Sriprakash Steel Industries vs Ramapada Chaterjee and Another

Manisana, J.—This is an appeal from an order of the District Judge, Kamrup made on 3.1.90 in Misc (J) Case No. 102 of 1981 arising out of Title Suit No. 23 of 1988 refusing to grant an interim injunction against the threats of patent action.

Facts, The M/s. Sriprakash Steel Industries instituted a suit being TS No 23 of 1988 in the Court of the District Judge Kamrup for a declaration that there has been no infringement of the principal Defendants'' alleged patent and the right of the Plaintiff to manufacture HDPE ,strainers as per specification required by the proforma Defendant, and for a permanent injunction against the principal Defendants-restraining them from taking any action against the Plaintiff on the basis of the notice dated 12.11.37. The case of the Plaintiff is that the notice dated 12.11.87 has been issued by the Plaintiff by the attorney of the principal Defendants threatening with proceedings for infringement of patent by alleging falsely that they have the patent right of manufacturing and marketing a kind of HOPE strainers. The notice is illegal as there has been no infringement of any patent. In the suit, the Plaintiff filed an application for temporary injunction restraining the principal Defendants, their men, agents and servants from taking the threatened action on the basis of the notice. The learned District Judge refused to grant interlocutory injunction. The order has been appealed to this Court.

There has been considerable amount of discussion about the jurisdiction of the District Judge to entertain the suit in view of Section 64 read with Section 104 of the Patent Act, 1970. This question has been raised in a matter concerned with an interlocutory application for an interim injunction. The question of jurisdiction ought to have been raised before the District Judge in the suit. However, if the District Judge has no jurisdiction any order is of no consequence Therefore, I would like to discuss the question of jurisdiction considering the facts and circumstances of the case and for my own satisfaction if the District Judge has jurisdiction prima facie.

Section 104 provides that no suit for a declaration u/s 105 or for any relief u/s 106 or for infringement of a patent shall be instituted in any Court inferior to a District Court having jurisdiction to try the suit However, under proviso to Section 104 where counter claim for revocation of a patent is made by the Defendant, the suit, along with the counter-claim, shall be transferred to the High Court for decision.

Section 104 concerns with three kinds of suit, namely (1), suit for a declaration u/s 105(1) suit for any relief under, Section 106 and (3) suit for infringement of a patent.

u/s 105, any person may institute a suit for a declaration that the use by him of any process or the making use or sale of any article by him does not or would not constitute an infringement of a claim of a patent against the patentee or the holder of an exclusive licence under the patent, notwithstanding that no association to the contrary baa been made by the patentee or licencee. Therefore, the suit u/s 105 is for a declaration as to noninfringement.

Section 106 relates to the suit for threats for patent action. u/s 106, where any person threatens any other persons with proceedings for infringement of patent, any person aggrieved thereby may bring a suit against him praying for the following reliefs-(a) a declaration to the effect that threats are unjustifiable ; (b) an injunction against the continuance of the threats ; and (c) such damages, if any as he has sustained thereby.

As regards the suit for infringement of a patent, infringement is the violation of patent rights. What constitute infringement of a patent is to be gathered from the rights conferred on a patentee.

In view of the above discussion, the suits u/s 104 are (1) suit for a declaration as to non - infringement; (2) suit for threats of patent action and (3) suit for infringement of a patent. In my opinion, the present suit is one for threats of infringement proceedings claiming reliefs available u/s 106, and not for infringement of a patent or for ft declaration as to non-infringement.

As regards the jurisdiction of the District Judge, in the present case the Plaintiff has also claimed that the patent is invalid on the grounds that the manufacturing of HDPE strainers is not a new invention or a new manufacture and also not a new combination of the component under the provision 6f the Patent Act, 1970, and that the product of HDPE strainers has not got any novelty or a new process nor has any scientific combination. The contention of Mr. Barua, the learned Counsel for principal Defendant-Respondents, is that the allegations on the basis of which the Plaintiff claims that the patent is invalid are grounds for revocations of a patent and as such, the High Court only has jurisdiction u/s 64 read with Section 104 of the Patent Act.

u/s 64 of the Patent Act, a patent may, on the petition of any person interested or of the Central Government or on a counter claim in a suit for infringement of a patent, be revoked by the High Court on any of the grounds provided in Section 64. As already stated, where a counter claim for revocation of patent is made by the Defendant the, suit along with the counter claim shall be transferred u/s 104 to the High Court for decision. A reading of Sections 64 and 104m together shows that the compound word "counter - claim" employed in Section 104 is referable to the suit for infringement of a patent only. Therefore, so far as the suit is concerned in order to attract the provisions of Section 104, the suit must be one for infringement of a patent and not for threats of patent action, and there must be a counter claim for revocation of the patent set up by the Defendant under Order 8, Rule 6A Code of Civil Procedure. The present suit is for the threats of patent action claiming u/s 106 ; but, not for infringement of patent, as already concluded.

Apart from the above discussions u/s 106 of the Patent Act, the Plaintiff in an notion for threats of patent action has to lay foundation that the threats have been made. If he lays the foundation the burden is discharged. Then it is for the Defendant to prove or to show that the act in respect of which proceeding are threatened constitute an infringement of the patent. If the Defendant succeeds in establishing the infringement the Plaintiff may show that the patent is invalid. Thereafter, the grant of the relief available u/s 106 would depend on the success or failure of the Plaintiff to prove the invalidity. Therefore in a suit for threats of patent action, invalidity of the patent can also be challenged.

It would be helpful at this stage to refer to a decision of the Supreme Court in Bishwanath Prasad Radhey Shyam Vs. Hindustan Metal Industries, In that case, the Supreme Court has, while dealing with a suit for infringement of a patent, held that the fact that the Controller has granted patent does not give raise to the presumption in favour of the validity of the patent. The grant and sealing of the patent or a decision rendered by the Controller in the case of opposition, does not guarantee the validity of the patent. The validity of the patent can be challenged on various grounds in revocation of infringement proceedings.

On reading of Section 104 read with Section 64 it indicates that the District Judge (sic, has) initial jurisdiction to entertain all the three kinds of suit mentioned above. However, In a suit for infringement of patent, if there is a counter claim set up by the Defendant for revocation of the patent, the suit, along with the counter claim, shall be transferred to the High Court, In such a case, the District Judge has to return the plaint for presentation to the High Court as under Order 7, Rule 10 Code of Civil Procedure. Therefore, I am of the opinion that at this stage it too early to say whether the District Judge has jurisdiction or not for the following reasons. In the course of the first bearing of the suit (framing issues) the Plaintiff may not raise the question of validity of the patent as the reliefs can be granted if the Plaintiff''s case is well founded irrespective of the invalidity. If the learned District Judge is of the opinion that he has no jurisdiction to decide the question of validity on the facts and circumstances of the case, he may pass necessary orders in accordance with law.

The next contention of Mr. Barua is as follows. The Plaintiff must reply to the threat that there has been no infringement of the patent and the plaint must contain a similar averment in order to give him right of action. It is not enough to say that it has not infringed the patent right and the patent is invalid. Since the Plaintiff has not replied to the threats and there is averment in the plaint, the suit that fail or the injunction sought cannot be granted. He has referred me to a decision of the Calcutta High Court in Upendra v. T.C. Martin AIR 1961 Cal 69 in Support of his contention. In that case the Calcutta High Court has held that it is not enough to say that the patent obtained by a person is not a valid one for the purpose of filling a suit under the Patent Act. There must be an unequivocal reply to the threat that there has been no infringement of any patent and the plaint mutt contain a similar averment.

I do not find in the Act and the rules framed thereunder that a Plaintiff has to reply to the threat that there has been no infringement and that it must be averred and proved that the Plaintiff has replied to the threat stating that there has been no Infringement. That part, I am of the view that, the effect of the decision of the Calcutta High Court in this regard would be giving too much importance to the form of pleading rather than injury or threatened injury, ever, in my opinion, there may be sortie materials In the plaint for the relief of injunction showing that there is at least reasonable expectation that the threats alleged are likely to be made against either the Plaintiff or to some Ors. in view of the use of words "continence and "threats" in Section 106. For these reasons, the contention of Mr. Barua cannot be accepted and I am, with great respect, unable to agree with the decision of the Calcutta High Court.

The next question which arises for consideration is whether the interlocutory injunction sought is to be granted. While granting or refusing an injunction at an interlocutory stage, there is always a risk that the Court may make ft wrong decision. But the Court is to take the risk, and it is a matter of degree, namely lesser degree of risk or greater degree of risk, of injustice. In the present case, if the interlocutory injunction is granted, it would practically or virtually give the principal relief sought in the suit. Therefore, in the present case, I am of the view that the existence of a prima facie case of a high-degree is to be seen apart from the balance of convenience or inconvenience and a boat of other relevant considerations.

Keeping the above principle in view, let me now examine the also on hand. The Plaintiff has prayed for interlocutory prohibitory injunction foe retraining the principal Defendant from taking any action against the Plaintiff on the built of the notice. u/s 106 in junction can be granted against the continuance of the threats. The meaning of the word ''continuance'' means the act of continuing. Therefore in the context of Section 106(1)(b), the word ''continuance'' means repetition of the threat at short interval. The Plaintiff, therefore, has to aver in his pleading and prove for such a relief for injunction that there has been repetition of the threat at short interval and. If there is no suck a reputation, it least there is some reasonable expectation that the threat alleged is likely to be made again cither to the Plaintiff or to some other persons. The purpose is to stop a patentee, who has no intention to enforce his alleged patent right, from going around and threatening the purchasers and other persons by asserting his alleged patent right and giving a threat of patent action for causing thereby hindrance to the plans for distribution and sale of his competitors.

Mr. Baruah, the learned Counsel for the principal Defendants, has further contended that the injection sought cannot be granted under Clause (b) of Section 41 of the Specific Relief Act. As stated earlier, the interlocutory injunction prayed for is to restrain the principal Defendants from taking any action against the Plaintiff on the basis of notice threatening the Plaintiff with proceedings for Infringement of a patent, Clause (b) provides that an injunction cannot be granted to restrain any person from instituting or prosecuting proceeding in a Court not subordinate to that from which injunction is sought. In Cotton Corporation of India v. United Industrial Bank AIR 1963 SC 1272 the Supreme Court has held:

Section 41(b) denies to the Court the jurisdiction to grant an injunction restraining any person from instituting or prosecuting any proceeding in a court which is not subordinate to the Court from which the injunction is sought. In other words the Court can still grant an injunction restraining a person from instituting or prosecuting any proceeding in a Court which is subordinate to the Court from which the injunction is sought.

Under, Section 104, no suit for infringement of patent is to be instituted in any Court inferior to a District Court. If the suit is instituted in the Court of the District Judge, viz, the same Court, the District Judge has the jurisdiction to regulate its own proceedings. Be that as it may, there is no allegation in the petition that injunction is necessary to prevent a multiplicity of the proceedings, if the injunction sought is nut granted. For the reasons stated, in the present case a prima facie case of a high degree, or relevant factors discussed above for considerations for granting injunction, have not been disclosed and, therefore, interim injunction cannot be granted.

For the foregoing reasons, the appeal is dismissed. No costs.