Tag Archives: IP Litigation

Jurisdiction of courts in online transactions: Impresario Entertainment & Hospitality Pvt Ltd V. S & D Hospitality

Introduction

Over the last decade or so, the Delhi HC has become the hub for cases pertaining to IP litigation. This prompts parties to initiate proceedings in Delhi HC relating to IP laws which has eventually raised questions regarding the jurisdiction of the court especially in online transactions. This issue has been  dealt by Mukta Gupta, J. in the present case.

Background of the case

The plaintiff is a company that provides restaurant services with its registered office in Mumbai and is carrying its business in HKV, New Delhi and a restaurant under the name and style of ‘SOCIAL’ which it has trademarked and has various coffee shops as well. It came to know in 2017 that the defendant has 2 restaurants in Hyderabad under the name ‘SOCIAL MONKEY’. Also, it has a popular beverage by the name ‘A GAME OF SLING’ and the defendant has named a beverage as ‘HYDERABAD SLING’ which is identical and/or deceptively similar to the plaintiff’s beverage.

Hence, the plaintiff had filed for seeking permanent injunction against the defendant from manufacturing, selling, marketing, advertising, and/or offering its services under the trademarks ‘SOCIAL’ and ‘STONE WATER’ or anything similar to them or any attempt to pass off its trademark in defendant’s outlets.

Both these outlets have entered into contract with popular websites like Zomato and Dine Out and so the information of both, along with menu and contact info is available on the websites of Zomato and Dine Out.

Issue

Without going into the merits of the case, the court must first satisfy itself that it has the jurisdiction to entertain the case. So, the issue before the court in this case was whether it had the jurisdiction to entertain the case or not?

Contentions

The primary contention of the defendant was that the court didn’t have the jurisdiction to entertain the suit as it neither had its registered office in Delhi nor it carried on any business in Delhi. Also, plaintiff’s registered office was located in Mumbai which was also outside the jurisdiction of Delhi HC. Defendant’s other contention was that the plaintiff failed to prove its principal office’s location as Delhi.

Responding to this, the plaintiff contended that it didn’t have any office or branch in Hyderabad and that its principal office for financing and licensing of all its brands was located in Delhi only.

The plaintiff also contended that due to the presence of the defendant on websites like Zomato and Dine-out, it was in a position to invite the customers of its plaintiff to visit its outlet in Hyderabad. This was vehemently opposed by the defendants as a misconceived proposition as mere booking or placing an order through internet was insufficient to conclude that a transaction had taken place.

The plaintiff had also contended that the defendant was planning to expand pan India as it had filed for trademark application which was opposed by the defendant stating that the plaintiff’s qua timet action lacks the necessary ingredients of any imminent danger.

Plaintiff also claimed that at least one customer from Delhi had booked a table in defendant’s outlet in Hyderabad and so the cause of action had arisen in Delhi.

Held and Analysis

Gupta J dismissed the case, for want of jurisdiction.

In reaching to this decision, the court relied heavily on the standards of jurisdiction set by the Delhi HC in the case of Banyan Tree Pvt Ltd. v. A. Murali Krishna Reddy[1]. In the Banyan Tree case, the court has held:

“…that the mere accessibility of the Defendants website in Delhi would enable this Court to exercise jurisdiction. A passive website, with no intention to specifically target audiences outside the State where the host of the website is located, cannot vest the forum court with jurisdiction.”

Necessary distinction was made between the ‘purposeful availment’ test and the ‘purposeful avoidance’ test. The court held that to establish the case, it was incumbent upon the plaintiffs to show that the defendants had purposely tried to target the customers of the jurisdiction of forum State. Once it was established, it was now upon the defendants to show that they had intended to avoid the availment of the jurisdiction of the forum State. Applying this in the case of the websites, the court held that mere interactivity of the website in the forum State did not attract its jurisdiction.

Considering the extent of burden of proof on the plaintiff to show that the defendant had purposefully availed the jurisdiction of the forum State, the court held that the defendant must enter in some commercial transaction with the customers of the forum State intending to pass off their goods as that of the plaintiffs. Material must be produced to the court by the plaintiff regarding the same and not the mere possibility of it.

The court thus held that even if the defendant attracted or had been able to attract the customers from other jurisdictions by way of Zomato and Dine-out, the customers would still be required to go to Hyderabad to avail the services. The best that could be done by the customers of other jurisdictions, the court held, was to book a table at defendant’s restaurant which ultimately led the completion of transaction at Hyderabad where the cause of action would eventually lie.

Despite being well reasoned judgement, the court has in this case intended to relate the cause of action with the completion of transaction. So, clouds of uncertainty still hover over the situation where delivery of goods can be made to the forum State or where assistance of an intermediary can be obtained. Not much can be said where the defendants are set ex parte as has happened in the previous case of Impresario Entertainment & Hospitality Pvt. Ltd v. Urban Masala[2] where Manmohan J. granted an ex parte injunction in the favour of the plaintiff against the defendant without even considering the jurisdictional claim.

Conclusion

The present case has dealt at length with the competency of the courts to entertain cases related to online transactions. Mere accessibility of the defendant’s website in the forum State can no longer be a ground for the courts to exercise jurisdiction.

Further, the law laid down in Banyan Tree (discussed here) has been upheld and the court has further narrowed down. The judgment in this case has paved the way for a more rigorous and consistent standard in determining the competency of the courts to entertain cases in case of online transactions.

Author: Hunney Mittal, intern at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at swapnils@khuranaandkhurana.com.

References:

[1]CS (OS) No.894/2008

[2]CS(COMM) 441/2017

[3] CS(COMM) 111/2017

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Curious Case of Corporate Viel in Revocation Petition

This case pertains to a suit filed by Galatea Ltd. & Anr (Petitioners), against Diyora & Bhanderi Corporation (Defendants) and thirteen other defendants, for infringing of its patent IN 271425 (suit patent) for a ‘device which eliminates presence of gas bubbles from the immersion medium”. Along with the suit, the plaintiffs filed an application under order 39 Rule 1 & 2 of Civil Procedure Code, seeking interim injunction restraining the latter from using, selling or offering to sell the patented device, which was denied by the district court Vadodra. Later, it was appealed by the Plaintiff in High Court that appointed a local commissioner to make a report on investigation held in the defendants’ premises and remanded the case back to the district court.

The defendants filed written statement denying all the allegations made by plaintiff, and also filed a counter claim under section 64 (1) (e) and (f) of Patent Act, 1970 for revocation of the patent in the High Court of Ahmedabad due to lack of  novelty[1] and inventive steps[2]. The proviso to section 104, Patent Act, 1970, necessitates the transfer of the case to the High Court.

The issue that the Plaintiff raised was that revocation by means of counter-claim filed by Defendant Nos. 4 & 5 before High Court is not maintainable as revocation petition has already been filed by Defendant no. 3 before the IPAB, being the same entity as Partners in Defendant no. 3 are directors in Defendant Nos. 4 and 5.

PLAINTIFF’S CONTENTION

Plaintiff relied on the case of Saurabh Exports v. Blaze Finance & Credits (P.) Ltd[3]where the Defendants entered into an agreement with the Plaintiff under which the Plaintiff made a deposit of 15 lakhs in the company, which the defendants failed to pay and all the defendants denied their liability to repay the same. Hence, the court lifted up the corporate veil on the basis that, theDefendants’companieswere a family arrangement made to defraud the Plaintiff under the cloak of a corporate entity. This makes the company and the directors liable. Referring to this case, the Plaintiff claimed that since partners and directors of Defendant Nos. 3, 4, and 5 are same, corporate veil of Defendant nos. 4 and 5 should be lifted and counterclaim should not be maintainable as it would lead to same relief of patent invalidation being asked through two judicial entities (IPAB and High Court). Thus, the Plaintiff argued that Defendant entities are not separate but are alter-egos of each other and that multiple entities of Defendants are created to conceal improper activities conducted by them. Where the corporate charter is employed for the purpose of committing illegality or for defrauding others, the court would ignore the corporate character and will look at the reality behind the corporate veil so as to enable it to pass appropriate orders to do justice between the parties concerned.[4]

Plaintiff referred to the case of Dr. Alloy Wobben & Ors. V. Yogesh Mehra & Ors,[5]where the court held that the use of the word or” in Section 64(1) demonstrates more than one remedies but that cannot be simultaneously used.Further, it was argued by the plaintiffs that since defendant no. 3 have already filed a revocation before IPAB, the revocation petition filed by Def. Nos. 4 and 5 are not sustainable as all of them are single entity. Hence, the subsequent revocation filed before the High Court must be stopped as the Defendants cannot avail dual remedy for the same cause of action, thereby making the counter-claim non-sustainable.

DEFENDANT’S CONTENTION

Defendants first highlighted a principle of Patent Law that if validity of a patent is challenged, i.e. revocation is pending for the patent suit, then no injunction can be granted.[6] Thus, plaintiff’s interim application under order 39 rule 1 & 2 of CPC, for seeking ex- parte injunction restraining the defendants from manufacturing, selling, offering for sale any infringed device must be rejected.

Defendants submitted their arguments on two grounds:

  1. Defendants asserted that Defendant nos. 3, 4, 5 are different entities.Defendant no. 4 and defendant no. 3 are completely different entities dealing with different line of business, although partners and directors are common. They explained,“Each company is a separate and distinct legal entity and the mere fact that two companies have common shareholders or common Board of Directors, will not make the two companies a single entity. Nor will existence of common shareholders or Directors lead to an inference that one company will be bound by the acts of the other.”[7] With regard to Defendant no. 5, it is totally a different entity as it is Private Ltd Co, incorporated under Company Act, 1956 comprising of different partners. The plaintiff has itself involved defendants 4 and 5 in the present suit, resulting them to have locus-standi in the case to file a revocation petition by means of a counter-claim according to section 64 of Patent Act, 1970.
  2. Corporate veil is applicable only in certain cases such as Tax evasion, fraud, enemy character, ultra vires Act, and act against public interest, negligent activities or company avoiding legal obligations. They further emphasized that corporate veil is a rule, and lifting of corporate veil is an exception that can be done only on limited circumstances. Corporate veil should be applied only in scenarios where it is evident that company was a mere camouflage or sham deliberately created by persons exercising control over the said company for the purpose of avoiding liability.[8]Thus, lifting of corporate veil is not valid in the present case as the defendant’s business is a bona fide company incorporated having a separate juristic entity.

JUDGEMENT:

Consequently, the District court of Vadodra, decided the whole case by discussing the following two issues.

Issue 1: Whether defendant no. 3, 4 and5 are different entities or not?

Defendant no. 3 is a partnership firm, and all partners of defendant no. 3 are the directors of defendant no. 4, which is a private Ltd. Company. Thus, these two entity are not independent of each other, rather they are an alter – ego of each other. Thus, the counter claim with regard to defendant no. 4 is not maintainable. However, defendant no.5 is a Private Limited Company incorporated under Company Act, 1956, having different directors. Hence, it is completely a separate entity from defendant 3 and 4.

Issue 2: Whether the ‘Lifting of corporate veil’ applicable on the present case?

The court held that corporate veil cannot be lifted and in case of defendant no. 5, no case has been raised by the plaintiff where defendant no. 5 falls under the scope ‘corporate veil’ as corporate veil can be lifted only in certain cases as mentioned by the defendants by referring to plethora of cases.[9]The plaintiff could not put the defendant company in fissures of those specific cases. The court listed out following six legal positions where the  corporate veil can be lifted:[10]

  • ownership and control of a company were out enough to justify piercing the corporate veil;
  • the Court cannot pierce the corporate veil, even in the absence of third party interests in the company, merely because it is thought to be necessary in the interests of justice;
  • the corporate veil can be pierced only if there is some impropriety;
  • the impropriety in question must be linked to the use of the company structure to avoid or conceal liability;
  • to justify piercing the corporate veil, there must be both control of the company by the wrongdoer (s) and impropriety, that is use or misuse of the company by them as a device or façade to conceal their wrongdoing; and
  • the company may be a ‘façade’ even though it was not originally incorporated with any deceptive intent, provided that it is being used for the purpose of deception at the time of the relevant transactions.

Thereby, on discussing the above issues, the Hon’ble Court dismissed the counter-claim of defendant no. 4 for the reason that it is the same entity as of defendant no.3. But the court accepted the counter-claim submitted by defendant no.5 taking it as a separate entity from Defendant nos. 3 and 4. Thus, the court ordered for transfer of the case to High Court of Gujarat according to Section 104 of Patent Act.

[1] Section 64 (1) (e) of the Patent Act : that the invention so far as claimed in any claim of the complete specification is not new, having regard to what was publicly known or publicly used in India before the priority date of the claim or to what was published in India or elsewhere in any of the, documents referred to in section 13:

[2]Section 64 (1) (e) of the Patent Act : that the invention so far as claimed in any claim of the complete specification is obvious or does not involve any inventive step, having regard to what was publicly known or publicly used in India or what was published in India or elsewhere before the priority date of the claim:

[3] [2006] 133 Comp. Cas. 495

[4]Singer India v. Chander Mohan Chadha[2004] 122 Comp. Cas. 468 (SC)

[5][(2014) 15 SCC 360]

[6] TVS Motor Company Limited v. Bajaj Auto Limited, 2009 (40) PTC 689 (Mad); Standipack Private Limited v. Oswal Trading Co. Ltd., 1999 (19) PTC 479.

[7]Indowind Energy Ltd vs. Wescare (I) Ltd.& Anr, AIR 2010 SC 1793

[8] Balwant Rai Salulja V/s. Air India Ltd., AIR 2015 SC 375

[9]Saurabh Exports V/s. Blaze Finlease and Credits Pvt. Ltd.  (supra); Chander Mohan Chadha and Ors.,(supra), Delhi Development Authority; Indowind Energy Ltd. V/s. Wescare; Balwant Rai Salulja V/s. Air India Ltd.(supra)

[10]Balwant Rai Salulja V/s. Air India Ltd.,AIR 2015 SC 375

Enzo Biochem Inc. v. Applera Corp. – A case pertaining to Doctrine of Equivalents

On August 02, 2017, the United States Court of Appealsfor the Federal Circuit ruled in favor of Applera Corp.and Tropix Inc.in the matter of Enzo Biochem Inc., Enzo Life Sciences Inc., Yale University v. Applera Corp., Tropix Inc. The Court affirmed that the district court accurately interpreted proper construction of claims in U.S. Patent No.5,449,767 (“the’767 patent”) and correctly analyzed Enzo’s doctrine of equivalents argument. In over thirteen years of litigation between the parties, the Court has considered this present infringement action on three separate occasions.

Background

Technology as disclosed in the ‘767 patent pertains to use of nucleotide probes to detect presence of a particular DNA or RNA sequence in a sample or to identify anotherwise unknown DNA sequence. According to the ’767 patent, many procedures employed in biomedical research and recombinant DNA technology rely on use of radioactive labels such as isotopes of hydrogen, phosphorus, carbon, oriodine. The ’767patent also notes serious limitations and drawbacks pertaining to use of radioactive materials that include, elaborate safety precautions, expensive use and purchase, and short shelf-life. As an alternative to use of radioactive labels, the’767 patent elaborates on a series of novel nucleotide derivatives that contain biotin, iminobiotin, lipoic acid,and other determinants attached covalently to pyrimidine or purine ring. Further, the ’767 patent asserts that the use of modified detection approach provides detection capacities equal to or greater than procedures which utilize radio isotopes, and also overcomes other limitations and drawbacks pertaining to use of radioactive labels.

The disputed languageof claim 1 involves following limitation:

“wherein A comprises at least three carbon atoms and represents atleast one component of a signaling moiety capable ofproducing a detectable signal . . . .”

Procedural History

In 2004, Enzo filed a suitag ainst Applera alleging infringement of six patentsincluding the ’767 patent. After multiple years of litigation in 2012, an appeal to the federal court regarding invalidity issues decided on summary judgment, Enzo I, 599 F.3d 1325 (Fed.Cir.2010). The jury found Applera infringed the claims at issue and awarded $48.6million in damages. In appeal, Applera argued that the district court erred in its claim construction because claims of the ’767 patent only cover indirect detection and alternatively, if the claims cover direct detection, they are invalid for lack of written description andlack of enablement. The Federal Court agreed with Applera and reversed the district court’s claim construction, Enzo II, 780 F.3d 1149, 1150 (Fed. Cir. 2015). The Court concluded that the inventors were claiming only indirect detection and thus, held that “the district court erred in construingthe disputed claims of the patent-in-suit to cover bothdirect and indirect detection”. The Court then remanded the case to the district court to determine whether accused product infringes under proper claim construction. The district court agreed with Applera and rejected doctrine of equivalents argument raised by Enzo. Hence, Enzo Appealed.

Opinion of the Court

Firstly, the Court discussed scope of Enzo II and concluded that the district court correctly interpreted Enzo II. According to the Court, the district court rightly referred to specification of the ’767 patent and opined that specification does not support inclusion of direct detection.

Secondly, the Court discussed doctrine of equivalents. According to Enzo, Applera infringes claims under doctrine of equivalents and the district court “misconstrued” its expert declaration and improperly drew inferences in favor of Applera, rather than Enzo. Further, Enzo asserted that scope of equivalents focused on a particular subset of direct detection.

According to the Court, the district court rightly explained that the patent “describes its method of indirect detection as a superior means of detection as compared to direct detection, with ‘detection capacities equal to or greater than products which utilize’ direct detection”. The Court explained that “the specification provides additional support that claim 1 covers only indirect detection”.

The Court relied on Dolly, Inc. v. Spalding & Evenflo Cos., 16 F.3d 394, 400 (Fed. Cir. 1994), according to which “the concept of equivalency cannot embrace a structure that is specifically excluded from the scope of the claims” and noted that the same principle applies in the present case. “Including direct detection as an equivalent of indirect detection would render meaningless the claim language on which decision in Enzo II was based”. Thus, direct detection cannot be an equivalent of indirect detection in relation to these patent claims.

Conclusion

The doctrine of equivalents is generally considered when a product or process does not literally infringe a patented invention but the product or process contains elements identical or equivalent to each claimed element of the patented invention. Further, an analysis of role played by each element in context of function, way, and result of the claimed element and the product or process is required. In the present case, the court excluded direct detection from the scope of claims by referring to specification of the patent application even when the claims expressly did not exclude direct detection. Thus, the present case is an instance of difficulties pertaining to analysis of doctrine of equivalents and indicates proving doctrine of equivalents as unfeasible.

Vacation of injunction upon invalidation of patent by USPTO ePlus. v. Lawson Software

In a recent judgment, The U.S. Court of Appeals for the Federal Circuit on July 25, 2014, vacated the U.S. District Court’s decision on injunction and contempt orders against Lawson Software and instructed the lower court to dismiss the patent litigation case brought by ePlus, Inc. This decision mainly pertains totwo main issues. Firstly, whether an injunction can continue after the USPTO has cancelled the only claim on which the injunction was based. Secondly, whether the civil contempt remedies based on violation of an injunction are appropriate when the injunction itself has been overturned on direct appeal. The decision can be found here.

 Background of the case:

 ePlus, Inc.,an IT assets selling and financing company, and assignee of U.S. Patent Nos. 6,023,683 (”683 patent hereinafter) and 6,505,172 (”172 patent hereinafter), sued Lawson Software, Inc. (“Lawson”) for infringementin the year 2009 in a district court. The district court found two of the asserted system claims and three of the asserted method claims not invalid, and a jury found that Lawson infringed those claims. The defendant then appealed in Court of Appeals for the Federal Circuit (CAFC) where it was decided that the two asserted system claims (claim 1 of the ′172 patent and claim 3 of the ′683 patent) were invalid, and that two of the three asserted method claims (claims 28 and 29 of the ′683 patent) were not infringed.

It further affirmed infringement of method claim 26. So CAFC remanded the district court to consider what changes are required to the terms of the injunction, consistent with the opinion. On remand, in addition to reconsidering the injunction, the district court also instituted contempt proceedings for the reason that Lawson had redesigned its software against which the injunction order was passed. The district court held Lawson in contempt for violating the injunction, finding that the redesigned products were no more than colorably different.The court ordered Lawson to pay a compensatory fine of $18,167,950 and coercive daily fines of $62,362 until it could show compliance with the injunction.Thus being aggrieved by such order, Lawson appealed the district court’s modified injunction and contempt order in CAFC.In the meantime during proceeding of validity of the said patent claim, USPTO held Claim 26 as invalid during reexamination procedure. Armed with UPSTO decision the defendant Lawson Inc. further appealed in CAFC against the decision given by district court on injunction and contempt of court.

 Decisions given by CAFC

Issue 1

Whether the district court’s modified injunction against Lawson must be set aside now that the USPTO has cancelled the patent claim on which it is based.

 It is well established principle of law that an injunction must be set aside when the legal basis for it has ceased to exist.Citing case of Mendenhall v. Barber–Greene Co. the court recognized that upholding injunctions would be “anomalous in the extreme in connection with patents this court has just held invalid.” Under these authorities, there is no longer any legal basis to enjoin Lawson’s conduct based on rights that claim 26 of the ′683 patent previously conferred as those rights have ceased to exist. Since USPTO found claim 26 invalid, claim 26 no longer confered any rights that support an injunction against infringement. Hence cancellation of claim 26 by the USPTO required vacation of the injunction.

 Issue 2

Whether the civil contempt remedies based on the violation of an injunction are appropriate when the injunction has been overturned on direct appeal?

 It was held that the case is not distinguishable on the ground that the injunction has been set aside as the result of the USPTO proceeding rather than a court judgment. Citing the case of Fresenius USA, Inc. v. Baxter International, Inc. whereit was held that a non-final money judgment of damages for infringement must be set aside where the judgment rested on a patent claim that the USPTO later cancelled. It was held that the cancellation of a patent requires that non-final judgments be set aside because the “cancelled claims are void ab initio,” Similarly, relying on these underlined principle the civil contempt sanctions in this case must be set aside.

 There would not have been any need to decide about the survival of the civil contempt sanctions in case the injunction had been final at the time the district court imposed civil contempt sanctions. Pertinently, the injunction here was not final even though claim 26 had been held infringed. The court unanimously held in Fresenius that even if the court has rejected an invalidity defense to infringement, an “intervening decision invalidating the patents unquestionably applies” as long as “the judgment in [the present] litigation is not final.” In Fresenius, the federal court had previously reviewed the district court’s rulings on infringement and invalidity and remanded the case to the district court to determine the scope of damages and injunctive relief. When reviewing the judgment reached by the district court on remand, the federal court held that the original district court judgment, while “final for purposes of appeal was not sufficiently final to preclude application of the intervening judgment” that led to the cancellation of the patent. It was concluded that the compensatory award for the violation of the injunction must be set aside in light of the cancellation of claim 26. Finally the CAFC remanded the lower court with instruction to dismiss.

 Conclusion:

Thus it can be concluded that the decision is based on the  valid principles of law that when the main subject matter i.e. Claim 26 is itself void ab initio then the order of injunction and the civil contempt to protect such claim cannot exist or say continue to exist and needed to be set aside. Thus the validity of any patent claims per se plays utmost importance in order to determine the rights and liabilities of the parties to the dispute.

About the Author: Mr Sitanshu singh, Patent Associate at Khurana & Khurana and can be reached at:  sitanshu@khuranaandkhurana.com

Central Government’s power of Revocation of Patent in Public Interest

Gopikrishnan M and Akash Patel, interns at Khurana and Khurana, Advocates and IP Attorneys, looks at Central Government’s power of Revocation of Patent in Public Interest.

The Indian Patent Act,1970(hereinafter Act) empowers the Central Government to revoke any patent granted by the Indian Patent Office if it feels that the said patent is prejudicial to public interest. There are two provisions in the Patent Act, 1970 which empowers the Central Government to revoke granted patents. One is Section 65 of the Act which gives power to the Government to give directions to the Controller to revoke a patent if the Government is satisfied that the invention is one relating to atomic energy for which no patent shall be granted.

Section 65 of the Act says:

65. Revocation of patent or amendment of complete specification on directions from Government in cases relating to atomic energy. –

(1) Where at any time after grant of a patent, the Central Government is satisfied that a patent is for an invention relating to atomic energy for which no patent can be granted under sub-section (1) of section 20 of the Atomic Energy Act, 1962, it may direct the Controller to revoke the patent, and thereupon the Controller, after giving notice, to the patentee and every other person whose name has been entered in the register as having an interest in the patent, and after giving them an opportunity of being heard, may revoke the patent.

(2) In any proceedings under sub-section (1), the Controller may allow the patentee to amend the complete specification in such manner as he considers necessary instead of revoking the patent.

Another important provision related to the Central Government’s power is Section 66 which empowers the Government to revoke the patent if it feels that the mode in which it is exercised is mischievous to the State or generally prejudicial to the public. In such cases, the Central Government has the power to revoke the patent but only after giving an opportunity to the patentee to explain why his patent should not be revoked. After such hearing, if the Government feels that the patentee could not explain why the invention does not affect public interest, it can revoke the patent by making a declaration in the Official Gazette.

Section 66 of the Act says:

66. Revocation of patent in public interest. –

Where the Central Government is of opinion that a patent or the mode in which it is exercised is mischievous to the State or generally prejudicial to the public, it may, after giving the patentee an opportunity to be heard, make a declaration to that effect in the Official Gazette and thereupon the patent shall be deemed to be revoked.

The provision has been used twice in India to revoke patents. The first instance was in the year 1994 and the second one happened way later in 2012.

Revocation of Agracerus’s Patent

The first instance was when a process patent was granted to Agracetus, a U.S. company, for genetically engineered cotton cell lines. Around the year 1994, this patent was revoked in public interest because it was viewed as being prejudicial to farmers’ rights. The Govt was of the view that Cotton is an important crop essential to national economy and should not be the subject matter of patents.

Indian Patent Number 168950 titled “A method of producing transformed Cotton Cells by tissue culture” was granted to Agracetus of USA based on the patent application number 919 Cal 87 (filed on 24/11/1987) by the Indian Patent Office.

The main claim of the patent stated:

A method of producing transformed cotton cells by method of tissue culture of immature cotton plants for generation into mature cotton plants, the process comprising exposing hypocotyl tissue of the same immature cotton plant on a medium to a culture to transformation component non-oncogenic Agrobacterium tumefaciens and harbouring a TI plasmid having a T-DNA region, including both foreign chimerix and a selection agent resistant gene.

No “pre grant” opposition was filed by any party and the Patent Office ended up granting the patent.The implications of granting such a patent was realized later and there was mounting criticism from the farmer community that this patent was prejudicial to their interests as it would impact the farming of a major crop of national importance and have negative ramifications on the Indian economy. After China and the US, India is the world’s third largest cotton producing nation. At least 190 million people in the developing world drive all or part of their cash income from cotton growing and handling.

Government Action

In October, 1994, the Indian Government revoked Agracetus’s controversial patent on transgenic cotton. The Indian Government under Section 66 of the Patent Act decided to summarily revoke the patent, “because of its far-reaching implications for India’s Cotton economy”. The government observed that the patent would affect the farmers and the cotton industry which would eventually result in negative ramifications on the Indian Economy.Later the United States also followed suit and revoked Agracetus’s patent.

Revocation of Avasthagen’s Patent

The Second instance was during the year 2012 when the Government revoked Avasthagen’s Patent invoking the provisions of Section 66. Avasthagen had obtained a patent protection for a medicine/tonic for controlling diabetes from the Indian Patent Office. This patent was granted for “synergistic ayurvedic/ functional food bioactive composition”. The patent was for the composition consisting of jamunlavangpatti and chundun and this composition was to be used for treatment of diabetes.

The government of India referred to the Traditional Knowledge Digital Library (TKDL) to revoke the patent. The patent which was granted in April, 2012 was revoked on the grounds of being mischievous and prejudicial to the public.

Avesthagen filed for a patent in European Patent Office (EPO) for the above said composition but when the examiners checked the patent with TKDL database, they provided a report due to which the patent was not granted. The report said that patent did claim subject matter disclosed by TKDL. CSIR had made individual intervention for the same. In April, 2012 a patent was granted to Avesthagen and this was the same patent which was rejected by EPO. IPO said that they did not have access to TKDL database that is why their examiners approved the patent.

Government Action

On getting knowledge about the same, the Government revoked patent invoking Section 66 of the Act.  The Government of India stated in revocation that the use of Jamun for the treatment of diabetes have been long known to India and thus the extract of Jamun will also give effective therapeutic activity for diabetes, and therefore the patent claims subject matter already disclosed and known in public domain through the Traditional Knowledge of India.

Avesthagen argued stating that it might be a TK that these plants are used for treating diabetes but it was not known that when given in combination they shows an aggressive effect. They also stated that by formulating the medicine, they have used an approach which is “innovative, noble and scientific” and screened the medicine for efficacy and safety using modern technology. On defending the patent, the company said that in developing formulation from 3 drugs they used a different approach. They told the DIPP that they had originally selected about 100 plants for the same, which was later shortlisted to 10. On patent being prejudicial to people, the Company said that the invention was novel and provided scientific validation to Indian TK and also said that they will support Indian farmers from whom the plant was bought and will provide employment to people.

The government countered it by saying that for centuries it was known that these plants were used for management of diabetes and thus, this was not an invention. An official of the court stated that when plants are known to act against a particular disease, extracts would certainly perform the same function. Government also said that a patent cannot be granted for validating something that is part of TK.

The Central Government was not content with the arguments raised by Avasthagen and it revoked the Patent which was granted by the IPO.

Conclusion

If we look at the history of Section 66, it can be observed that the Government of India has invoked its powers to revoke patents only twice. In both situations, the Government ensured that public interest is not disturbed due to grant of those patents. The section acts as a correctional provision and the Government is considered as the adjudicating authority, which ensures that interest of public is given more priority than personal interests. The public at large need not approach the Court every time for striking down every such patent. The presence of such provision hence lowers the burden on the Judiciary. Now that the Traditional Knowledge Digital Library is accessible to the Government, it is being anticipated by many that the Government may try to weed out more of such patents.

No Exclusive Trademark Rights to Lord Krishna’s name: Delhi High Court

Delhi High Court’s Division Bench recently upheld the Single Judge Bench Judgment declining the claim of the Appellant, Bhole Baba Milk Food Industries Ltd. (a diary products manufacturer) of exclusive right over the use of word ‘Krishna’ for dairy products.

The Appellant has obtained registration of the mark “KRISHNA” having pictorial reflection of Lord Krishna standing on a lotus flower for dairy products falling in Class-29 of the Trade Mark Act vide Trade Mark No. 597519 and has been manufacturing ghee, milk products and dairy products since 1992. The Appellant has also obtained registration of the label mark “KRISHNA” in the same class vide Trade Mark Nos 783679 and 599070. Following is the representation of the mark 597519 and 599070 respectively

The Appellant accused Parul Food Specialties Ltd (Respondent, also a diary products manufacturer), of infringing on its trademark “Krishna” The Respondent were selling ghee under the mark “PARUL’S LORD KRISHNA”, “Parul’s” and “Lord” having a font so small that only the word “KRISHNA” catches the eye due to its prominence. The Appellant further asserted that the word “KRISHNA” has become a “well known” within the meaning of Section 2(zg) of Trade Marks Act and has acquired secondary distinctiveness (as evidenced from their sales figures).

On January 19, 2011, the Single Judge, Justice Rajiv Shakhdar refused to give exclusive trademark rights of the word “Krishna” and declined to grant injunctive relief to stop the Respondent from using mark “Krishna”, but directed the Respondent to change the font size and to print the words “PARUL’S LORD” with the same prominence as the word “KRISHNA” so that it would not be confused with the products of the appellants.

The Appellant thereon appealed to the Division Bench, consisting of Justice Pradeep Nandrajog and Justice Sunil Gaur. The division bench upheld  the single-judge bench’s order against Bhola Baba’s plea and said: “We are in agreement with the view taken by the learned single judge not only for the reasons given by the learned single judge but the additional reason, as in the instant case, a deity may be associated with a particular kind of goods.  It is common knowledge that Lord Krishna, as a child, was known for his love of milk and butter and thus Lord Krishna is closely linked with milk and butter and this would certainly dilute a proprietary claim projected by any person, in relation to Krishna with dairy products”.

The Division bench further highlighted that the registration obtained by the Appellant is not per-se to the word “KRISHNA” but is to the word “KRISHNA” written in a distinctive form. The Division bench concluded that “The distinctiveness to which the appellant can lay a claim is to what it has got registered as a whole and such registration cannot possibly give an exclusive statutory right to the appellant qua a particular word of common origin”.

Judgment of the Division Bench is tentative and the Final decision post trial would be with respect to the evidence led.

The Complete judgment of the Division Bench can be read from here and the complete Single-Judge Bench’s Order is available here.

The Indian Trade Marks Registry has recently uploaded on their website a list of 86 marks which have been prohibited from grant of registration and the list can be viewed by clicking here.

About the Author: Mr. Vinayak Aher, Trade Mark Attorney in Khurana & Khurana and can be reached: Trademark@khuranaandkhurana.com.