Enercon’s patent litigation

CHENNAI3rd Floor, ‘Creative Enclave’,

148-150, Luz Church Road,Mylapore,

Chennai - 600 004.Tel: +91 - 44 - 2498 4821

BANGALORE Suite 920, Level 9,

Raheja Towers,26-27, M G Road,

Bangalore - 560 001.Tel: +91 - 80 - 6546 2400

COIMBATOREBB1, Park Avenue,

# 48, Race Course Road,Coimbatore - 641018.

Tel: +91 - 422 – 6552921

[email protected]

WEBSITEwww.altacit.com

ENERCON’S PATENT LITIGATION

MULTIPLICITY OF PROCEEDINGS IN PATENT DISPUTES

P.ILANANGAIIP CONSULTANT

PATENT DEPARTMENT



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


INTRODUCTION:

• Patent disputes in India often involve multiple proceedings in different jurisdictions.

• A single patent may form the subject matter of pre-grant or post grant opposition proceedings before the Controller, revocation proceedings before the Intellectual Property Appellate Board (IPAB), patent infringement suit filed by the patent holder in a district court and a counter claim filed by the defendant before the High Court, seeking revocation of the patent.

contd…




Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


• The stake holders usually involve in multiple patent challenges resulting in enormous wastage of resources.

• In one such case Enercon vs Yogesh Mehra, the Supreme Court of India has rationalized the procedure for revocation of patents in India by delivering a judgement that bars opponents from challenging the validity of patents before multiple forums simultaneously.

• It has held that revocation of a patent can be sought either by filing a revocation petition before the IPAB or by filing a counter claim in a patent infringement suit before the High Court – the opponent cannot exercise both the options.




Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


LEGAL CONTEXT:• Under the Patents Act, 1970, the validity of a patent may be

challenged in the following manner: 1. Through a pre-grant opposition under Section 25(1). Under Section 25(1) of the Indian Patent Act, ‘any person’ can file a pre-grant opposition. This is to be done before the grant of the patent.

• Once the patent is granted, there are two options:2. Through a post-grant opposition under Section 25(2). Under Section 25(2), a ‘person interested’ can file a post grant opposition within a year of the grant of the patent.

contd..




Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]



3. Under Section 64, a ‘person interested’ can initiate revocation proceedings any time during the lifetime of the patent, there are two options:3a. Revocation petition filed before IPAB under Section 64(1)3b. A counter claim before the High Court filed in a suit for infringement of the patent. In this case, only High Courts and above have the jurisdiction.

FACTS OF THE CASE:• Dr. Alloys Wobben (“Appellant”) is a scientist engineer and founder

of Enercon GmBH, a German company involved in wind turbine manufacturing. Dr. Wobben holds Indian patents for several inventions in the field of wind turbine generators and wind energy converters.

contd…..



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]



• In India, he had a joint venture partnership with M/s Yogesh Mehra and Ajay Mehra (“Respondents”) through a joint venture company called Enercon India Limited (“EIL”), formed in 1994.

• The licences to use the technical know-how were granted by Enercon GmBH through written intellectual property licence agreements with EIL. However, the last license agreement dated September 29, 2006 was terminated by the Appellant on December 8, 2008, due to non-fulfillment of obligations by the Respondents.

• The Appellant contended that even after the termination of the agreements, the Respondents continued to use the patents, without any authority.

contd…



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]



• This gave rise to a dispute between the two parties.

• In 2009, EIL filed nineteen revocation petitions before the IPAB seeking revocation of Dr. Wobben’s (“Appellant”) Indian Patents under Section 64(1) of the Patents Act, 1970.

• Thereafter, Dr. Wobben (“Appellant”) in retaliation filed ten patent infringement suits before the Delhi High Court against EIL (“Respondents”). Post filing of infringement suits, EIL (“Respondents”) further filed four revocation petitions before the IPAB. Thus, a total of twenty three revocation petitions were filed by EIL (“Respondents”) before the IPAB.

contd…..



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]



• In response to the patent infringement suit, EIL (“Respondents”) filed counter claim seeking revocation of patents before the Delhi High Court. The prayers in the revocation petition before the IPAB and the counter claim were same.

• The question which arose was which of the two forums (IPAB or the High Court), should continue with the revocation proceedings.

• Although the High Court had passed a consent order whereby all patent disputes were to be consolidated before the High Court, yet the Respondents continued to pursue the revocation petitions before the IPAB.

• Eventually, the litigation reached the Supreme Court for determination of the correct course of action to be followed by the Respondents.

• The Supreme Court first interpreted the provisions of the Act and then looked at parallel legislations like the Civil Procedure Code and the Trademarks Act, 1999 to find an answer to the above issue.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]



CONTENTIONS:• The Appellant raised the following points before the Supreme Court:According to Section 64 (1) of the Act either a counterclaim or a revocation

petition can be filed challenging the validity of the patent and both of them cannot be perused simultaneously. This is very clear from the reading of Section 64 (1) of the Act wherein the word “or” is used and this has to be given disjunctive reading and not a conjunctive reading. If such an interpretation is not given it will result in conflicting findings in a revocation petition and a counter claim.

Section 64 (1) of the Act reads as under:• Subject to the provisions contained in this Act, a patent, whether granted

before or after the commencement of this Act, may, b e 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 b y the High Court on any of the following ground



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]



JUDGEMENT :• The Supreme Court held that the remedies available under Section 64, i.e., a) by

way of a revocation proceeding before the IPAB and b) by way of a counter-claim in an infringement suit before a High Court were not conjunctive and the applicant has to make a choice between the two remedies.

• The Court stated that the use of the word “or” in Section 64 of the Indian Patent Act clearly demonstrated that the that the 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 individual, in a suit for infringement.

• The Court agreed with the appellant’s arguments that even though a plurality of remedies are available to the respondents under Section 64 of the Indian Patent Act, the word “or” used therein, separating the different remedies, barred the respondents from availing both the remedies, for the same purpose, simultaneously.

contd…..



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]



• The Court also noted that the opening words of Section 64 are “Subject to the provisions contained in this Act”, which, according to the Court, basically meant that the provisions contained in Section 64 are subservient to other provisions of the Indian Patent Act. Therefore, if any proceeding has been initiated by “a person interested”, under Section 25(2), the same will eclipse the right of the same person to file a revocation petition under Section 64 or to file a counter-claim, to seek the revocation of a patent, in response to a patent infringement suit.

• The Court ruled that in case both the forums, i.e., the IPAB for revocation proceedings and the High Court for a counter-claim, have already been approached, then the following rules applied:

if a revocation petition is filed before the filing of a counter-claim in an infringement suit, the defendant will be barred from seeking revocation of the patent in the infringement suit through a counter-claim;

if revocation of a patent has already been sought in an infringement suit through a counter-claim, the defendant will not be able to file a revocation petition before the IPAB.

contd…..



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]



• The Court, in absence of any clear answers or guidelines in the Indian Patent Act, based its reasoning on settled principles of law. According to the Court a counter-claim is essentially a suit filed by the defendant and for all intents and purposes has to be treated like a plaintiff. Since a counter-claim is an independent suit, it cannot be allowed to proceed, where the defendant has already initiated action in another forum, on the same cause of action as per Sections 10 and 151 of the Civil Procedure Code.

Section 10 of CPC Stay of suit:• 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 Court in 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.

Section 151 of CPC:• Saving of inherent powers of Court: - Nothing in this Code shall b e deemed to limit or

otherwise affect the inherent power of the Court to make such orders as may b e necessary for the ends of justice or to prevent abuse of the process of the Court.”



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


CONCLUSION

• The Supreme Court's judgment on streamlining the judicial proceedings of patent cases clearly mandates that if a revocation petition is filed before an infringement suit, the petitioner would be disentitled in law from seeking the revocation of the patent through a counter-claim. Given the unique nature of patent rights and the flexibilities of common law, the judgment subtly lays a clear path for patent litigation, so as to avoid multiplicity of litigation and answers several questions regarding proper use of forum for litigation.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


Law

Enercon’s patent litigation