the defendant has referred to the Division Bench judgment of this Court in Niky Tasha India Pvt. Ltd. v. Faridabad Gas Gadgets Pvt. Ltd 26 (1984) Delhi Law Times 57. The relevant passage may be reproduced as follows: "INEngland, as in India, it is open to a plaintiff at any time after the institution of the suit to move for an interlocutory injunction to prevent the defendant from infringing his design between then and the date of trial. In Smith v.Grigg Limited (1924, 41 Rpc 149), it was held that same principles apply to the case of a design as are applicable in the case of a patent. The plaintiff must show that he has a prima facie case,both that his design is valid and that it has been infringed by the defendant. The mere fact that the plaintiff is in possession of a patent or of a registered design is not of itself necessarily prima facie evidence of validity. On the contrary, where it appears that the design has only recently been registered,and where it appears that there is substantial issue to be tried an interlocutory injunction will not be granted. (Russell- Clarke page 121)."
(18) The facts of the present case would indicate that the patent was granted to the plaintiffs on 25th January, 1990, and the priority date was fixed as 12th May, 1987.The present suit was filed in this Court in the year 1992. The defendant has cited instances, which would indicate that the plaintiff sold the subject matter of the patent, prior to the priority date namely, 12th May, 1987. It has also been shown that the tenders,which were floated by various Government of India Undertakings, related to junction boxes, in which the plaintiffs , as well as, the defendant both participated. The defendant has further filed various photographs to show that the junction boxes of plaintiff No.1 were installed at various public places at Delhi, such as on poles in Laxmi Nagar area, Shahdra area etc. The junction boxes are of the same type, as described by the plaintiffs in its patent specification and can be seen in the public places mentioned above,even to this date. The ground is, therefore, made that the patent is invalidate since there was a duty cast on the plaintiff no.1 to have informed the patent office that it had in fact sold its product, covered by the said patent in India prior to the priority date of 12th May, 1987. The said junction boxes were in public view prior to the priority date and, therefore, it is contended that the plaintiffs were not entitled to the registration of the patent. The defendants have prima facie shown on record that the plaintiffs have sold the junction boxes prior to the priority date, as well as, there was some display of the goods in public and the public was put in possession of the design.
(19) The only grounds, which are made by learned counsel for the plaintiff are that the supply of the plaintiff was made to the Government undertaking and, therefore, it would squarely fall under Section 64(2)(a) read with Section 64(3) of the Act. Learned counsel for the defendant , on the other hand, has placed reliance on the provisions of Section 64(e) and has contended that the invention is not new, having regard to what was publicly known or publicly used in India before the priority date of the claim.
(20) It will not be necessary for me to go into the detailed examination of the facts in the present case, as it will involve proper trial in due course. The balance of convenience has to be worked out to consider, whether it will be in the interest of justice to grant interim injunction to the plaintiffs during the pendency of the suit. There is no doubt that some sales have taken place in respect of the goods of the plaintiffs and there has been an element of public display as well. The contention of the counsel for the defendant is supported by the settled law in various judgments, which have already been reproduced above, to the extent that simply because the plaintiffs are in possession of a patent, would not entitle them to the grant of interim injunction, which will jeopardise the entire business of the defendant. It has also been established that the patent was registered in the name of the plaintiff No.1 only on 25.1.1990 and the priority date was fixed as 12th May, 1987. The patent obviously has been registered recently and the suit was filed two years after the registration of the said patent. The balance of convenience, on the facts and circumstances of this case, will not be in favor of the plaintiffs to continue with the interim injunction as granted by this Court. There are substantial issues to be tried and the interlocutory injunction will not be appropriate to be continued during the pendency of the proceedings in the suit.
(21) There is also some force in the contention of counsel for the defendant to the effect that where the plaintiffs can be adequately compensated by damages, in case, the suit is decreed, the proper course would not be to grant the interim injunction. He has contended that the junction boxes are only sold to public Corporations and Government undertakings, as there is no private business in this field, lt would, therefore, be very easy to assess the damages in case, the suit of the plaintiff is ultimately decreed. The defendant, on the contrary, is alleged to have made sizable investment in his business for the manufacture of telecommunication items and it maybe unjust to deprive him to participate in the business.
(22) I.A.1069/92.IS accordingly dismissed. I.A.1992/92 also stands disposed of. Nothing expressed herein shall be considered to be an expression of opinion on the merits of the suit.