Salzer Electronics Ltd. vs SG Controls and Switchgear

K. Chandru, J.—Both applications were filed by the applicant/plaintiff, seeking for an interim injunction with reference to an infringement of

the applicant''s registered patent bearing No. 198122 in respect of Integral Cam Operated Rotary Switch by manufacture and sale of products

identical to the applicant''s products and also seeking for an interim injunction restraining the respondents from in any manner passing off Cam

Operated Rotary Switches manufactured and sold by them by using identical or deceptively similar product, same or similar trade dress, colour

scheme, get-up and layout. Pending notices on the Original Applications, no ex parte order of injunction was granted. A counter affidavit, dated

09.04.2011 has been filed in both original applications. The applicant has filed a reply affidavit, dated 25.04.2011.

The applicant/plaintiff had filed a suit for the grant of similar relief of permanent in nature. On suit notice being served, the first defendant/first

respondent had filed a written statement, dated 18.04.2011 and also made a counter claim declaring that the patent granted under No. 198122 is

liable to be revoked u/s 64 of the Patent Act, 1970 and also for revoking the patent granted in favour of the plaintiff.

Heard the arguments of Mr. A.A. Mohan, learned counsel for the applicants and Mr. A. Prabhakara Reddy, learned counsel appearing for the

respondents.

The case of the applicant was that the applicant belonged to the famous Salzer Group incorporated as a company with the Registrar of

Companies in the year 1985. They are pioneer in India in manufacturing and selling wide range of switches, rotary switches, parts, components,

fitting of switches since the year 1985. Their products were manufactured with technical and financial collaboration of M/s. Saelzer Schaltgerate

Fabrik, GmbH, Germany. The applicant''s rotary switches were certified with UL and CE certifications and it qualifies for the export to American

and European markets. They also has the certification of ISO 9000 : 2004, ISO 9000 : 2008. They are the market leader in manufacturing world

class Cam Operated Rotary Switches. The applicant had invented a novel Integral Cam Operated Rotary Switches in the year 1999. For

protecting their intellectual property, they had applied for the registration of their new invention with the Controller of Patents on 31.08.1999 under

the title Integral Cam Operated Rotary Switches. It has provisions for activating the circuits in or more switch settings. It is enabled with an inbuilt

programmed activation for loading circuits. The applicant had put in their intellectual skill and labour in the development and standardization of the

invented product. By virtue of the long, continuous and extensive use for more than a decade, the applicant''s unique design along with the Yellow

ad Red colour combination for exterior panel and knob for their reputed Integral Cam Operated Rotary Switches have acquired secondary

meaning and has been used as trade dress for switches. They have salient features which distinguishes it from other ordinary Rotary Switches. The

applicant''s rotary switches are marketed through world renowned Larson & Tubro Ltd. Their sale figures for the year from 2000-01 to 2009-10

have been set out in paragraph 9 of the common affidavit filed by the applicant. In the year 2009-2010, it is Rs. 954 lakhs.

But to the shock and surprise, the applicant came to know that the respondents have been manufacturing the identical rotary switches with

identical technology, identical design and identical yellow and red colour combination. The applicant had purchased the respondents'' product and

dismantled the same to know its dimensions and specifications. It is apparent that the respondent had imitated all features of the applicant''s

patented product. The applicant had issued a legal notice on 08.04.2010 calling upon the respondents to cease and desist from manufacturing the

product. The first respondent by reply dated 21.04.2010 had declined the request. But, however, the respondent had temporarily stopped

manufacturing and marketing the impugned rotary switches. But the applicant''s marketing people came across the resurfacing of the first

respondent''s spurious, counterfeit rotary switches using the applicant''s identical technology. The intention of the first respondent was obvious.

They by their wrongful activities had committed the acts of infringement of the patent. The second respondent is the dealer of the first respondent''s

impugned product. The specification of the applicant''s product as well as the respondents'' product was set out in paragraph 13 of the affidavit. It

is unnecessary to reproduce the same. But it is contended that the applicant has the exclusive right to use and exploit the patent u/s 48 of the

Patents Act, 1970. The respondents had caused confusion and deception and are infringing the registered patent. The respondents had copied the

unique colour scheme yellow and red. The applicant has both statutory and common law right over the unique and novel product. If the

respondents are allowed to carry on their business, the sale and reputation of the applicant''s product will be adversely affected by the sale of

inferior quality by the respondents. The applicant will also suffer irreparable loss and injury.

In the counter affidavit filed by the respondents, it was stated that the applicant did not approach this court with clean hands. They are making

deliberate and false statements. The applicant''s notice in April, 2010 was promptly replied on 21.4.2010. Thereafter, the applicant kept quiet for

one year and now they had filed the present suit. The allegation that after notice the respondents had stopped manufacturing and marketing the

product was denied. The patent obtained by the applicant was revocable on a mere cursory look of the specifications and the claim made. The

applicant had obtained the patent by playing fraud and misleading the officials. Most of the manufacturers of Cam Operated Rotary Switches use

the identical shape and colour scheme. The shape is also universally same being dictated by the functionality. The defendants/respondents had also

shown the rotary switches manufactured by the other manufacturers, i.e., Kundan, Jaibalaji, Selvo and Smilltech, which are identical. Therefore,

there is no case for the grant of any interim order.

In the written statement filed in the suit, it is further elaborated by stating that the patent obtained by the applicant does not disclose any new

technology. They had obtained frivolous patent without having invented any new product. The invocation of Section 45 is un-called for. The

defendants are in the industry for more than 23 years and have established their own goodwill and reputation. The defendants are carrying on their

own old business by following the ethical practice in the industry. There was no need or necessity for them to copy or use the patented technology.

The patent obtained by the applicant was without any inventive steps. It was the vexatious patent obtained by them. The description of the

invention as given in the complete specifications relating to the patent No. 198122 gave only the method of assembling the Cam operated rotary

switches which is universally followed by all manufacturers. There is no novelty in the assembling. Every manufacturers of the cam operated rotary

switches use the same red and yellow colour. Therefore, the applicant cannot claim and exclusive right over the said colour. In claiming patent

referring to prior art, the plaintiff had stated that ""Modern rotary switches are, however, more complex and standardized. The selective switching

action between pole(s) and load terminal(s) in a rotary switch is now carried out in a unit, which is called a switching module. Switching modules

are standardized and a rotary switch may comprise one or more of switching modules. Switching modules are also referred to in the art as decks,

packets and stages and by other terms but in this specification the term ''switching modules'' is uniformly used."" Therefore, it cannot be contended

that they have the patent of Cam Operated Rotary Switches.

In the reply affidavit filed by the applicant, it was stated that the applicant had distinguished the relevant prior arts, which explicitly brings out the

difference from each of the prior art. The applicant had also explained the difference between the US patent and Salzer patent.

In the light of these rival contentions, it has to be seen whether the applicant has made out any case for the grant of an interim order?

It was contended that u/s 48, the patent granted under the Act shall confer upon the patentee, if the subject matter of the patent is a product,

the exclusive right to prevent third parties who do not have his consent, from the act of making, using, offering for sale, selling or importing for

those purposes that product in India. The respondents placed reliance upon Section 64 of the Patents Act to contend that the subject of any claim

of the complete specification is not an invention and if the patent was obtained wrongfully and if the invention of the claim of the complete

specification is not new and it does not involve any inventive steps, it is open to the respondents to seek for revocation of the patent u/s 64(4)

without prejudice to the provisions of Section 64(1) and the patent may be revoked by this court if this court is satisfied.

Mr. A.A. Mohan, learned counsel appearing for the applicant placed reliance upon a judgment of the Bombay High Court in Lallubhai

Chakubhai Jariwala Vs. Chimanlal Chunilal and Co., for contending that under the Patents Act, the term ""manufacture"" comprehends not only the

production of article, but also the means and method of producing it, so that a new process or the improvement of an old process can be a

manufacture within the meaning of the Act. The word ""art"" is sometimes used as an equivalent of manufacture. The question whether there is

invention is a question of fact in each case.

He also referred to a judgment of the Delhi High Court in Hindustan Pencils (P) Ltd. Vs. India Stationery Products Co. and Another, for

contending that a mere delay cannot disentitle the patentee from getting the relief from the court. Reliance was placed upon the following passage

found in paragraphs 30 and 31, which reads as follows:

It would appear to be difficult to accept that relief of temporary injunction should not be granted, because of the delay on the part of the

plaintiff, even though the Court feels, at that point of time, that ultimately permanent injunction will have to be granted.

Even though there may be some doubt as to whether laches or acquiescence can deny the relief of a permanent injunction, judicial opinion has

been consistent in holding that if the defendant acts fraudulently with the knowledge that he is violating the plaintiff''s rights then in that case, even if

there is an inordinate delay on the part of the plaintiff in taking action against the defendant, the relief of injunction is not denied. The defence of

laches or inordinate delay is a defence in equity. In equity both the parties must come to the Court with clean hands. An equitable defence can be

put up by a party who has acted fairly and honestly. A person who is guilty of violating the law or infringing or usurping somebody else''s right

cannot claim the continued misuse of the usurped right.....

He also referred to a decision of the division bench of this court in Gandhimathi Appliances Limited, Kelambakkam, Kacheepuram District,

Tamil Nadu Vs. L.G. Varadaraju and others reported in (2000) 3 MLJ 85 for contending that appropriating what has already been patented as

part of ones product and adding something thereto does not render such device any less an infringement of the patented product as if it were to be

held otherwise. He referred to the paragraph 35 of the said judgment which reads as follows :

35....Appropriating what has already been patented and as part of ones product and adding something thereto, does not render such device any

less an infringement of the patented product as if it were to be held otherwise, anyone who makes the slightest improvement over the pre-existing

knowledge can claim to disregard every patent then in existence in respect of pre-existing state of knowledge as reflected in the different devices

for which patents had been granted at a prior point of time.

The learned counsel also placed reliance upon a division bench judgment of the Delhi High Court in Raj Parkash Vs. Mangat Ram Chowdhry

and Others, and referred to the following passage found in paragraph 25, which reads as follows:

25....If the infringing goods are made with the same object in view which is attained by the patented article then a minor variation does not mean

that there is no piracy. A person is guilty of infringement if he makes what is in substance the equivalent of the patented article. Some trifling or

unessential variation has to be ignored......

He further referred to a division bench judgment of this court in Wockhardt Limited Vs. Hetero Drugs Ltd. and others reported in 2006 (32)

PTC 65 (Mad.)(DB) and referred to the following passages found in paragraphs 33 and 34 which reads as follows :

In the instant case, after, strenuous scrutiny and examination of the appellant''s claim, the competent authority, namely, Patent Office has

granted both Process Patent and EMR in favour of the appellant. It cannot also be debated that unless they are cancelled by the authority

concerned or appropriate Forum, the appellant would not be disentitled to exercise its right for a period of five years. In other words, no other

party is entitled to use the said formulation during the tenure of the said EMR.

Appellant is the only company in India to get an EMR. Patent and EMR rights are for a limited period of five years and, unless the same are

exercised in the said period, it will be rendered useless. When this period of short tenure is sought to be disturbed over the rights by any other

party, which has no prima facie right by virtue of Process Patent and EMR granted to the appellant, then, this Court has to necessarily prevent the

other party, by affording appropriate relief in favour of the appellant/plaintiff, by granting the injunction sought for.

He lastly referred to a judgment of this court in Mariappan Vs. A.R. Safiullah and another reported in MIPR 2008 (3) 0431 for contending

that the right to grant injunction need not flow only from Order 39 Rule 1 CPC., even without invoking the provisions, in an appropriate case the

court can grant injunction u/s 151 CPC.

Per contra, Mr. A. Prabhakara Reddy, learned counsel for the respondents referred to a judgment of the Supreme Court in Bishwanath

Prasad Radhey Shyam Vs. Hindustan Metal Industries, and referred to the following passage found in paragraphs 17, 18 and 33, which reads as

follows :

The object of Patent Law is to encourage scientific research, new technology and industrial progress. Grant of exclusive privilege to own, use

or sell the method or the product patented for a limited period, stimulates new inventions of commercial utility. The price of the grant of the

monopoly is the disclosure of the invention at the Patent Office, which, after the expiry of the fixed period of the monopoly, passes into the public

domain.

The fundamental principle of Patent Law is that a patent is granted only for an invention which must be new and useful. This is to say, it must

have novelty and utility. It is essential for the validity of a patent that it must be the inventor''s own discovery as opposed to mere verification of

what was already known before the date of the patent.

It is noteworthy that the grant and sealing of the patent, or the decision rendered by the Controller in the case of opposition, does not

guarantee the validity of the patent, which can be challenged before the High Court on various grounds in revocation or infringement proceedings.

It is pertinent to note that this position, viz., the validity of a patent is not guaranteed by the grant, is now expressly provided in Section 13(4) of the

Patents Act, 1970. In the light of this principle, Mr. Mehta''s argument that there is a presumption in favour of the validity of the patent cannot be

accepted.

He also referred to a judgment of the Delhi High Court in Standipack Private Limited and Another Vs. M/s. Oswal Trading Co. Ltd., and

referred to the following passage found in paragraph 16, which reads as follows :

When the conditions referred to in Section 64 are examined and applied to the facts ad circumstances of the present case in the light of the

observations made, herein-before, it is clear that the use of the pouches for packaging purposes of the nature of the one used by the plaintiff and in

respect of which patent has been granted was widely prevalent. The same is also an admitted position when the plaintiff has stated that the storage

of liquid products other than liquid in a pouch does not constitute a novel idea. Some of the defendants have filed applications for revocation of the

patent granted in favour of the plaintiff u/s 64 of the Patents Act. There are cases where it is held that when an application is filed seeking for

revocation of the patent and questioning the validity of the patent the Court should not grant an injunction. It is settled law that in an action for

infringement of a patent an injunction would not be granted where the validity of the patent itself has been questioned and a revocation petition has

been filed. In this connection reference may be made to a decision of the Madras High Court in V. Manioka Thevar Vs. Star Plough Works,

Melur, wherein it was held that if from the objections raised by the defendant it is clear that a serious controversy exists as to whether or not the

invention involves any new inventive skill having regard to what was known or used prior to the date of the patent; courts would not grant an

injunction restraining the defendant from pursuing his normal business activity. It was also held that an interim injunction would not be granted if the

defendant disputes the validity of the grant. In Niki Tasha India Pvt. Ltd. Vs. Faridabad Gas Gadgets Pvt. Ltd., it was observed by this Court that

no injunction should be granted when there is a serious question of the validity of the design to be tried in the suit and an application for cancellation

has been made.

A reference was made to a judgment of the Court of Appeal in Windsurfing International Inc. Vs. Tabur Marine (Great Britain) Ltd. reported

in (1985) R.P.C. 59 regarding the scope of novelty and the right of prior user of a design.

Further reference was made to a judgment of the division bench of this court in TVS Motor Company Limited Vs. Bajaj Auto Limited

reported in 2009 (3) CTC 178, wherein the circumstances under which the validity of the patent can be challenged in a suit and various principles

emerged were set out in paragraph 69, which reads as follows :

When we refer to the various decisions relied upon by the learned senior counsel for the respective parties the following principles emerge viz.,

(i) The validity of a patent can be challenged in a suit on various grounds of revocation as set out under Sections 64 and 107 of the Patents Act.

(ii) For the grant of interim injunction in a patent matter, the prima facie validity of the patent should be shown and also the prima facie infringement

should be proved apart from the availability of balance of convenience and irreparable loss.

(iii) If the patent is a new one, mere challenge at the Bar would be quite sufficient for the refusal of an interim injunction as compared to a fairly old

patent.

(iv) Even in IPR cases, apart from prima facie case, balance of connivance and irreparable injury, the mere registration of the patent alone would

not be sufficient and the Court must look at the whole case i.e. the strength of the case of the plaintiff and the strength of the defendant.

(v) Irrespective of the examination and investigation made under Sections 12 and 13 of the Patents Act, no presumption can be drawn as to the

validity of the patent and whether the application for revocation of patent is pending and when serious controversy exist as regards the existence of

an invention based on prior art, the Court should be slow in granting the injunction.

(vi) There can be no infringement if the opponent has proved the same result by a different combination of different elements.

(vii) The general rule in regard to the construction of the validity of a patent is, that construction which makes it valid should be preferred rather

than the construction which rendered it invalid.

(viii) Patent specification should intend to be read by a person skilled in the relevant art but their construction is for the Court and to do so it is

necessary for the Court to be informed as to the meaning of the technical words and phrases and what was the common general knowledge i.e.,

the knowledge that the notional skilled man would have.

(ix) In construing an allegation of infringement, what is to be seen is whether the alleged infringement has taken the substance of the invention

ignoring the fact as to omission of certain parts or addition of certain parts.

(x) While analysing a claimed invention, it is relevant to examine as to whether the invention requires independent thought, ingenuity and skill,

producing in a distinctive form a more efficient result and there by converting a comparatively defective apparatus into a efficient and useful one

which, taken as a whole, is novel.

(xi) Though the grant of patent by itself does not guarantee its validity, it should be given some weight and significance while considering the

question of prima facie case and it is always open to the defendant to question the validity of the patent.

(xii) Though the claimed invention may consist of known factors, known integers i.e. if by combination of such known integers if a new use has

been discovered that should be construed to have displayed inventive steps by way of ingenuity and skill.

In the light of the above, he sought for dismissal of the applications.

In the light of the above rival contentions, it has to be seen whether the applicant/plaintiff has made out any case for the grant of an injunction?

As rightly contended by the respondents, the claim for a valid patent can be challenged in a suit u/s 64(2) and they have also filed a cross

objection in the written statement and have paid court fee for the same. Therefore, it is a matter fit for trial. Even before the trial and a final verdict

to be given, it cannot be said that the applicant has made out a prima facie case for the grant of the injunction. Even the balance of convenience

does not stand in their favour for the grant of the injunction. As rightly contended by the respondents, the patent obtained by him is not out of any

new invention and several manufacturers are using the similar design. After issuing the notice in the year 2010, the applicant also delayed in filing

the suit. Though the delay by itself cannot defeat the right of the patentee, but the fact that he had issued the notice and got the reply as early as in

April, 2010, but never chose to question the action of the respondent can be a relevant factor for declining the entire relief. Under these

circumstances, both applications will stand dismissed. However, there will be no order as to costs.