Chemtura Corporation vs Union Of India & Ors.
2009 Latest Caselaw 3425 Del

       IN THE HIGH COURT OF DELHI AT NEW DELHI

                                CS(OS) No. 930 of 2009

                                           Reserved on: August 3, 2009
                                           Decision on : August 28,2009

       CHEMTURA CORPORATION                       ..... Plaintiff
                       Through: Mr. Shanti Bhushan, Senior
                       Advocate with Mr. Sanjay Kumar,
                       Ms. Arpita, Mr.Vineet Rohilla and
                       Mr. Sanjai Pathak, Advocates
                       for Plaintiff/Applicant in
                       IA No.6782/2009.

                       versus

       UNION OF INDIA & ORS.                   ..... Defendants
                          Through: Mr.Ajay Gupta, Senior
                          Advocate with Mr. S. Majumdar,
                          Mr. S.Banerjee, Mr.A. Mishra and
                          Ms. Y.Jaishankar, Advocates for
                          Defendants/Applicants in
                          IA No.8372/2009.

       CORAM:
       HON'BLE DR. JUSTICE S. MURALIDHAR

       1. Whether reporters of the local news papers
          be allowed to see the judgment?                            No
       2. To be referred to the Reporter or not?                     Yes
       3. Whether the judgment should be reported in the Digest? Yes


                                     JUDGMENT

28.08.2009

S. Muralidhar, J.

IA No. 6782/2009(u/O XXXIX Rules 1 & 2 CPC) & IA No.8372/2009 (u/O XXXIX Rule 4 CPC)

1. IA No.6782/2009 is an application by the Plaintiff under Order

XXXIX Rules 1 and 2 CPC seeking an ad-interim ex parte injunction

restraining the Defendant No.1 from infringing the rights of the

Plaintiff under No.213608 (granted on January 9, 2008 by the

Controller of Patents) by accepting the offer for sale of a side bearing

pad assembly by the Consortium of which Defendants 2 to 4 are

members. It also seeks an injunction to restrain Defendants 2 to 4

from making, manufacturing, using or offering for sale the side

bearing pad assembly by infringing the Plaintiff‟s Patent. By an order

dated 27th May 2009 this Court restrained Defendants 2, 3 and 4 and

erstwhile Defendant No.3 till the next date of hearing from infringing

the patent rights of the Plaintiff and further restrained them from

manufacturing, using or offering for sale any device in infringement

of the patent of the Plaintiff. IA No. 8372/2009 was filed thereafter by

Defendants 2, 3 and 4 under Order XXXIX Rule 4 CPC seeking the

vacation of the said stay order. It may be mentioned that after deletion

of erstwhile Defendant No.3 from the array of parties, in the

circumstances noticed hereafter, the erstwhile Defendants 4 and 5

have been renumbered as Defendants 3 and 4.

Background

2. The aforementioned suit has been filed seeking permanent

injunction in the above terms and also for rendition of accounts by the

Defendants and for payment by the Defendants of Rs. 1 crore as

liquidated damages to the Plaintiff. The suit also prays for a direction

that the entire stock of the impugned product in the custody or

possession of the Defendants should be forthwith seized and delivered

up to the Plaintiff for destruction.

3. The Plaintiff is a corporation organised under the laws of the State

of Delaware, United States of America („USA‟). It claims to be the

world leader in hot-cast urethane prepolymers and a leading

manufacturer of specialty aqueous urethane dispersions and polyester

polybols.

4. The Plaintiff has sought to explain the significance and use of the

invention in respect of which a patent has been granted to it as under:

"axles and wheels of a rail car are mounted on wheel trucks that in turn support a carriage. A two stage suspension system comprising a primary and a secondary stage is generally employed on the wheel trucks. Although in India we call the entire coach as a „bogie‟. This primary suspension isolates the wheel truck i.e. the bogie from the wheel. The secondary suspension isolates the carriage from the bogie. During movement of the train there is a lateral roll which is sought to be controlled by the secondary suspension systems that are placed between the wagons and the bogie i.e. the axels and wheels of the rail car. This secondary suspension system includes mounts for coupling both the bolster to the bogie and the carriage to the bolster. The bolster is supported on steel helical coil springs called bolter springs. For mounting the carriage on to the bolsters a cleat and a pad arrangement known as side bearer mount is commonly employed. The cleat can be in the form of a metal block or a block holding a wheel or a pad. Generally the pad is made of laminated rubber and steel, and is bolted to the carriage underbody. More recent pad designs employ urethane springs bonded with rubber. It is claimed that these mounting devices physically limit the extent of rail car lateral roll but do little to dampen roll forces".

5. According to the Plaintiff its invention "is directed to a side bearing

pad assembly for absorbing and cushioning compression forces." The

description of the invention is as under:

"The assembly comprises a first and second housing, a

first and second load bearing member, and biasing means. The first housing has an exterior surface and defines a bore extending at least partway through the first housing. The first housing is coupled to the first load bearing member, thus defining a first abutment surface on the first land bearing member opposite the first housing. The second housing has an exterior surface and also defines a bore extending at least partway therethrough. The second housing also has a bore, of a shape complementary to the exterior surface of the first housing, and is adapted to slidably or telescopically receive the first housing therein. The second housing is coupled to the second load bearing member, thus defining a second abutment surface on the second load baring member opposite the second housing."

6. The actual description of the entire invention is set out in a far more

detailed manner in para 9 of the plaint. According to the Plaintiff it

filed the first application for grant of patent for the aforementioned

device i.e. the side bearing pad assembly under Application No.

09/407,053 on 27th September 1999 in the USA and was granted

under Patent No.7,083,165 on 1st August 2006. A corresponding

patent application for grant of patent of the device was filed in India

on 21st June 2001. The said application was a National Phase

Application under Patent Co-operation Treaty (PCT) arising out of

PCT International Application No. PCT/US00/25339 dated 15 th

September 2000. The Plaintiff‟s application was examined by the

Patent Office and a First Examination Report was issued on 20 th

October 2004. According to the Plaintiff it complied with all the

requirements stipulated by the Controller of Patents. Thereafter the

examination process was undertaken and patent was granted on 9 th

January 2008 under No. 213608. The copy of the certificate of grant

of patent has been placed on record.

7. According to the Plaintiff it has been granted patent in respect of 14

claims which define the scope of its invention. These have been set

out in para 16 of the plaint. It is stated that the Plaintiff has thus

obtained for a period of 20 years from the date of the filing of the PCT

international application, an exclusive right to prevent third parties,

who did not have the consent of the Plaintiff, from the act of making,

using, offering for sale, selling or importing for those purposes the

subject device in India. It is stated that the patent is still subsisting on

the Register of Patents and a renewal fee in respect thereof is being

paid at the Patent Office annually. It is stated that the patents for the

subject device have been granted to the Plaintiff in three countries

worldwide including in India.

8. The Plaintiff states that the application for grant of patent in the

subject device was originally filed in the name of Uniroyal Chemical

Company Inc. which merged with and into Crompton Manufacturing

Company Inc. Subsequently, Crompton Manufacturing Company Inc.

changed its name to Chemtura USA Corporation. Thereafter

Chemtura USA Corporation merged with and into Chemtura

Corporation i.e. the Plaintiff.

9. The Plaintiff states that it has licensed the said device to three

companies in Lucknow. These companies are Avadh Rubber Ltd.,

Aryan Exporters Pvt. Ltd., and Prag Industries. It is stated that these

three companies are manufacturing and supplying the subject device

to the Union of India i.e. Defendant No.1 through the Ministry of

Railways and its Original Equipment Manufacturers, including freight

wagon builders. It is stated that two drawings for commercial use

according to the technology covered by the subject device have been

approved by Director General, Research Designs & Standards

Organisation („RDSO‟).

10. According to the Plaintiff by virtue of Section 48 read with

Section 53 of the Patents Act, 1970 („Act‟) the Plaintiff‟s Patent

Certificate No. 213608 dated 9th January 2008 is valid for a term of 20

years with effect from 15th September 2000, the date on which the

PCT International Application was filed. Therefore the Plaintiff has

the exclusive right to prevent third parties who do not have the

Plaintiff‟s prior consent, from making, using, offering for sale, selling

and/or importing for these purposes the Bearer Pad Assembly for a

term of 20 years from 15th September 2000. It is pointed out that

inasmuch as the application in relation to the subject patent was

published on 19th July 2003 and 20th April 2007, in view of Section

11-A (7) of the Act, the Plaintiff was entitled to claim damages on

account of infringement of its patent, from the earliest date of

publication of the subject application i.e. 19th July 2003.

11. Defendants 2 to 4 and erstwhile Defendant No.3 under an

agreement dated 1st May 2008 formed a Consortium whereby they

jointly and severally agreed to develop and market "Constant Contact

Side Bearer of 23 tonnes axle load Cansub Bogies". The consortium

submitted manufacturing drawings for approval to Member

Mechanical, Railway Board, without the Plaintiff‟s consent, for the

device which according to the Plaintiff was infringement of the

Plaintiff‟s patent for the subject device. It is submitted that a

comparison of the drawing of the Plaintiff which has been approved

by the RDSO and the drawing for the same device submitted by the

Consortium of the Defendants 2 to 4 and erstwhile Defendant No.3 for

approval to the Member, Mechanical Railway Board would show that

the Consortium is infringing the Plaintiff‟s subject patent. The

Plaintiff has placed on record an affidavit dated 11th February 2009 of

one Ajaib Singh, Ph.D a Chemist with over 40 years experience in the

field of polyurethane technology and its applications. In the said

affidavit Ajaib Singh states that he worked for M/s. Uniroyal

Chemical Company Inc. (UCCI) from where he retired as Director of

Technology. He had been asked to consider if the features of the

Claims of the Plaintiff‟s subject patent were present in the

Defendants‟ product offered for sale to the Ministry of Railways. He

concluded that the Defendants‟ product "has all of the features

required by at least Claims 1,3, 6 and 14 of the Subject patent and

infringes the Subject Patent." It is submitted by the Plaintiff that the

drawings submitted by the Consortium infringe "at least claim 1" of

the subject patent which is the Bearer Pad Assembly comprising a

first housing, a first load bearing member, a second housing, a second

load bearing member and biasing means including at least one

compression spring positioned within the bore of at least the first

housing. It is stated that the proposal submitted by the Consortium

shows that it had offered for sale a device which infringes the

Plaintiff‟s subject patent.

12. A notice dated 27th October 2008 was issued by the Plaintiff

through its attorney to Defendants 2 to 4 and erstwhile Defendant

No.3 asking them to cease infringing the subject patent forthwith. On

3rd November 2008 the Plaintiff‟s Attorney also issued a notice to the

General Manager, Railway Board, Member (Mechanical), Railway

Board and the RDSO under Section 80 CPC. On 24th November 2008

the Advocate for the Defendant No.2 informed the Attorney for the

Plaintiff that Defendant No.2 was ready to comply with the conditions

laid down in the notice dated 27th October 2008 but currently that

would not be possible as one of the partners was seriously ill.

Accordingly 45 days‟ time was sought for compliance with the

Plaintiff‟s notice. However this was followed by a letter dated 17th

December 2008 written by the Advocate for Defendants 2, 3 and 4

informing the Attorney for the Plaintiff that a revocation application

against the subject patent had been filed by the Consortium on 4th

December 2008 before the Intellectual Property Appellate Board

(„IPAB‟). Notice was received thereafter by the Plaintiff from the

IPAB about the filing of the said revocation application.

13. In the revocation application Defendants 2, 3 and 4 stated that a

tender for the procurement of 46,800 pieces of side bearing pad

assembly had been initiated by the South East Central Railway,

Bilaspur. The tender opened on 9th September 2008. Defendants 2 to

4 with erstwhile Defendant No.3 participated in the tender and quoted

a price of Rs.2,300/- as compared to the L-1 price of Rs.3,300/- per

piece. According to the Plaintiff the above statement by the

Defendants 2, 3 and 4 constitutes an admission on their part that they

were infringing the Plaintiff‟s subject patent. The Plaintiff seeks the

transfer of the revocation application pending before the IPAB to this

Court. It is submitted by the Plaintiff that after the grant of the subject

patent in its favour with effect from 15th September 2000, it has the

exclusive right to use, offer for sale and sell the subject device and

that if the Defendants 2 to 4 were not restrained from offering for sale

the subject device to Defendant No.1 by infringing the Plaintiff‟s

patent then irreparable damage and harm would be caused to the

Plaintiff which cannot be compensated in terms of the money.

14. The suit was listed on 20th May 2009 along with the

aforementioned application. Summons in the suit and notice in the

application were directed to issue to the Defendants, returnable on 27th

May 2009. On that day the Defendants 2 to 4 and erstwhile

Defendant No.3 appeared. A statement was made on behalf of

erstwhile Defendant No.3 that it was no longer a part of the

Consortium and "is not supplying the infringing goods to Railways or

to any other persons." The statement was taken note of and the

Directors of the erstwhile Defendant No.3 were ordered to be bound

by it. Erstwhile Defendant No.3 was deleted from the array of parties.

On being asked by the Court to show that the Defendants 2, 3 and 4

have a prima facie good ground for revocation of the Plaintiff‟s

patent, learned counsel for those Defendants stated that he had to file

documents in support of such contention. In the circumstances, the

Court restrained Defendants 2, 3 and 4 till the next date of hearing

from infringing the patent rights of the Plaintiff and further restrained

them from manufacturing, using or offering for sale any device in

infringement of the Plaintiff‟s patent.

The Case of the Defendants 2, 4 and 5

15. IA No. 8372/2009 was filed thereafter by Defendants 2, 3 and 4

under Order XXXIX Rule 4 CPC seeking the vacation of the interim

stay. It was contended by Defendants 2, 3 and 4 that no cause of

action had arisen within the jurisdiction of this Court and that this

Court has no territorial jurisdiction to entertain the suit. It was pointed

out by Defendants 2, 3 and 4 that the tender which forms the basis of

institution of the suit was called for in Bilaspur. None of the

Defendants, except Defendant No.1, was based within the jurisdiction

of this Court. Defendant No.1 Union of India was not a proper party

and had been roped in only to justify the territorial jurisdiction of the

Court. Defendants 2 and 3 were based in Calcutta, Defendant No.4 in

Dehradun and the Plaintiff in the USA. It is submitted that Patent No.

213608 was granted in the name of M/s. Uniroyal Chemical Company

Inc. However the suit has been filed by Chemtura Corporation without

explaining the connection inter se between the two entities.

16. On merits it was contended by Defendants 2, 3 and 4 that the grant

of a patent does not guarantee the validity thereof. After being aware

of the challenge to the validity of the patent before the IPAB, the

Plaintiff had chosen to institute the present suit. The Plaintiff had

failed to reply to the revocation application before the IPAB and had

kept seeking extension of time. Attacking the grant of registration of

patent in favour of the Plaintiff, the Defendants point out that their

enquiries revealed that an application had been made in the USA on

about 27th September 1999 for the invention titled „side bearing pad‟.

The application was made initially in the name of the inventor

Richard L. Palinkas and later assigned in favour of UCCI. Thereafter

on 15th September 2000, UCCI made an International Application

claiming priority of the aforementioned US application and

designating several European countries and others countries including

India. The international application was published on 5th April 2001.

Based on the International Application, UCCI filed national and

regional phase applications in India and Europe respectively. It is

stated that the US Patent application underwent examination during

which several prior art[s] were cited by the US Patent Authority. The

closest prior art cited was US Patent No.4566678 which disclosed the

claimed invention of the Plaintiff almost in all respects barring the

feature that the compression spring was in the shape of a torus. Being

aware of it, during the prosecution of the said US application the

Plaintiff conceded to the position of the torus shape of the

compression spring. So it surrendered its broad claims and combined

the feature of Claim 7 referring to a specific shape of the compression

spring. Thus after limiting its claims UCCI was granted a patent by

the US Patent Office on or about 1st August 2006.

17. The European Patent authorities also cited several prior arts when

they took up the Plaintiff‟s application for examination. In order to

overcome the cited prior art which according to the European

Examining Authority wholly taught the broad invention as originally

claimed, the Plaintiff was constrained to amend the claims by

characterizing the same to at least one spring element being a

compression spring of a solid resilient material formed as a toroidal

shape. Therefore the claim was narrowed down and thereafter the

European Patent Office granted patent registration in respect of a

device having at least one spring being a compression spring

comprising a solid resilient material formed as a toroidal ring.

According to the Defendants 2, 3 and 4 both in the European and US

Patent Offices, the Plaintiff failed to obtain protection of its broad

claims and in both jurisdictions the protection has been restricted to

compression spring of solid resilient material formed as a toroidal

ring. Further in the US even the toroidal shape was further restricted

to torus shape.

18. It was pointed out that unaware of the serious objections on the

basis of cited prior arts raised by the US and European Patent

authorities, the Indian patent authority granted the Plaintiff the patent

for the subject device with minimal amendments. Claim No.2 was

merged in Claim No.1 and the subsequent claims were re-numbered

by the Plaintiff. The Defendants point out that the First Examination

Report (FER) dated 20th October 2004 of the Controller of Patents in

India raised some insignificant objections without even citing a single

prior art whereas the US and European authorities had cited several

closely similar patents based on which the Plaintiff was compelled to

restrict its claims to the toroidal/torus shape of the compression

spring. In para 8 of the requirements communicated with the PER the

Controller sought information on the "details regarding the search

and/or examination report including claims of the applications

allowed, as referred to in Rule 12(3) of the Patents Rules 2003

(„Rules‟) in respect of same or substantially same inventions filed in

any one of the major patent offices, such as USPTO, EPO and JPO

etc., along with appropriate translation where applicable". This had to

be furnished within a period of 30 days.

19. In response thereto, the Plaintiff by its letter dated 14th October

2005 did not specifically reply to para 8 of the requirements while

maintaining that all the remaining requirements had been complied

with. It appears that telephonic discussions took place between the

Patent Examiner and the Plaintiff‟s representative between 15th and

19th October 2005. This resulted in a further letter dated October 19,

2005 by the Plaintiff to the Patent Examiner. In the said letter the

Plaintiff‟s attorneys stated that "that there has been no further

development subsequent to the Form 3 which was filed at the time of

filing the application in India. The requirement in this regard may be

withdrawn." According to Defendants 2, 3 and 4 this statement was

false since between 21st June 2001 when the Form 3 was filed and

October 19, 2005 when the aforementioned letter was written, the US

Patent Authorities had issued a rejection letter of 26 th July 2001

stating that they were not satisfied with the amendments made by the

Plaintiff to its claims. By June 12, 2002 the claims were amended at

least five times because the Plaintiff failed to overcome the closely

similar prior art citations of the US Patent Office. These facts were

withheld from the Controller of Patents in India. Likewise the

examination details of the applications before the European Patent

Office were also not brought to the notice of the Controller of Patents

in India.

20. It is then stated that the Defendants‟ product was different from

that of the Plaintiff‟s since the Defendants were able to offer a

warranty for a period of at least 30 months as against the normal life

time of the Plaintiff‟s product which is about 20/21 months. The

Defendants‟ product was priced far less and would result in a saving

of 80% of the production cost for Defendant No.1. The Defendants

have further cited the Indian Railways Standard Condition Clause

1701 in terms of which the Ministry of Railways were not concerned

with the patent rights of any party. The said clause required the

Contractor to indemnify the Railways against all claims which may be

made in respect of the suits for infringement of any right protected by

patent, registration of designs or trade mark. In terms of Clause 1702,

the Contractor was also not to be liable for payment of any royalty,

fee or other expenses for use of any patent and for this purpose was to

be treated as an agent of the Government.

21. The specific case of Defendants 2, 3 and 4 is that the Plaintiff (a)

obtained the patent on a false suggestion or representation and (b)

failed to disclose to the Controller of Patents the information in terms

of Section 8 of the Act. It is submitted that the patent was obtained on

a false suggestion that there was no further development in regard to

the applications filed in US and Europe. It is further pointed out that

the Plaintiff wholly suppressed its own US Patent No. 3932005 which

clearly teaches the use of the toroidal shape of the elastomeric

member. Therefore the patent was liable to be revoked on the grounds

mentioned in Section 64(1) (j) and (m) of the Act.

22. On merits it is submitted that the invention for which the Plaintiff

has been granted a patent does not involve any inventive step having

regard to what was publicly known or publicly used in India or what

was published in India or elsewhere before the priority date of the

claim. Further the complete specification does not sufficiently and

fairly describe the invention and the method by which it is to be

performed and that the description of the method or the instructions

for the working of the invention as contained in the complete

specification are not by themselves sufficient to enable a person in

India possessing average skill in, and average knowledge of, the art to

which the invention relates, to work the invention. Section 3(d) of the

Act is invoked to contend that the use of the toroidal shape of the

compression spring is known from the Plaintiff‟s US Patent

No.3932005 published on 13th January 1976. Therefore the use of the

toroidal shape of the compression spring is merely a new use of a

known knowledge and not patentable as such.

Submissions of counsel

23. Mr. Shanti Bhushan, learned Senior counsel appearing on behalf

of the Plaintiff submits that a validly granted patent unless set aside

will have to be given full effect to and enforced as such. He submits

that although under Section 13(4) of the Act the grant of a patent does

not guarantee its validity, as far as the present case is concerned since

a detailed examination of the Plaintiff‟s application has been

undertaken by the Controller of Patents in terms of Section 12 and

there was no pre-grant or post-grant opposition in terms of Section 25,

the validity of the patent must be presumed as of date. He referred to

Section 48 of the Act which gives a right to the patent holder to

prevent third parties from offering for sale, without the prior consent

of the patentee, a device based on the drawings/designs of the Plaintiff

in respect of which it holds the patent. It is submitted that the mere

pendency of an application for revocation before the IPAB cannot

dilute the right of the patentee. Even the IPAB did not have the power

to grant a stay. Reliance is placed on the decisions in K. Ramu v.

Adyar Ananda Bhavan and Muthulakshmi Bhavan 2007 (34) PTC

689 (Mad), Mariappan v. A.R. Safiullah 2008 (38) PTC 341and

Telemecanique & Controls (I) Ltd. v. Schneider Electric Industries

SA 94 (2001) DLT 865 in support of this proposition.

24. It is pointed out by Mr. Shanti Bhushan that in terms of the

requirement under Section 8 of the Act read with Rules and the

corresponding Form 4 in force on the date of making the patent

application, the Plaintiff had only to furnish information about the

filing of patent applications elsewhere. Those details were in fact

furnished. With reference to the requirement of furnishing the

information as asked for by the Controller in Clause 8 of the letter

dated 20th October 2004, it is submitted that only where a claim has

been accepted and patent granted, there would be a need for the

Plaintiff to furnish to the Controller of Patents, the search and

examination reports of the corresponding authorities of the countries

where the patent was granted. However, as on that date i.e. 15th

October 2005 no grant of patent had been made by either the US

Patent Office or the European Patent Office. Therefore there was full

compliance with the requirement of Clause 8. It is stated that there

was no false information given or suppression of relevant information

by the Plaintiff.

25. It is further pointed out by Mr.Shanti Bhushan that the search

report available at that point of time was the international search

report which was in fact furnished to the Controller of Patents. The

word „status‟ in Form 3 only required the Plaintiff to indicate whether

the application for patent in a country outside India was pending,

allowed or dismissed. If every stage of the application in a country

outside India has to be disclosed to the Controller of Patents, it would

make his task impossible and cumbersome. Referring to a Wikipedia

printout on the PCT, Mr. Shanti Bhushan states that the filing of the

PCT application is to be construed as furnishing the details relating to

filing of application in each designated State. Without prejudice to the

above contentions Mr. Shanti Bhushan submits that not every

suppression of fact or false statement would vitiate the grant of patent.

What would have to be seen is whether the suppression of fact had the

potential of affecting the grant of patent. In support of this

submission, he refers to the Halsbury‟s Laws of England (Vol.35 page

564) and the decision in Valensi British Radio Corpn 1973 RPC 337.

26. On behalf of the Defendants Mr. Ajay Kumar Gupta, learned

Senior counsel and Mr. S. Majumdar, learned counsel addressed

arguments. Mr. Gupta first pointed out that he was restricting his

submissions to the grounds specified in Section 64(1) (j) and (m) in

order to press home the point that the patent granted in favour of the

Plaintiff is revocable. He submitted that the mere grant of a patent did

not guarantee its validity and that a challenge to its validity could be

raised in defence to a suit for infringement. Mr. Gupta relied upon the

decisions in Bajaj Auto Ltd. v. TVS Motor Company Ltd. 2008(36)

PTC 417 (Mad.), J. Mitra v. Kesar Medicaments 2008 (36) PTC 568

(Del.), B. Braun Melsungen V. Rishi Baid 2009 (40) PTC 193 (Del.)

and F. Hoffmann-LA Roche Ltd. v. Cipla Ltd. 2009 (40) PTC 125

(Del.).

27. It is then submitted that the patent itself had not been worked by

the Plaintiff and the three approved manufacturers of the Plaintiff who

were claimed to be its licencees. The fact that they were licencees was

also contested since the licence would have to be in writing and be

registered in terms of Sections 68 and 69 of the Act. No such

document was placed on record by the Plaintiff. If the patent had not

been worked by the Plaintiff no injunction could be granted in its

favour.

28. Mr. Gupta pointed out that in the tender process, 14 parties

participated. Each of them offered the subject device for sale to the

Ministry of Railways. Yet, only Defendants 2, 3 and 4 have been

impleaded in the instant proceedings. The Plaintiff was awarded 95%

of the quantity for which the tender was floated. Only the

"developmental order" to the extent of 5% of the total quantity

purchased, was awarded to Defendants 2, 3 and 4. Secondly, the

drawings on the basis of which the device had to be manufactured and

supplied were made available by the Railways to all the tenderers.

Referring to Section 47 of the Act it is submitted that it is open to the

Government to insist on adherence to certain specifications and that in

such event Section 48 would not come into play. In fact, Section 48

has been specifically made subject to Section 47 of the Act.

29. Mr. Majumdar, learned counsel for the Defendants 2, 3 and 4

supplemented the submissions of Mr. Gupta. He pointed out that as

far as Section 8 (1) (a) of the Act is concerned, there was a breach

thereof committed by the Plaintiff in not setting out the detailed

particulars in the application and by suppressing the material facts. As

regards the undertaking in terms of Section 8 (1)(b) of the Act the

Controller was required to be kept informed in writing from to time of

the development in the applications filed elsewhere. This was not

done. Section 8 (2) of the Act was also not complied with since the

Plaintiff did not furnish to the Controller of Patents, when asked by

him, the details relating to the developments in the application filed

for grant of a patent elsewhere. The furnishing of the international

search report at the time of filing the national phase application was

not in compliance with the requirement of furnishing information on

the search and examination reports as envisaged by Section 8 (2) of

the Act.

30. It was further submitted that among the grounds for revocation of

the patent spelt out in Section 64 of the Act, one under Section 64 (1)

(h) was that of "sufficiency". In other words if the complete

specification provided for the patent by the Plaintiff did not

sufficiently mention the method by which it was to be performed, the

patent would be liable to be revoked. Submissions were also advanced

on the lack of an inventive step and obviousness which did not justify

the grant of a patent for the subject device. It is submitted that the

Plaintiff‟s own US Patent No. 3932005 (dated 13th January 1976)

makes reference to the toroidal shape of the compression member

which is the leading and essential feature of that patent so as to

provide dampening of the compression forces and internal strains

generated due to the motion of rail cars. It was clear that the toroidal

contact surface of the compression spring was known according to the

Plaintiff‟s own Patent No. 3932005 and therefore the present device

could not be a technical advancement amounting to an inventive step.

At best the use of the toroidal shape of the compression spring was a

new use of a known substance and therefore not patentable in terms of

Section 3 (d) of the Act.

31. In reply, Mr. Shanti Bhushan submits that although Section 48 has

been made subject to Section 47, it has to be read with Section 156

and the requirements of that provision cannot be dispensed with. He

relies upon the decision in Garware Wall Ropes Ltd. v. A.I.Chopra

2009 (111) Bom LR 479.He submits however that had the Railways

directly placed an order with the Plaintiff, then perhaps Section 47

would have prevented the Plaintiff from alleging infringement of its

patent.

Scope of the present proceedings

32. The issue that arises for consideration is whether the Plaintiff has

made out a case for grant of an injunction and in other words, whether

the interim injunction granted by this Court by its order dated 27 th

May 2009 should continue to operate during the pendency of the suit?

33. The case of the Plaintiff is that since till date there has been no

order revoking the patent, it should be treated as valid and therefore

injunction not refused. On the other hand the Defendants rely on

Section 64 read with Section 107 of the Act to contend that the

challenge to the validity of the patent can be raised as a defence to a

suit for infringement. The mere fact that Section 48 of the Act has

been amended in 2002, does not grant any higher protection to the

patent. Once the defendant is able to raise a credible challenge to the

validity of the patent then injunction must be refused.

34. In F.Hoffmann- LA Roche Limited v. Cipla Limited the Division

Bench of this Court was considering an appeal filed by Roche, the

Plaintiff there, against the refusal of injunction by the learned Single

Judge. It was the case of Roche that it held a valid patent for the drug

Tarceva the generic form of which was being manufactured and sold

by the Defendant Cipla. It was urged by Roche that the holder of a

patent was entitled prima facie to the grant of an injunction since such

patent would have been granted after examination at several levels

including the oppositions thereto at the pre-grant and post-grant stage.

It was further urged that unless the Defendant was able to discharge

the heavy burden of showing that it had a stronger prima facie case

than the Plaintiff, it should not be permitted to defeat the right of the

Plaintiff to an injunction against infringement by casually raising a

challenge to the validity of such patent. While negativing this plea it

was observed by the Division Bench as under:

"53. The plea of the plaintiff that since there is a multi-layered, multi-level examination of the opposition to the grant of patent it should accorded the highest weightage, is not entirely correct. The contention that there is a heavy burden on the defendant to discharge since it has to establish that it has a stronger prima facie case of the plaintiff is contra indicated of the decisions in the context of Section 13(4). Reference may be made to the decisions in Biswanath Prasad Radhey Shyam v. M/s Hindustan Metal Industries AIR 1982 SC

1444, Standipack Pvt. Ltd. v. Oswal Trading Co. Ltd. AIR 2000 Del 23, Bilcare Ltd. v. Amartara Pvt. Ltd. 2007 (34) PTC 419(Del), Surendra Lal Mahendra v. Jain Glazers (1979) 11 SCC 511. In BeechamGroup Ltd. v. Bristol Laboratories Pty Ltd. (1967-68) 118 CLR 618 and Australian Broadcasting Corporation v. O'Neill (2006)229 ALR 457 it was held that the defendant alleging invalidity bears the onus of establishing that there is "a serious question" to be tried on that issue. In Hexal Australia Pty Ltd. v. Roche Therapeutics Inc. 66 IPR 325 it was held that where the validity of a patent is raised in interlocutory proceedings, "the onus lies on the party asserting invalidity to show that want of validity is a triable question." In Abbot Laboratories v. Andrx Pharmaceuticals Inc. (decision dated 22nd June 2006 of the U.S.Court of Appeals for the Federal Circuit 05-1433) the Court of Appeals followed its earlier ruling in Helifix Ltd. v. Blok-Lok Ltd. 208 F.3d 1339 where it was held (at 1359): "In resisting a preliminary injunction, however, one need not make out a case of actual invalidity. Vulnerability is the issue at the preliminary injunction stage, while validity is the issue at trial. The showing of a substantial question as to invalidity thus requires less proof than the clear and convincing showing necessary to establish invalidity itself." (emphasis supplied) In Erico Int'll Corprn v. Vutec Corprn (U.S.Court of Appeals for the Federal Circuit, 2007-1168) it was held that the "defendant must put forth a substantial question of invalidity to show that the claims at issue are vulnerable."

In the facts and circumstances of the case it was held that Cipla had

raised a credible challenge that rendered Roche‟s patent vulnerable.

The order of the learned Single Judge refusing injunction was upheld.

35. Keeping in view the aforementioned law as explained by the

Division Bench of this Court, it bears examination if the Defendants

2, 3 and 4 have been able to raise a credible challenge to the validity

of the Plaintiff‟s patent. In other words, the question is whether the

defendants have "put forth a substantial question of invalidity to show

that the claims at issue are vulnerable"? One of the grounds urged by

the Defendants in support of this submission is that the Plaintiff has

been in breach of Section 8 of the Act thus rendering its patent

vulnerable to revocation in terms of Section 64 (1) (j) and (m) of the

Act. This issue is therefore taken up for consideration first.

Non-compliance with Section 8

36. Section 8 of the Act is titled „Information and undertaking

regarding foreign applications‟. Section 8 (1) (a) requires an applicant

for a patent to file along with his application a statement setting out

the detailed particulars of the application filed by such applicant "in

any country outside India in respect of the same or substantially the

same invention". Section 8 (1) (b) requires such applicant to also

furnish an undertaking that up to the date of the grant of patent in

India he will keep the Controller of Patents informed in writing "from

time to time" of detailed particulars as required under clause (a) in

respect of such application made in a country outside India. The

corresponding rule is Rule 12 (1) of the Rules which states that the

statement and undertaking to be filed in terms of Section 8 (1) of the

Act will be in Form 3. Prior to the making of the present Rules in

2003, the earlier relevant Rule was Rule 13 which was to the same

effect with slight changes in Form 3.

37. The Plaintiff submitted its National Phase Application for grant of

patent in respect of side bearing pad assembly corresponding to the

PCT Application dated 15th September 2000 to the Controller of

Patents in Mumbai on 21st June 2001. Among other documents, it

enclosed with the said application the completed Form 3 and the

international search report. That search report merely indicated the

filing of a patent action by the Plaintiff elsewhere. The International

Application indicated the US Application made in 1999 as the prior

application. The Plaintiff may be right in contending that the Form 3

which was prevalent at that point of time did not contain a column

„status‟ and, therefore, all that it was required to inform the Patent

Controller was that it had made applications for patent for the same

invention in different countries. However, the requirement of the law

did not end there. While Section 8 (1) (a) of the Act required the

applicant to furnish a statement on the applications made in other

countries, Section 8 (1) (b) required the applicant to give an

undertaking that "up to the date of grant of patent in India" (or as

earlier worded "up to the date of the acceptance of his complete

specification filed in India") the applicant would keep the Controller

informed in writing "from time to time" of detailed particulars as

required in clause (a) in respect of every other application relating to

the same or substantially the same invention if any filed in any

country outside India subsequent to the filing of the application

referred to in the abovesaid clause within the prescribed time. Even

under the Form 3 as was prevalent on the date of filing the

application, an undertaking had to be given to the effect that "up to

date of acceptance of the complete specification filed in connection

with our abovementioned application, we would keep the Controller

informed in writing from time to time of the details regarding the

applications for patent filed outside India from time to time for the

same or substantially same invention within three months from the

date of filing such application." Therefore this did not hinge on the

Controller asking for particulars but the applicant keeping the

Controller informed "from time to time". The expression "time to

time" meant a periodicity of furnishing information akin to updating

the Controller on the current status of the applications filed in other

countries. It is not, as suggested by the learned Senior counsel for the

Plaintiff, a mere furnishing of information whether the application is

pending or dismissed.

38. Given that the national phase application is itself a part of the

scheme of filing patent claims internationally in terms of the PCT, the

submission that the Controller will be deluged with paperwork if he

were to be kept informed of all developments in such applications, is

clearly one of desperation. The very function of the Controller is to

ensure that a patent is granted in keeping in view the current

knowledge of the closest prior art relevant to the subject device or

process. This is being statutorily facilitated by requiring the applicant

to keep the Controller updated of all developments in the pending

applications in other countries made for the same patent. Given this

object of the provision there can be no two opinions that the

disclosure has to be a periodic one and giving full particulars. On the

facts of the present case there is no indication that the Plaintiff

furnished the necessary details of its US and European applications

for grant of patent to the Controller in India "from time to time."

39. The matter does not end there. Section 8(2) reads as under:

"8. Information and undertaking regarding foreign applications. (1) ......

(2) At any time after an application for patent is filed in India and till the grant of a patent or refusal to grant of a patent made thereon, the Controller may also require the applicant to furnish details, as may be prescribed, relating to the processing of the application in a country outside India, and in that event the applicant shall furnish to the Controller information available to him within such period as may be prescribed."

40. As far as Section 8(2) is concerned, the Controller on his own may

also require the applicant to furnish details "relating to the processing

of the application in a country outside India, and in that event the

applicant shall furnish to the Controller information available to him

within such period as may be prescribed." That requirement is

mandatory as has been further emphasised by the wording of Section

64(1) (j) ["that the applicant has failed to disclose to the Controller the

information required by Section 8 or has furnished information which

in any manner was false to his knowledge"] which indicates the non-

compliance with such directive of the Controller as a ground for the

revocation of the patent. The obtaining of a patent, "on a false

suggestion or representation" is a further ground of revocation under

Section 64 (1) (m).

41. In order to examine the contention of the Defendants of the

violation by the Plaintiff of Section 8 (2) and therefore referring its

patent vulnerable for revocation in terms of Section 64(1)(m) of the

Act it is necessary to set out in full the letter dated 20th October 2004

written by the Patent Controller to the Plaintiff. The said letter reads

as under:

"No. IN/PCT/2001/00752/MUM

To,

Remfry & Sagar, Attorneys-at-Law, Gresham assurance House, 1 Sir P.M. Road Mumbai-400 001

SUB: FIRST EXAMINATION REPORT

REF: PATENT APPLICATION NO.

IN/PCT/2001/00752/MUM

NAME OF APPLICANT: Uniroyal Chemical Company, Inc.

With reference to the request no. 2654/RQ/2004, made on 26.08.2004 by you for examination the above quoted application has been examined under section 12 of the Patents Act, 1970, as amended by the Patents (Amendment) Act, 2002 and the first statement of objection of forwarded herewith the compliance.

The documents noted in the margin are enclosed herewith for amendment in these respects and shall be resubmitted to this office within 4 months from the

date of issue of this statement U/R 24 (4) together with an observation that you would like to offer in connection therewith.

If any correction is made in any page of the specification that page should be freshly typed and in duplicate. The original pages in that case should be returned to this office duly cancelled.

The application referred to above will be deemed to have been abandoned unless all requirements imposed by the said Act and Patents Rules, 2003, are complied within 12 months U/S 21 (1). No extension of time beyond 12 months is allowed.

The pages of the complete specification should be retyped wherever corrections or interpolations are made. The typed pages should preferably be on white papers in order that clear photocopies of the specification can be prepared at the time of publication of the specification.

(Pinkesh K. Jain) Examiner of Patents & Design For Asstt. Controller of Patents & Design

Encl:1. Application on form 1

2. Complete specification

3. Complete drawing

4. Form 5 Note: All communications to be sent to the controller of patents at the above address.

1. Claim 1 does not sufficiently define the characterized constructional feature of the bearing pad assembly. All essential constructional features of the assembly should be given in claim 1. Constructional features given in claims 2, 8 & 9 should be merged with claim 1.

2. Claim 1 is not supported by description in view of expression "outwardly facing abutment surface".

3. Claims 5, 6, 13 and 14 are not supported by description.

4. Title and opening para should be made consistent with Claims.

5. Application may be filed on Form 1A.

6. Application form should be dated.

7. Further details regarding foreign filing should be filed along with petition.

8. Details regarding the search and/or examination report including claims of the applications allowed, as referred to in rule 12 (3) of the Patents Rules, 2003, in respect of same or substantially same inventions filed in any one of the major patent offices, such as USPTO, EPO and JPO etc., along with appropriate translation where applicable, should be submitted within a period of 30 days from the date of receipt of this communication as provided under section 8 (2) of the Indian Patents (Amendment) Act, 2002.

9. Statement of claims should be prefaced by words "We Claim".

10. Pages of complete specification should be renumbered serially at the bottom of the page as indicated therein.

11. Complete specification should be dated & signed at the end of the claims.

12. Indian patent application number should be given in Form 5.

13. Drawings should be prepared according to the rule 15 of The Patents Rule, 2003.

14. Kindly note that it may not be possible to repeatedly examine your amended specification, therefore you should submit the documents only after fully complying with the above requirement. If you desire to discuss the matter, you can visit this office with prior appointment".

42. There are two requirements which are apparent from the reading

of the above letter. The first is that the amended documents were to be

resubmitted to the Office "within four months from the date of the

issue of the statement under Section 24(4) of the Act." Clearly, no

such amended document was filed within four months as required. In

the un-numbered para 5 of the reply dated 17th October 2005 it was

stated by the Plaintiff that "the amendments carried out in the

specifications have necessitated retyping of pages 9 and 10 as fresh

pages 10 and 11 respectively. The retyped pages are submitted

herewith in duplicate along with former pages which have been

cancelled." But this was not in compliance with Clauses 7 and 8.

Clause 7 required the Plaintiff to furnish "further details regarding

foreign filing." Clause 8 required them to furnish details regarding

search and/or examination report including claims of applicant

allowed.

43. It is not possible to agree with the submission of Mr. Shanti

Bhushan that the search and the examination report is required to be

furnished only if it has resulted in the allowing of the Plaintiff‟s claim

by the Patent Office in a foreign country. The word "including" only

means that the Plaintiff has to additionally furnish the search and the

examination report where applications have been allowed. It was

incumbent on the Plaintiff therefore to furnish to the Controller of

Patents any search or/and examination report that may have been

issued by the Patent Office either in US or Europe as on the date of

their reply i.e. 17th October 2005. What is significant is that initially

by the letter dated 17th October 2005 to the Patent Controller, the

Plaintiff did not adhere to the requirements of paras 7 and 8 at all.

Later after the telephonic conversation it submitted that a letter dated

19th October 2005 where it simply stated that "there has been no

further development subsequent to Form 3 which was filed at the time

of filing the application in India." This statement, as will be seen

hereafter, was not true.

44. A detailed chart has been produced by the Defendant, which the

Plaintiff has been unable to counter, which shows the history of the

processing of the application by the Plaintiff in the US Patent Office.

It shows that after the filing of Form 3 in India i.e. on 21 st June 2001

and prior to the date of filing of reply i.e. on 19th October 2005 there

were a series of developments in the US patent application. The

examination report in the US is called as an Office Action. The final

Office Action was prepared on 26th July 2001 whereby claims 1 to 8

and 10 to 16 were rejected. In response thereafter on 25 th September

2001, the Plaintiff carried out a preliminary amendment of the claims.

On 15th January 2002 some of these claims were rejected. A response

was filed thereto by the Plaintiff on 8th February 2002. There was

another non-final Office Action on 2nd July 2002 where again Clauses

1, 3 to 8, 10 to 15 and 17 to 22 were rejected. There was yet another

final office action on 19th November 2002 after the Plaintiff had

sought to respond to the rejection by the earlier Office Action. The

Plaintiff also filed an appeal on 18th February 2003 while

simultaneously responding to the final Office Action of 19th

November 2002. There was a final Office Action on 21st December

2004. From the Examiner Report of 20th June 2005 it is apparent from

the chart that there were several developments in the US Patent Office

Action which obviously did have a bearing on the examination of the

application by the Indian authorities. When, by the letter dated 13th

September 2004 (delivered to the Plaintiff on 20th October 2004), the

Controller of Patents was asking for "details regarding the search

and/or examination report in respect of same or substantially same

invention filed as referred to in Rule 12(3) of the Patents Rules 2003

in respect of same or substantially same inventions filed in any one of

the major patent offices, such as USPTO, EPO and JPO etc." the

Plaintiff obviously was required to furnish the above details. The

Plaintiff itself does not deny that it did not do so. The filing of the

international search report in June 2001 was not in compliance with

the above requirement.

45. It is not possible to accept the submission, made by referring to

the Halsbury‟s Laws of England, that since the omission to furnish

particulars is not serious enough to affect the grant of the patent, it did

not impinge on its validity. Section 64 (1) (j) and (m) indicate to the

contrary. Further under Section 43 (1) (b) a patent can be granted only

when the application has been found not to be contrary to any

provision of the Act. It cannot be said that the omission to comply

with the requirement of Section 8 (2) was not serious enough to affect

the decision of the Controller to grant the patent to the Plaintiff. The

information, if provided, would have enlightened the Controller of the

objections raised by the US patent office and the extent to which the

Plaintiff had to limit its claims to the torus shape of the compression

spring, which was a key feature of the subject device. Had the

Controller been informed of the Plaintiff‟s own patent No.3932005

dated 13th January 1976, he would have been called upon to examine

if that patent taught the use of a toroidal shape of a compression

member and whether therefore the subject device was an inventive

step within the meaning of the Act.

46. It was submitted by Mr. Shanti Bhushan that as long as the patent

was not revoked it had to be enforced. The decisions cited by Mr.

Shanti Bhushan in support of this contention are now examined. K.

Ramu v. Adyar Ananda Bhavan 2007 (34) PTC 689 (Mad), did not

deal with the question of non-compliance with Section 8 and

consequently the patent being rendered vulnerable to revocation under

Section 64 (1) (m) of the Act. Therefore that decision would not be of

much help to the Plaintiff. Likewise, in Telemecanique & Controls

(I) Ltd. although the injunction was granted on merits, the Court

acknowledged that the mere grant of patent will not by itself ensure

the grant of an injunction in favour of the patent holder. Significantly,

the Division Bench emphasised that the patent holder would have to

show that the patent had been worked. The decision in Mariappan is

also distinguishable on facts. A central feature of the present case is

whether there is infringement by a supplier of the Railways pursuant

to a public tender in terms of which he has no option but to supply the

device in accordance with a drawing given to him by the Railways. A

peculiar feature of such contract are the Clauses 1701 and 1702 of the

Indian Railways Standard Condition which has been adverted to

already. None of the above cases cited by the Plaintiff involve similar

facts.

47. It was urged on the strength of the above decisions that after its

amendment in 2002, Section 48 has strengthened the right of a patent

holder to prevent third parties from infringing his rights and that the

case for the grant of an injunction is correspondingly enhanced. This

does not appear to be entirely correct. Section 48 (1) of the Act as it

stood prior to the amendment in 2002 (with effect from 20 th May

2003) under sub-Section (1) specified that the grant of a patent before

the commencement of the Act would confer on the patentee the

exclusive right to make, use, exercise, sell or distribute the invention

in India. Section 48 (2) of the Act stipulated that it was subject to the

provision of Section 47 and that patent granted after the

commencement of the Act shall confer on the patentee, where the

patent is for an article or substance, the exclusive right to make, sell or

distribute such article or substance and where it was for a method or

process of manufacturing an article or substance, the exclusive right to

use or exercise the method or process in India.

48. Under the amended Section 48 (1) of the Act, the patent granted

shall, where the subject matter of the patent is a product, give the

patentee the exclusive right to prevent third parties, who do not have

his consent, from the act of making, using, offering for sale, selling or

importing for those purposes that product in India. Likewise, where

the subject matter of the patent is a process, the patentee would have

the exclusive right to prevent third parties, who do not have his

consent, from the act of using that process, as well as from the act of

using, offering for sale, selling or importing any product obtained

directly by that process in India. The change is therefore, that under

the amended Section 48 a right is given to the patent holder Plaintiff,

to prevent third parties from making, selling or offering for sale, the

product for which such patent has been granted without the prior

consent of the patent holder. The amended Section 48, however, does

not in any manner change the position as regards the validity of the

patent itself. It would still be vulnerable to challenge in terms of

Section 13 (4) read with Sections 64 and 107 of the Act. A similar

conclusion has been arrived at in Bajaj Auto Ltd. v. TVS Motor

Company Ltd. (supra).

49. This Court holds that for the aforementioned reasons, in view of

the prima facie non-compliance by the Plaintiff with the requirement

of Sections 8 (1)(b) and 8(2) of the Act, the ground for revocation as

contained in Section 64 (1) (m) is prima facie attracted. This Court

does not find it necessary to examine in a greater detail whether the

other grounds for revocation, including those spelt out in Sections 64

(1) (h) or (j), are attracted. In the considered view of the Court, that

would require evidence to be led. The Court is also, therefore, not

examining whether the subject patent is vulnerable on the grounds of

lack of inventive step and obviousness or non-working of the patent.

The petition before the IPAB will perhaps afford an opportunity for a

full fledged enquiry into those aspects, and therefore this Court

refrains from expressing any opinion thereon.

The effect of Section 47 of the Act

50. The point concerning the Ministry of Railways supplying the

drawings to the bidders for the tender floated by it for the supply of

subject device requires to be addressed next, particularly since this is a

peculiar feature of this case. The letter dated 23rd/25th June 2004

written by the Director General (Wagon) of the RDSO to as many as

ten prospective suppliers of the side bearing pad informs them of "the

decision taken to manufacture the Cansub 22 HS bogie with PU side

bearer to drawing No. AAL-021101 (Alt.1) with effect from

01.09.2004." The letter also mentions the three manufacturers in

Lucknow stated to be the Plaintiff‟s licencees as the "approved

sources." What is interesting is that this was written at a time when

the subject patent for the device was pending consideration before the

Controller of Patents. What it also shows is that the supplier of the

device would have no choice but to supply the device to the Railways

which answered the drawing. This explains Clauses 1701 and 1702 of

the Indian Railways Standard Condition which exempts not only the

Railways from being made liable for infringing the rights of a patent

holder but also its contractor who for that purpose is to be treated as

"an agent of the Government." In fact the Plaintiff does not contest

this legal proposition. The argument is that while the Railways may be

exempt in terms of Section 48, they will have to also account for

Section 156 and therefore their contractor cannot use the subject

patent for manufacture of the subject device without the prior

permission of the Plaintiff. This is what requires examination.

51. Section 48 which spells out the rights of the patent holder has been

expressly made "subject to the other provisions contained in this Act

and the conditions specified in Section 47." Therefore, the right under

Section 48 is a qualified right. The relevant sub-sections of Section 47

which set out the conditions read as under:

"47. Grant of patent to be subject to certain conditions.-

The grant of a patent under this act shall be subject to the condition that--

1. any machine, apparatus or other article in respect of which the patent is granted or any article made by using a process in respect of which the patent is granted, may be imported or made by or on behalf of the Government for the purpose merely of its own use;

2. any process in respect of which the patent is granted may be used by or on behalf of the Government for the purpose merely of its own use;

3...

4....."

52. A plain reading of the above provision is that the patent in respect

of the subject device "may be used by or on behalf of the Government

for the purpose merely of its own use." This is an implied condition of

the grant of patent. In the circumstances, if the government through

the Ministry of Railways has itself supplied the drawings to the

prospective suppliers and asked them to supply side bearing pads in

conformity with those drawings, it cannot possibly be said that there is

an infringement by either the Railways or its contractor of the patent.

In the present case, the Plaintiff has also participated successfully in

the very tender in which the Consortium of the defendants has been

awarded a small percentage of the contract for supply of side bearing

pads. It knew of the above stipulation and has not chosen to question

it till the tender was finalised and the contract awarded. The Plaintiff,

by participating in such tender, must be taken to have consented to the

use of its patent by both the Railways as well as any supplier of the

Railways to whom the contract for supply was to be awarded. It is

also not in dispute that the Defendants have formed their Consortium

only for supplying the subject device to the Railways. Although

Section 156 of the Act states that patent will bind the Government,

that provision has also been made "subject to the other provisions

contained in this Act." A harmonious reading of Sections 47 and 156

of the Act would indicate that the object is not to involve the

Government or its department or a contractor acting on its behalf in

any litigation involving infringement of patent when the product or

process in question is for the "own use" of the government. This is a

price that the patent holder pays for getting a sizeable chunk of the

contract, in this case 95%, which is virtually a monopoly. Where it is

not for the government‟s own use, or where the Government supplies

the drawings of a patented product without the knowledge or consent

of the patent holder, then Section 156 would permit enforcement and

protection of the patent even against the government.

53. In Garware Wall Ropes Limited v. A.I. Chopra the learned Single

Judge of the Bombay High Court (Nagpur Bench) had occasion to

interpret Section 47 of the Act. The words „merely of its own‟

occurring in Section 47 of the Act was held to mean that use for the

purposes of the Government by any department of the Government

and use by servants and agents of the Government in performance of

their duties/in discharge of their duties assigned to them irrespective

of who is benefited by such use. It was held that this would not

include use by any other person like contractor or railways since the

meaning is strictly restricted to the direct use by any department of the

Government or its servants. A reference was made to Sections 99 and

100 of the Act concerning the use of inventions for the purposes of the

Government. This Court understands Section 47 to not restrict the

making of the device by the Government itself because the words

used are "made by or on behalf" of the Government. It is the end use

that has to be for the Government or its department exclusively.

Clauses 1701 and 1702 which were perhaps not noticed in the said

decision. These clauses virtually exempt the railways and the

contractor from liability in such instance. There can be no manner of

doubt as far as the present case is concerned, that the subject device

was to be made on behalf of the Ministry of Railways by the supplier

to whom the contract was to be awarded. It is for the purposes of the

own use of the Ministry of Railways. It would appear therefore, that

Section 47 (1) would bar the Plaintiff from seeking to prevent

Defendants 2 to 4 from making the subject device since it is going to

be manufactured and supplied only to the Railways for its own use.

54. For the above reasons, this Court is not satisfied that the Plaintiff

has been able to make out a prima facie case for the continuation of

the interim injunction in its favour. As will be seen hereafter, the

balance of convenience at this stage also appears to be in favour of the

Defendants 2, 3 and 4 for not granting an interim injunction in favour

of the Plaintiff.

Balance of convenience

55. The finalised tender document has been placed on record. What

has been awarded to the Plaintiff is 95% of the total quantity of the

device to be supplied to the Railways. In fact Clause 7 of the

"instructions" appended to the tender itself made it clear that "Item is

reserved for bulk procurement for RDSO approved sources. Others

can be considered for developmental order." What the Consortium has

been awarded is the "developmental order" which is barely 5% of the

total quantity. If the object of the Act is to ensure that the patent

holder has the exclusive right to commercially exploit the patent, then

that object is more or less achieved in the present tender as well,

notwithstanding Section 47 of the Act. By refusing an injunction,

while still imposing conditions on the Defendants 2, 3 and 4 to

maintain accounts, the Court would be ensuring that in the event of

the Plaintiff succeeding, it will be compensated even as regards the

5% quantity. In the above circumstances, the balance of convenience

is not in favour of grant of an interim injunction as prayed for by the

Plaintiff.

Conclusion

56. Accordingly the interim injunction granted by this Court on May

27th 2009 stands vacated and the prayer by the plaintiff for the grant of

an interim injunction is rejected. However, it is directed that

Defendants 2, 3 and 4 will each file affidavits of undertaking in this

Court within two weeks undertaking that they will, during the

pendency of the present suit, keep complete accounts of the

manufacture, sale and supply of the subject device and file in this

Court such accounts, duly certified by their auditors at the end of

every three months, with advance copies to the Plaintiff. The

Defendants 2, 3 and 4 will also undertake to file the annual statement

of sales of the subject device duly authenticated by their auditors.

57. It is inevitable that at the interlocutory stage, in an intellectual

property rights case, elaborate arguments are advanced on the basis of

materials on record and the Court is invited therefore to give an

opinion, which may seem detailed. Yet, it needs to be clarified that

this opinion is only a prima facie one formed at the pre-trial stage and

is not intended to influence either the final outcome of the suit or any

other proceedings involving the parties in any other forum, including

the IPAB.

58. I.A. Nos.6782 and 8372 of 2009 are disposed of in the above

terms.

S. MURALIDHAR, J.

AUGUST 28, 2009 dn/rk