Overview

MULTIPLE REMEDIES UNDER ONE SECTION CANNOT BE AVAILED SIMULTANEOUSLY IN PATENT LITIGATION 

Supreme Court of India has further attempted to curb the potential abuse of Judicial Process vide its landmark judgment delivered in the matter of Dr. Aloys Wobben and another Vs Yogesh Mehra and others [http://supremecourtofindia.nic.in/outtoday/ac671813.pdf], on multiplicity of proceedings pertaining to same subject matter being pursued simultaneously before two different fora.  In the instant case the significant issue that came to be adjudicated before a division bench comprising of Justice Jagdish Singh Khehar and Justice A.K. Patnaik, was whether the simultaneous remedies by virtue of Section 64(1) of Indian Patent Act (“Act”), to assail the same patent first as “any person interested” and then as a “counter-claim in a suit for infringement”, are available under Act.

Decision

The Hon’ble Court in its judgment stated that:

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“ even though more than one remedies are available to the respondents in Section 64 of the Patents Act, the word “or” used therein separating the different remedies provided therein, would disentitle them, to avail of both the remedies, for the same purpose, simultaneously. On principle also, this would be the correct legal position.”
…

Facts

Dr. Aloys Wobben (“Appellant”), a scientist engineer, is the founder of Enercon GmbH, a leading German Company engaged in the activity of manufacturing of wind turbines. Enercon GmbH carried its manufacturing activity in India through a Joint Venture partnership with Enercon India Limited (“Respondent”) and licensed the usage of various such patents owned by Appellant to Enercon India Ltd through written agreements, renewed from time to time.  Owing to certain non fulfillment of obligations by Enercon India Ltd, Appellant terminated such agreements, however, respondent continued the use of such patents, in absence of any authorization in this regard.

Thereafter, respondent filed a number of “revocation petitions” before Intellectual Property Appellate Board (the “Appellate Board”) under section 64(1) of the Act. The Appellant, aggrieved by the misuse of his patents, filed several patent infringement suits before the High Court of Delhi (“High Court”). Respondent thereafter filed “counter-claims” in response to the aforementioned suits and went on to further file several “revocation petitions” before the Board.

Some Revocation Petitions filed by Respondent were settled by Board whereas some were pending decision, however, the relief of revocation of Appellant’s patent sought by respondent was same in both revocation petitions and counter claim thereby re-agitating the same claim at the same time on the same. subject matter before two different forums. This litigation now, in light of matters pertaining to same subject matter being filed before multiple forums, came to be adjudicated before Supreme Court, to determine the correct course of action and settle a harmonious interpretation to provisions of the Act.

Procedure to challenge patent as per Act 

• That once the “counter claim” is instituted as a response to a suit for infringement in High Court, all the “revocation petition” proceedings before the “Appellate Board” whether filed prior or after, the filing of suit for infringement, shall cease to continue.
• That the proceedings before High Court by filing “counter claim” as a response to suit for infringement would debar all similar proceedings on same subject matter filed before subordinate fora, as jurisdiction of High Court is exclusive and cannot be eclipsed by filing similar proceedings simultaneously before Appellate Board, primarily owing to the basic principle that the inferior forum will make way for superior forum.
• That the “Appellate Board” is an administrative tribunal and therefore does not possess the authority to take away jurisdiction of High Court to adjudicate plea of revocation filed as a counter claim in response to suit of infringement,  on the account of independent revocation petition filed with respect to same patent(s) on the same grounds before such Appellate Tribunal.
• That the usage of word “or” between the three remedies available to any person interested as stipulated in section 64(1) further indicate that such person interested must choose one of the prescribed remedies and cannot avail two remedies simultaneously, fist by filing a “revocation petition” and then by filing a “counter claim” in a suit for infringement.

Findings of Supreme Court

Supreme Court accepted the contentions advanced by Appellant and observed that the two proceedings before two different forums with respect to same subject matter and on same grounds cannot be allowed to proceed simultaneously. Supreme Court agreed with the contention of Appellant that the usage of word “or” between the remedies stipulated in section 64(1) [Subject to the provisions contained in this Act, a patent, whether granted before or after the commencement of this Act, may, be revoked on a petition of any person interested or of the Central Government by the Appellate Board or on a counterclaim in a suit for infringement of the patent by the High Court on any of the following ground]  are not to be read as a conjecture and therefore does not entitle any person interested to avail more than one remedy simultaneously and re-agitate the same issues at the same time before two different forums.

Now having established the above, the controversy revolved around the question that on having availed both the remedies, which one should the respondent be permitted to pursue. Supreme Court prima facie observed that choice should fall in favour of superior forum, however, even after analyzing the Act in all due deliberation, Supreme Court could not come to a conclusion. Therefore Supreme Court decided to resort to known principles of law, to resolve this issue. Supreme Court thereafter equated “counter-claim” to a “suit/counter-suit” and after relying on principles of res judicata, [The terms are based on latin words meaning “a thing decided” more specifically defined in section 11 of civil procedure code] establishing that counter-claim has the same nature as that of an independent suit. Supreme Court thereby stated that since the revocation petition were filed by respondents later than the infringement suit by appellants, the revocation petitions cannot be permitted to continue, as proceeding with an already initiated legal recourse on the same subject matter in a different forum is contrary to the principles of res judicata, crystallized by virtue of section 10 [No Court shall proceed with the trial of any suit in which the matter in issue is also directly and substantially in issue in a previously instituted suit between the same parties, or between parties under whom they or any of them claim litigating under the same title where such suit is pending in the same or any other Courtin India having jurisdiction to grant the relief claimed, or in any Court beyond the limits of India established or continued by the Central Government and having like jurisdiction, or before the Supreme Court.]  of Civil Procedure Code (CPC).

Supreme Court also observed a consent order was passed by concerned High Court, wherein parties agreed that all their litigation should be consolidated and heard by High Court itself. In this regard, the Hon’ble court stated that having consented to one of the remedies postulated under law, it would not be open to either of the consenting parties, to seek redressal from a forum in addition to the consented forum. Therefore Supreme Court affirmed that since the parties on subject of procedure has consented to the forum which also had the statuary jurisdiction to do the same was justified in adjudicating the merits of the instant suits and counterclaims.

Analysis by Supreme Court

Supreme Court analysed the various provisions under the Act for opposing grant of patents and accordingly concluded an interpretation to section 64(1) of the Act in harmony with other provisions of the Act. The Hon’ble court observed that Section 25 and 64 of the Act grants remedies to a person for instituting revocation petitions or opposing/challenging the grant of Patent. For complete interpretation of Section 64(1) Supreme Court observed that the section 25(2) [At any time after the grant of patent but before the expiry of a period of one year from the date of publication of grant of a patent, any person interested may give notice of opposition to the Controller in the prescribed manner on any of the following grounds, namely…] and Section 64 (1) are alike in as much as locus of an “interested person” is concerned. The Supreme Court on close examination of this section found out that it has been prefaced by the words “Subject to the provisions of the act”, therefore in the event an opposition petition is filed under section 25 (2) (post grant opposition), the same will eclipse the right to avail remedies under section 64(1).

The SC accepted the contention of Appellant that the usage of word “or” in section 64(1) by necessary implication means liberty granted to any person interested to file a “revocation petition”, to challenge the grant of a patent to an individual, cannot be adopted simultaneously by the same person, i.e. firstly, by filing a “revocation petition”, and at the same time, by filing a “counter-claim” in a suit for infringement  and held that both the counter claim and revocation petition cannot be availed simultaneously under Section 64 (1).

The Hon’ble Court observed the similarities between “counter-claim” and a suit and stated that counter claim is of same nature as a suit filed by one who is impleaded as a defendant. Supreme Court further observed that:

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•  A “counter-claim” is essentially filed to obstruct the claim raised in a suit.
•  A “counter-claim” is tried jointly, with the suit filed by the plaintiff, and has the same effect as a cross-suit.
•  for all intents and purposes a “counter-claim” is treated as a plaint, and is governed by the rules applicable to plaints.
•  The court trying a suit, as well as, the “counter-claim”, has to pronounce its judgment on the prayer(s) made in the suit, and also, those made in the “counter-claim”.

…

The Hon’ble Court while relying on aforementioned observations and principles stipulated in section 10 and section 151 [Nothing in this Code shall be deemed to limit or otherwise affect the inherent power of the Court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court] of CPC established that a “counter-claim” is of the nature of an independent suit, and therefore a “counter-claim” cannot be allowed to proceed, where the defendant has already instituted a suit against the plaintiff, on the same cause of action. Supreme Court while stressing on the fact that aforementioned interpretation is imperative to harmonize the provisions of the Act, stated If the respondents in their capacity as “any person interested”, had filed a “revocation petition” before the institution of an “infringement suit”, they cannot be permitted to file a “counter-claim” on the same cause of action.

Conclusion

Such a judgment paved the path for potential patent litigation as the party will now be clear in terms of choosing the appropriate remedy in the proper forum. This will on one hand curb the abuse of judicial process and on the other hand will reduce the cost of litigation by nullifying multiplicity of proceedings. The significance of this judgment cannot be narrowed wherein Supreme Court has successfully avoided the situation wherein the Appellate Board and High Court may have given contradictory orders on the same issue, however, certain ambiguities continue to remain unsettled, such as the consequence of filing an infringement suit during the pendency of revocation petition before Appellate board. Moving ahead, the judgment is certainly a base for other connected unanswered issue(s) and must be considered while analyzing strategy for patent litigation.