Delhi High Court
Unilin Beheer B.V. vs Balaji Action Buildwell on 29 January, 2018
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 29th January, 2018.
+ CS(COMM) 1683/2016
UNILIN BEHEER B.V. ..... Plaintiff
Through: Mr. Pravin Anand, Mr. Dhruv
Anand, Ms. Udita Patro and Mr.
Shamim Nooreyezdan, Advs.
Versus
BALAJI ACTION BUILDWELL ..... Defendant
Through: Mr. Hari Subramaniam and Mr.
Sanuj Das, Advs.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
IA No.15331/2017 (of defendant u/S 151 CPC)
1. On 20th December, 2017, the following order was made:
"1. The defendant / applicant seeks stay of proceedings
in this suit for infringement of patent and for ancillary
reliefs, contending that the term of the patent has expired
and the defendant / applicant, prior to institution of this
suit, had approached the Intellectual Property Appellate
Board (IPAB) under Section 64 of the Patents Act, 1970
for revocation of the patent.
2. The counsel for the plaintiff appears on advance
notice.
3. I have enquired from the counsel for the defendant /
applicant, whether there is any provision in the Patents
Act analogous to Section 124 of the Trade Marks Act,
1999.
CS(COMM) 1683/2016 Page 1 of 13
4. The counsel for the defendant / applicant has drawn
attention to Section 113, particularly to sub Section (2)
thereof, to contend that there has to be an implied stay of
proceedings in the suit.
5. Section 113(2) of the Patents Act only provides that
if in revocation proceeding, certificate of validity has
been issued, then in any subsequent suit before a Court
for infringement / revocation of patent, the patentee, if
succeeds, will be entitled also to payment of full costs,
charges and expenses of and incidental to any such suit or
proceeding. The same does not provide for award of
damages for infringement.
6. I have enquired from the counsel for the defendant /
applicant, whether there is any judgment interpreting
Section 113(2) i.e. whether the „subsequent suit‟ referred
to therein has to be a suit subsequent to the grant of
certificate of validity or subsequent to the institution of
the proceedings for revocation.
7. Both the counsels state that there is no case law on
the subject till now.
8. I have enquired from the counsel for the defendant
/ applicant that there being no provision in Section 113
for grant of damages and the provision being confined
only to costs, why should proceeding in the suit of the
plaintiff, which now survives only for damages, be stayed.
It has further been enquired, whether the defendant /
applicant in the written statement in the present case has
taken the defence of validity of the patent.
9. The counsel for the defendant / applicant states that
though a defence of validity of a patent has been taken but
no counter claim in that respect has been made.
10. In my understanding, no counter claim is required
to be made and a defence of validity would suffice and an
issue framed and finding thereon will suffice inasmuch as
without the same, the provision permitting such a defence
would not make any sense.
CS(COMM) 1683/2016 Page 2 of 13
11. It prima facie appears that once concurrent
jurisdiction has been vested in IPAB as well as in this
Court, to go into the question of validity, there can be no
ipso facto stay under Section 113 of the Patents Act.
12. The counsel for the defendant / applicant seeks
adjournment to argue.
13. List on 29th January, 2018 as already scheduled.
14. Though the counsel for the plaintiff seeks time to
file reply but the question being only legal, no need for
reply is felt."
2. On request of the counsel for the defendant/applicant, the
proceedings were adjourned to today.
3. The counsel for the defendant/applicant has today drawn attention
to Section 114(1) of the Patents Act and has contended that the defence
taken by the defendant/applicant in this suit would only result in invalidity
of either one or all the claims of the plaintiff's subject patent and will not
result in revocation of the patent and the patent would remain on the
register and entitle the plaintiff to amend the claim/s held to be invalid.
Per contra, it is contended that if the defendant/applicant succeeds in the
Revocation Petition filed before the IPAB, the patent would be taken off
the register and no claim of the plaintiff would survive.
4. On enquiry, whether the application before the IPAB was filed
before the institution of this suit or after the institution of the suit, the
counsel for the defendant/applicant states that though the
defendant/applicant had missed the deadline of one year for applying for
revocation before the Registrar but filed the application for revocation of
CS(COMM) 1683/2016 Page 3 of 13
the patent of the plaintiff subject matter of this suit before the IPAB well
before the institution of this suit.
5. On further enquiry, it is stated that the defendant/applicant in its
defence in this suit is impugning the validity of all claims made by the
plaintiff with respect to the subject patent but it is contended that as long
as the patent remains on the register and has not been removed, the
plaintiff can still amend the claims.
6. On enquiry, whether the claims can be amended, after the validity
of the patent has expired, the answer is in the negative.
7. Section 107(1) of the Patents Act entitles the defendant in a suit for
infringement of patent to in its defence take every ground on which it may
be revoked under section 64. However that leads me to the inference that
if the defendant in its defence has impugned all the claims which
constitute a patent and the Civil Court upholds such a defence, the effect
thereof would be no different from the order of the IPAB revoking the
patent; such a decision would of course be inter parties and not in rem, but
may be relied upon by others in infringement suit filed by the patentee.
8. The counsel for the plaintiff, on enquiry, whether the plaintiff has
instituted suit for infringement of the subject patent against any other
person, replies in the negative.
9. The counsel for the defendant/applicant has also relied upon Dr.
Aloys Wobben Vs. Yogesh Mehra AIR 2014 SC 2210 to contend that the
defendant/applicant having sought revocation of the patent under Section
64 before the IPAB before the institution of the present suit, was
precluded from filing a Counter-Claim in the present suit for revocation of
CS(COMM) 1683/2016 Page 4 of 13
the subject patent. It is further contended that now that the term of validity
of the patent has expired and the only relief which the plaintiff can be
entitled to in this suit is of damages, it will be in the fitness of things that
the previously instituted proceedings before the IPAB are allowed to be
decided and the trial of the present suit stayed till then, inasmuch as in the
event of the defendant/applicant succeeding in the Revocation Petition,
the suit of the plaintiff will have to be dismissed. It is further contended
that even if IPAB holds one of the claims of the plaintiff to be invalid, the
plaintiff still would not be entitled to maintain a suit for infringement and
for damages.
10. I have enquired from the counsel for the defendant/applicant that if
the proceeding before the IPAB and before this Court were to be the same,
whether not it will be more convenient to have the proceedings before this
Court instead of before the IPAB, inasmuch as during the course of
recording of evidence in this suit with respect to the validity of the patent
challenged in the defence, evidence on the aspect of infringement and
damages, if any also will be led simultaneously.
11. The counsel for the plaintiff has argued that the proceedings before
the IPAB have in fact become infructuous on the term of validity of the
patent having expired. It is stated that IPAB has been disposing of
revocation proceedings recording the said reason. It is further contended
that IPAB has become functional, after two and a half years now only and
has a huge pendency and the proceedings before IPAB would take much
longer than disposal before this Court.
CS(COMM) 1683/2016 Page 5 of 13
12. I have enquired from the counsels, whether there is any difference
in the enquiry into validity of the patent, dependent upon whether the
defendant has only taken a defence under Section 107(1) of the Patents
Act or has filed a Counter-Claim under Section 64 of the Patents Act for
revocation of the patent.
13. The counsel for the plaintiff states that there is no difference and the
efficacy of the order on such a defence and of an order on the Counter-
Claim would be the same.
14. The counsel for the defendant/applicant states that if a defendant
succeeds on the defence of invalidity, only with respect to some of the
claims constituting the patent, the patent would not be held to be invalid.
He however agrees that it would be so even in case of Counter-Claim.
15. The counsel for the defendant/applicant next contends that if a
defendant makes a Counter-Claim for revocation of patent and succeeds
therein, it will be a judgment in rem and not a judgment in personam and
the Registrar will revoke the patent. It is also stated that in a Counter-
Claim for revocation of patent, the Registrar of Patents would also be a
necessary party.
16. I have, in the facts aforesaid, considered, whether to stall the
proceedings in this suit awaiting the outcome of the IPAB in the
application filed by the defendant for revocation of patent of the plaintiff.
Though the counsel for the plaintiff has contended that IPAB in the past
has been disposing as infructuous such applications, during the pendency
of which the term of the patent lapses, but has fairly admitted that
there is no order of the IPAB holding/laying down that the application
CS(COMM) 1683/2016 Page 6 of 13
for revocation of the patent becomes infructuous on lapsing of the term of
the patent sought to be revoked. It is thus today not known what will be
the fate of the application for revocation. Having given thought to the
matter, I have for the reasons appearing hereinafter concluded that the
proceedings in this suit are not to be stalled. My reasons are as under:
A. The Patents Act, vide Section 64 thereof has vested the
jurisdiction to revoke the patent in the IPAB as well as in a
Counter-Claim in a civil suit for infringement of the patent. Unlike
the Trade Marks Act, Section 57 whereof vests the jurisdiction to
cancel the mark only in the Registrar of Trade Marks or the IPAB,
and not in the Civil Court, Section 107 of the Patents Act confers
concurrent jurisdiction in the IPAB and the Civil Court to grant the
relief of revocation.
B. Supreme Court in Patel Field Marshal Agencies Vs. P.M.
Diesels Ltd. 2017 SCC OnLine SC 1388 was concerned with the
following questions:
"In a situation where a suit for infringement is
pending wherein the issue of validity of the
registration of the trade mark in question has been
raised either by the plaintiff or the defendant and no
issue on the said question of validity has been framed
in the suit or if framed has not been pursued by the
concerned party in the suit by filing an application to
the High Court for rectification under Sections
111 read with Section 107 of the Trade
and Merchandise Marks Act, 1958, whether recourse
to the remedy of rectification under Sections 46/56 of
the 1958 Act would still be available to contest the
validity of the registration of the Trade mark."
CS(COMM) 1683/2016 Page 7 of 13
and held:
(i) that the Trade Marks Act of the year 1958 and 1999
suggest that if a proceeding for rectification of the Register in
relation to the trade mark of either the plaintiff or the defendant
is pending and a suit for infringement is filed wherein the said
plea is raised either by the plaintiff or the defendant, the suit
shall remain stayed;
(ii) that if no proceeding for rectification are pending on the
date of filing of the suit and the issue of validity of registration
of the trade mark of the plaintiff or the defendant is raised and
the same is prima facie found to be tenable, an issue to the
aforesaid effect shall be framed by the Civil Court and the suit
will remain stayed for a period of three months from the date of
framing of the issue so as to enable the concerned party to apply
for rectification;
(iii) that if no such application for rectification is filed despite
such order of the Civil Court, the plea with regard to validity of
registration of trade mark shall be deemed to have been
abandoned and the suit shall proceed in respect of any other
issue that may have been raised therein;
(iv) that in case where the issue of invalidity is raised or arises
independent of a suit, the prescribed statutory authority will be
the sole authority to deal with the matter; however, in a situation
where a suit is pending (whether instituted before or after the
filing of a rectification application) the exercise of jurisdiction
CS(COMM) 1683/2016 Page 8 of 13
by the prescribed statutory authority is contingent on a finding
of the Civil Court as regards the prima facie tenability of the
plea of invalidity;
(v) that in a situation where the Civil Court does not find a
triable issue on the plea of invalidity, the remedy of an
aggrieved party would not be to move the IPAB for rectification
but to challenge the order of the Civil Court in appeal - this is
necessary to avoid multiple proceedings on the same issue and
resultant conflict of decisions;
(vi) that the intention of Legislature is clear; all issues relating
to and connected with the validity of registration have to be
dealt with by the Tribunal and not by the Civil Court;
(vii) that in cases where the parties have not approached the
Civil Court, the statute provides an independent statutory right
to an aggrieved party to seek rectification of a trade mark;
(viii) that however, in the event the Civil Court is approached,
inter alia, raising the issue of invalidity of the trade mark, such
plea will be decided not by the Civil Court but by the Tribunal
under the 1958 Act;
(ix) that the IPAB (under the 1999 Act) will however come
into seisin of the matter only if the Civil Court is satisfied that
an issue with regard to invalidity ought to be framed in the suit;
once an issue to the said effect is framed, the matter will have to
go to the IPAB and the decision of the IPAB will thereafter bind
the Civil Court;
CS(COMM) 1683/2016 Page 9 of 13
(x) that if despite the order of the Civil Court, the parties do
not approach the IPAB for rectification, the plea with regard to
rectification will no longer survive;
(xi) the jurisdiction of rectification conferred by Sections 47
and 57 of the 1999 Act is the very same jurisdiction that is to be
exercised under Section 124 of the 1999 Act when the issue of
invalidity is raised in the suit but by observance of two different
procedural regimes.
C. Though there is no equivalent in the Patents Act of Section 124
of the Trade Marks Act which was for interpretation in judgment
aforesaid, but following the spirit of what has been held inspite of
Section 124 in the Trade Marks Act, it has but to be held that the civil
proceedings will have precedence, if revocation is not applied for till
the institution of the suit;
D. Though the plaintiff in the present case has prior to the
institution of this suit availed of the remedy of revocation before the
IPAB but still, considering the fact that the jurisdiction of revocation
has been conferred concurrently in the IPAB and in the Civil Court in
a Counter-Claim in a suit for infringement, the proceedings in the Civil
Court will have precedence;
E. The principle of Section 10 of the Code of Civil Procedure,
1908 (CPC) cannot be attracted to a proceeding before the IPAB and
the Civil Court;
F. Though a perusal of Dr. Aloys Wobben supra shows that the
Supreme Court in that case also considered the applicability of Section
CS(COMM) 1683/2016 Page 10 of 13
10 of the CPC to the matter aforesaid but ultimately concluded that
there is a bar to filing of a Revocation Petition before the IPAB, after
making the Counter-Claim for revocation and to filing of the Counter-
Claim, after making the Revocation Petition;
G. Even if the analogy of Section 10 of CPC were to apply, it is felt
that since the IPAB in not in a position to grant the relief of
infringement if any and consequential relief, now that the term of
validity of the patent has expired, it is more convenient and expedient
that the proceedings in this suit continue, rather than be stayed during
the pendency of the revocation proceedings before the IPAB;
H. In my view, the effect of taking the defence under Section
107(1) of the Patents Act and/or of making a Counter-Claim under
Section 64 of the Patents Act would be the same and the presence of
the Registrar of Patents in a Counter-Claim would not make any
difference;
I. It is also found that the decisions of IPAB are often subject
matter of writ petitions, in this Court first before the Single Judge and
then in appeal before the Division Bench and considerable time is thus
spent before the said decision of IPAB attains finality. For this reason
also, it is felt that the aspect of validity of the patent be also decided
before this Court instead of the proceedings in this suit remaining
stayed till the decision of the IPAB on the application for revocation of
patent and/or till the said decision attains finality.
CS(COMM) 1683/2016 Page 11 of 13
17. The counsel for the defendant/applicant then suggests that the
revocation proceedings before the IPAB be transferred to be tried along
with this suit.
18. Though the counsel for the plaintiff has no objection thereto but
considering this Court being a Civil Court/Commercial Division, the said
power cannot be exercised by me.
19. The counsel for the defendant/applicant has then contended that the
defendant/applicant be permitted to withdraw the revocation proceedings
and to file a Counter-Claim in this suit.
20. The counsel for the plaintiff has no objection.
21. Though I have hereinabove concluded that there is no difference
between taking a defence of invalidity on the same grounds on which
revocation can be sought and making Counter-Claim for revocation but it
is deemed appropriate to grant liberty to the defendant/applicant therefor.
The defendant is thus permitted to withdraw the revocation proceedings
pending before IPAB and to file a Counter-Claim in this suit.
22. The application is dismissed with liberty aforesaid.
IA No.1230/2018 (for condonation of 10 days delay in filing reply to
IA No.13688/2017)
23. Allowed and disposed of.
IA No.1231/2018 (for condonation of 10 days delay in filing reply to
IA No.13689/2017)
24. Allowed and disposed of.
IAs No.13688/2017 & 13689/2017
CS(COMM) 1683/2016 Page 12 of 13
25. To be taken up for consideration on 2nd August, 2018.
CS(COMM) 1683/2016
26. The defendant, if so desires, may within thirty days hereof file a
Counter-Claim to this suit for revocation of the patent, after withdrawing
the proceedings under Section 64 of the Patents Act pending before the
IPAB. If no such Counter-Claim is made within thirty days hereof, the
aforesaid liberty shall cease to exist and the time shall not be extended.
27. If Counter-Claim is filed, written statement thereto be filed within
further thirty days.
28. Replication thereto, if any be filed within yet further thirty days
thereafter.
29. The parties to, before the next date of hearing, file affidavits of
admission/denial of each other's documents, if any filed in the Counter-
Claim.
30. List for framing of issues, if any and for consideration of all
pending applications on 2nd August, 2018.
RAJIV SAHAI ENDLAW, J.
JANUARY 29, 2018 Bs..
CS(COMM) 1683/2016 Page 13 of 13