OJA/82/2006 1/58 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD O.J.APPEAL No. 82 of 2006 IN CIVIL SUIT No. 4 of 2005 WITH CIVIL APPLICATION No. 296 of 2006 WITH O.J.APPLICATION Nos. 366 & 378 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE M.S.SHAH Sd/- HONOURABLE MR.JUSTICE K.A.PUJ Sd/- ========================================= 1. Whether Reporters of Local Papers may be allowed to see the judgment ? YES 2. To be referred to the Reporter or not ? YES 3. Whether their Lordships wish to see the fair copy of the judgment ? NO 4. Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? NO 5. Whether it is to be circulated to the civil judge ? NO =================================================== GARWARE-WALL ROPES LTD. - Appellant Versus M/S. TECHFAB INDIA & 5 – Respondents ========================================= Appearance : O.J.APPEAL No.82 of 2006 and CIVIL APPLICATION No.296 of 2006 MR KAMAL TRIVEDI, SENIOR COUNSEL WITH MR YJ TRIVEDI for OJA/82/2006 2/58 JUDGMENT Appellant. MR KS NANAVATI, SENIOR ADVOCATE FOR NANAVATI ASSOCIATES for Respondent No. 1. None for Respondents : 2 – 6. O.J.CIVIL APPLICATION No.366 and 378 of 2007 MR KS NANAVATI, SENIOR ADVOCATE FOR NANAVATI ASSOCIATES for Applicants. MR KAMAL TRIVEDI, SENIOR COUNSEL WITH MR YJ TRIVEDI for Opponents. ========================================= CORAM : HONOURABLE MR.JUSTICE M.S.SHAH and HONOURABLE MR.JUSTICE K.A.PUJ Date : 25/4/2008 CAV JUDGMENT (Per : HONOURABLE MR.JUSTICE K.A.PUJ) 1. The appellant – original plaintiff has filed this appeal challenging the interlocutory order dated 13.07.2006 passed by the Learned Single Judge of this Court below injunction application Exh. 5 in Civil Suit No. 04 of 2005 whereby the injunction as prayed for was refused. 2. It is the case of the appellant that the appellant is a well reputed manufacturer and seller of synthetic ropes, twines and yarns, nettings and various rope products including Geosynthetic products and systems. One of such products OJA/82/2006 3/58 JUDGMENT manufactured and sold by the appellant is known as Synthetic Rope Gabion, referred to as SRG Invention in the plaint of the suit. The SRG invention is primarily used for the preservation of riverbanks, seashores, seacoasts etc., particularly to prevent erosion caused by natural processes. Long back since 1983, the appellant has been having a well equipped Research and Development (“R&D”) unit undertaking R&D in the fields of interests to the appellant including Geosynthetics. The said R&D Units have been since then approved and recognized by the Ministry of Science and Technology, Government of India. One of such products developed by the appellant through its exhaustive R&D experiments, is the SRG Invention, which has been granted a Patent. The SRG Invention relates to the Geosynthetic field of technology, recently developed as a branch of its own. The Synthetic Products used in conjunction with soil and earth are known as “Geo-Synthetic Products”. This field is a combination of various other disciplines such as civil engineering, environmental engineering, geology, biology, oceanography, etc. The SRG Invention seeks to overcome the problems and/or limitations faced by other known types of means used for preventing soil erosion, including the known types of gabions and large size cement concrete Tetrapod, and also performs exceedingly well against the challenges such as continuous onslaught of water, corrosion, abrasion, OJA/82/2006 4/58 JUDGMENT etc., posed and/or arising out of sea / river water. 3. The appellant applied for a patent under the Patent Act by way of Patent Application bearing No. 455/BOM/99 on 22.06.1999, along with complete Specification, as required under the Patent law. Drawings were also filed along with the complete Specification. After verifying and examining the claim of the appellant in respect of the SRG Invention, and after the examiner of patents issued a report in that behalf, the Controller of Patents accepted the patent claim of the appellant on 10.06.2004. Such claim for a patent by the appellant was published in the Gazette of India for opposition, if any on 04.02.2005. As there was no opposition, the Controller of Patent sealed the patent on 13.05.2005. It bears a Patent No. 195352 in favour of the appellant. Thus, the patent in favour of the appellant came into existence w.e.f. 22.06.1999 as by virtue of Section 45 of the Patents Act, 1970, the granting of patent relates back to the date of application. The appellant, since then, has been continuously manufacturing, marketing, using, selling and/or offering for sale the SRG Invention extensively. The sales figures of the SRG Invention manufactured and sold by the appellant are stated in the plaint of the suit. The said SRG Invention is a commercially successful product as it overcomes / solves the limitations, disadvantages, failures and/or problems of the OJA/82/2006 5/58 JUDGMENT known systems / methods used against soil erosion. 4. It is also the case of the appellant that the respondent Nos. 2 to 6, who were serving with the appellant and were closely connected with the affairs of the appellant's patented SRG Invention, were absorbed by respondent No.1. After getting access to all the related information, technical know-how and or trade secrets in respect of the appellant's patented SRG Invention from respondent Nos. 2 to 6, the respondent No.1 started manufacturing, selling, offering for sale, etc., the impugned gabions as more particularly stated in the plaint which are identical to and / or deceptively similar, having identical features of the appellant's patented SRG Invention. In the appellant's view, such an act of the respondent No.1 amounts to infringement of its patented SRG Invention. 5. It is also the case of the appellant that the appellant came to know about all these acts of the respondent No.1 sometime in October 2005. The appellant, therefore, filed Regular Civil Suit No. 02 of 2005 along with application for injunction Exh.5 on 17.10.2005 before the District Court, Surat. The learned District Judge, Surat has granted ex-parte ad-interim injunction in favour of the appellant on 18.10.2005 restraining the respondents from committing acts of infringement in respect of the appellant's patented SRG OJA/82/2006 6/58 JUDGMENT Invention. 6. Being aggrieved by the said ex-parte ad-interim injunction, the respondents preferred Appeal From Order No. 350 of 2005 before this Court on 25.10.2005. The Learned Single Judge of this Court has interfered with the order of the learned District Judge, Surat in the said Appeal From Order on 26.10.2005 and while vacating the ad-interim injunction, the Learned Single Judge has observed that in case the respondents feel that impugned gabions are different than the patented SRG Invention of the appellant, the respondents were free to manufacture and sell the impugned gabions. The Learned Single Judge has, however, directed the respondents to maintain accounts in such case. The Learned Single Judge has also prescribed time bound schedule to complete the hearing of the injunction application Exh.5. 7. Since the respondents challenged the validity of the patented SRG Invention and sought that such patent granted in favour of the appellant be revoked, through the written statement, the said suit was transferred to this Court under the provisions of the Patent Act. The learned District Judge, Surat while ordering transfer of the said suit to this Court extended the ad-interim relief as modified by this Court in A.O. No. 350 of 2005 till 18.11.2005. OJA/82/2006 7/58 JUDGMENT 8. It is also the case of the appellant that after transfer of the said suit to this Court, the same was renumbered as Civil Suit No. 04 of 2005 and the interim injunction application was listed for hearing before this Court on 18.11.2005. The injunction application was heard by this Court and vide CAV Judgment dated 13.07.2006, the Learned Single Judge has refused to grant the interim injunction as prayed for by the appellant. 9. It is this order of the Learned Single Judge passed below an application Exh. 5 in Civil Suit No. 04 of 2005 which is under challenge in the present appeal. 10.Mr. Kamal Trivedi, learned Senior Counsel appearing with Mr. Y. J. Trivedi for the appellant has submitted that grant of a patent is in a nature of a quid pro quo transaction. The patent applicant is promised, of market exclusivity and monopoly rights for a certain period i.e. 20 years, in respect of the invention, subject to qualifying for a Patent, in exchange of the Patent Applicant disclosing his invention to the society. The rationale behind the grant of a Patent is to give incentive to the inventors, by grant of monopoly rights for certain period, to invent and to disclose the invention to public, for its benefit. In absence of the Patent system, OJA/82/2006 8/58 JUDGMENT inventors would prefer to practice the invention in a secretive manner. On the other hand, the Patent system, by a mere grant of a Patent, does not conclusively guarantee the validity of the Patent so granted and gives incentive to interested people to invalid a Patent and throw the invention in public domain for free use by the society. He has, therefore, submitted that the patent system strikes a balance to give inventors incentive to invent and also to throw as much as “inventions”, that do not meet the requirements of the Patentability, in public domain. 11.Mr. Trivedi has further submitted that appellant has been granted a Patent in respect of a Synthetic Rope Gabion along with other features (“SRG Invention”), which is more particularly described in the plaint. The said Patent of the appellant is valid and subsisting. As there was no opposition, patent was granted on 13.05.2005. In order to bring out an effective solution against soil erosion, the appellant has conducted various experiments and tests and the present Patent is the result of such efforts taken by the appellant. Soon after filing of the Patent Application on 22.06.1999, the appellant has been manufacturing the SRG Invention and have sold the same in various parts of the country. The appellant's SRG Invention has been well appreciated by the people in the field of Technology, which is Geosynthetics. The OJA/82/2006 9/58 JUDGMENT respondent No.1 has been manufacturing, selling and/or offering for sale a product, which the appellant claims to be identical to and/or substantially similar to the appellant's patented SRG Invention, since December, 2004. This was possible only because of some of the employees of the appellant left the appellant to join the respondent No.1. Thus, the respondent No.1 has been indulging in infringing acts intentionally. The respondent No.1 has been manufacturing, selling and/or offering for sale a product that is identical to and/or substantially similar to the appellant's Patented SRG Invention. All or substantial features of the appellant's patented SRG Invention are present in the respondents' product. 12.Mr. Trivedi has further submitted that although mere grant of a Patent does not guarantee the conclusive validity of the Patent so granted, the grant of a Patent raises a prima facie case of validity of the Patent or carries some weightage at the temporary injunction stage. Such prima facie weightage in favour of the validity of the Patent is of course subject to proper rebuttal by the respondent, by cogent and convincing evidence on record, that the Patent so granted is prima facie invalid. Hence, the onus of making out a prima facie case of infringement of the appellant's Patent by the respondents is on the appellant and the onus of making out a prima facie OJA/82/2006 10/58 JUDGMENT case of invalidity of the appellant's patent is on the respondents. 13.Mr. Trivedi has further submitted that the appellant has been granted a Patent on the SRG Invention. The said patent is validly granted in accordance with the law, and meets all the requirements of the Patent Act. He has further submitted that the respondent No.1 infringes the appellant's Patent. Due to grant of a Patent in favour of the appellant, the appellant is entitled to prevent any third party, who without the consent of the appellant, manufactures, sells, and offers for sale, the Patented SRG Invention. He has, therefore, submitted that the appellant is entitled to monopoly rights granted by the Act. 14.Mr. Trivedi has further submitted that although synthetic ropes and gabions, individually are known earlier, a synthetic rope gabion along with other features, was not publicly known and hence it is an invention for the purposes of the Patent Act, 1970. He has further submitted that inventive steps for SRG Invention are not mere workshop improvements. The SRG Invention produces a new article and performs phenomenally better than the existing known means of soil erosion including known types of gabions i.e. metal gabions etc., and hence it is rightly granted a patent OJA/82/2006 11/58 JUDGMENT under the Act. He has further submitted that the SRG Invention has many advantages and solves the problems and limitations of the known types of gabions. The SRG Invention was not publicly known before filing of the Patent Application by the appellant. There is no material on record to suggest that SRG Invention was publicly known prior to the date of the Patent Application. He has further submitted that the SRG Invention was not obvious to the person skilled in the technology at the date of filing of the Patent Application. The Patent has to be construed objectively, through the eyes of a skilled addressee. The fact of validity of the appellant's Patent is also clear from the commercial success of the appellant's SRG Invention and the long-felt need for a solution which the SRG Invention fulfills. The fact that the respondent is copying the appellant's SRG Invention clearly shows the value and the validity of the appellant's patent. There is enough material on record to show that the person skilled in the art does not feel the SRG Invention to be obvious and known prior to the filing of the Patent application. He has, therefore, submitted that in light of the documents on record, the appellant has made out a prima facie case of validity of the appellant's patent. 15.Mr. Trivedi has further submitted that for the purposes of determining infringement by the respondent, specification OJA/82/2006 12/58 JUDGMENT and/or features of the appellant's SRG Invention has to be compared with the description of respondent's product. The difference as pleaded by the respondent in respect of type of joints i.e. knotting / inter-lacing / inter-looping / inter-mashing and UV Stebilizer are not of importance. The UV Stebilizer is optional and even the appellant is offering the same as stated in the plaint. Such difference does not throw the respondent out of the infringement of the appellant's patent. Mr. Trivedi has further submitted that the respondent has taken the substance of the SRG Invention and the changes, if any, made by the respondent are inconsequential. By taking substance of the SRG Invention, the respondents are infringing the appellant's patented SRG Invention. He has further submitted that it is clear from the documents on record and the samples produced before the Court that the respondent is manufacturing, selling and/or offering for sale, a product, which is identical to and/or substantially similar to the appellant's patented SRG Invention. The respondent's product has all and/or substantial features of the appellant's patented SRG Invention in it. Difference, if any, made by the respondent are inconsequential. He has, therefore, submitted that the appellant has made out a strong prima facie case of infringement of the appellant's patent by the respondent No.1. OJA/82/2006 13/58 JUDGMENT 16.Mr. Trivedi has further submitted that the onus of making out a prima facie case of invalidity of the appellant's patent is on the respondent. The respondent has failed to bring out any document on record of invalidity of the appellant's patent. The respondent has not filed a single affidavit of any person skilled in the art for suggesting that the appellant's patent is invalid. A mere challenge at the bar about the invalidity of the Patent is not sufficient. The respondent has to make out a prima facie case, with the aid of cogent and convincing evidence on record, that the appellant's patent is prima facie invalid. The respondent has alleged that SRG Invention of the appellant is not an invention as it is not novel, and obvious. In this connection, he has submitted that the appellant's patent is novel and / or was not publicly known prior to the date of the application for patent and was not obvious to the persons skilled in the art at the date of filing of the Patent application. He has further submitted that the only certain alleged isolated documents are sought to be relied upon by the respondent to suggest that the SRG Invention was not novel and / or obvious at the date of filing of the Patent Application by the appellant. Such isolated documents cannot be relied upon to prima facie conclude that the patent is invalid for lack of novelty and/or obviousness. He has further submitted that the respondent has not produced sufficient details about the “Nylon Crate Bags” referred to in OJA/82/2006 14/58 JUDGMENT the correspondence produced by the respondent. The details stated are too vague and insufficient to prima facie come to a conclusion of invalidity of the patent. Nylon Crate Bags are not gabions and do not perform like gabions. Nylon Crate Bags are used for flood control and not for prevention of soil erosion. In light of this, the respondent has not brought anything on record with sufficient substantiation to state and show that the Nylon Crate Bags act like gabions. 17.Mr. Trivedi has further submitted that the balance of convenience is in favour of the appellant and if the order passed by the Learned Single Judge is not reversed and interim injunction is not granted, grave and irreparable losses would be caused to the appellant. The patent is for a limited duration, and in case temporary injunction is not granted, the appellant's market will be taken away. The appellant has been in the market in respect of the SRG Invention since the filing of the Patent Application and the appellant has made huge investments in that behalf. The appellant has been bestowed with statutory rights and hence, infringement of such rights call for grant of temporary injunction as prayed for by the appellant. He has further submitted that the respondent is a new comer as admittedly the respondent has started manufacturing, selling and/or offering for sale, product identical to and/or substantially similar to the OJA/82/2006 15/58 JUDGMENT appellant's SRG Invention only since December 2004. Additionally, the respondent is not a manufacturer of synthetic rope, the basic raw material of the SRG Invention and hence, the respondent would not have any financial burden as compared to the appellant. The market share of the respondent is meagre of Rs.22.83 Lacs, as compared to the appellant. He has further submitted that if the interim injunction is not granted, the appellant will loose all the licensing opportunities available to the appellant, thereby the appellant was deprived of the statutory rights to exploit the monopoly. 18.Mr. Trivedi has further submitted that the appellant's claim is not that by mere grant of a patent, a conclusive presumption is made as regards the validity of the patent, as the Patent Act provides for challenge of the grant. He, however, submitted that the right conferred to the Patentee under Section 48 of the Act, establishes the title in favour of the patentee. The grant of the patent, however, can be prima facie presumption of valid patent, unless rebutted by the respondent with cogent and convincing evidence that the patent is prima facie invalid. The respondent, in order to rebut the prima facie presumption of validity in favour of the appellant, is required to raise “serious controversy” by bringing documents on record to show that prima facie the OJA/82/2006 16/58 JUDGMENT patent granted to the appellant is invalid. 19.Mr. Trivedi has further submitted that the respondent is taking a defense for the first time that there is suppression about the facts and the patent specifications. The appellant nevertheless submits that there is no suppression about the facts and the patent specification describing the invention , as required under the provisions of the Act. Only the invention is required to be described in the specification and in the claim. What is to be disclosed in the patent specification and the claim is clearly mentioned in the provisions of Section 10 of the Act. Merely because the specification and the claim filed by the appellant for the said patent before the authorities concerned does not refer to various prior arts concerning “gabions” in detail, the SRG Invention vis-a-vis the appellant's patent does not become invalid. It is only because of the fact that the Act does not require prior art to be mentioned. The specification is to incorporate details about the invention only. In order to be patentable, an improvement on something known before or a combination of different integers already known, can become the subject matter of a patent for a particular product. The combination of old and known integers may be so combined that their working – inter-relation, may produce an improved result. In the present case, as against various gabions in vogue at a OJA/82/2006 17/58 JUDGMENT prior point of time like (i) metal gabions using sheets or metal mesh with metal wire; or (ii) polymer-sheet gabions, manufactured out of polymer sheets; or (iii) nylon crates; or (iv) gabions made out natural fiber, the appellant's SRG is a different type of gabion using for the first time synthetic rope, having advantages like more flexibility, non-corrosive, having more strength and capable to take the contour of the ground level. He has, therefore, submitted that mere challenging the validity of the Patent is not sufficient for not granting of injunction. The respondent has to establish a strong case of invalidity. The respondent has failed to produce any material for establishing prior publication, prior use or any of the grounds mentioned in Section 64 of the Act for challenging the validity and, therefore, the appellant is entitled to an interim injunction as prayed for. 20. Mr.Trivedi has relied on following judgments of Indian High Courts including Hon'ble Supreme Court as well as English Courts in support of his various submissions. In the case of Bishwanth Prasad Radhey Shyam V/s. Hindustan Metal . Industries, 1982 SC 1444, (2) in the case of Lallubhai Chakubhai Jarivala V/s. Shamaldas Sankalchand Shah, 1934 BOM 407, (3) in the case of Gandhimathi Appliances Ltd., V/s. L.G. Varadaraju, 2001 (1) CTR 459 (Madras) (4) in the case of Raj Prakash V/s. Mangat Ram OJA/82/2006 18/58 JUDGMENT Choudhary, 1978 Delhi 1, (5) in the case of Farbwerke Hoechst Aktiengesellschaft Vormals Meister Lucius & Bruning a Corporation V/s. Unichem Laboratories, 1969 BOM 255, (6) in the case of Graham V/s. John Deere Co.383 U.S. 1 (1996) (7) in the case of Rosedale Associated Manufacturers Ld. V/s. Carlton Tyre Saving Coy. Ld. 1960 RPC 59 (8) in the case of Kolster Speedsteel V/s. Stora Kopparbergs Berg Slags, Lexsee 793 F2D 1565, 1571 (9) in the case of Hinde V/s. Osborne, 1885 RPC 64 (10) in the case of Rotomac Pens Ltd. V/s. Milap Chand & CO., 1999 PTC (19) 757 (11) in the case of Telemecanique & Controls (I) Limited V/s. Schneider Electric Industires SA, 2002 (24) PTC 632 (Del) (12) in the case of Midas Hygiene Industries (P) Ltd., V/s. Sudhir Bhatia, (2004) 3 SCC 90 (13) in the case of Heinz Italia V/s. Dabur India Ltd., (2007) 6 SCC 1, (14) in the case of K.Ramu Vs. Adyar Ananda Bhavan Muthulakshmi Bhavan, MIPR 2007(1) 0352. Some of these decisions are discussed in the later part of this judgment. 21.Mr. K. S. Nanavati, learned Senior advocate appearing for the respondents has submitted that the gabion claimed by the appellant to be their own invention is neither true nor correct. The gabions are cylinders that are fitted with earth or stones and are used in building structures such as dams or OJA/82/2006 19/58 JUDGMENT dikes. They are also used for prevention of soil erosion along