Vol. E, Order Comp., Pt. I, pp. 122-123.
8. As matters stand today, therefore:
9. I am only required to consider the CTR's first motion for
injunctive relief, what was first Ex. "5" before the Thane District
Court and is now Notice of Motion 497 of 2014. I am not
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2013. I am also not required to address the issue of whether Sergi
can simultaneously maintain a Counter-Claim, a pre-grant
opposition, a post-grant opposition and a revocation application. I
will comment on this toward the end of this judgment.
10. From great power comes great electricity, and electrical
transformers are essential in the transmission, distribution and use
of AC (alternating current) electrical energy to consumers.
Transformer types vary depending on use, from the small ones used
in domestic appliances and products, to the very large installations
used in power generation and distribution. A transformer is an
electrical device that transmits electrical energy between two or
more circuits through electromagnetic induction. Typically, it is
used to increase (step-up) or decrease (step-down) AC voltages, i.e.,
to change these voltages within power networks. In power
distribution systems, transformers are essential since the resistance
of power distribution wires or lines causes an energy loss. By
stepping up the power to a higher voltage, transformers are able to
mitigate the effects of this loss, yielding economy and efficiency in
power distribution. From the point of power generation to final
delivery to a consumer, a series of transformers of varying sizes and
types are deployed by power distribution companies. Voltages need
to be reduced from their initial high levels to levels that can be used
domestically (typically 220-240V or 110V). The high voltages of
transmission towers (stepped up to make up for transmissions
losses) are steadily stepped down at receiving substations,
distribution transformers on smaller poles and so on till acceptable
power supply is delivered to an industrial or domestic consumer.
There are two basic types of transformers, single-phase and three-
phase, and there are other variants (core-type, shell-type, berry-
type, for instance) as well. We are here concerned, of course, with
11. All transformers generate heat energy. The large transformers
generate very high heat energy, and these require some type of
special cooling and insulation. Some are air-cooled, while others use
oil or water or some combination of these. The fundamental
principles are, first, that an electrical current produces a magnetic
field (electromagnetism) and, second, that a changing magnetic field
within a coil of wire induces a voltage across the ends of the coil
(electromagnetic induction). Changing the current in the coil
changes the magnetic flux developed, and this changing magnetic
flux induces a voltage in a secondary coil. The simplest transformer
might have a soft iron or silicon steel core and windings placed on it.
Both the core and the windings are insulated. The entire assembly is
founded on Faraday's Laws of Electromagnetic Induction.
12. Stable at high temperatures, transformer oil or insulating oil
(also 'dielectric oil'), normally obtained by fractional distillation and
subsequent treatment of crude petroleum, provides excellent
insulation. It is also used as a coolant and to suppress what is known
as 'arcing' and 'corona'. For improved cooling, especially in large
power transformers, the oil-filled tanks that are typical in such
devices often have external radiators through which the oil circulates
13. Electrical transformers, like almost anything else, are subject
to Murphy's Law: if anything can go wrong, it will. Transformers
fail. The causes can be many, from insulation failures, internal
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equipment, improper installation and maintenance to incorrect
grounding, lightning strikes, damage to power lines, prolonged
overloading, damage to the core, damage to the winding, and even,
it is reported, small animals across the power lines. Often, the result
of a failure is an electric arc between the transformer's conductors,
or even between a conductor and the transformer's tank. The
electrical arc creates a high-energy short-circuit in the system, and
this in turn causes a surge in the coolant oil. That triggers a
chemical reaction of gas accumulation, and the pressure within the
tank rises sharply and swiftly. The consequences can be
catastrophic: often an explosion and, as the oxygen in the air outside
meets with the superheated oil, an immediate fire.
14. Oil-filled transformers with a conservator (oil reservoir) may
have a gas detector relay. This is called a Buchholz Relay. These
have been use at least since the 1940s. The relay was first developed
by Max Buchholz in 1921. A Buchholz Relay is a safety device
mounted on oil-filled power transformers. It is equipped with an
overhead oil reservoir called a 'conservator'. Typically, it is used to
detect gas accumulation within the transformer due to corona
discharge, overheating, or an internal electric arc. On a slow
accumulation of gas, or rapid pressure rise, the Buchholz Relayis
designed to trip a protective circuit breaker that disconnects power
from the transformer. Transformers without conservators are
usually equipped with sudden pressure relays. These perform a
function similar to the Buchholz Relay.
15. At the simplest level, a diagram of an electrical transformer
16.
container fitted to the pipe that connects the main tank to the oil
conservator tank. It has two principal elements. The upper element
is a hinged float that moves up or down depending on the oil level,
rather like the float in any cistern. Typically, the float has a mercury
switch, the alignment of which varies according to the float's
position. The second element is a baffle plate with another mercury
switch. This plate is so fitted (again on a hinge) just ahead of the
inlet from the main tank. When oil enters the Buchholz Relay from
that inlet at high pressure, the baffle plate's alignment and the
mercury switch levels change. There are also gas release valves
above the relay. Electrical leads are taken from the mercury switches
through a terminal block. The Buchholz Relay is a mechanically
activated device. The principle is this: on a transformer failure, the
insulating oil is decomposed into Carbon Monoxide and Carbon
Dioxide (CO and CO2). These gases accumulate in the upper part of
the Buchholz container. That causes the oil level to fall. With that,
which in turn triggers an alarm. More severe faults are often
accompanied by oil surges. These strike the lower-positioned baffle
plate and close the mercury switch attached to that plate. This
energizes the trip circuit of the circuit breakers and that allows the
faulty transformer to be taken off-grid, isolated from the rest of the
power system. While this is the theory, it sometimes so happens that
a Buchholz Relay returns a 'false positive': it activates without any
real transformer failure. This might happen due to air pockets or
bubbles (which force down the oil level). The lower baffle plate
mercury switch may also be activated if the velocity of oil delivery is
high, though not due to an internal fault, and this trips the circuit.
The following diagrams show a typical (and over-simplified)
17. Generally speaking, some safety systems (I am not confining
myself here to the two competing devices) detect or sense imminent
assist at a slightly later stage, and ensure a quick and safe shut-down
or allow a transformer to be taken offline smoothly. In essence, they
seem to be warning systems; CTR says its device is an early warning
system, one that anticipates an imminent explosion, something that
Sergi's does not.
18. CTR claims that apart from its domestic patent application, it
also applied internationally. In the course of the international
application(s), CTR sought the written opinion of an International
Searching Authority, established under the Patent Cooperation
Treaty, on the novelty, inventive step(s) and industrial applications
of the CTR's claim. The ISA is said to have examined CTR's
technology and compared it to the prior art including, importantly,
patent, "for a method of prevention, protection and detection
against explosion and fire" in an oil-filled electrical transformer,
detected breaks in electrical insulation using a pressure sensor,
depressurizing the coolant in the tank using a valve, and cooling the
heated coolant by injecting a pressurized inert gas into the bottom of
the tank. This stirred the coolant and prevented oxygen from
entering the tank, and hence prevented a fire. In contrast, CTR's
Patent was, in ISA's opinion, a method of detecting the possibility of
a fire or explosion in advance, before the decomposition of the
coolant or dielectric oil into hydrocarbon gases, and in doing so with
little to no delay. It was said to be based on a warning feedback by
monitoring the incoming and outgoing current in the transformer
and using a detected imbalance as a signal to the circuit breaker.
Then the Buchholz Relay signal and the circuit breaker were used to
generate a control signal that triggered the draining of the
combustible coolant fluid, followed by the injection of nitrogen gas
from the bottom of the transformer tank to stir the coolant. The
Plaint, pp. 49-50.
(including Sergi's patent) did not use a Differential Relay to sense
an imbalance in the incoming and outgoing current together with
the signals from the Buchholz Relay and the circuit breakers to
generate a control signal at an early stage. Importantly, Sergi's own
initial patent claimed to be faster than the prior art that preceded it.
Other patents were temperature-sensor based; Sergi's was pressure-
sensor based; and CTR claims to be even quicker in detection. The
ISA report notes that none of the previous patents had all these
features in combination. The Differential Relay, the Buchholz Relay
and the Circuit Breaker are all integers in transformer safety device
19. In paragraphs 13 and 16 of the Plaint, CTR says that the
fundamental features of its patent are these:
20. The principal difference between the two patents, Mr. Seervai
says, is in the timing. CTR's system does not await a pressure build-
up. That, according to him, is an event that occurs later, though
perhaps only fractionally. But that minute delay makes all the
difference. CTR's system 'senses' an imminent pressure build up,
before or just as it starts, and responds instantly. CTR's system thus
'kicks in' at two early stages: when there is arcing, because this is
typically a precursor of the problems that follow; and before or at
the very start of the pressure build-up. CTR's system is electrical:
the Differential Relay is, by definition, an electrical device. This is in
distinction to Sergi's patented system of a pressure sensor, a
mechanical device; one that is, according to CTR, prone to frequent
malfunctions and inherently unreliable. CTR's control unit collects
'data' (meaning input signals) from the Differential Relay, the
Buchholz Relay and the Circuit Breakers.39
21. It is important to note here that CTR's case is not patent-
versus-patent. It is that Sergi is now manufacturing a product not
according to its own patent, but in infringement of CTR's. Sergi, on
the other hand, claims that CTR's Patent itself was wrongly
granted; that there is nothing novel or inventive about any of it; that
all of it was known to the prior art; nd that known integers have only
been shuffled about to give the impression of inventiveness; and that
it does not do what it claims, viz., to provide an early warning
system. Indeed, Mr. Chagla's submission is that on any reading of
CTR Complete Specification Patent No.202302, "Summary of the
Invention", Vol. G-1, pp. 6-28 at pp. 10-11.
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detection time at all. The patent itself is vulnerable, he says.
22. CTR's complete specification40 sets out what, according to it,
is the 'prior art', including in Sergi's Indian Patent No.189089. That
patent uses a pressure sensor as a means for detection. Other
patents are also explained. According to CTR, all these use
'pressure means'. These, CTR claims, come late in time sequence
after much damage is done; specifically 'tearing'. None of them, it
says, teaches a system or method to detect or prevent tearing without
delay, before it occurs. CTR's system is said to operate before the
coolant oil's decomposition. Specifically, it claims that its system is
'devoid of pressure sensors, temperature sensors or vapor sensors'.
The complete specification sets out 14 'claims': there were
originally 16 in the provisional specification, but these seem to have
been merged and then split during the patent grant process to yield
23. Sergi's Indian Patent No. 18908941 also claims to reduce time.
It specifically says that the patent uses a pressure-sensor means to
detect a break in the electrical insulation of the transformer and then
triggers a partial draining of the coolant, and the cooling of the tank
by the injection of a pressurized inert gas to stir the coolant and
flush the oxygen.
Document at Thane Dist. Ct. R&P Vol. II ("D-2"), pp. 1029-1080; Vol.
G-1, pp. 6-28.
Plaint, pp. 73-89.
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24. On 24th July 2009, CTR obtained an expert technical opinion
from Dr. D.B. Talange and Dr. S. S. Dambhare, respectively
Professor & Head and Associate Professor of the Department of
Electrical Engineering, College of Engineering, Pune.42 The
Talange-Dambhare opinion was in response to CTR's request of
17th July 2009 to determine if the Sergi 3000 system (from Sergi's
catalogue) was identical or substantially similar to CTR's Patent
No.202302. The opinion was based on the catalogue description,
Sergi's Patent No.189089, CTR's Patent No. 202302, Sergi
France's catalogue, and a technical drawing of the Sergi 3000. The
Talange-Dambhare opinion was unequivocal on this: that CTR's
Patent's novelty lay in its use of the current-imbalance sensing
Differential Relay; and the use of the Buchholz Relay's oil surge
relay feature. These, the opinion said, were absent in the Sergi India
Patent and the Sergi France catalogue. The Sergi India catalogue
however claimed to have both these features. The report concluded
Sergi India Patent; that the Sergi France catalogue product did not
show the novel features of CTR's Patent; and that the Sergi India
product in its catalogue did show the novelties of CTR's Patent. In
other words, the Sergi 3000 product sold in India did not accord
with its patent, but was identical or substantially similar to CTR's
Indian Patent.
25. In addition, CTR relies on two affidavits of one T.R.
Subramanian, Controller-General of Patents and Trade Marks from
1996 to 1998. The first of these is dated 26th March 2010 in the
Plaint, pp. 248-250.
and was filed as Exhibit "E" to CTR's further affidavit dated 16th
January 2012 in its Notice of Motion No.665 of 2011.44 The two
affidavits differ in important respects: the second followed the DTL
tender and Mr. Subramanian then had for his examination copies of
drawings submitted by Sergi to DTL, the DTL tender and so on.
The questions put to him were also different: the first related to the
validity of CTR's Patent, and the second was an examination of
whether the Sergi (India) 3000 product infringed the CTR Patent. I
26.
In the first affidavit, Mr. Subramanian was of the view that
CTR's Patent combined the Differential Relay, the Buchholz Relay
and the Circuit Breaker for delivering three input signals to the
control unit, and the control unit in turn triggered a fire
extinguishing system. The system, he said, detected the possibility
combustible coolant oil set in. He was, in 2010, of the considered
view that this was a clear technical advancement. He also saw
Sergi's Patent No.189089 as being 'completely different' since it
pressure sensitive system which operates
at a later stage when the pressure inside
the transformer tank is static or after a
fire or rupture has taken place in the
transformer. The pressure system
Motion paperbook, pp. 73-81.
^
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thereafter operates the fire extinguishing
system.
(Emphasis added)
Specifically, Mr. Subramanian took the line that although all the
integers in CTR's Patent taken individually were known to the prior
art, no previous system or device used them in this unique
combination array. The earlier systems operated to disconnect
power supply to the transformer, but provided no method of
detecting an explosion or fire. He also specifically opined, in March
2010 that Sergi's product had adopted the novel and inventive
features of CTR's Patent and that there was a clear case of
infringement.
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THE DTL TENDER SPECIFICATIONS
27. The DTL Tender contained technical specifications of the
fire protection system.45 It required a "Nitrogen Injection Fire
Prevention Cum Extinguishing System" ("NIFPES"). Clause 2.5
related to "Activation of the NIFPES", and clause 2.5.2 spoke of
"the Auto Mode":
2.5.2 Auto Mode
a) For Prevention of Fire : i) Differential Relay
Operation
ig ii) Buchholz Relay
parallel with Pressure
Relief Valve or RPRR
(Rapid Pressure
Release Relay)
iii) Tripping of all
concerned breakers is
a pre-requisite for
initiation of system
activation
b) For Extinguishing Fire : i) Fire Detector
ii) Buchholz Relay
paralleled with
Pressure Relief Value
or RPRR.
iii) Tripping of all
connected breakers is
a pre-requisite for
initiation of system
activation.
Motion paperbook, pp. 82-121; from p. 111.
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CTR'S CASE IN INFRINGEMENT
28. Mr. Seervai says that on a plain reading, these specifications
eliminated any product that accorded with Sergi's Patent No.189089
since that did not feature a Differential Relay, a Buchholz Relay and
a Circuit Breaker working in tandem like this. Indeed, he says, this
was a bespoke specification that only a device in accordance with
CTR's Patent could meet.
29. During the hearings, Mr. Seervai handed in colour copies of
the Sergi France brochure for its Sergi 3000 product and the Sergi
India brochure for ostensibly the same thing. On an inner page of
each is a flowchart or diagram. The French brochure does not show
a Differential Relay at all. On the Fire Prevention side, it also does
not show a Buchholz Relay being deployed. It only shows a pressure
sensor. We must bear in mind that we are here concerned with the
fire prevention patent, not the fire extinguishing patent; for, on the
fire extinguishing side, the Sergi France brochure does have a
Buchholz Relay (and this seems logical). Sergi's Indian brochure is
markedly different. It is also ostensibly for the Sergi 3000 product,
one that is, therefore, presumably in accordance with the Sergi
Patent No. 189089. But the flowchart or diagram in the Indian
brochure now shows, in prevention mode, the deployment of both a
Differential Relay and a Buchholz Relay, along with a Pressure Relief
Valve and a Master Trip (circuit breaker). It claims that the
Buchholz Relay and the Pressure Relief Valve are alternates to each
other, but the Differential Relay and the Master Trip must work in
conjunction ("and").
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30. What Sergi India has done, Mr. Seervai says, is not to tack on
a Differential Relay and a Buchholz Relay to their product. They
have simply abandoned their product and are using one that is
CTR's. It was impossible for Sergi to obtain the DTL contract
without infringement.
31. One of the reasons for this, CTR says in paragraph 22 of the
Plaint, is the very great success of its patented commercial offering.
Many State Electricity companies professed their approval, as did
the Central Electricity Authority, a statutory body. The patent was
said to have set a new benchmark. This success eroded the market
for Sergi's competing product based on its Patent No. 189089; and
this led Sergi, or so CTR says, to all manner of desperate moves,
including filing the patent infringement action in Calcutta to which I
have previously referred.
32. CTR's case in infringement is set out in paragraphs 23 to 27
of the Plaint. Of course, it is repeated at several places through this
mountainous record, but I do not think it is necessary at the stage of
the Motion to minutely examine each of these assertions.
33. Till 2007, Sergi manufactured its product in accordance with
its own Patent. Then, seeing the success of CTR's rival offering,
and having failed through the Calcutta patent infringement act to
stop its onward march, Sergi wholly abandoned its patented
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product. It then put the Sergi 3000 into the market and this was and
is, CTR says, nothing but a slavish copy of CTR's Patent.46
34. CTR says that the essential integers of Sergi's product are the
same as those in CTR's Patent.47 I understand this to mean the
deployment of the Differential Relay and the Buchholz Relay with
an oil surge sensor, in the unique manner of CTR's Patent. CTR
says that Sergi's brochures and the flowchart in those shows this.
These two essential features of CTR's Patent do not exist in Sergi's
patent; they do in the Sergi 3000 sold in India.48
Plaint, paragraph 23, Vol. A, p. 19.
Plaint, paragraph 24, Vol. A, pp. 19-20.
Plaint, paragraph 25, Vol. A, pp. 20-21.
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THE CONTESTING EXPERT OPINIONS
35. I believe this is a good place to attempt a small excursion into
the contesting 'expert' opinions placed on record. I have already
discussed some of the material that CTR relies on in its Plaint;
specifically, the Talange-Dambhare opinion and Mr. Subramanian's
first affidavit. I take up now Mr. Subramanian's second affidavit of
10th January 2012 filed in Notice of Motion No. 665 of 2011.49
Here, Mr. Subramanian specifically directed himself to the question
of infringement. He considered, among other documents, the DTL
tender, Sergi's drawings submitted to DTL, the two contesting
patent specifications and the Sergi 3000 brochure. The questions to
him were whether or not the Sergi 3000 product sold to DTL
accorded with Sergi's Indian Patent No.189089; and whether or not
the Sergi 3000 product agreed to be sold to DTL was identical or
substantially similar to CTR's Indian Patent No.202302. He formed
the opinion CTR's Patent was indeed unique and novel. It used its
various integers in a special way for its intended purpose. In
contrast, the Sergi Indian Patent was entirely pressure sensor based.
The activation trigger was only the pressure sensor. He concluded
that the Sergi Patent did not accord with Sergi's Indian patent, and
that the product offered by Sergi was identical, or at least
substantially similar, to CTR's Indian Patent No. 202302. The
features described in Sergi's brochure did not figure in its patent;
but they did and do form part of the essential technical
specifications and novelty of CTR's Patent.
Motion No. 665 of 2011 paperbook, pp. 320-324.
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36. I find it very difficult to fault Mr. Subramanian's reasoning
and train of thought in either of his affidavits, and I am equally
unable to simply jettison the Talange-Dambhare opinion. All these
seem to me to be entirely consistent with CTR's depiction of its
Patent and the complete specification of CTR's Patent. The obvious
inconsistency between Sergi's French brochure and its Indian
brochure is simply inexplicable at least to this extent: that while the
French brochure describes a system or method that accords with
Sergi's Patent No. 189089, the Sergi India brochure does not and is
a clear departure from it. On the face of it, the Sergi India product
brochure hews very closely to CTR's Patent.
37. The matter should really have ended at this; and very little
more was required. Mr. Chagla however mounts a frontal assault on
the CTR patent itself: there is, he says, nothing so very novel or
unique about it. All its integers are, and even at the time of the
application, were known to the prior art. CTR's mere re-
arrangement of these well-known integers with their well-
documented and well-established functions is by no means a novelty
sufficient to sustain a patent; and if there is no properly granted
patent, Sergi's deployment of those very integers cannot possibly
constitute infringement. What CTR claims as being novel on the
priority date of 16th November 2005 was also previously disclosed
by CTR itself in its brochures, Mr. Chagla claims, formed part of
the prior art, and was fully anticipated.
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38. In opposition to CTR's experts, he relies on the opinions of
one Rajiv Bhatnagar, a consulting patent agent,50 and of one Gaurav
U. Phadnis, a lawyer with a bachelor's degree in mechanical
engineering and a master's degree in intellectual property and
competition law.51 I rather got the impression that Sergi invokes
both opinions with no great enthusiasm, and perhaps
understandably: Mr. Chagla has more substantial points of defence.
Indeed, I would disregard Bhatnagar's opinion entirely on one
solitary ground: in saying that the Buchholz Relay has been used
since the 1950s (which nobody denies; indeed, possibly earlier), he
says that 'several of these facts are reported on Wikipedia (a
respected technical encylcopedia on the Internet)'. That is, I
imagine, enough to tell us of the reliability of his opinion even prima
facie. In any case, all that he says is that the many integers are known
to the art, a matter that takes us nowhere. What is, however, of
interest is that he does not mention the use in a particular
combination or sequence of these known integers, as if to suggest that
they can be randomly deployed and will still yield the same final
result. I imagine that to be completely incorrect. Phadnis's opinion
is in response to specific questions put to him: whether the
Differential Relay and the Buchholz Relay are known to the prior art
(they are; no opinion was needed on this); whether the validity of
the CTR patent can be challenged (I expect anything can be
challenged; the question should properly be whether it can be
successfully challenged); and finally, whether the Sergi 3000 system
as shown in the brochure infringes CTR's Patent. What he does not
Motion paperbook, pp. 127-129
Motion paperbook, pp. 130-187.
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seem to have been shown is Sergi's French brochure. Phadnis then
provides a tabular comparison of the two patents and his opinion. In
this, he speaks only about the various components or integers but
not about the manner in which they are made to work together. The
flaw in this analysis lies, I think, in his opinion that there is no great
novelty in claiming that the Differential Relay senses an imbalance
in the input and output currents, because that is precisely what the
function of the Differential Relay is in the first place. This begs the
question. CTR does not claim that the Differential Relay is being
adapted to do something other than what it is supposed to do. It
claims that the result of that function, an electrical signal, is for the
first time being used to provide an input signal to a control unit,
something that has never been done before. This seems to have
escaped Phadnis; and, indeed, the very same thing could be said
about the Pressure Sensor or Pressure Relief Valve in Sergi's patent.
Neither of these opinions is persuasive.
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SCHEMATICS
39. Before I turn to the next set of submissions, I think it would
be useful to set out some of the schematics that have been placed on
record. There are very many of these scattered through the record.
Others have been tendered. Some are illegible and it is not possible
to reproduce these here. During arguments, Mr. Chagla tendered
two such schematics, one on 12th February 2015 and another
revised version on 16th February 2015. I have taken only the latter. I
have also included the schematics from the Sergi's French and
Indian brochures, and one flowchart that is in CTR's Written
Statement to Sergi's Counter-Claim. Between these, I believe the
contesting claims are sufficiently clear. These are set out on the
pages that follow.
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40. The first is a block diagram of CTR's Patent annexed to the
Plaint.52
Plaint, Vol. A, p. 89-A.
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41. The second is a flowchart from the Written Statement to the
Counter-Claim.53
42. This seems clearly to show that the CTR Patent claims to act
ahead in time of the Sergi Patent. The reference to the Elin
technology is a reference to the previous international license
relating to fire extinguishing. We are concerned with the novelty of
the methods at the point above the 'transformer explosion' step in
the ladder depicted above.
Vol. A, p. 344
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43. Sergi's French brochure has this schematic:
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44. The Sergi India brochure shows this:
45. Now these last two images clearly demonstrate that the Sergi
India product brochure shows key elements that the Sergi France
brochure does not show at all on the prevention and detection side:
specifically, the Differential Relay and the Buchholz Relay. Further,
while CTR claims to use the Buchholz Relay to sense an oil surge,
and says that Pressure Relief Valve is irrelevant and can be tacked on
without making any difference at all (Mr. Seervai says it sends no
'signal' but is only an alarm), the Pressure Relief Valve is a
mechanical (non-electrical) device that is admittedly essential to
Sergi's original patent and as shown in the Sergi France brochure.
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46. Mr. Chagla's second comparative chart shows this:
47. Here we see the differences as Mr. Chagla perceives them.
According to him, in the Sergi product, the Differential Relay or the
Buchholz Relay or the Pressure Relief Valve trips the circuit breaker;
the Differential Relay also sends a signal to the Control Unit; either
the Buchholz Relay or the Pressure Relief Valve also sends a signal
to the Control Unit; and the Circuit Breaker also sends a third signal
to the Control Unit. He says this is faster and more efficient than
CTR's claim; and there is nothing very unique or novel about any of
it. It is faster because, according to him, since the CTR claim works
in series and needs simultaneous signals from all three inputs to the
Control Unit, it is much slower.
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COMBINATION PATENTS & MOSAICING
48. This formulation is strenuously disputed by Mr. Seervai. The
law does not, he says, require every integer of a patent to be novel:
the whole can be both greater and more novel than the sum of its
parts. To dislodge a granted patent, the defendant in such an
infringement action must do more than merely assert a lack of
novelty or simply show that some, or even all, integers are
previously known. Once the plaintiff has shown that he holds a
validly granted patent and that it prima facie appears to be an
inventive step, there can be no finding for a defendant's contention
that the patent is a mere arrangement or re-arrangement of known
devices only on a defendant making that assertion. To succeed, that
defence must be backed with scientific literature, and persuasive
expert opinion.54 Section 3 of the Patents Act tells us what are not
inventions, and among the various categories listed is this:
Section 3 -- What are not inventions
The following are not inventions within
the meaning of this Act, --
(a) ...
(f) the mere arrangement or re-
arrangement or duplication of known
devices each functioning independently of
one another in a known way;
Strix Ltd v Maharaja Appliances Ltd., MIPR 2010 (1) 0181 (Del), per S.
Muralidhar J.
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I think the words I have emphasized form a limitation to the
defence. It is not enough to show (as both Sergi's experts seem to
do) that the patent has known devices or integers. Nor is it enough
to show that those devices perform the functions for which they
were intended; that, at least, is obvious, for if they did not, they
would not be used and would be mere surplusage. It must also be
shown that every one of these integers functions independently of
every other one and does so in a manner that is known. I cannot
possibly arrive at that finding. The material before seems clearly to
indicate that CTR's use of the Differential Relay, the Buchholz
Relay and the Master Trip or Circuit Breaker, all previously known
to the art, have been used in a completely unique and novel fashion.
They do not work independently of each other in a known way; and
the patent lies precisely in the combination of their use, the timing,
and the manner in which their known functions are deployed to
deliver a stated result. 'Mosaicing', cobbling together bits and
pieces, is not in and of itself a complete defence to a patent
infringement action except in very limited circumstances. In short,
to succeed, the charge of mosaicing must itself be self-evident and
plain, one that can be put together by "an unimaginative man with
no inventive capacity".55 The cobbling together must be so obviously
non-inventive that 'he who runs can read'.
49. There is a vast body of law, both here and in other
jurisdictions, on this. For combination patents, the issue for
J. Mitra & Co. Pvt. Ltd. v Kesar Medicaments & Anr., 2008 (36) PTC 568
(Del.), per Sanjay Kishan Kaul J (as he then was), citing Terrell on
Patents, 16th ed., 2006, in turn quoting Reid LJ in Technograph v Mills &
Rockley, [1972] RPC 346 at 355.
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determination is whether the combination of the integers was at the
relevant time obvious, not whether each integer regarded in
isolation was obvious.56 In contemporary terms, the test is to see
whether this combination of integers from the myriad previous
publications that constitute the prior art is an obvious selection.
50. In M/s Bishwanath Prasad Radhey Shyam v Hindustan Metal
Industries,57 the Supreme Court dealt with this question in a patent
infringement action relating to a new device and method of
manufacturing utensils. There too, as here, the defence of mosaicing
was raised. The Court held that to be patentable, an improvement
on what was previously known, or a combination of matters
previously known, must be more than mere workshop improvement.
It must be an 'inventive step'. It must produce a new result, a new
article or a better or cheaper article (or result) than before. It is
permissible to combine old, known integers such that in the new
combination and their inter-dependency or interrelation they
produce a new process or an improved result. A mere collection of
old integers that does not involve an inventive faculty does not
qualify. It is not the 'new-ness' of purpose or the novelty of
application that is relevant; there must be novelty in the mode of
application. That mode must display some ingenuity. When it is said
that the patent is precisely such a non-inventive, self-evident
mosaic, and that what it does is 'obvious', then that defence of
'obviousness' must be construed strictly and objectively. It must be
Davison, Mark J, Ann L. Monotti and Leanne Wiseman; Australian
Intellectual Property Law, Cambridge University Press, paragraph 13.8.1
(1979) 2 SCC 511; under the Patents & Designs Act, 1911.
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shown to be something that does not naturally suggest itself; it must
not be the obvious or natural suggestion of the previously known.
51. The integers may be known, but they may be arranged or re-
arranged in some previously unknown and non-obvious manner to
deliver a new or improved result. It is not enough to say merely in
opposition that each of the integers was previously known. Their
rearrangement must be one that suggests itself for the defence to
succeed.
52. In Gandhimati Appliances Ltd v L. G. Vardaraju,58 a Division
Bench of the Madras High Court said in the context of a patent-
claim contest about wet grinders that it is accepted as sound law that
a mere juxtaposition of old (meaning known) integers so that each
performs its own proper function independently of any of the others
is not a patentable combination; but where these old, known integers
are so placed together as to have a working interrelation producing a
new or improved result, then there is patentable subject matter in
the idea of the working interrelation brought about by such a
collation of these integers.
53. Incidentally: that paragraph in Gandhimati Appliances cites
Diplock LJ in Reymes-Cole v Elite Hosiery Company Ltd,59 but I
suspect incorrectly.60 That decision, though of Diplock LJ with
(2000) 3 MLJ 85; per R. Jayasimha Babu and Mrs. Prabha Sridevan JJ;
paragraph 29 of the MLJ report.
[1965] RPC 102
The citation in the MLJ report ("1965 RPC 117") is also incorrect; the
correct citation is [1965] RPC 102.
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Willmer LJ delivering a separate but concurring judgment, was one
that related to a particular type of closed-toe hosiery or stocking. It
did not contain any such passage, as indeed it could not, because no
such question arose there. The seeming error notwithstanding, I
still believe the proposition to be correctly stated.
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THE PRESSURE RELIEF VALVE: ESSENTIAL OR NOT?
54. This legal position, too well-settled now I take it to admit of
any meaningful dispute, leads ineluctably to another legal
consequence: once it is found that there is a validly granted patent,
i.e., that there is prima facie inventiveness and novelty, and the
defence of mosaicing fails, then it is always necessary to compare
the patent (or patented device) to the device said to be an
infringement. If the latter adds merely non-essential or superfluous
elements, or makes trifling variations, the charges of piracy and
infringement are not deflected.61
55. This necessarily takes us to the question of the Pressure
Relief Valve or PRV and Mr. Chagla's claim that it is 'essential' to
the DTL Tender. The PRV is wholly disclaimed by CTR, which says
it forms no part of its invention. Yet the PRV was required by DTL,
according to Mr. Chagla, and Sergi's product and patent both
featured it. Sergi did not, therefore, tack on something wholly
redundant and claim its product to be different; it supplied what was
necessary, essential and called for, something not superfluous or
redundant, and something that is entirely missing in the CTR
patent. If Sergi uses something that CTR actively disclaims, Mr.
Chagla says, then there can be no infringement; otherwise, the
patent is invalid.
Raj Parkash v Mangat Ram Choudhary, AIR 1978 Del 1
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56. I do not think this is an entirely correct reading of the DTL
tender specification. In fact, I think it is entirely incorrect. The DTL
Tender's Technical Specifications do not in fact mandate a PRV.
They do mandate a Differential Relay, and they mandate a Buchholz
Relay with a PRV or a Rapid Pressure Release Relay (RPRR). The
essentials of this tender specification are the Differential Relay, the
Buchholz Relay and a tripping system. The PRV or the RPRR are
alternatives for use with the Buchholz Relay. I have earlier
explained, as best I could, the functioning of a Buchholz Relay, and
this is precisely the reason why I felt it necessary to do so. The
Buchholz Relay is not, in the DTL specification, an alternative to
the PRV or the RPRR. It is to be used with either a PRV or a RPRR,
and that is necessary because of the functioning of the Buchholz
Relay in the first place. Consequently, the addition of the PRV to
CTR's Patent is utterly inconsequential. A device on that patent
would just as easily work without a PRV (to which, in any case, the
DTL specification itself allows an alternative). But the system that
DTL called for cannot possibly work without a Differential Relay or
a Buchholz Relay. Those are essential. It also cannot work with
merely a PRV or even with a PRV and a Buchholz Relay. Therefore,
what Sergi has 'tacked on' is not something inconsequential. The
fact that the Differential Relay was a known integer makes no
difference in this case. Its deployment in the manner in which
CTR's Patent uses it is prima facie a novel and inventive method
returning an improved result. When I look beyond the patent, as
courts must sometimes do, I find that there is compelling material to
support what CTR says.
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57. The degree of inventiveness is irrelevant. Slight alterations or
improvements may yield dramatically important results and might
be the result of very great ingenuity. In Canadian Electric Co Ltd v
Fada Radio Ltd,62 the Privy Council said just this and went on to
hold that sometimes it is the combination itself that is the invention;
if the invention requires independent thought, ingenuity and skill,
producing in a distinctive form a more efficient result, there is the
subject matter of a patent. A new combination of well known
devices, and their application to a new or more useful end, may
require invention to produce it and may be good subject matter for a
patent. If all of this, including that combination and that result, are
shown convincingly to be in the public domain, of course no patent
can result. But that is hardly the case here. No one claims that a
Differential Relay, a Buchholz Relay and a Circuit Breaker were used
in this manner at any time prior to CTR's Patent. Even Sergi does
not say this. All it says is that the Differential Relay is known; the
Buchholz Relay is known; and therefore, putting them together lacks
all inventiveness. This is a quite incorrect reading of the law, which
suggests just the reverse.
58. The Differential Relay's use in conjunction with the Buchholz
Relay seems to me to be the 'pith and marrow' of CTR's Patent (an
expression to which I will return presently); and, to use the words of
Wadia J in Lallubhai Chakubhai v Chimanlal & Co.,63 what Sergi
seems to have done is to take from CTR the substance of its
invention. Wadia J said that sometimes a patent is infringed by the
AIR 1930 PC 1
AIR 1936 Bom 99
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taking of only a part; but that depends on whether part so lifted and
for which protection is sought is a new and material part, especially
in the case of a combination. I read the word 'part' in this phrasing
not to mean an individual integer per se but a portion of the patent.
This has been the law for a very long time: if the defendant really
has taken the substance and essence of the plaintiff's combination,
its 'pith and marrow', the mere fact that certain parts are added or
omitted does not mean there is no infringement.64
Proctor v Bennis, [1886] 36 Ch. 740
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THE RELEVANCE OF THE GRANT OF THE PATENT
59. Further, the grant of the patent supports CTR, and while the
grant of a patent is no guarantee of its validity, it is a material
consideration for the determination of a prima facie case; that is to
say, it is not to be ignored entirely. In Gandhimati Appliances,65 the
Madras High Court considered this aspect of the matter and held
that a plaintiff is always entitled, at a prima facie stage, to rely on the
secured patent as prima facie proof of validity. The plaintiff's burden
of proof is more rigorous if it holds no patent. But the grant of a
patent does not render it absolutely inviolate; the burden remains on
the plaintiff to show a prima facie case for interlocutory relief. The
defendant can always question the validity of the patent. When it is
able to show some grounds, and here we must have regard to the
decision of Muralidhar J of the Delhi High Court in Strix Ltd as to
what is required of the defendant in such a demonstration, then the
mere grant of the plaintiff is not in and of itself sufficient to warrant
interim relief. Mr. Chagla is perhaps correct in his submission, based
on the Division Bench decision of the Delhi High Court in F.
Hoffman La Roche Ltd & Anr. v Cipla Ltd.,66 that at the interim stage
he is not required to demonstrate invalidity; that will await the trial.
He only needs to show prima facie vulnerability of the patent. The
fact that the patent-grant process is a rigorous one is not a complete
answer. This finding in Hoffman La Roche is, in my judgment, to be
(2000) 3 MLJ 85
2009 (110) DRJ 452 (DB), per AP Shah CJ and S. Muralidhar J.
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carefully parsed lest it be read counter to the classic dictum of
Diplock LJ in American Cyanamid v Ethicon Ltd,67 also a patent case:
The instant appeal arises in a patent
case. Historically there was undoubtedly a
time when in an action for infringement of
a patent that was not already "well
established", whatever that may have
meant, an interlocutory injunction to
restrain infringement would not be granted
if counsel for the defendant stated that
it was intended to attack the validity of
the patent.
Relics of this reluctance to enforce a
monopoly that was challenged, even though
the alleged grounds of invalidity were
weak, are to be found in the judgment of
Scrutton L.J. as late as 1924 in Smith v.
Grigg Limited ([1924] 1 K.B. 655); but the
elaborate procedure for the examination of
patent specifications by expert examiners
before a patent is granted, the
opportunity for opposition at that stage
and the provisions for appeal to the
Patent Appeal Tribunal in the person of a
patent judge of the High Court, make the
grant of a patent nowadays a good prima
facie reason, in the true sense of that
term, for supposing the patent to be
valid, and have rendered obsolete the
former rule of practice as respects
interlocutory injunctions in infringement
[1975] 2 WLR 316 : [1975] AC 396
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actions. In my view the grant of
interlocutory injunctions in actions for
infringement of patents is governed by the
same principles as in other actions. I
turn to consider what those principles
are.
American Cyanamid was cited before the Division Bench hearing
Hoffman La Roche, and this is so noted. The distinction, I think, is
that thin line that the Division Bench drew between an assault on
the invalidity of the patent, something that in the old days a
defendant only needed to state he intended to seek in order to
wholly defeat an injunction application in a patent infringement
action, and a defence at that interim stage that demonstrated prima
facie the vulnerability of the patent. The Hoffman La Roche finding is
not inconsistent with American Cyanamid in this respect; it may
indeed be a necessary evolution of it. These are two sides of the
coin: on one, a plaintiff is not automatically entitled to an injunction
only on the ground that he has a patent not yet invalidated; on the
other, by merely saying that the patent's validity is proposed to be
challenged, a defendant cannot defeat an injunction claim but must
prima facie demonstrate vulnerability, and he must do so in the
manner suggested by Muralidhar J in Strix Ltd.
The 'Implausibility' Of Ctr's Patent
60. Mr. Chagla then attempts to show that the patent as granted is
implausible in what it claims. He bases this on the fact that CTR
clearly says that the three essential integers of its patent work in
series; they must all work in interdependence; and once each of
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them is required to return a result to fire a control mechanism (the
use of the word 'and' as opposed to 'or'), then there is no question
of saving time or anticipating a result. Waiting for three distinct
inputs to feed in is bound, Mr. Chagla says, to return a slower and
not a faster response time. In contrast, the Sergi 3000 uses either the
Buchholz Relay or the PRV, and this makes it faster. I do not think
this is even remotely accurate. The homegrown diagrams that
purport to compare the CTR Patent and the Sergi 3000 (reproduced
earlier, in paragraph 46) that Mr. Chagla tendered are needlessly
confusing. I also think they are somewhat inaccurate, at least on the
Sergi side of the fence. The Sergi India brochure gives us a much
clearer picture; and closely read, it shows no material difference at
all. For the Sergi 3000, as produced, also requires three inputs from
(i) the Differential Relay, (ii) the Buchholz Relay or the PRV and
(iii) the Master Trip (or Circuit Breaker). The only 'or' here sits
between the Buchholz Relay and the PRV. That does not mean that
a signal trifecta is not required by the Control Unit in the Sergi 3000
product. Indeed, viewed like this, the Sergi 3000 product is in every
way indistinguishable from the CTR Patent.
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SERGI'S OTHER DEFENCES
61. I turn now to the remaining defences. Some of these are,
perhaps of necessity, intertwined or at least overlapping. I have tried
to segregate them to the extent possible, and to order them in a
sequence that seemed to me logical. In doing this, I have kept firmly
in mind the fact that I am here concerned with an interim
application for injunctive relief. I am not trying the suit. Straight
away, that means one thing: I do not assess the validity of the patent,
despite Mr. Chagla's exhortations that I should; I address myself
only to seeing whether he is able to make out a sufficient case of
vulnerability, following the principle set out in Hoffman La Roche
and harmonizing it with the pronouncement in Gandhimati
Appliances.
Speed of Grant
62. Mr. Chagla's submits that CTR obtained its patent with, if
not ungodly, at least uncommon despatch in a mere eight and a half
months, as opposed to the many years the process usually takes. To
demonstrate this, Mr. Chagla (despite, I think, his own reservations
and perhaps driven to it by some of his juniors with a pronounced
penchant for over-simplification) treated me on 13th February 2015
to a long and colourful diagram. I mean that literally: three A3 size
sheets pasted together, folded and re-folded. The chart has
deceptively bright but distinctly menacing arrows that point
inexorably to nether regions. I took the chart on file, but with not
much more enthusiasm than that with which Mr. Chagla tendered
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it.68 For the chart is as long on hope as it is on sticky tape, and
certainly seems to be something of a hunt for the snark. I do not
believe it makes the slightest difference at this stage when or how
quickly the patent was granted, and the submission on this seems to
me to just hang in the air with no foundation to shore it up. That
entire argument is completely defeated with just two words:
therefore what? Merely decrying speed of examination is to
advocate sloth, inefficiency, mediocrity and ineptitude. A patent is
not improved for having been several years or a decade or more in
the granting of it; conversely, it is not invalid for having been
granted quickly. Indeed, I should imagine that in a world and at a
time when the existing technology changes every nano-second,
speed in examination that does not sacrifice accuracy and diligence
must be the norm and not the exception. It is devoutly to be wished
for.
Prosecution History Estoppel: The Gillette Defence
63. A more substantial defence is the one on prosecution history
estoppel. Mr. Chagla took me through the original application, the
various examination reports and then the complete specification,
submitting along the way a chart showing the changes or
amendments made from time to time. The purpose of this exercise,
shortly put, was to demonstrate that the PRV was essential to the
Sergi product and patent; was actively disclaimed by CTR in its
patent; and yet was an essential requirement of the DTL tender. Mr.
Chagla laid a very great emphasis on CTR's use of the phrase
File G-2, Tab D.
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"and/or other sensing means" in relation to the Buchholz Relay to
say that even CTR acknowledged the need for a PRV or an RPRR in
its patent application amendments, but took these out later. CTR
thus narrowed its claim to finally yield a complete disclaimer of the
PRV. Since the PRV is an essential component, Mr. Chagla argues, it
is not open to CTR to invoke the doctrine of equivalents to claim
infringement in regard to the surrendered territory. Prosecution
history estoppel is not restricted to amendments intended to avoid
prior art but also applies to a narrowing amendment made to satisfy
any statutory requirement or the demands of an examination report
from the Controller's office.69 This is generally correctly stated as a
principle in law, but on the facts before me I do not think it is at all
correct, because its starting assumption, viz., that the PRV is
essential to the DTL Tender, is not. CTR disclaimed the PRV as
irrelevant, and it maintains that position. Mr. Seervai says, and I
think quite correctly as I have already discussed, that the essential
element is not the PRV at all, which is one of the substitutes possible
with the Buchholz Relay, but the combination of the Differential
Relay and the Buchholz Relay. CTR makes no claim to exclusivity in
either of these integers on their own, as indeed it cannot. Mr.
Chagla's argument seems to me to overlook the well settled law on
combination patents. Once I arrive at this finding, the next
argument, that CTR is confined to a system without the PRV, and
can claim no infringement in a system that does have the PRV,70
Festo Corporation v Shoketsu Kinzoku Kogyo Kabushiki Co. Ltd. et al., 535
US 722 (2002); Mabuchi Motors K.K.'s Patents, [1996] RPC 387; Scimed
Life Systems Inc v Advanced Cardiovascular Systems Inc, 232 F.3d 1337
White & Ors. v Dunbar & Ors., 119 US 47 (1886) : 30 L.Ed.303 : 1886
SCC Online US SC 220.
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cannot hold; simply because the PRV is a substitutable (and in that
sense superfluous) element.
64. Indeed, viewed like this, one of the authorities cited by Mr.
Chagla is actually against him. In Rodi and Wienenberger AG v Henry
Showell Ltd.,71 the House of Lords had before it a claim relating to an
expanding watch bracelet. In separate judgments, both Morris LJ
and Upjohn LJ said that one who borrows the substance of a
patented invention cannot escape the consequences by making
immaterial variations. The question is whether an essential feature
has been infringed. There will still be infringement if non-essential
integers are omitted, added or replaced (the 'pith and marrow'
doctrine). The only escape is for the defendant to show that the
patentee plaintiff constricted his claim by excluding something
essential; and when the defendant added that essential integer, he
was not guilty of infringement. But this latter portion cannot, as we
have seen, apply to the present case in relation to the PRV.
65. The finding on the PRV being non-essential also undermines
Mr. Chagla's invocation of the Gillette Defence, drawn from Gillette
Safety Razor Company v Anglo-American Trading Company Ltd.72 If
CTR's claims were so wide as to include the PRV, then, according to
Mr. Chagla, the patent must fail for lack of novelty and for having
been known to the prior art. If, on the other hand, the patent cannot
cover the use or deployment of the PRV, which is essential, then
there is simply no infringement. Again, this argument is based on a
[1969] RPC 367
30 RPC 465
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finding, as a matter of fact or admission, that the PRV is indeed
essential to the DTL tender and to the entire system(and possibly to
the CTR patent as well). Although Gillette, too, was a case where a
specification as filed was amended, and restricted after the
amendment, it was not a case of a combination patent of this type. I
must note that CTR is quite categorical in its assertion that the
functions of each component are interdependent and the system
cannot function unless all the components work in this inter-
dependency producing a cumulative result; and that this is not a
mere collation of integers performing independently.73 The Gillette
Defence has no application to the present case.
Pre-Publication
66. There is then the question of pre-publication. Given the
priority date of 16th November 2005, if Sergi is able to show that
CTR's Patent, as claimed and as specified, was published, known
and anticipated, and not saved by any of the statutory provisions
regarding anticipation in Chapter VI of the Patents Act,74 it cannot
possibly claim infringement. Mr. Chagla relies on two sets of
documents to establish this: first, what I will call an 'iteration chart',
a chronological tracing of the evolution of the CTR patent; and
secondly, a bundle of CTR's brochures. The first of these, the
'iteration chart', is an annexure to CTR's Affidavit in Reply to
Sergi's revocation application before the IPAB.75 Mr. Chagla
references an entry of 2004 (before the priority date of 16th
Written Statement to the Counter-Claim, Vol. A, pp. 309-310.
No submissions on Chapter VI of the Act were advanced on either side.
Vol G-3, pp. 384-388.
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November 2005) to say that the technology claimed by CTR was
known well before. I do not think this is correct. That entry76 relates
to "fire prevention and extinguishing", not "explosion detection";
and it is the latter that is the subject matter of CTR's Patent. The
details of that subject matter are to be found on the next page77 and
these show that the first development of the explosion prevention
subject technology was in 2006, after the priority date. The previous
fire prevention and extinguishing technologies were under license
from Elin; not so the explosion detection and prevention technology.
It is in 2006 that for the first time for explosion prevention shows
the use of a Differential Relay; a Buchholz Relay (oil surge mode) or
a PRV or a RPRR (later disclaimed); and a master trip or circuit
breaker for transformer isolation. I do not think it is possible to
compare the fire prevention and extinguishing methods with the
explosion detection and prevention ones in the manner Mr. Chagla
suggests; these seem to me to be very different things.
67. This disjunct also carries forward to the CTR brochures that
Mr. Chagla shows. There is in the same volume a statement of flier
preparation, followed and preceded by various brochures.78 A look at
two of these is enough: there is a flier of April 200079 and another of
October 2006.80 Mr. Chagla insists these are the same. Indeed they
are not. The first, of 2000, is in relation to fire prevention and
extinguishing, while the second relates to explosion detection. That
Vol. G-3, p. 387, internal page 120.
Vol. G-3, p. 387, internal page 121.
Vol G-3, pp. 451-452, internal pages 184-185.
Vol G-3, p. 459, internal page 192.
Vol G-3, p. 463, internal page 196.
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is not the only difference. The performance and function of the
Differential Relay differs too (a trip as opposed to a signal); their
purposes are different.
68. One of the documents on which Mr. Chagla relies is of July
2004. It is supposedly a CTR flier and it discloses the prior art, he
says;81 and therefore the patent is not just vulnerable, it simply could
not have been granted. However, this is also for fire prevention and
extinguishing. But that is not all. CTR says this was a document
annexed by Sergi to its plaint in the Calcutta High Court suit it filed
against CTR for patent infringement. The document, it says, is
entirely fabricated and no such flier was ever issued.82 Given the fate
of that suit (withdrawn) and particularly the interim applications
made by Sergi and their outcome, and given too the nature of the
contesting assertions, I do not think it is possible to regard this
document as being in any way determinative. Whether or not there
was fabrication must await trial.
Sergi: Suppression In Ctr's Plaint
69. I am not especially impressed by Mr. Chagla's submissions on
suppression and misdirection in the Plaint and his extended
exposition on this aspect of the matter. He took me through
paragraph 17 of the Plaint,83 and the annexures to the Plaint to say
that when CTR first moved Court it did so not on its complete
Plaint, p. 203, Vol. A.
Written Statement to Counter-Claim, Vol. A, pp. 315-316.
Vol. A, p. 11-15.
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specification but on its provisional specification, one that had later
suffered at least two amendments. He read this with the
specifications and claims to show that the claims had altered
between the time of the application and so had the specification.
Specifically: although there was earlier a reference to 'other sensing
means' and to the PRV 'and/or' the RPRR, CTR later disclaimed
the PRV entirely. His submission was that on a cold reading of the
Plaint as it stands, the distinct impression is that CTR's Patent
includes the PRV, and conceals the fact that this has been disclaimed;
and that it is on this basis, and this basis alone, that CTR has laid its
case in infringement.
70. All this might have been of some consequence had I been
hearing an application by CTR for ad-interim reliefs. Today, there is
little wind in these sails. CTR's final, complete specification is on
record; it was filed, though late, before the Thane District Court
even before the case was transferred to this Court. What I must
consider therefore is the material that is before me, and not, as Mr.
Chagla's argument seems to suggest, a stripped-down version of it,
pared to just the original Plaint and ignoring everything else. I
imagine that would be a most unreasonable and unacceptable way of
approaching a matter of this complexity and with this much material
on record.
71. Indeed, I do not read the Plaint as being quite so shocking (so
to speak) as Mr. Chagla would have it, and I imagine that courts
must be somewhat more fault-tolerant than this. To arrive at Mr.
Chagla's destination, a finding of deliberate and material
suppression must be returned; one designed to yield an otherwise
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impossible judicial outcome. An accidental omission or oversight of
something immaterial, and the non-disclosure at an initial stage of
something that is now very much front-and-centre seems to me not
to fit these parameters. It is not possible to read the Plaint today in
isolation, to take if off-line as it were. The completeness of
disclosure on the record is sufficient insulation (so to speak) against
this charge.
72. For these reasons, and given my finding on an application of
the 'pith and marrow' rule, I find Mr. Chagla's reliance on various
authorities on 'fraud' and on withholding of material documents to
be of little assistance. Maganlal Kuberdas Kapadia v Themis
Chemicals Ltd84 was, for instance, an appeal against an ad-interim
order. We are well beyond that stage now; and, as I said earlier, at
the ad-interim stage, without so complete a record, these
considerations may have been of consequence. Similarly, the
frequently cited S. P. Chengalvaraya Naidu v Jagannath85 was a case
about a litigant's fraud and the withholding of a document vitally
relevant to the litigation and obtaining a preliminary decree on that
basis. Given this 15,000 page record, I seriously doubt that such an
allegation can subsist today. Prestige Lights Ltd v State Bank of India86
also stands on a markedly different footing: when a borrower
claimed his representation under Section 13(3-A) of the SARFAESI
Act had not been considered, it was found as a finding of fact that
the claim of such a representation having been made was only an
afterthought. So when Mr. Seervai says that the 'suppression'
Appeal No. 332 of 1991 decided on 22nd April 1991.
AIR 1994 SC 853
(2007) 8 SCC 449
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alleged must be a material suppression, one that will tilt the scales in
the present litigation, I believe he is completely correct.87 The non-
disclosure of the immaterial is immaterial. Once all the material is
before the Court, such allegations of suppression are of no
consequence.88 It is, however, of some consequence that this charge
comes to be made so late in the day, at a stage when it has lost all
relevance by the simple account of such a massive disclosure, or
even over-disclosure of the material. I must note that the charge is
also misdirected: the body of the Plaint is not, I think, incorrect in
the way it sets out the claims. The wrong specification seems to
have been annexed, but even at the time of the hearings before the
Thane District Court, Sergi does not seem to have made too much
of this: it filed a detailed affidavit with 10 grounds of defence. This
was not among them.
Arunima Baruah v Union of India, (2007) 6 SCC 120
SJS Business Enterprises (P) Ltd. v State of Bihar & Ors., (2004) 7 SCC
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THE 'PITH AND MARROW' RULE OF CONSTRUCTION
73. Not only must I look at the complete or final patent
specification, but I must, and I think this is well accepted in this
branch of the law, have regard to what has for a very long time been
called the 'pith and marrow' of the invention. This is an expression
that can be traced back to Clark v Adie,89 also a combination patent
case, where the House of Lords said that the court should look to
the 'pith and marrow' of the invention to see whether a patent
infringement had occurred. The law then evolved to Catnic
Components Ltd. v. Hill & Smith Ltd.,90 a House of Lords decision
that was another watershed in which Diplock LJ, borrowing quite
openly from doctrines of statutory interpretation, advocated a
'purposive' approach to construction. That now-legendary passage
is still worth reproducing:
My Lords, a patent specification is a
unilateral statement by the patentee, in
words of his own choosing, addressed to
those likely to have a practical interest
in the subject matter of his invention
(i.e. "skilled in the art"), by which he
informs them what he claims to be the
essential features of the new product or
process for which the letters patent grant
him a monopoly. It is called "pith and
marrow" of the claim. A patent
specification should be given a purposive
(1877) 2 App Cas 315
[1982] RPC 183
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construction rather than a purely literal
one derived from applying to it the kind
of meticulous verbal analysis in which
lawyers are too often tempted by their
training to indulge. The question in each
case is: whether persons with practical
knowledge and experience of the kind of
work in which the invention was intended
to be used, would understand that strict
compliance with a particular descriptive
word or phrase appearing in a claim was
intended by the patentee to be an
essential requirement of the invention so
that any variant would fall outside the
monopoly claimed, even though it could
have no material effect upon the way the
invention worked.
74. I read the emphasized portion to mean two things: first, as
casting a duty on the court to ascertain just what it is over which the
patentee claims monopoly, i.e., to determining what is essential to
the patent, its 'pith and marrow'; and, second, to deciding whether
the removal of that so-called essential (or those so-called essentials)
would defeat an infringement claim even if it made no difference to the
final result. This is not to be read, in my judgment, as proposing that
the addition of a superfluous element saves infringement. It is
instead a test of seeing whether the removal of what the patentee
claimed to be essential would have no material effect on the way the
device worked.
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75. What do we find when we look at the complete specification
(the patent as finally granted)?91 I believe it is wholly irrelevant at
this stage that the original 16 claims were reduced to 15 (the last
being deleted), and those 15 then, by a process of merging claims 1
and 2, and claim 8 with claim 9, and splitting claim 15 into two,
became for all intents and purposes 14 claims. Read together, those
claims make it clear that CTR has wholly eliminated and therefore
disclaimed the PRV. It insists on the two critical integers I have
mentioned earlier working together. These, working together, form
the 'pith and marrow' of CTR's Patent. Removing either of them
cannot meet either the DTL tender requirements or deliver the
same result. Adding something superfluous to them does not defeat
infringement. That might have been defeated had it been possible to
show that removing any of these integers would still generate the
same result; for then those integers would clearly be non-essential.
Even Sergi does not claim this. It, too, in its Sergi 3000 product
demands the use of all three integers; but it adds to this the PRV:
like marzipan, this is only possibly attractive, certainly distracting
but in no way essential.
76. In Reymes-Cole v Elite Hosiery Co Ltd,92 Diplock LJ said that
"points of construction are short; judgments about them ought to
be." That was in a pithier and more concise age, one not so
bedevilled by the ready availability of far too much case law and
information. To that expression, I might only add: so must
arguments on construction.
Document at Thane Dist. Ct. R&P Vol. II ("D-2"), pp. 1029-1080; Vol.
G-1, pp. 6-28.
[1965] RPC 102
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THE ARRIVAL OF THE UNLIKELY SCENARIO FROM
ALOYS WOBBEN
77. I must clarify that it is my understanding that I am not, at this
prima facie stage, required to assess the validity of the patent, or
whether Sergi can maintain its pre- and post-grant oppositions, its
application for revocation of the patent and its Counter-Claim all at
the same time. I have subsequently clarified this to both sides, and
that issue is pending in this very matter before another court. It is
not, therefore, necessary to consider the impact of the Supreme
Court's decision in Dr. Aloys Wobben & Anr. v Yogesh Mehra & Ors.,93
except to note that it over-rules the decision of the Delhi High
Court that was relied on by Mr. Justice Gavai in this very litigation
while deciding Civil Revision Application No.185 of 2011 (against
the District Court's order refusing to take the Counter-Claim on
record) on 6th June 2011.94 I need only note that the present
litigation is unusual because it is precisely the situation that the
Supreme Court said was unlikely ever to arise: where there are,
pending all at once, a post-grant opposition (and also a pre-grant
opposition, it seems), a Counter-Claim and an application for
revocation. If the grant of a patent is not determinative and does not
yield an injunction for the asking, it must follow that the mere
pendency of a Counter-Claim, oppositions or revocation
applications cannot defeat an injunction claim either.
(2014) 15 SCC 360 : 2014 SCC Online SC 484
See list of dates appended; Reported in 2011 (47) PTC 521 (Bom) : 2011
(5) Bom CR 806; copy at Vol. E, Orders Comp. Pt. I, pp. 39-78.
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78. THE FATAL CONTRADICTION IN SERGI'S
DEFENCE
79. I return finally to what seems to me to lie at the heart of the
present case: and that is a contradiction inherent in Sergi's defence.
Sergi claims the PRV to be essential to both its product and its
patent. But if it is essential it cannot possibly be sidelined with an
"or" as is shown in Sergi India's brochure and even in the
comparative chart. It cannot be an alternative. It must necessarily be
deployed, without fail, every single time. That is not even what
Sergi puts forth in its own documentation, and I do not think it is
enough to say "look, we use the PRV and CTR does not, therefore
there is no infringement", unless it is shown that the PRV is not
optional. The DTL tender makes it optional, and even Sergi's use of
it, marked with the word "OR" makes it so. Clearly, this puts the
matter beyond the pale. The PRV fails the Catnic test and fails it
utterly.
80. In its Written Statement to the Counter-Claim, CTR points
out that worldwide Sergi has abandoned the PRV for a 'rupture
disc',95 but this has not been commercialized. Consequently, the
only apparent use of the PRV is to somehow try and dodge the
bullet, as it were, to escape CTR's claim on infringement. That
small and irrelevant addition affords no defence.96
Vol. A, p. 304.
Beecham Group Ltd v Bristol Laboratories Ltd, [1967] 16 RPC 406
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GENERAL PRINCIPLES
81. As I see it, the principles one may legitimately draw in a
combination patent infringement case are these:
81.1 The invention cannot be a mere arrangement or re-
arrangement of previously known integers all
functioning independently in a known way;
81.2 These integers, though all themselves previously
known, may be combined in a previously unknown way,
acting inter-dependently, each of them essential, to
produce a new and improved result.
81.3 Each of the integers must be essential. If any one can be
taken out without affecting the final result, it is not
essential.
81.4 If a patent claim is overbroad, and for that reason,
includes in the sweep of the case for infringement the
defendant's invention, i.e., by including every single
non-essential and essential addition, then the patent
may be prima facie invalid for want of novelty. No
person can claim such a monopoly as would result in a
bar to future improvements. If the patent is, on the
other hand, so narrow that it excludes the addition of
another essential integer, then there is no infringement.
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81.5 Where a patent has been granted on the patentee
disclaiming a particular integer, i.e., by saying it is not
essential to his product, then the addition of that non-
essential integer does not, per se, defeat the claim for
infringement. It must be shown that the additional
integer is essential, required and returns a result that is
as or more efficient than that produced by the patent.
Adding something superfluous to the essential integers
does not defeat an infringement claim. It must be
shown that what is added is also essential and that it
satisfies the previous tests of interdependency,
producing as good a result or a new and improved
result.
81.6 The patent must be read in a purposive manner to
determine what constitutes its 'pith and marrow'.
81.7 At an interim stage, a Court is not required to examine
the validity of a patent so much as its vulnerability; and
this is to be tested not on a mere say-so, but with the
aid of cogent and persuasive technical and scientific
material, including reliable expert opinions and other
data.
81.8 The fact that a patent has been granted is not wholly
immaterial at an interim stage. While the grant is not a
complete answer to a charge of prima facie invalidity or
vulnerability, it is still a factor to be considered and
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given appropriate weight; just how much is fact-
dependent.
81.9 The speed of grant of a patent is wholly irrelevant,
particularly if it is made without a substantiated (and
substantial) case on illegality and mala fides.
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CONCLUSIONS & SUMMARY OF FINDINGS
82. I find for the Plaintiff, CTR, because: the DTL tender
specification required the Differential Relay, the Buchholz Relay
(with a PRV or a RPRR), and a Circuit breaker; the Sergi patent did
not feature the Differential Relay; the PRV is not essential, even on
Sergi's demonstration (the use of the word 'or') either to the CTR
patent, to Sergi's product or the DTL tender; the addition of the
PRV is a non-essential addition; the pith and marrow of CTR's
invention is the two integers working interdependently to produce
what is, prima facie, a dramatically improved result at the stage of a
explosion detection (not fire extinguishing or fire detection and
prevention); Sergi has entirely abandoned its patent and has adopted
CTR's; Sergi could not have met the DTL bid without such an
infringement.
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THE BALANCE OF CONVENIENCE AND OTHER
DETERMINANTS FOR INTERIM RELIEF
83. Where lies the balance of convenience? The answer suggests
itself: it cannot possibly lie with Sergi, and the fact that it has been
allowed to continue with the DTL tender (on non-infringing terms)
is now not as material as the question once might have been. The
Notice of Motion is in wider terms. Sergi cannot possibly be
permitted to continue with what I have found to be a clear case of
infringement. That being said, there is to my mind an overwhelming
prima facie case, and it is difficult to see how CTR might be able to
recoup its losses by a decree in damages; those losses are possibly
beyond computation.
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ORDER
84. The Motion succeeds. There will be an interim order in the
following terms, broadly in keeping with of prayer clauses (a), (b)
and (e) of the Notice of Motion:97 that pending the hearing and final
disposal of the suit:
(a) Defendants Nos. 1 and 2 shall not, directly or
indirectly, or through any party or person acting on
their behalf, infring the Plaintiff's patent No.202302 by
making, using, offering for sale, or selling either the
impugned Sergi 3000 product or any other similar
infringing product that contains the identical or
substantially similar system of a principal of a
Differential Relay and a Buchholz Relay (oil surge
feature);
(b) Defendants Nos. 1 and 2 are not to infringe the
Plaintiff's Patent No. 202302 by using the method
provided under that Patent by manufacturing, selling or
offering for sale either the impugned Sergi 3000
product or any other product that infringes the
Plaintiff's patent and from using, offering for sale or
selling any product that is obtained directly by the
method provided under Plaintiff's Patent.
There is an error in numbering. There are no prayers (c) and (d).
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(c) the 1st and 2nd Defendants shall not circulating and
submitting to any third parties, including purchasers,
lessees or persons inviting tenders (and including
government bodies) any technical brochures, literature,
pamphlets, fliers, drawings, specifications or other
printed or audio-visual material that displays and shows
the identical or substantially similar method as that of
the Plaintiff's Patent No.202302, i.e., the principal of
the Differential Relay and the Buchholz Relay (oil surge
method) as set out in the Plaintiffs' patent.
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COSTS
85. I have long believed that costs must follow the event, and that
our courts are altogether too timorous in the matter of costs. The
delays in our system are legendary and these result in as many
frivolous or untenable defences as there are frivolous, mischievous
and vexatious lawsuits. The trajectory of this litigation's history is a
case in point. For five years, the litigation has shuttled between the
District Court in Thane and the Supreme Court via this Court. A
colossal record has been generated; a small forest was probably
destroyed en passant. In all this time, CTR has been attempting to
protect its patent from the depredations of its sole competitor. Both
sides have deployed large teams of legal counsel, and that, as we
know, comes at no little cost. When one of these parties succeeds,
and it does not matter which for this purpose, not to award costs is, I
think, a step in the wrong direction. It encourages useless defences
and false suits. Parties must know that there is a very real risk in
financial terms should they fail. In Haldyn Glass Works Pvt Ltd v
Oriental Fire & General Insurance Co Ltd,98 I considered this
question in the context of a suit that I decreed against an insurance
company. The first appeal was admitted, as indeed it had to be as a
matter of course, and while the actual order of costs may have been
stayed (though I believe there was an order of deposit of the decretal
amount), there is as yet no final determination on the issue of costs,
one that I took separately. In doing so, I referenced Section 35 of the
Code of Civil Procedure, 1908, the relevant High Court (Original
Side) Rules, the provisions of the Bombay Pleaders Act, 1920 and
Suit No. 2716 of 1986 decided on 16th April 2014.
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numerous decisions of the Supreme Court and of High Courts:
Manindra Chandra Nandi v Aswini Kumar Acharjya,99 Salem
Advocates Bar Association v. Union of India ("Salem-II"),100 Ashok
Kumar Mittal v. Ram Kumar Gupta and Anr.,101 Vinod Seth v.
Devender Bajaj and Anr.,102 Sanjeev Kumar Jain v Raghubir Saran
Charitable Trust & Ors.103 and Shri Dilipkumar Hirachand Jain v
Dena Bank & Ors.104 among them. I cited Sanjeev Kumar Jain in
which the Supreme Court said (with emphasis added):
"27. The mandate of Sub-section (2) of
Section 35 of the Code that where the
Court directs that any costs shall not
follow the event, the Court shall state
its reasons in writing is seldom followed
in practice by courts. Many courts either
do not make any order as to costs or
direct the parties to bear their
respective costs without assigning or
recording the reasons for giving such
exemption from costs. Unless the Courts
develop the practice of awarding costs in
accordance with Section 35 (that is, costs
following the event) and also give reasons
where costs are not awarded, the object of
the provision for costs would be defeated.
Prosecution and defence of cases is a time
consuming and costly process. A
60 Ind Cas 337 : ILR (1921) Cal 427
(2005) 6 SCC 344 : AIR 2005 SC 3353
(2009) 2 SCC 656
(2010) 8 SCC 1
(2012) 1 SCC 455
2013 (6) Bom CR 127, per Ghuge, J.
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plaintiff/petitioner/ appellant who is
driven to the court, by the illegal acts
of the Defendant/Respondent, or denial of
a right to which he is entitled, if he
succeeds, to be reimbursed of his expenses
in accordance with law. Similarly a
Defendant/Respondent who is dragged to
court unnecessarily or vexatiously, if he
succeeds, should be reimbursed of his
expenses in accordance with law. Further,
it is also well recognised that levy of
costs and compensatory costs is one of the
effective ways of
ig curbing false or
vexatious litigations."
86. The Supreme Court emphasized the need for 'realism' in
approaching the question of costs. It would, I believe, be wholly
unrealistic to let this matter pass with the usual order requiring each
side to bear its own costs. That might have been the correct thing to
do had I found the case poised on an edge, and, being forced by the
duties of my office, elected for one side over the other. I have
arrived at no such finding. I have found there to be no merit at all in
the defence. To permit this to pass without any real consequence is
directly contrary to the mandate of the Supreme Court.
87. I am mindful that the Supreme Court in Sanjay Kumar Jain
itself says that the award of costs must be within the confines of the
governing rules, but where those rules speak to a bygone era, one
that is hardly recognizable and is itself unrealistic in today's times,
no court required first and last to render this thing we call 'justice', I
believe we must free ourselves of these manacles from a prelapsarian
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age when a rupee actually meant something. After all, these are not
indigent parties, persons or bodies lacking means. To the contrary:
they have at their command quite extraordinary financial resources.
Those who can pay, must.
88. But so long as those Rules remain, and remain unchanged, it
is not permissible to award costs beyond them. That is the only
reason I am unable to award the costs that I might otherwise have
thought reasonable. The Plaintiff will be entitled to costs in
accordance with the Rules.
89.
Mr. Chagla applies for a stay saying that the matter has been
pending for some time and the injunctions I have granted will result
in considerable commercial distress to Sergi. Mr. Kane for the
Plaintiff says that Sergi has agreed not to infringe, even before the
Supreme Court, and therefore is unaffected by the present order,
one that relates to no particular tender or contract. All that Sergi is
restrained from doing is continuing with the infringement, and that
is something it has already agreed not to do. I believe Mr. Chagla
may have a point when he says that the finding I have returned holds
Sergi's product to be infringing and he is surely entitled to test this.
Given that the Court's Diwali vacation starts just a week from now,
the operation of this order is stayed till 23rd November 2015.
(G.S. PATEL, J.)
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ANNEXURE : CHRONOLOGY
1. On 5th November 1996, Sergi's director Philippe Magnier
filed an Indian Patent Application for registration of an invention
entitled "Method and Device for Preventing/Protecting
Electrical Transformer Against Explosion And Fire" under the
Patents Act. On 13th December 1996, Magnier licensed this patent,
then yet under process, to Sergi (France). On 14th December 2002,
Magnier obtained Patent No.189089 in respect of this application.105
Magnier/Sergi (France) claim to hold corresponding patents in
various international jurisdictions including France; USA;
European Patent Office (EPO), which covers Belgium, Switzerland,
the UK and some other European countries; Austria; Germany;
South Africa; Sweden; Mexico; and Colombia.
2. On 27th February 2001, one Elin Energieversorgung of
Austria filed an opposition to the Board of Appeal of the European
Patent Office (EPO) inter alia on the ground that Elin held a prior
patent. That opposition seems to have been rejected on 15th
December 2004, notified on 28th January 2005. Elin had licensed
its prior patent to CTR, but this seems to have expired.
3. Three years later, on 16th November 2005, CTR filed an
Indian Patent Application No. 1425/MUM/2005 for the registration
of an invention it called "A System and Method For Preventing
Vol. A, Part (c), p. 118; for consistency, footnote numbers are continued
from the main body of the judgment.
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And/Or Detecting Explosion And/Or Fire Of Electrical
Transformers".106 CTR's application was published in the official
journal of the Patent Office on 18th November 2005.107 On 20th
January 2006, the Patent Office issued a First Examination
Report.108 CTR responded with an amendment on 31st January
2006.109 There followed a Second Examination Report on 18th April
2006,110 and changes in response by CTR111 under its letter dated
26th April 2006.112
4. In the meantime, Philippe Magnier, who held Indian Patent
No. 189089 and was a Director at Sergi (France), filed a patent
infringement action against CTR as Civil Suit No.27 of 2006 in the
Calcutta High Court. Sergi (France) was the 2nd plaintiff to this
suit. The four other defendants to the suit were various companies
as purchasers of the competing fire systems. The application for
interim reliefs was opposed. On 22nd February 2006, a Single Judge
of the Calcutta High Court allowed CTR to continue to sell its
product in accordance with law, inter alia recording a statement by
counsel for Sergi (France) that the two products were different.113
By an order dated 17th April 2006, the Single Judge of the Calcutta
High Court declined to re-hear the application by Sergi (France) as a
new motion, but clarified that the statement made on 22nd February
Vol. A, Part (a), p. 39.
Vol. A, Part (a), p. 37.
Vol. G-1, pp. 224-226.
Vol. G-1, pp. 227-245.
Thane Dist Ct R&P Vol. II ("D-2"), p. 787; Vol. G-2, Tab 2
Thane Dist Ct R&P Vol. II ("D-2"), p. 1081; Vol. G-2, Tab 5
Thane Dist Ct R&P Vol. II ("D-2"), p. 1141; Vol. G-2, Tab 5
Vol. A, Part (a), p. 246.
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2006 on behalf of Sergi (France) would not bind at the final hearing
of the motion; all contentions were kept open. On 7th February
2011, Sergi (France) unconditionally withdrew its suit. This is stated
here only for completeness, and will find place again in the correct
chronological order.
5. On 1st August 2006, the Patent Office wrote to CTR saying
its application had been found in order for a grant, but cautioning it
that the Letters Patent would follow only after the disposal of any
pre-grant opposition; and that CTR could initiate infringement
proceedings only after that grant was issued.114
6. CTR was granted its Patent No. 202302 on 3rd August 2006
under Section 43 of the Patent Act for "A SYSTEM AND METHOD
FOR PREVENTING, PROTECTING AND/OR DETECTING EXPLOSION
AND/OR FIRE OF ELECTRICAL TRANSFORMERS."
7. On 15th December 2008, the 1st Defendant ("Sergi") filed
an application under the Right to Information Act 2005 enquiring
about CTR's Patent application status. On 30th January 2009, the
Patent Office replied, saying that Patent No. 202302 had been
granted on 3rd August 2006. On 9th May 2009, Sergi enquired of
the Mumbai Patent Office if this grant had been notified and, on 1st
July 2009, Sergi's lawyers wrote to the Central Public Information
Officer repeating this query.116 On 21st July 2009, the Assistant
Vol. G-1, p. 246/51.
Vol. A, Part (a), p. 39.
Vol. A, Part (b), p. 298.
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Controller of Patents & Designs and Central Public Information
Officer responded to Sergi's lawyers saying that CTR's application
and grant had not been notified under Section 43(2) of the Patents
Act, and that this was inadvertent.117
8. Sergi filed what it calls a 'pre-grant opposition' under Section
25(1) of the Patents Act on 20th January 2010.118 On the same day,
Sergi also filed a post-grant opposition under Section 25(2) of the
Patents Act.119 Both oppositions were served on CTR on 30th
January 2010.
9.
On 20th January 2010, Delhi Transco Ltd ("DTL") floated
tender T/SP/11/2009/44 for the purchase of 64 fire systems.120 The
tender notice specified a techno-commercial bid opening date of
16th February 2010 and a price bid opening date of 16th March
2010. The former was later postponed to 15th March 2010 and the
latter to 28th September 2010.
10. On 11th February 2010, CTR filed Civil Suit No.1 of 2010
before the Thane District Court as an action in patent infringement
against Sergi.121 CTR made an application under Order 39 Rules 1
and 2 of the Code of Civil Procedure, 1908 ("CPC") for an ad-
interim injunction restraining Sergi from infringing CTR's Patent.
This application, numbered as Exhibit "5" before the Thane
Vol. A, Part (b), p. 304.
Vol. C, Comp, 5, pp. 229-230, paragraphs 11 and 12.
Vol. A, Part (b), p. 583; part of Ex. C to the Written Statement.
Vol. A, Part (a), p. 251.
Vol. C, Comp. 5, from pp. 167-221.
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District Court, is the present Notice of Motion.122 On 15th February
2010, a handwritten purshis or application seeking urgent ex parte ad-
interim reliefs was filed on CTR's behalf before the Thane District
Court.123 This purshis, numbered as Exhibit 9, says that for the
purpose of ad-interim ex parte relief only, CTR restricted itself to an
application to restrain Sergi from selling its rival product to DTL
under the latter's tender.
Vol. C, Comp. 5, pp. 198-221; also at Vol. C, Comp. 1, pp. 12-34.
Vol. C, Comp. 5, p. 222.
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11. On 15th February 2010, the Thane District Court granted ex
parte ad-interim reliefs "in terms of the purshis Ex. 9"against Sergi
and its distributor (the present 2nd Defendant).124 CTR was
directed to comply with the provisions of Order 39 Rule 3 of the
CPC and the notices were made returnable on 2nd March 2010.
CTR served the ad-interim order on Sergi on 16th February 2010.
Sergi claims to have been informed by the 2nd Defendant of the
suit, and it appeared before the District Court on 2nd March 2010,
the returnable date. The actual writ of summons in the suit was
served on Sergi only on 4th March 2010.125
12. On 12th March 2010, Sergi submitted its bid to DTL's
tender.126 It says it told DTL about the 15th February 2010 order of
the Thane District Court.127 CTR also submitted a bid. DTL opened
the technical bids on 15th March 2010.128
13. On 20th March 2010, Sergi filed its Written Statement129 and
reply130 to CTR's suit and injunction application respectively.
14. On 23rd March 2010, CTR filed an application under Order
39 Rules 2-A and 11 of the CPC, numbered before the Thane
Vol. C, Comp. 5, pp. 223-234; "Order below Ex. 5"
Vol. C, Comp. 1, p. 60, paragraph 7 of Sergi's Reply Affidavit.
Vol. C, Comp. 1, p. 40.
Vol. C, Comp. 1, p. 73.
Vol. C, Comp. 4, Pt II, p. 442.
Vol. A, Pt. (b), from p. 255.
Vol. B, Notice of Motion 497 of 2014 (present Motion), pp. 29-58,
numbered as Ex.22 before the Thane District Court.
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District Court as Misc. App. No. 68 of 2010. This is now Notice of
Motion No. 193 of 2013 before this Court.
15. Sergi filed two replies dated 26th March 2010131 and 3rd April
2010.132 In paragraph 16 of the first of these, Sergi through Antoine
Magnier (Philippe Magnier's son) undertook not to sell its products
to DTL till the restraint was lifted.133 On 26th March 2010, Sergi
wrote to DTL about the pendency of the proceedings.134 In its first
Affidavit in Reply to Notice of Motion 193 of 2013 (dated 26th
March 2010 and filed on 30th March 2010), Magnier fils said there
was no breach of the ex parte ad-interim order of 15th February 2010
because it had not actually sold any products to DTL but merely
offered to sell them, and there was no restraint against the making of
such an offer. CTR filed a rejoinder dated 8th April 2010.135 That
same day, Sergi filed its counter-claim in the suit. This was not then
taken on file on account of some objections.
16. On 13th April 2010, the Thane District Court passed an order
on CTR's M.A. No.68 of 2010 (now Motion No. 193 of 2010),136
saying that the application would be heard with Ex.5, the application
for interim relief. The hearing was adjourned to 16th April 2010.
Vol. B, Motion 192 of 2013, pp. 58-86.
Vol. B, Motion 192 of 2013, pp. 87-91.
Vol. B, Motion 192 of 2013, pp. 58, at p. 63.
Vol. C, Comp. 1, p. 74.
Vol. C, Comp. 1, pp. 92-107; also at Vol. B, Motion 193 of 2013, pp. 92-
107.
Vol. C, Comp. 1, pp. 50-51.
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17. On 16th April 2010, the grant of CTR's Patent No. 202302
was published in the Official Journal of the Patent Office.137
18. On 22nd April 2010, CTR filed a copy of its patent with the
specifications as granted in the Thane District Court proceedings.
This was taken on record as Exhibit 48.138
19. On 3rd July 2010, Sergi filed an application for leave to have
its counter-claim taken on record.139 This was numbered as Ex. 57.
On 7th August 2010, the Thane District Court directed that this
application would be heard along with CTR's application for interim
relief (Ex.5, the present Notice of Motion).140
20. In the meantime, DTL's Tender Committee met on 7th June
2010, 3rd August 2010 and 10th August 2010. It evaluated the three
bids received, from CTR, Sergi and one Vendere. Sergi was said not
to meet certain Pre-Qualification criteria. The Committee noted the
respective legal documents, copies of orders and notices being
received from both CTR and Sergi. It thus resolved to co-opt the
GM (Legal) to assist the Tender Committee.141 The Committee met
again on 13th September 2010.142 The GM (Legal) was present.
Vol. C, Comp. 5, pp. 271-274.
Ex. 48 at Thane Dist Ct R&P Vol. IX, p. 679; Document at Thane Dist.
Ct. R&P Vol. II ("D-2"), pp. 1029-1080; Vol. G-1, pp. 6-28;
Vol. C, Comp. 4, Pt. I, pp. 206-209
Vol. C, Comp. 4, Pt. I, p. 113.
Vol. C, Comp. 4, Pt. II, pp. 439-441.
Vol. C, Comp. 4, Pt. II, pp. 435-438.
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Noting the pending disputes, the Committee concluded that CTR
and Sergi were the only two techno-commercially viable bidders.
21. On 1st September 2010, Sergi filed Writ Petition No. 6994 of
2010 against the Thane District Court's order of 7th August 2010
deferring Sergi's application for taking its counter-claim on record.
The writ petition was disposed of by an order dated 15th September
2010.143 The order of the Thane District Court was undisturbed,
with observations to the effect that should the District Court find
that Section 104 of the Patents Act applied, it would not pass orders
in the other applications; and, conversely, on finding that that
section would not apply, the District Court would then hear the
applications.
22. On 28th September 2010, DTL opened the price bids. Sergi
was declared to be the lowest bidder, L-1.144 On 4th October 2010,
Sergi wrote to DTL saying it looked forward to receiving a purchase
order.145
23. On 17th September 2010, in view of the clarifications of this
Court in its order of 15th September 2010 on Sergi's writ petition,
Sergi filed an application under Section 9A of the CPC questioning
the jurisdiction of the Thane District Court since it had lodged a
Vol. C, Comp. 4, Pt. I, pp. 114-116.
Vol. C, Comp. 4, Pt. II, pp. 442-444.
Vol. B, CTR Additional Affidavit, p. 3.
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counter-claim. The application was allowed on 12th November 2010
and the preliminary issue was framed.146
24. On 2nd December 2010, DTL placed a purchase order on
Sergi.
25. On 9th December 2010, CTR filed another Misc. App. No.
319 of 2010 also under Order 39 Rules 2-A and 11 of the CPC (now
numbered as Notice of Motion No. 192 of 2013).148 An ex parte ad-
interim order was obtained on that day issuing notice to Sergi and
restraining it from complying with the purchase order.149 On 10th
December 2010, Sergi made the required security deposit with
DTL. On 14th December 2010, it was served with the ex parte ad-
interim order dated 9th December 2010. Sergi filed A.O. No. 1446
of 2010 against this order. That appeal was disposed of on 24th
December 2010 allowing Sergi to apply to the District Court for a
variation permitting it to submit drawings to DTL.150 The
application was made and, on 28th December 2010, rejected.151
26. On 1st January 2011, the Thane District Court decided the
preliminary issue of jurisdiction in part, holding that it continued to
have jurisdiction over the suit, but without deciding the question of
Vol. C, Comp. 4, Pt. I, pp. 117-118.
Vol. C, Comp. 2, p. 16.
Vol. C, Comp. 2.
Vol. E, Orders Comp. Pt. II, pp. 1-2.
Vol. C, Comp. 4, Pt. I, pp. 121-125.
Vol. C, Comp. 4, Pt. I, pp. 126-139.
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jurisdiction in respect of Sergi's counter-claim, keeping that in
abeyance.152
27. Sergi appealed the order of 28th December 2010. Its A.O.
(St) No.33478 of 2010 was disposed of on 11th January 2011.153 The
appeal was partly allowed; the impugned order was set aside; Sergi's
application to submit drawings to DTL was allowed, but with the
direction that Sergi would take no further steps in execution of the
contract till CTR's interim application (Ex. 5) was disposed of. This
was to be done within four weeks. An application for stay of the
order was rejected. CTR's Special Leave Petition No.1919 of 2011 to
the Supreme Court was dismissed on 20th January 2011.154
28. Sergi then filed a Civil Revision Application No.62 of 2011
against the Thane District Court's order dated 1st January 2011 on
the jurisdiction issue. That was allowed by Mr. Justice Gavai on 2nd
February 2011, directing the District Court to decide the
jurisdictional issue in view of Section 104 of the Patents Act before
11th February 2011.155 CTR's Special Leave Petition No. 4214 of
2011 against this order in civil revision failed on 15th February
2011.156
Vol. C, Comp. 4, Pt. I, pp. 140-165; read with the observations in
paragraph 30 at pp. 162-163.
Vol. C, Comp. 4, Pt. I, pp. 166-184; Per B.R. Gavai J.
Vol. C, Comp. 4, Pt. I, pp. 185-186.
Vol. C, Comp. 4, Pt. I, pp. 187-200.
Vol. C, Comp. 4, Pt. I, pp. 204-205.
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29. On 7th February 2011, Sergi unconditionally withdrew its
patent infringement suit filed in the Calcutta High Court.
30. On 18th February 2011, the Thane District Court rejected
Sergi's application for leave to take its counter-claim on record and
held that it continued to have jurisdiction over the suit.157 On 23rd
February 2011, Sergi filed Writ Petition No. 1608 of 2011 impugning
this order. This was later converted into Civil Revision Application
No. 185 of 2011.
31. On 25th February 2011, the Thane District Court allowed
CTR's application for interim relief, Ex. 5.158 Only the operative part
was pronounced and made available. On 28th February 2011, Sergi
sought a six-week stay on the order and a restraint against CTR from
circulating or publishing it. This was refused.159 Sergi filed A.O.
No.246 of 2011 against the order of 25th February 2011. On 3rd
March 2011 and 11th March 2011, the High Court declined to give
the A.O. priority hearing. Sergi filed Special Leave Petition
No.8384-8385 of 2011 against the High Court orders, contending
that the reasoned judgment had even till then not been made
available. On 17th March 2011, the Supreme Court issued notice,
directed the filing of a reply and, in the meantime, stayed the
operation of the Thane District Court's order dated 25th February
2011.160
Vol. C, Comp. 4, Pt. I, pp. 210-236.
Vol. C, Comp. 4, Pt. I, p. 237, operative order; Vol. C, Comp. 4, Pt. I, pp.
238-264, judgment and order.
Vol. C, Comp. 4, Pt. I, pp. 265-267. Also at Vol. C, Comp. 5, pp. 293-295.
Vol. C, Comp. 4, Pt. II, pp. 270-271.
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32. The reasoned order on CTR's injunction application Ex.5 was
issued by the Thane District Court on 19th March 2011.161
33. As Sergi continued its product, SERGI 3000, for sale on its
website and in brochures, CTR filed a third application Misc. App.
No. 87 of 2011 before the Thane District Court (now numbered as
Notice of Motion No. 191 of 2013 in this court) under Order 39
Rules 2-A and 11 of the CPC.
34. Magnier filed a separate post-grant opposition on 15th April
2011 before the Controller of Patents against CTR's Patent No.
202302.
35. On 2nd May 2011, the reasoned judgment of the Thane
District Court being now available, the Supreme Court disposed of
Sergi's Special Leave Petitions.162 The matter was remanded to the
High Court, liberty being reserved to Sergi to amend the Memo of
Appeal and take new grounds. Sergi's application for interim reliefs
in appeal were directed to be disposed of in six weeks.
36. In May 2011, Sergi apparently met with DTL and since there
was a stay from the Supreme Court, commenced supply of its
product.163
Vol. C, Comp. 4, Pt. I, pp. 238-264.
Vol. C, Comp. 4, Pt. II, pp. 272-276.
Vol. C, Comp. 4, Pt. II, pp. 378-380.
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37. Civil Revision Application No. 185 of 2011 (against the
District Court's order refusing to take the counter-claim on record)
was argued and judgment reserved on 3rd May 2011. The judgment
was pronounced on 6th June 2011.164 The impugned order dated
18th February 2011 was set aside and Sergi's application to have its
counter-claim taken on record was allowed. A stay was sought, and
it was directed that the suit would not be transferred to the High
Court for six weeks.
38. CTR went to the Supreme Court in Special Leave Petition
No. 18224 of 2011. The six-week stay on transfer was extended for
another two weeks.165 On 20th June 2011, the stay was extended for
a further two weeks. On 27th June 2011, after hearing parties in
A.O. 246 of 2011, this Court held that the six-week stay granted by
Mr. Justice Gavai on the suit transfer would end on 18th July 2011,
while the six-week stay by the Supreme Court on the interim
injunction would end on 4th July 2011. The Court therefore
extended the stay on the injunction order till the next date.166 CTR
filed Special Leave Petition No. 18220 of 2011 against this order.
After some extensions, on 2nd August 2011, the Supreme Court
dismissed the Special Leave Petitions for non-prosecution. All
interim orders were vacated.167
Vol. E, Orders Comp. Pt. I, pp. 39-78; Reported in 2011 (47) PTC 521
(Bom) : 2011 (5) Bom CR 806
Vol. C, Comp. 4, Pt. II, p. 277.
Vol. C, Comp. 4, Pt. II, pp. 282-283.
Vol. C, Comp. 4, Pt. II, pp. 280-281.
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39. On 23rd August 2011, this Court passed an order in Sergi's
A.O. No. 246 of 2011 against the order of 25th February 2011
allowing CTR's application for interim relief, Ex.5. The Court said
that now that the counter-claim had been filed, the Thane District
Court no longer had jurisdiction, and whether or not the impugned
order continued in force could only be decided by this court. The
appeal was found to be infructuous.168 The order was slightly
modified on 9th September 2011 on an application for speaking to
the minutes of the previous order, recording that the lack of
continued jurisdiction in the Thane District Court was a submission
made by Sergi.169 A further correction to a date noted in the order
was made on 23rd September 2011.170
40. On 29th August 2011, the Thane District Court allowed the
application for transfer of the suit and took the counter-claim on
record. An order directing the transfer followed on 1st October
2011.171
41. On 11th November 2011, CTR filed Notice of Motion No.655
of 2012 seeking inter alia to restrain Sergi from entering into any
contracts with the Rajasthan Raj Vidyut Prasaran Nigam Ltd
("Rajasthan Electricity Board") pursuant to its tender. On 15th
November 2011, this Court recorded Sergi's undertaking that it
would manufacture and sell products only in accordance with its
own know-how and Patent and public domain material, and that, in
Vol. C, Comp. 4, Pt. II, pp. 284-287.
Vol. C, Comp. 4, Pt. II, pp. 288-289.
Vol. C, Comp. 4, Pt. II, p. 290.
Vol. A, Pt. (a), p. 253-A.
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any event, it would not infringe CTR's Patent.172 This order
extended to Rajasthan Electricity Board and Bharat Petroleum
Corporation Limited. On 28th November 2011, this was extended to
DTL.173 CTR filed an Additional Affidavit in this Notice of Motion
seeking urgent reliefs, saying that Sergi had made applications to
Rajasthan Electricity Board to include its name as a vendor of a
product that was an infringement. Ad-interim reliefs were refused
on 17th January 2012.174 The Court observed that prima facie the
orders of the District Court did not operate as on that date.
42. CTR filed Appeal (L) No. 40 of 2012 and Appeal (L) 70 of
2012 against this order. Both were disposed of on 16th March
2012.175 The Appeal Court found that the ad-interim and interim
orders dated 15th February 2010 (the first ad-interim order on Ex.5)
and 25th February 2011 (the final order on Ex. 5) of the Thane
District Court in fact continued in force and were not rendered
infructuous; i.e., that they continued to be valid and subsisting; and
that the final order of 25th February 2011 should be treated as an ad-
interim order itself. Ex. "5", the present Notice of Motion, was
directed to be treated as pending. The appeals were allowed. The
judgment and order was stayed for four weeks, subject to Sergi not
entering into a fresh contract with another party in respect of the
products in question. It was clarified that the stay was to enable
Sergi to execute the contract with DTL.176
Vol. E, Order Comp., Pt. I, pp. 92-94.
Vol. E, Order Comp., Pt. I, pp. 94A-94B.
Vol. E, Order Comp., Pt. I, pp. 95-97.
Vol. E, Order Comp., Pt. I, pp. 98-121.
Vol. E, Order Comp., Pt. I, pp. 122-123.
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43. The Controller of Patents did not take Sergi's pre-grant
opposition on record. Sergi filed Writ Petition No. 2308 of 2011 in
this Court against that decision, also urging that CTR's Patent had
been granted with uncommon despatch. At the hearing of that
petition, Sergi placed the order dated 27th January 2012 passed by
the Senior Joint Controller of Patents and Designs. That order
noted that certain documents sought to be produced by Sergi were
not to be taken on record. By its order dated 6th March 2012, the
Division Bench of the High Court in the Writ Petition allowed Sergi
to file those documents within two weeks but granted no further
relief. 177
44. On 22nd March 2012, CTR moved to speak to the minutes of
the appellate order dated 16th March 2012. It sought a clarification
that order would not prejudice CTR's contempt applications. The
Appeal Court clarified that its order only meant that the ad-interim
injunctions would 'revive' four weeks from 16th March 2012.178
45. On 26th March 2012, Sergi filed Special Leave Petition
No.10347-10348 of 2012 before the Supreme Court against the
order(s) of 16th March 2012. On 9th April 2012, the Supreme Court
issued notice and, in the meantime, directed that the appellate order
enabling Sergi to execute its contract with DTL, would continue to
operate subject to the conditions in that order.179
Mohit S. Shah CJ (as he then was), and R. M. More J; order copy not on
record.
Vol. E, Order Comp., Pt. I, pp. 124-125.
Vol. C, Comp. 4, Pt. II, pp. 324-325.
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46. CTR filed its counter-affidavit in these Special Leave
Petitions. On 25th May 2012, leave was granted in both Special
Leave Petitions and these were disposed of with several
directions.180 The present Notice of Motion was to be taken up at an
early date; so too the suit itself. Till that time, Sergi would be
entitled to continue to manufacture and sell its product in
accordance with its patent but without infringing CTR's Patent (in
accordance with its undertaking given to the High Court on 15th
November 2011).
47. On 19th June 2012, Sergi filed a revocation application (ORA
Nno.42/12/PT/MUM) under Section 64 of the Patents Act. This is
pending before the Intellectual Property Appellate Board ("IPAB").
48. There are a few additional intervening facts to be noted.
Though neither of them have any impact on the present
proceedings, these are shortly stated for completeness. The first of
these is that Sergi has filed a civil suit in the Delhi High Court
against CTR for infringing Sergi's Patent No. 189089. There is
some disagreement between the parties as to the present status of
that suit. CTR says it filed an application under Order VII Rule 11 of
the CPC for rejection of the plaint, and obtained an order dated 16th
April 2014 on that application inter alia staying the suit and directing
the Registrar of Patents to decide the issue of the license claimed by
Sergi. That order was challenged in CTR's appeal before the
Division Bench, and orders are reserved. CTR however contends
Vol. C, Comp. 4, Pt. II, pp. 326-332.
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that the suit is pending at the stage of admission and denial of
documents.
49. Second, there is an order dated 30th October 2012 (B.P.
Dharmadhikari J) on CTR's perjury application in Civil Application
No.1282 of 2012 in A.O. No.102 of 2011. The Court found a prima
facie case to have been made out against Sergi and Antoine Magnier
warranting action under the Code of Criminal Procedure, 1973.
Sergi has filed Special Leave Petition No.37703 of 2012 against this
order. On 11th December 2012, the Supreme Court stayed the order.
The Special Leave Petitions are pending.
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