1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH : N A G P U R. APPEAL AGAINST ORDER NO. 83 OF 2007 APPELLANT :- Garware – Wall Ropes Ltd. A Company incorporated under the Companies Act, 1956, having its Registered office at Plot No.11, D-1 Block, M.I.D.C., Chinchwad, Pune 411 019. Through its Company Secretary Shri Anil Sadashiv Wagle. ...Versus... RESPONDENTS :- 1. M/s. A.I. Chopra, Engineers & Contractors, a proprietary concern through its sole proprietor A.I.Chopra, having its Office at 8 Shirke Layout, Raj Nagar, Nagpur – 440 013. 2. Konkan Railway Corporation Ltd. A company incorporated under the Companies Act, 1956, having its Registered Office at Plot No.6, Sector 11 Belapur Bhavan, CBD Belapur Navi Mumbai – 400 614. -------------------------------------------------------------------------------------------- [Shri A.A. Valsangkar, Adv. for appellant] [Shri S.V. Manohar, Adv. for respdt. No.1] [Shri R.P. Darda, Adv. for respdt. No.2] -------------------------------------------------------------------------------------------- 2 CORAM : A.B. CHAUDHARI, J. Date of reserving the judgment : 11.12.2008 Date of pronouncing the judgment : 18.12.2008 J U D G M E N T 1. Heard. Admit. Heard finally by consent of the parties. 2. Being aggrieved by the order, below Exh. 4, dated 18.6.2007 in Civil Suit No.2/2007 (Garware Wall Ropes Limited...Versus...M/s A.I. Chopra & another), rejecting the application for grant of temporary injunction filed by the appellant/plaintiff, the present appeal was filed. 3. This appeal was decided by this Court by judgment and order dated 19.12.2007. In Civil Appeal No.4762/2008 decided on 1.8.2008, the Hon'ble Supreme Court of India set aside the said judgment and remitted these appellate proceedings for fresh disposal in accordance with law and also indicated the questions to be decided. Thereafter, respondent-original defendant No.1 in the instant appeal filed Civil Application 3 No.6230/2008, which came to be allowed by this Court under order dated 28.8.2008. That application came to be allowed and the documents proposed to be filed with the said application were taken on record. Learned Counsel for both the parties then stated before me that the said order dated 28.8.2008 was put to challenge before the Apex Court, which dismissed the special leave petition. The appeal was taken up for final hearing with the consent of both the Counsel for the parties and was heard by me at length for a few days. Following questions fall for consideration of this Court. (1) Whether the products patented as GSWR and Spiral Lock Systems are allegedly in use and in fact being used for more than two decades ? (2) What is the scope and effect of Section 100 of the Patents Act, 1970 (as amended) and its impact in the present case ? FACTS : 4. The appellant who is the original plaintiff filed suit for declaration that defendant No.1 is not entitled to manufacture, 4 sell, use etc. or offer for a sale and the products patented for the plaintiff titled as “GSWR and Spiral Lock Systems bearing Patent Nos. 196240 and 201177 and for a decree for perpetual injunction. The appellant also claimed damages in the sum of Rs.5,00,000/- for the past actions with further prayer for decree for rendition of accounts for infringement of the patents. Respondent No.2 – Konkan Railway is a co-patentee with the appellant in respect of 240 patent. 240 patent manufactured by the appellant-company is primarily used in mountainous terrains for protection against boulder rockfall, mud slides, avalanche and the 177 patent i.e. Spiral Lock System is used primarily to bind two adjacent panels of boulder nets with each other, more particularly to prevent boulders/rocks from escaping from the junction of two net sections. Both 240 and 177 patents are the results of efforts of appellant in its research and development wing. On 15.3.2001 application for GSWR System was made to the controller for patent, while on 21st September, 2004, similar application was made for 177 patent – Spiral Lock System with the controller with all specifications along with drawings and after completion of all 5 the technical requirements. Upon payment of renewal fees both the patents are valid. In accordance with the provisions of Patents Act, 1970 (hereinafter referred to as the Act) and the Patents Rules, 2003, (hereinafter referred to as the Rules) these patents were examined by the examiner and acting on his report after thorough scrutiny, 240 patent was sealed on 27.10.2005, while 177 patent was sealed on 23.6.2006. Needless to say that objections were invited by the controller by publication, but none were received. Respondent No.1 is a railway contractor. In or about Month of December, 2005, the appellant came to know that respondent No.1 without consent and authority from the appellant is manufacturing, using, selling and/or offering for sale, for its own commercial benefit, Steel Wire Rope Net System and Steel Spiring Lock System which are identical to and/or substantially similar to and as all essential features of plaintiffs patented GSWR System and patented Spiral Lock System resulting into infringement thereof. The appellant came to know that respondent No.1, in fact, supplied those systems to various railway authorities in response to the tenders and also participated in the 6 tender which was opened on 13.4.2006, floated by Divisional Railway Manager (W) Central Railway, Mumbai. The plaintiff sent a legal notice to respondent No.1 on 18.4.2006, but respondent No.1 continued to participate and offer the said systems in response to tenders. The entire manpower of the scientists and the huge money invested by the appellant in its research and development for the said systems will be in vain, if respondent No.1 is not restrained immediately. Along with the suit the appellant also filed application for grant of temporary injunction (Exh.4). Respondent No.1 entered appearance in the suit and hotly contested the same by filing written statement as well as reply to the application for temporary injunction. Before me, respondent No.1 – Konkan Railway through its Counsel Mr. Darda supported the case of the appellant by making a statement to that effect. Respondent No.1 set up a defence that Section 100 of the Patents Act grants complete protection for using the said patents for the work of railways, which is a department of the Central Government and such contracts are signed on behalf of the President of India which is an authority in favour of respondent 7 No.1 as contemplated by Section 100 of the Act. The appellant did not even provide complete specifications of the patents without which there cannot be adjudication about alleged infringement. The patents claimed by the appellant are common in use and in fact have been used for the past two decades or so. The application for temporary injunction was liable to be rejected for delay and latches on the part of the appellant. The learned trial Court, thereafter, heard both parties and rejected the application for grant of temporary injunction. SUBMISSIONS ON BEHALF OF APPELLANT : 5. Shri A.A. Valsangkar, learned Counsel for the appellant made the following submissions : (1) Both the patents were sealed by the controller after inviting objections and that too after considerable time from the date of application in each case. Expert examiner has examined the patents and submitted his report, pursuant to which the controller granted the patents and sealed them. Respondent No.1 never objected to or opposed the same at any point of time 8 and even as on date did not institute any proceedings for revocation of the patents before the competent authority nor in the present suit respondent No.1 has filed any counter claim praying for revocation of the patents and respondent No.1 has merely by virtue of provisions of Section 107 of the Act chosen to put the aspect of revocation by way of defence. Though there may not be any presumption attached to the sealing of patents till the time there is revocation by the Civil Court, the fact of existence of patents with the appellant – plaintiff must outweigh any grounds for revocation thereof. (2) The conduct of respondent No.1 in not opposing the patents on any ground whatsoever until the suit is filed and the fact that the patents exist since few years will be relevant to determine the grant of temporary injunction. (3) Respondent No.1 does not dispute that he has been infringing the patents but his defence is that the Systems are known for two decades or so and further that there is a protective umbrella in the form of Section 100 of the Act, because respondent No.1 is using the products for the purposes of Government i.e. 9 Indian Railways. But then according to learned Counsel, no material was placed before the trial Court in support of the defence that the Systems were in use for two decades or so and some documents have been filed for the first time in this Court, which cannot be treated as evidence in the absence of any affidavits of the concerned persons in support of those documents. Assuming that these documents can be considered by this Court then in that case contents of the affidavits of Shri Ramesh s/o Manjnath Telang and Shri Shashank s/o Moreshwar Vaidya filed before this Court in rebuttal to the said documents filed by respondent No.1 have not been controverted. (4) Except raising the said defence that the Systems have been in use for two decades or more the written statement/reply do not cull out any other defences in specific manner which can be raised as provided by the Act and therefore, the submissions made by learned Counsel for respondent No.1 on several other aspects of defences have been made contrary to the pleadings and the defences set up for the first time in arguments and are liable to be ignored. 10 (5) Reading of all the documents filed by respondent No.1 before this Court for the first time in support of this defence do not at all show that the patented Systems of the appellant/plaintiff are said to have been known and used in those papers as no specifications have been mentioned about those Systems in order to arrive at prima facie conclusion that the patented Systems are same or similar. Even otherwise the papers placed before this Court show that they are after the applications were made by the appellant to the controller. (6) In so far as 177 patent Spiral Lock System is concerned, not a single document or affidavit has been filed even in this appeal to show that the same was being known and used for two decades or so. (7) The patented Systems are the invention and the appellant is the true and first inventor as required by Patents Act. The Systems are not mere improvements as stated but is an invention within the meaning of Section 2(1) (j) of the Patents Act involving inventive steps. 11 (8) The appellant-plaintiff exhausted the formal procedure before approaching the Civil Court having kept watch on respondent No.1 as to whether he persisted in infringement of the patents and within no time filed the suit and since the action of infringement is being continued even on date and looking to the tenure of the patents, respondent No.1 cannot be allowed to take benefits thereof at the costs of the appellant/plaintiff during the pendency of the suit which might take years together for decision. There is no delay or latches as alleged as even now the infringement continues. (9) Respondent No.1 has specifically set up a defence about protection under Section 100 of the Patents Act but has failed to file on record any authorization by the Central Government in writing and the Agreement with the railways even in the name of President of India cannot be termed as authorization contemplated by Section 100 of the Act. Even then the Agreement relating to Secunderabad clearly provides in clause 15 thereof for payment of royalty or obtaining of licence etc. from the patentee, which shows that railways are fully aware that 12 authorization in writing from Central Government was required which respondent No.1 does not have and this according to learned Counsel supports his case. Section 48 of the Act creates certain rights in favour of the patentee which cannot be taken away in the manner that is being done. Learned Counsel finally prayed for allowing the instant appeal and issuance of temporary injunction. He cited following decisions : (1) K. Ramu...Versus...Adyar Ananda Bghavan Muthulakshmi Bhavan [MIPR 2007 (1) 0352]. (2) Telemecanique & Controls (I) Ltd. ...Versus...Schneider Electric Industries SA [2002 (24) PTC 632 (Del) (DB)]. (3) Midas Hygiene Industries (P) Ltd. & another...Versus...Sudhir Bhatia & Ors [(2004) 3 SCC 90]. (4) Bishwanath Prasad Radhye Shyam ...Versus...Hindustan Metal Industries [AIR 1982 SC 1444]. (5) Gandhimathi Appliances Limited, Kelambakkam, Kancheepuram District, Tamil Nadu...Versus...L.G. Varadaraju and others [2001 (1) CTR 459 (Madras) (DB)]. 13 SUBMISSIONS ON BEHALF OF RESPONDENT NO.1: 6. Shri S.V. Manohar, learned Counsel for respondent No.1 vehemently opposed the appeal and made the following submissions : (1) For seeking temporary injunction prima facie case, balance of convenience, availability of damages in lieu of temporary injunction and irreparable loss are the factors which in the facts of the present case are against the appellant/plaintiff and therefore, no case for temporary injunction is made out during the pendency of the suit. (2) Indian Railways has not been made party to the suit or in the present appeal for whose benefit respondent No.1 is providing the products and installing them and in the absence of necessary party which is likely to be seriously affected with irreparable loss, no injunction can be granted. (3) Mere registration of a patent does not confer any right on the appellant particularly because in the instant case registrations were granted by default and at any rate the Act categorically provides for revocation thereof and respondent No.1 14 has specifically taken a defence making out a case of revocation or for making the patents ineffective for the reasons stated in the written statement/reply. No value therefore can be attached to the fact that there is a registration of patents. (4) Since the Patents Act itself provides for contesting the claim made by the plaintiff on the strength of the defences provided in the Act itself even for revocation of the patents or making them ineffective by merely raising the defence without lodging a counter claim, there was no need for respondent No.1 in law to approach for revocation of the patents before the competent authority and adjudication is required to be made by the Civil Court once a suit is filed. (5) Learned Counsel for respondent No.1 took me through the pleadings in the plaint as well as written statement/reply. Pointing out the same, he argued that in paragraph No.13 of the plaint itself there is admission that the Systems were known and what the plaintiff did was nothing more than some improvement therein. According to him by amending Act No.38 of 2002, the terminology new and useful improvement 15 which was occurring in the definition of invention inter alia stands removed meaning thereby that improvement is not the invention as per Section 2 (1) (j) of the Act. (6) The tenor of the averments in the plaint thus clearly show that these Systems were in existence and known and used for two decades or so. Therefore, no importance can be attached to the patented Systems as claimed. (7) Respondent No.1 in addition has placed enough research material on record of this Court clearly showing the knowledge and use of the Systems in question for long number of years and even more than two decades as is clear from the research papers. The patented Systems do not indicate specifications and could not have been registered. There is neither any invention nor inventive steps as defined under the Act. (8) Learned Counsel for respondent No.1 then took me through the documents filed before this Court for the first time in support of the defence regarding knowledge and use of the systems for more than two decades. But it is not possible to quote each and every thing here. 16 (9) The delay and latches on the part of the appellant in approaching the Court and praying for temporary injunction must result into dismissal of the prayer for injunction. (10) The appellant was not the person entitled to the grant of patents. The patents were wrongfully obtained. There is no invention qua the patents in question. The alleged invention was already publicly known and publicly used before the priority date of the claim in India and elsewhere. The claim made does not involve any inventive steps. (11) Inviting my attention to Section 47 of the Act, Advocate Shri Manohar argued that the alleged rights of patentees under Section 48 of the Act are subject to the conditions specified under Section 47 of the Act and therefore, Section 47 of the Act provides for full protection to respondent No.1 since admittedly respondent No.1 is acting on behalf of the Government and for the purposes of the Government. The alleged rights of the patentees get frozen in such a event and therefore, Section 47 of the Act squarely applies in the case in hand. 17 (12) Respondent No.1 is not using the Systems manufactured by him for any other commercial activity or commercial establishment except for the Indian Railways which is the Government department and therefore, it is for the purposes of Government. The appellant cannot claim any superior rights as his so called rights as patentee are subject to Section 47 of the Act. (13) The fact that respondent No.1 is using the Systems manufactured by him only for Indian Railways and the Agreements are signed by the railway authorities in the name of President of India is enough to show that there is a written authority in favour of respondent No.1, which is spoken of in Section 100 of the Act. To insist for a separate authority in writing is absurd. (14) As it is, the appellant has already claimed damages in the suit and that being the alternate relief available to it, the discretionary relief of temporary injunction cannot be granted and the plaintiff may work out damages and claim the same even for the future actions. Finally, Advocate Shri Manohar prayed for dismissal of the appeal with costs. 18 He cited the following decisions : (1) AIR 1982 SUPREME COURT 1444 (M/s. Bishwanath Prasad Radhey Shyam...Versus...M/s. Hindustan Metal Industries). (2) AIR 1986 SUPREME COURT 717 (Ram Chand Bhatia...Versus...Hardyal). DISCUSSION : 7. The Patents Act, 1970 was passed after consideration of Shri Justice N. Rajagopala Ayyangar's recommendations and the Act as well as Rules came into force on 21.4.1972. Some remaining provisions which were accepted came into force from 1.4.1978. Therefore, considerable changes were made by 1970 Act in contrast to the Patents and Designs Act 1911. The Act was amended again in March 1999 and June, 2002 to meet India's obligations under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), which forms part of the agreement establishing the World Trade Organization (WTO). Thereafter, the Patents Amendment Act 15 of 2005 was brought into force by way of ordinance, namely, Patents (Amendment) 19 Ordinance 2005 dated 26.12.2004 and ultimately was enacted as the Patents Amendment Act, 2005 which has made substantial changes. To the inventor a patent system confers certain definite advantages. The incentive for technical invention is monetary reward. In the case of machines or apparatus it is impossible to keep the invention secret since knowledge of the invention may be obtained by dismantling the machine. If a patent is obtained for the invention, the patentee gets exclusive right to use the invention for a definite period, which right can be lawfully enforced against the infringers. If he has no financial resources to work the patent, he can get monetary reward by granting licence to others or by assigning the patent. This appears to be the central idea. 8. Chapter III of the Patents Act, 1970 provides for applications for patents. Section 6 of the Act provides for the persons who are entitled to apply and it says that application can be made for a patent and for invention by the true and first inventor. Section 10 of the Act provides for specifications of the patents which must be disclosed along with the application to the controller. Section 11 of the Act provides for priority dates of 20 claims of a complete specification. After receipt of application, thus, as per the said provisions, Chapter V of the Act provides for publication and examination of applications. Section 11-A of the Act provides for publication in the manner provided by the said provisions. Section 11-B of the Act provides for compulsory examination of the claims for patents by the examiner. Section 12 of the Act provides for reference by the controller to the examiner for making a report to him on the patent. Section 13 of the Act provides for the investigation etc. by examiner into the claim for the patent and preparation of report by him upon his investigation and submission thereof. Section 14 of the Act provides for consideration of such reports of examiner by the controller. Upon consideration of the said report as provided by Section 14 of the Act, the controller after complete satisfaction makes an order for grant and finally seals the patent. 9. After considering the aforesaid scheme in the Act for granting patent it would be wrong to say that the patents are granted mechanically as a matter of course. On the contrary, it clearly appears that the claim has to undergo investigation by 21 examiner who is expert in the particular field and then after passing the test as contemplated by the provisions of the Act and the Rules and even after inviting the objections from public at large by making publication of the claim, the controller is supposed to grant the patent and seal it. The submission of Advocate Shri Manohar that mere registration or sealing of patent by default does not give any credence therefore does not appeal to me. Merely because there is no presumption in favour of a patent which is registered and sealed, one cannot jump to a conclusion that the fact of registration and sealing of patent should be ignored or that the Court should treat a registered and sealed patent valueless merely because a dispute has been raised by the contesting parties about the patent. 10. Chapter XII of the Act provides for revocation of patents. Section 64 of the Act provides for various grounds on which a counter claim can be filed for revocation of the patents. I quote Section 64 (1) of the Act as under. “Section 64 (1) : Subject to the provisions contained in this Act, a patent, 22 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 counter-claim in a suit for infringement of the patent by the High Court on any of the following grounds that is to say - (a) that the invention, so far as claimed in any claim of the complete specification, was claimed in a valid claim of earlier priority date contained in the complete specification of another patent granted in India; (b) that the patent was granted on the application of a person not entitled under the provisions of this Act to apply therefor; (c) that the patent was obtained wrongfully in contravention of the rights of the petitioner or any person under or through whom he claims; (d) that the subject of any claim of the complete specification is not an invention within the meaning of this Act; (e) that the invention so far as claimed in any claim of the complete 23 specification is not new, having regard to what was publicly known or publicly used in India before the priority date of the claim or to what was published in India or