Gilead Sciences Inc vs Intellectual Property Appellate ...
2012 Latest Caselaw 85 Del

15.

*        IN THE HIGH COURT OF DELHI AT NEW DELHI


+                         Date of Decision: 05.01.2012


%        W.P.(C) 7640/2011 & C.M. No. 17304/2011 (for stay)


         GILEAD SCIENCES INC                                ..... Petitioner
                      Through:           Mr.    Sudhir    Chandra,      Senior
                                         Advocate, with Mr. Hemant Singh,
                                         Mr. G. Nataraj & Mr. Manish Kumar,
                                         Advocates.
                      versus

         INTELLECTUAL PROPERTY APPELLATE BOARD
         THROUGH THE DY REGISTRAR AND ORS ..... Respondents
                      Through: Mr. Neeraj Chaudhari, CGSC, for the
                               respondents No. 2 & 3/UOI.
                               Dr. Abhishek Manu Singhvi, Senior
                               Advocate, with Ms. Mitul Das &
                               Ms.Meenu Sharma, Advocates for the
                               respondent No. 4.


         CORAM:
         HON'BLE MR. JUSTICE VIPIN SANGHI


VIPIN SANGHI, J. (Oral)

1. The petitioner in this petition under Article 226 of the Constitution of

India assails the order dated 13.06.2011 passed by the Intellectual Property

Appellate Board (the Board), whereby the Board has rejected the petitioners

application for condonation of delay in filing the appeal under Section 117A

of the Patents Act, 1970, against the refusal of the Controller of Patents and

Designs (The Controller) to accept the petitioners Indian Patent Application

No.896/DEL/2002. The said application was refused after pre-grant

opposition by respondent no.4 herein.

2. The order refusing to accept the petitioner's aforesaid patent

application was passed by the Controller on 30.07.2009, whereas the appeal

was preferred before the learned Board on 26.08.2010. The period of

limitation within which the appeal could have been preferred is prescribed in

Section 117A(4) as three months from the date of the decision, order or

direction of the Controller. Apparently, there was a delay of about ten

months in filing of the said appeal.

3. The issue with regard to maintainability of an appeal against pre-grant

rejection of the patent application was settled by the judgment of this Court

in M/s. UCB Farchim S.A. v. M/s. Cipla Limited & Others, 167 (2010)

DLT 459, decided on 08.02.2010. Until then, the legal position with regard

to maintainability of an appeal under Section 117A, against the refusal of the

patent application on account of pre-grant opposition was not settled. This

was so because Section 117A, in terms, did not mention an order or decision

of the Controller under Section 25(1) (which deals with pre-grant

opposition), but only made reference to an order passed under Section 25(4)

(which deals with post-grant opposition), as an order against which an

appeal would be maintainable. Moreover, the Board in its order dated

27.10.2009 in the case of Yahoo Inc. v. Controller of Patents,

MANU/IC/0080/2009, appears to have held that no appeal lies in the case of

an order passed on a pre-grant opposition.

4. The submission of learned senior counsel for the petitioner is that

after the decision in UCB Farchim (supra) was rendered, the petitioner filed

W.P.(C.) No.532/2010 (in relation to the rejection of the petitioner's patent

application No.963/DEL/2002) to seek a clarification from the Court as to

whether the said ruling dated 08.02.2010 would apply in rem retrospectively.

This writ petition was disposed of on 23.02.2010 by the Court, permitting

the petitioner to file an appeal with an appropriate application seeking

condonation of delay.

5. The further submission of the petitioner is that despite the aforesaid

judgment of the Delhi High Court in the case of UCB Farchim (supra), the

IPAB continued to assume the posture that an appeal against an order passed

under Section 25(1) of the Act was not maintainable under Section 117A of

the Patents Act.

6. In respect of one of the appeals preferred by the petitioner against an

order passed under Section 25(1) by the Controller, the IPAB initially raised

various objections on 02.12.2009. That appeal had been preferred in respect

of patent application No. 2076/DEL/1997. The initial objection was raised

before the judgment of this Court in UCB Farchim (supra). One of the

objections raised was to clarify as to how an order passed under Section

25(1) is appealable under Section 117A of the Patents Act.

7. The same objection was sought to be revived when the petitioner

sought entertainment of the appeal vide a letter dated 23.02.2010 received in

the office of the Board on 18.03.2010. The Board still persisted with its

objection that an appeal under Section 117A is not maintainable against an

order passed by Controller under Section 25(1).

8. Mr. Chandra, learned senior counsel for the petitioner submits that the

Board listed the said appeal for hearing, to hear on the aspect of its

maintainability vide a notice dated 05.07.2010. Only after the matter was

heard by the Board on 02.08.2010, the Board orally observed that the appeal

would be maintainable. The order of the Board on the issue of

maintainability was passed on 30.11.2010, when the Board directed that the

appeal be numbered.

9. Mr. Chandra submits that a perusal of the order dated 30.11.2010

passed by the Board would show that the reason given by the Board for

holding that the remedy of appeal under Section 117A is available, was that

the interest of natural justice requires that an appeal should be entertained.

He submits that, in fact, the Board was bound by the decision of this Court

in the case of UCB Farchim (supra) and it should have, straightaway,

accepted the said legal position and entertained the appeal without raising

any further objection, or hearing any further arguments. He submits that by

raising an issue of maintainability of the appeal despite the judgment of this

Court in UCB Farchim (supra), the Board unnecessarily created doubts in

the mind of the litigants with regard to maintainability of the appeal, which

prevented the petitioner from preferring the appeal in relation to refusal of

patent application No. 896/DEL/2002 earlier than when it was preferred.

10. Mr. Chandra submits that the appeal had been preferred on

26.08.2010 after the Board, during the course of hearing on 02.08.2010,

orally observed that it would entertain appeals against orders passed under

Section 25(1), under Section 117A of the Patents Act.

11. Mr. Chandra submits that the Board is vested with the power to

condone the delay in filing of the appeal by virtue of Section 117A(4). He

submits that the present members of the Board have taken the view that the

issue relating to maintainability of the appeal having been decided on

08.02.2010, the petitioner knew that it had right of appeal against order of

rejection passed by Controller under Section 25(1). He submits that the

Board has now correctly observed that when UCB Farchim (supra), in no

uncertain terms states that a right of appeal exists in respect of an order

passed under Section 25(1), the Board had no further option in the matter.

He submits that, however, the earlier members of the Board were reluctant

to concede that position despite the decision in UCB Farchim (supra). Mr.

Chandra submits that the Board has not appreciated the fact that on account

of the uncertainties created by the earlier attitude and actions of the Board,

the petitioner was not sure whether an appeal would be entertained by the

Board, even if filed by the petitioner.

12. Mr.Chandra further submits that the right of appeal is a valuable right.

The rejection of the petitioner's patent application has serious civil

consequences for the petitioner. The right of appeal is the only remedy

available in law with the petitioner. The petitioner cannot file a fresh

application to register the patent as, by now, it would be barred by

limitation. The delay, if any, in filing of the appeal to assail the order of the

Controller under Section 25(1) of the Act has only delayed the registration

of the petitioner's patent. On the other hand, the said appeal has not caused

any prejudice to anyone, including respondent No. 4. The condonation of

delay, if any, would, therefore, not prejudice the rights of, inter alia,

respondent No. 4, as respondent No. 4 would still have the right to oppose

the petitioner's appeal on merits, even if the so-called delay is condoned.

Mr. Chandra placed reliance on the decision of the Supreme Court in N.

Balakrishnan Vs. M. Krishnamurthy, AIR 1998 SC 3222.

13. The petition is opposed by the respondent No. 4. Dr. Singhvi, learned

senior counsel for the respondent No. 4, submits that the petitioner has over

the years been making various patent registration applications, which have

been opposed by the said respondent from time to time. The petitioner is,

therefore, well-aware of the legal position with regard to the remedies which

are available to it against the non-grant of the patent application under

Section 25(1) of the Act.

14. Dr. Singhvi submits that the petitioner made four patent applications

which were rejected on different dates. The details of these applications and

the dates on which they were rejected under Section 25(1) by the Controller

are as follows:

  Sl. No.        Patent Application No.              Order rejecting application
                                                       under Section 25(1)
      1         396/DEL/1996                                 23.03.09
      2         896/DEL/2002                                 30.07.09
      3         2076/DEL/1997                                30.07.09
      4         963/DEL/2002                                 09.03.09

(The patent application to which the present writ petition relates has been

shown in bold)

15. Dr. Singhvi submits that in relation to the first of the aforesaid patent

applications, the petitioner preferred a review before the Controller on

25.04.2009; in relation to the last of the aforesaid applications, the petitioner

preferred a writ petition on 27.01.2010; however, in relation to the order

passed rejecting the patent application in question, i.e. patent application No.

896/DEL/2002, the petitioner invoked no remedy to assail the order dated

30.07.2009 passed by the Controller under Section 25(1).

16. Dr. Singhvi submits that it was open to the petitioner to have preferred

a writ petition soon after passing of the order dated 30.07.2009 by the

Controller under Section 25(1), however, that was not done. The petitioner

neither filed an appeal under Section 117A, nor a writ petition before a

competent Court to assail the order dated 30.07.2009. This clearly shows

that the petitioner, in fact, had no intention of assailing the order passed by

the Controller on 30.07.2009, and the appeal preferred, highly belatedly, on

26.08.2010 was merely an afterthought. He submits that just as the

petitioner had preferred an appeal under Section 117A in relation to the

rejection of the patent application No. 2076/DEL/97 in the year 2009,

similarly, the petitioner could have preferred an appeal before the Board in

relation to the rejection of patent application No. 896/DEL/2002, even if the

same were to remain under objections, however, the petitioner did not take

any such steps.

17. Dr. Singhvi submits that the respondent No. 4 has a vested right as an

appeal was not preferred within the period of limitation. Therefore, the

order passed by the Controller rejecting the petitioner's patent application

has attained finality. Entertainment of the appeal at this stage, by condoning

the immense delay would prejudice the said vested right of the respondent.

18. Dr. Singhvi further submits that under Section 117A(4), the Appellate

Board could entertain the appeal filed beyond the period of limitation

provided the same is permitted "in accordance with the rules made by it

allow". He submits that the order assailed before the Board having been

passed on 30.07.2009, the Intellectual Property Appellate Board (Patents

Procedure) Rules, 2010, which came into force only on 30.11.2010, would

not be applicable in the present case.

19. He further submits that the decision relied upon by the petitioner in

the case of N. Balakrishnan (supra) does not advance the case of the

petitioner. Rather the Supreme Court has held that where the explanation for

the delay smacks of mala fides, or it is a part of a dilatory strategy and where

the Court has reasonable ground to think that the delay was occasioned by

the party deliberately to gain time, the Court should lean against acceptance

of the explanation. While condoning the delay, the Court should not forget

the opposite party altogether.

20. Having heard learned senior counsel for the parties, considered the

facts & circumstances of this case, the other surrounding circumstances, and

having considered the judgment of the Supreme Court relied upon by both

the parties, I am inclined to allow the present petition, set aside the

impugned order dated 13.06.2011 of the Board and accept the petitioner's

explanation for the delay in filing the appeal before the Board, as, I am of

the view that the approach of the learned Board is laconic.

21. It is not in dispute that till the judgment of the Delhi High Court was

rendered in the case of UCB Farchim (supra) on 08.02.2010, the

maintainability of the appeal under Section 117A in respect of an order

passed under Section 25(1) by the Controller was seriously in doubt. In fact,

the Board appears to have itself taken the view that such an appeal would

not be maintainable, in its order dated 27.10.2009 passed in the case of

Yahoo Inc. (supra). There is no doubt that the Board was not entertaining

such appeals at the relevant time when the order dated 30.07.2009 was

passed by the Controller. The petitioner was aware of this position, as its

appeal preferred against the order passed in patent application No.

2076/DEL/1997 was lying in defect on the ground that an appeal against an

order under Section 25(1) was not maintainable before the Board under

Section 117A of the Patents Act. Therefore, it is clear that the failure of the

petitioner to file an appeal against the order dated 30.07.2009 passed by the

Controller in respect of patent application No. 896/DEL/2002 within the

period of limitation cannot be held against it.

22. Even according to the respondent, the petitioner is thickly into the

business of filing patent applications and was aware of the legal position

with regard to maintainability of the appeal in relation to an order under

Section 25(1).

23. During the course of arguments, the respondent has informed the

Court that the issue about maintainability of the appeal against an order

under Section 25(1) was pending in this Court for about a year. A perusal of

the said judgment shows that various writ petitions of the year 2009 were

also decided along with the case of UCB Farchim (supra). Therefore, the

conduct of the petitioner in awaiting the decision in that case, to know where

it stands and thereafter to prefer its remedy also cannot be held against it and

is an acceptable explanation.

24. Even after the said decision was rendered, it is not disputed that in the

petitioner's other appeal, the Board sought to raise doubts about the

maintainability of the appeal as notices dated 05.07.2010 were issued to the

petitioner in SR No. 494/09/PT/IPAB and SR No. 495/09/PT/IPAB asking

the petitioner to appear for hearing on 02.08.2010 to address the Board on

the issue of maintainability of the appeal. Therefore, even though this Court

had ruled that an appeal under Section 117A would lie in respect of an order

under Section 25(1), the Board, at the relevant time, seems to have still

entertained doubts regarding the maintainability. These doubts, it appears,

were cleared only during the course of hearing before the Board on

02.08.2010.

25. If the Board itself entertained such doubts about the maintainability of

the appeal till as late as 02.08.2010, despite this Court having been rendered

its judgment in UCB Farchim (supra) as early as 08.02.2010, there is no

justification to attribute greater wisdom to the petitioner. By hind site, it is

very easy for the Board now to say that the petitioner should have known

that once this Court had ruled that an appeal would be maintainable, the

Board did not have an option but to entertain the appeal. However, despite

that being the obvious preposition, the fact of the matter is that the Board did

raise doubts about the maintainability of the appeal, even though the

judgment of this Court in UCB Farchim (supra) was brought to its

knowledge. Consequently, the petitioner, it appears, was all at sea, not

knowing in which direction to proceed.

26. The petitioner may have been taking shots in the dark, as it preferred a

writ petition in one case (in relation to patent application No. 963/DEL/2002

rejected on 09.03.2009), and thereafter preferred an appeal on 06.04.2010,

but that does not mean that the failure of the petitioner in taking any steps in

relation to the order passed in patent application No. 896/DEL/2002, in the

aforesaid facts & circumstances, can be construed as an abandonment by the

petitioner of its right to assail the said order passed by the Controller. One

cannot lose sight of the fact that every legal remedy availed of by a party

entails substantial legal costs. In the scenario which presented itself and as

noted above, the petitioner may have been reluctant to take one or the other

action, not knowing whether the remedy invoked was even maintainable or

not.

27. The respondent has failed to satisfy me as to how it has been

prejudiced due to the late filing of the appeal by the petitioner. By delaying

the filing of its appeal, the petitioner has only lost time. Even if the

petitioner is held entitled to grant of patent registration in respect of the

application in question, the same has been delayed due to the petitioner's

own conduct. On the other hand, the respondent No. 4 continues to enjoy

the rights available to it, which it would have exercised had the appeal been

preferred in time. Respondent No. 4 would be entitled to contest the said

appeal on merits. There is no prejudice caused to or suffered by respondent

No. 4 or any other person by the delayed filing of the appeal and it is not

shown that the petitioner is guilty of deliberate delay in filing the appeal

with any particular object in mind.

28. The Supreme Court in N. Balakrishnan (supra) held that the rules of

limitation are not meant to destroy the rights of parties. They are meant to

see the parties do not resort to dilatory tactics but seek their remedy

promptly. The object of providing a legal remedy is to repair the damage

caused by reason of legal injury. Refusal to condone delay would result in

foreclosing a suitor from putting forth his case. There is no presumption that

the delay in approaching the court is always deliberate. The expression

"sufficient cause" under Section 5 of the Limitation Act should receive a

liberal construction so as to advance substantial justice (see Shakuntala

Devi Jain Vs. Kuntal Kumari, AIR 1996 SC 575 and State of West Bengal

Vs. The Administrator, Howrah Municipality, AIR 1972 SC 749). There

could be some lapse on the part of the litigant concerned. That alone is not

enough to turn down his plea and to shut the doors against him.

29. Though Dr. Singhvi has also relied upon the same judgment, it has not

been shown that in the facts of this case it could be said that the explanation

furnished by the petitioner smacks of mala fides or the delay is a part of a

dilatory strategy on the part of petitioner. The approach of the learned

Board in dealing with the petitioner's application to seek condonation of

delay appears to be misdirected, and has resulted in manifest failure of

justice.

30. Though Dr. Singhvi has sought to point out a couple of apparent

contradictions in the petitioner's rejoinder, in my view, the same are not

material. The Court has to take a holistic view of the matter and so viewed,

I am satisfied that the petitioner was prevented on account of the lack of

clarity in the law with regard to maintainability of an appeal under Section

117A in respect of an order passed under Section 25(1) of the Patents Act,

compounded by the aforesaid conduct of the Board in raising doubts

regarding maintainability, despite the decision in UCB Farchim (supra).

31. I may now deal with a submission of Dr. Singhvi that the Board

cannot condone the delay beyond the period of three months, as, according

to him, further period is not specified in the Rules. Section 117B of the

Patents Act provides that:

"The provisions of sub-sections (2) to (6) of section 84, section 87, section 92, section 95 and section 96 of the Trade Marks Act, 1999 (47 of 1999) shall apply to the Appellate Board in the discharge of its functions under this Act as they apply to it in the discharge of its functions under the Trade Marks Act, 1999. (Emphasis supplied) "

32. Section 92 of the Trade Marks Act, 1999 states that the Appellate

Board shall not be bound by the procedure laid down in the Code of Civil

Procedure, 1908 but shall be guided by principles of natural justice and

subject to the provisions of the Trade Marks Act and the rules made

thereunder. The Appellate Board shall have the powers to regulate its own

procedure including the fixing of places and the times of its hearings.

33. Though rules had been framed under the Patents Act in the year 2003

called the Patents Rules, 2003, these rules are silent with regard to the

procedure for preferring an appeal under the Patents Act. This is so,

presumably for the reason that the Appellate Board, acting under Section 92

of the Trade Marks Act, has framed the Intellectual Property Appellate

Board (Procedure) Rules, 2003, which deal with the procedure for preferring

an appeal before the Appellate Board. In the discharge of its functions under

the Patents Act, these Rules apply to the Board, as they apply to the

discharge of its functions under the Trade Marks Act.

34. Rule 14 of the Intellectual Property Appellate Board (Procedure)

Rules, 2003 framed under the Trade Marks Act states that if the Appellate

Board is satisfied that there is sufficient cause for extending the time for

doing any act prescribed under the rules (not being a time expressly

provided for in the Trade Marks Act, 1999), it may, subject to such

conditions as may think fit to impose, extend the time and inform the parties

accordingly. This power is exercised upon making of an application to the

Appellate Board in the prescribed form. The procedure for preferring an

appeal under the aforesaid rules is prescribed from Rule 3 onwards.

Therefore, the Appellate Board is empowered to extend the time for

preferring an appeal under Rule 14 of the Intellectual Property Appellate

Board (Procedure) Rules, 2003 framed under Section 92 of the Trade Marks

Act.

35. A reading of Section 117A(4) shows that the Board has the power to

extend the time beyond three months. This is evident from the use of the

words "or even such further time as the Appellate Board may, in accordance

with the rules made by it allow". The submission of Dr. Singhvi that the

period of limitation for preferring an appeal is three months and the Board

cannot relax the same any further, therefore, cannot be accepted. A reading

of Section 117A(4) read with Rule 14, as aforesaid, shows that there is no

outer limit in respect of the period for which the Board may condone the

delay. However, the delay can be condoned upon the Board being satisfied

that sufficient cause for extending the time for preferring an appeal has been

disclosed.

36. Even under Rule 16 of "The Intellectual Property Appellate Board

(Patents Procedure) Rules, 2010", and Rule 3 of "The Patents (Appeals and

Applications to the Intellectual Property Appellate Board) Rules, 2011", the

Board is empowered to condone the delay in cases disclosing sufficient

cause therefor.

37. For all the aforesaid reasons, I allow the writ petition and set aside the

impugned order of the Board dated 13.06.2011. The Board shall now

proceed to consider the petitioner's appeal on its merits. The parties are left

to bear their respective costs.

VIPIN SANGHI, J

JANUARY 05, 2012 SR/'BSR'