IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.RAMKUMAR MONDAY, THE 17TH MAY 2010 / 27TH VAISAKHA 1932 OS.No. 3 of 1999(A) ------------------- OS.21/1999 of I ADDL.DISTRICT COURT, ERNAKULAM .................... PLAINTIFF(S): ---------- LOW HEAT DRIERS PVT.LTD., KIZHAKKAMBALAM REPRESENTED BY ITS MANAGING DIRECTOR K.I. KURIAKOSE, AGED 50 YEARS S/O. ITHAPPIRI, RESIDING AT CHAMAKKATTU HOUSE, ASAMANNUR VILLAGE, KUNNATHUNADU TALUK BY ADV. SRI.V.K.ISAC DEFENDANT(S): -------------- 1. BIJU GEORGE, PROPRIETOR, EMCEES INDUSTRIES, NEAR POPULAR THEATRE, KOOTHATTUKULAM, MOOVATTUPUZHA TALUK ERNAKULAM DISTRICT 2. M/S, EMCEES ENGINEERING CENTRE, OPPOSITE TELEPHONE EXCHANGE, M.C. ROAD, KOOTHATTUKULAM. MUVATTUPUZHA TALUK, ERNAKULAM DISTRICT ADV. SRI.ALEXANDER JOSEPH FOR R1 & R2 SRI.JOSEPH KODIANTHARA SC RUBBER BOARD. THIS ORIGINAL SUIT HAVING BEEN FINALLY HEARD ON 24/11/2009, THE COURT ON 17/05/2010 DELIVERED THE FOLLOWING: CR V. RAMKUMAR, J. * * * * * * * * * * * * * * * * * * O.S. No. 3 of 1999 * * * * * * * * * * * * * * * * Dated: 17th May, 2010 JUDGMENT In this suit filed under Order VII Rule 1 C.P.C. and Section 108 of the Patents Act, 1970, (“the Act” for short) the plaintiff seeks a decree for a permanent prohibitory injunction restraining defendants 1 and 2 , their workers, agents and assignees from manufacturing or attempting to manufacture, selling or offering for sale any product covered by specifications of patent No. 176771 of 31-5-1990, during its validity and directing the defendants to pay a sum of Rs. 75,000/- towards the loss incurred by the plaintiff with interest at the rate of 18 percent per annum from the date of suit till reaslisation or in the alternative directing the defendants to furnish a full and true account of the money realised by sale of the driers manufactured and sold by infringing patent number 176771 of 31-5-1990. O.S. No. 3 of 1999 -:2:- THE PLAINT 2. The material plaint averments are as follows:- The plaintiff is a company registered under the Companies Act, 1956 and incorporated in the year 1987. The plaintiff is represented by its Managing Director K.I. Kuriakose. The registered office of the company is at Kizhakkambalam Village in Ernakulam District. The plaintiff company is a small scale industrial unit and is promoted by agriculturists to carry on the business of manufacturing, producing and designing of drying equipments for agricultural produces. One Sri. C.P. Philipose, who is one of the promoters of the company is a rubber cultivator and is a postgraduate in Engineering. It was he who invented a new device for drying of agricultural produces. The new invention was further developed in consultation with another rubber cultivator who had been a design engineer to TELCO and a new smoke house was developed. The plaintiff developed the prototype of the new device at the instance of the inventor. O.S. No. 3 of 1999 -:3:- The said prototype proved to be useful for drying ribbed rubber sheets and of immense use to the agriculturists. Some of the special features of the new invention are : a) The drying chambers are almirah-like construction having top exit means to permit the escape of smoke and flue gas. b) Furnace with fire splitters placed directly below the chambers. c) The arrangement of the partition plates are in such a manner as to constrain the hot smoke and flue gas which enter the bottom most chamber to take a 'U' turn to enter the next chamber and so on. d) Rubber sheets can be loaded and unloaded without the person entering the smoke house. The new invention is noteworthy for its fuel efficiency, ease of use, portability and for getting better grades of dried rubber. After conducting tests for a long period of three years the plaintiff company decided to start commercial production of the newly invented driers. Before marketing the product to the rubber cultivators the plaintiff company contacted the Rubber Board at Kottayam and had preliminary discussions. The Department of Rubber Processing under the Rubber Board O.S. No. 3 of 1999 -:4:- Kottayam, as per letter dated 3-11-1989 informed the plaintiff that they are deputing their Specifications Officer for a detailed evaluation on 15-11-1989. Sri. K.T. Mani (Specification Officer) conducted an evaluation and submitted his report dated 29-11-1989. After evaluation, the Rubber Board as per letter dated 30-11-1989 asked for detailed drawings of the two models intended to be marketed by the plaintiff. The detailed drawings were furnished and as per letter dated 12-6-1990 the Rubber Board accorded sanction to the plaintiff for marketing the two models of driers developed by it and which were tested and approved by the Rubber Board. The usefulness of the new invention was widely acclaimed by the rubber cultivators and the newspapers. Commercial production of the modern rubber sheet drier was started by the plaintiff by March 1990. Advertisements were published in various newspapers and in a publication by name 'Rubber' issued by the Rubber Board. The driers manufactured by the plaintiff company have been marketed all over Kerala including the neighbourhood of the defendants who are having their activity at Koothattukulam. O.S. No. 3 of 1999 -:5:- The plaintiff also got the new invention evaluated by the Kerala Industrial and Technical Consultancy Organisation (KITCO), an establishment owned by the State Government. They also furnished a copy of their evaluation report to the plaintiff/company. An application was filed by the plaintiff company for getting the patent for the invention described “a device for smoke drying of agricultural products” as an assignee of C.P. Philipose, the inventor. The said application was filed on 31-5-1990 as per Form 1 A of the Rules framed under the Patents Act, 1970 along with complete specification and requested for the grant of a patent for the said invention. The Controller of Patents issued a notice on 20-9-1996 to the plaintiff to the effect that the complete specifications in respect of the application for patent submitted by the plaintiff was accepted and that information about such acceptance had been published in the Gazette of India dated 7-9-1996. Subsequently, as per notice dated 20-1-1997 the Controller of Patents informed the plaintiff that the patent was sealed as on 31-5-1990 and that the patent No. is 176771. As a patentee of the new device the plaintiff company has got the exclusive O.S. No. 3 of 1999 -:6:- privilege of making, using, exercising, selling and distributing its drying devices in India. The plaintiff has also paid the renewal fee on 20-5-1998 for the period from 31-5-1998 to 31- 5-1999. The plaintiff company is putting the patented invention for commercial production of its different models of driers. The plaintiff company has not issued any licenses or sub licenses to any person. Knowing fully well that the rubber sheet drier manufactured and marketed by the plaintiff company is a product designed after extensive research and development and that the invention of the device has been patented in favour of the plaintiff company, the first defendant designed a drier infringing the specifications in the patent. The first defendant is manufacturing and marketing the offending dries through M/s. Emcee's Engineering Center, the 2nd defendant which is a proprietary concern of the Ist defendant. The plaintiff company came to know of the infringement of its patent rights in the month of December 1997. Immediately on 24-12-1997 the plaintiff company caused a lawyer notice to be issued to the defendants calling upon them to forthwith stop the manufacturing and marketing O.S. No. 3 of 1999 -:7:- of their rubber sheet driers infringing the plaintiff company's patent rights and also for accounts. To the said notice, the defendants have caused a reply dated 23-1-1998 to be sent raising false and untrue contentions. They have contended that the driers designed by them are advanced driers which are marketed under the trade name “Four sheet drier” and that the claims made in the plaintiff's specifications are publically known. The defendants have denied the plaintiff's allegation regarding infringement and have threatened the plaintiff that they will launch proceedings under Section 106 of the patents Act, 1970. The defendants have not initiated any action under Sec. 105 of the Act for a declaration that the manufacturing of rubber sheet driers by the defendants does not constitute an infringement of the claim of the patentee. The defendants have not also applied to the patentee with particulars of the product in question. In spite of specific notice given to the defendants they are continuing the manufacture and sale of rubber sheet driers infringing the exclusive right of the plaintiff company. The claims made in the specification submitted by the plaintiff are novel and are of immense use to the rubber cultivators. O.S. No. 3 of 1999 -:8:- The patent has been granted with effect from 31-5-1990. The plaintiff company is exploiting the patent by manufacturing and marketing different models of the drier. The modern ribbed rubber sheet driers manufactured by the plaintiff company are acclaimed for their quality and high standards. The driers manufactured by the plaintiff company are marketed in the State of Kerala as well as in other States such as Assam, Meghalaya, Missoram, Tripura, West Bengal, Orissa, Maharashtra, Tamil Nadu, Karnataka etc. whereever there is rubber cultivation. The different models manufactured and marketed by the plaintiff-company are RRSD - 96, 240, RRSD - 320 and larger versions of RRSD-160, RRSD -240 and RRSD 320 suitable for sheets weighing upto 1 kg. All models are now eligible for Rubber Board subsidy. With a view to promote Small Scale Industries, the plaintiff-company is purchasing different components of the driers manufactured by different S.S.I. Units and different individual establishments. The sales turnover of the plaintiff-company had been steadily increasing. For the year 1995-96 the sales was Rs. 29,63,028/-. For the year 1996-1997 the turnover was O.S. No. 3 of 1999 -:9:- Rs. 35,14,641/-. However, the sales turnover for the year 1997- 98 recorded a decline to show a figure of Rs. 31,86,551/-. The sales turn over for the year 1998-1999 was considerably reduced to Rs. 16,76,456/-. The fall in sales turn over was Rs. 15,10,095. The main reason for the sales turnover coming down to almost half of the turnover of the previous years is due to the manufacturing of spurious machines by the defendants imitating the patented device of the plaintiffs without conforming to the standards. The patented device of the plaintiff company had inspired the confidence of its customers who were preferring the same to the conventional driers. The manufacturers of imitated driers do not have the know-how nor are they concerned about the quality and standards expected of such driers. The indifference shown by such manufacturers may result in the customers loosing their confidence about the safety and utility of the drier. By entering the market such manufacturers cause a threat to the survival of not only the plaintiff company but also the eleven S.S.I. feeder units depending on the plaintiff company for work orders. There is a drastic downfall in the sales of the O.S. No. 3 of 1999 -:10:- plaintiff company. The plaintiff company has exclusive patent right to manufacture the patented devices during the period of validity of the license. The defendants are manufacturing devices by infringing the patent rights of the plaintiff . They are liable to be restrained by a decree of permanent prohibitory injunction restraining them from manufacturing or offering for sale of their infringing products . The loss sustained by the plaintiff due to the sale of the infringing products of the defendants is estimated at Rs. 75,000/-. The defendants are liable to pay the said amount to the plaintiff as damages. In case, the defendants dispute the quantum of damages, they are liable to state full and true accounts of the money realised by them through manufacture and sale of their driers by infringing the rights of the plaintiffs. The defendants are continuing the infringement even after notice by the plaintiff. The plaintiff is not left with any other alternative except filing this suit. The cause of action for the suit arose in October 1997 when the defendants started manufacturing and selling rubber sheet driers by infringing the patent rights of the plaintiff and on 24-12-1997 when the plaintiff caused a O.S. No. 3 of 1999 -:11:- lawyer notice to be sent to the defendants and on 23-1-1998 when the defendants caused a reply notice to be sent and thereafter within Koothattukulam Village of Moovattupuzha Taluk within the jurisdiction of the District Court, Ernakulam. Hence, a decree may be passed as prayed for. 3. The suit was originally filed on 7-4-1999 in the District Court, Ernakulam as provided under Section 104 of the Act and was numbered as O.S. No. 21 of 1999. THE WRITTEN STATEMENT 4. The suit was resisted by the defendants who filed a written statement contending inter alia as follows:- The suit is not maintainable either on facts or on law. The plaintiff has neither stated in the plaint nor annexed thereto the particulars of the alleged breach relied upon. The suit is liable to be dismissed for the non-compliance of Order VI Rule 4 A C.P.C. The Controller of Patent and the Inventor of the patented invention are necessary parties to the suit. The suit is, therefore, liable to be dismissed for non-joinder of necessary parties. The statements, allegations and averments O.S. No. 3 of 1999 -:12:- contained in paragraph one of the plaint are incorrect, misleading and are denied. The statement regarding the legal status of the plaintiff and its Managing Director and the claim that the plaintiff is a Small Scale Industrial Unit promoted by an agriculturalist for carrying on the business of designing, manufacturing and producing drying equipments for agricultural produces are not within the knowledge of these defendants. The plaintiff is put to strict proof regarding the same. The plaint averments regarding the alleged development of the so called new invention in consultation with other rubber cultivators are incorrect and are denied. The names of the so called inventor and developer of the new device have not been mentioned in the plaint. The further claim in the plaint that at the instance of the inventor the plaintiff developed the prototype of the new device which was proved to be useful for drying rubber sheets is also incorrect and is denied. In fact, the drying device produced and sold by the plaintiff was in existence for the last so many years . A number of persons and workshops have been manufacturing and selling such devices with or without modifications and O.S. No. 3 of 1999 -:13:- alterations. Almirah like drying chambers, furnaces with fire splitters etc. were in use in driers of agricultural produces from time immemorial. There is no invention in providing the top exit means of permit for the escape of smoke and flue gases. It is based on the scientific principle that hot smoke and flue gases will go only upward since their weight is less than the atmospheric air. In all smoke exist devices (chimneys) the exit will be at the top. Hence, top exit device is not an invention. There is nothing novel in the loading and unloading of rubber sheets without entering the smoke house and also in the passage of smoke taking a “U” turn. The allegation that the new invention is notable for its fuel efficiency, ease of use, portability and for getting higher grade of dried rubber etc. are exaggerated claims without any basis. The further statement that the plaintiff had conducted tests over a long period of three years before marketing the product to the rubber cultivators, the plaintiff had contacted the Rubber Board and had preliminary discussions, that the Department of Rubber Processing in the Rubber Board had deputed their Specification Officer for evaluation, that after the O.S. No. 3 of 1999 -:14:- evaluation by the said Officer, the Rubber Board had asked for detailed drawings and that the Rubber Board accorded sanction for two models of driers developed by the plaintiff etc. are misleading and are denied by these defendants. The Rubber Board is a Government Agency for Promoting and developing rubber cultivation . It has got its own research wing for conducting researches in various fields such as cultivation and processing of raw rubber. The Rubber Board had introduced modified methods of driers for drying rubber sheets. The Rubber Board is also encouraging the manufacture and use of driers which are useful to the cultivators. These defendants had also got approval from the Rubber Board for manufacturing and marketing driers. The driers of these defendants are also getting subsidy and other financial assistance from the Rubber Board. A number of other manufacturers have also got approval from the Rubber Board for manufacturing their driers. Rubber Board approval enables the cultivators to get financial assistance from the Rubber Board such as subsidy, bank loan etc. For getting approval from the Rubber Board, it is not necessary that the O.S. No. 3 of 1999 -:15:- model is a new invention. The approval by the Rubber Board cannot be the basis for a claim that the drier of the plaintiff is a new invention. The plaintiff is put to strict proof regarding the averments in paragraph 2 of the plaint. The statements in paragraphs 3 and 4 of the plaint are misleading, incorrect and are denied. The claim of the plaintiff that it has the exclusive privilege of making, using, exercising , selling and distributing its drying devices in India is false, incorrect and are denied. The sealing of a patent by the Controller of Patent does not give rise to a presumption in favour of its validity. The validity of the patent claimed by the plaintiff has not been approved by any court of law. Hence, the plaintiff does not have any exclusive right as claimed in the plaint since the same is against Section 13 (4) of the Patents Act. A number of other manufacturers such as Dhoomitha Multi Driers, Kuruppampadi and others are manufacturing and selling driers with due publicity in daily newspapers as well as in the “Rubber” Magazine published by the Rubber Board. The statement in paragraph five of the plaint that the plaintiff designed its product after extensive research and development O.S. No. 3 of 1999 -:16:- is incorrect and misleading. In fact, there is no novelty in their product and it is not an invention as contemplated under law. The statement that these defendants designed a drier infringing the specification in the plaintiffs patent is not correct and is denied. The driers designed and manufactured by these defendants are not identical to those of the plaintiff. The main features of the plaintiff's drier as claimed by the plaintiff such as fire-splitters, arrangement of partition plates , passage of smoke by taking a 'U' turn , insulated burners, almirah like construction joined in series, top smoke exit etc. are absent in the driers of these defendants. On the other hand, the driers of these defendants are having non-insulated single layer burner which is placed at the centre of the drier. Heat-cum-guide plates at both sides of the burner having only two chambers that is the drying chamber and pre-heat chamber, inclined separator plates, insulated inclined top, one time changing of heat from pre-heat chamber to the drying chamber etc. are the features of the driers of these defendants and those features are absent in the plaintiff's driers. From the above it is clear that the model of the plaintiff O.S. No. 3 of 1999 -:17:- and these defendants are not identical and these defendants have not infringed the patent of the plaintiff. The statement that the plaintiff came to know about the infringement in December 1997 is not correct. These defendants and others have been selling their driers even before December 1997 after due publicity. The statement that the plaintiff caused a lawyer notice to be issued to these defendants is admitted. These defendants have sent an appropriate reply to the said lawyer notice. The statements made in the said reply notice are true. The non-initiation by these defendants of any action under Sec. 105 of the Patent Act will not give any right to the plaintiff. These defendants have got every right to manufacture and sell their driers and the plaintiff does not have any exclusive right as claimed by them. The claim made in paragraph 7 of the plaint that the plaintiff's specifications are novel and are of immense use to the rubber cultivators is incorrect. The rubber sheet driers claimed by the plaintiff were already in existence and there is no novelty in them. A simple workshop modification of such driers will not give any novelty to a product and it cannot be called an invention. The O.S. No. 3 of 1999 -:18:- grant of patent by the Controller of Patent will not give any exclusive right to the plaintiff to manufacture and sell driers to the exclusion of all others. The claim made that the driers manufactured by the plaintiff are acclaimed for their quality and high standards is incorrect. If the plaintiff has lost market due to the poor quality and utility of their driers and it is not the fault of these defendants or anybody else. The claim made by the plaintiff regarding the variety of models manufactured and marketed by them and the volume of sales etc. are not within the knowledge of these defendants and the plaintiff is put to strict proof regarding the same. The plaintiff's claim that it is getting different components of the driers manufactured by S.S.I. Units and industrial establishments is not not within the knowledge of these defendants and it is for the plaintiff's to prove the same. The further statement that the reason for the decline in the turnover of the plaintiff is due to the manufacture and sale of spurious machines by these defendants imitating the patented devices without conforming to the standards is incorrect and is denied. If the plaintiff has suffered a set back in the O.S. No. 3 of 1999 -:19:- market it is due to the imperfections in their driers as mentioned above. The statement of the plaintiff that other manufacturers do not have the knowhow regarding good quality driers and that other manufacturers are not concerned about the high quality standards is not correct. If the plaintiff is facing any threat to survive, it is not due to the fault of these defendants but is due to the defect of the plaintiff's product. These defendants are not liable to pay Rs. 75,000/- or any other amount as damages. The plaintiff has no cause of action for the suit and the cause of action alleged in the plaint is not true. The suit valuation as well the court fee calculated and paid are not correct. The District Court, Ernakulam, has no jurisdiction to try the above suit. The plaintiff is not entitled to get a decree of injunction without getting its right declared by a court of law. The suit may be dismissed with costs of these defendants. These defendants are making a counter claim as follows:- The patent No. 176771 dated 31-5-1990 and sealed on 27- 2-1997 in favour of the plaintiff is invalid and is liable to be revoked. The following are the particulars of the objections O.S. No. 3 of 1999 -:20:- raised in support of the invalidity of the patent:- A. The claim of the plaintiff is not an invention. It is only a workshop modification and/or a re- arrangement of a country-side kitchen chimney used for drying agricultural produces and it was in use for a long time in the past. In a conventional kitchen, hearth is acting as the furnace. Above the hearth are horizontal partitions or tiers made of bamboo mats, reeds, etc. which are used for keeping agricultural produces. Modification to the masonry chimney with concrete or tiled roofing and doors is the above steel drier with a facility to load and