PATENTS - Infringements

WHAT CONSTITUTES A PATENT INFRINGEMENT?

•       An encroachment upon the invention patented by the owner is called "infringement".

•       Patent infringement is the unauthorized making, using, offering for sale, selling any patented invention within India, or importing into India of any patented invention during the term of a patent.

•       Patent infringement occurs when a product infringes one or more patents.

DIRECT INFRINGEMENT

•       ‘Direct patent infringement’, is the most obvious and the most common form of patent infringement.

•       In the most basic definition, direct patent infringement occurs when a product that is substantially close to a patented product or invention is marketed, sold, or used commercially without permission from the owner of the patented product or invention.

INDIRECT INFRINGEMENT AND CONTRIBUTORY INFRINGEMENT

•       ‘Indirect patent infringement’, suggests that there was some amount of deceit or accidental patent infringement in the incident.

•       For e.g. a person A holds a patent for a device and a person B manufactures a device which is substantially similar to the person A’s device. The person B is supplied with a product from a Person C to facilitate manufacturing of the person B’s device. If the device so manufactured by the person B infringes on the Person A’s patent, then the person C indirectly infringes the Person A’s patent. Further, if such a product is knowingly sold or supplied, it may lead to contributory infringement. For example, in the above example if the Person C knowingly supplies the product to the Person B then the infringement is construed as contributory infringement

DETECTING PATENT INFRINGEMENT

1.     A direct way to determine patent infringement is to keep a market-watch for all products released in the market by a company in a technology domain. (especially for competitors)

• All these products can then be closely examined to determine what features of these products tread onto the inventions patented by the company.
• To facilitate this, the company can avail some patent analytic services to create a patent portfolio for the company, especially, if the company has a huge number of patents across various technological domains.

2.     Secondly, the company should keep an eye on all the published patent applications of its potential competitors. This can be done by doing a patent-watch in the technology area and for the competitors to analyze patenting activity in the last 3-4 year.

·      The portfolios generated using patent-watch help in anticipating the product that a competitor may be launching.

·      A comparison with the company’s patent portfolio may establish that some of these anticipated products may infringe on one or more of its patents.

·      This gives an early idea about competitor’s moves and helps the company prepare in advance to take further appropriate action.

·      For example, to save litigation costs, the company may try to invalidate/oppose the patent/patent publication before hand, so that the competitor never launches the product in question.

STEPS TO ESTABLISH INFRINGEMENT

•       Having detected that one of the patents of the company might be infringed by a Competitor’s product or process, a detailed analysis should be performed to establish patent infringement (special patent analytic service can be used for the same).

•       The product or the process need not infringe all claims of a granted patent, in fact it is merely enough even if the product or process in question is found to infringe even a single claim of the granted patent.

•       To perform this analysis, a complete description of all products or processes of a competitor, which will include all product brochures or promotional materials, web site pages, instructions or directions for use, advertisements, and product packaging should be compared with patents that are being infringed.

•       The infringement analysis may be depicted in the form of a claim chart, which highlights the features, of a competitor’s product or process that read onto one or more claims of the patents granted to the company.

•       The usual strategy of a defendant will be to try to invalidate the patent in question and if the defendant succeeds in invalidating the patent, then the litigation suit will have to be withdrawn.

•       Therefore, before filing a patent infringement suit, it is very essential to get an invalidation search conducted for the patents to evaluate the strength of the patents.

•       It is advisable to establish validity of the patents before filing a patent infringement suit against a competitor, because, if a competitor succeeds in invalidating the patents in question, the company may incur significant legal costs and also market prestige, position, and market share will be at stake.

PATENT LEGAL SYSTEM OF INDIA

•       The courts in India receive:

1. Patent Administrative Cases

•       In patent administrative cases, the Indian Patent Office is the defendant. These types of cases includes dispute on grant of a patent, patent invalidation and upholding, and compulsory licensing.

2. Patent Infringement Cases

•       In patent infringement cases, patentee or patent assignees pursue damages against wilful infringement conduct by the alleged infringer.

•       These cases includes infringement of patent, disputes relating to ownership of patent, disputes regarding patent rights or right for application, patent contractual disputes, contractual disputes of assignment of patent right, patent licensing, and dispute relating to the revocation of patents.

HIERARCHY OF COURTS IN PATENT ADMINISTRATIVE CASES

HIERARCHY OF COURTS IN PATENT INFRINGEMENT CASES

PATENT CLAIM INFRINGEMENT

•       In India, no infringement action may be started until a patent has been granted.

•       This right to obtain provisional damages requires a patent holder to show the following:

1.     The infringing activities occurred after the patent application was published;

2.     The patented claims are substantially identical to features of the process or the product infringing the patent; and

3.     The infringer had actual notice of the published patent application.

SUPREME COURT OF INDIA HAS LAID DOWN THE FOLLOWING GUIDELINES…..

•       Biswanath Prasad Radhey Shyam v. Hindustan Metal Industries 1978 (Patent in question: ‘Means for holding utensils for turning purposes’)

•       Read the description and then the claims;

•       Find out what is the prior art;

•       What is the improvement over the prior art;

•       List the broad features of the improvement;

•       Compare the said broad features with the defendant’s process or apparatus; and

•       If the defendant’s process or apparatus is either identical or comes within the scope of the plaintiff’s process or apparatus, there is an infringement.

INJUNCTION

•       Injunction is as an equitable remedy in the form of a court order, whereby a party is required to do, or to refrain from doing, certain acts.

•       An injunction may be preliminary or permanent.

•       A preliminary injunction is a provisional remedy granted to restrain activity of a defendant on a temporary basis until the Court can make a final decision after trial and a permanent injunction is one which is granted after the trial.

•       For the court to order an injunction, the plaintiff has to fulfill the following criteria:

1. Establish his case only at a prima facie level, i.e., the plaintiff has to show that he has some possibility of success and that his claim is not vexatious; (Prima Facie - based on the first impression; accepted as correct until proved otherwise.)
2. Demonstrate irreparable injury if a temporary injunction is not granted; and
3. Demonstrate that the balance of convenience is in favour of the plaintiff (i.e. the plaintiff will be more disadvantaged because of the non-grant of the injunction that the defendant will be disadvantaged because of the grant of one).

•       Permanent injunction is granted only after the trial when the Court concludes that the defendant’s product infringes the plaintiff’s patent

SEVERAL CASES OF PATENT INFRINGEMENT

BAJAJ AUTO LTD. Vs. T.V.S. MOTOR COMPANY LTD

•       Bajaj’s patent:

•        According to the Bajaj Auto Limited (hereinafter the appellant), it was granted Indian Patent No. 195904 in respect of a patent application titled “An Improved Internal combustion engine working on four stroke principle” with a priority date of 16th July2002. The patent was granted on 7^th July, 2005.

•       Features of the invention (DTS-i Technology) are:

•       Small displacement engine as reflected by a cylinder bore diameter  between 45 mm and 70 mm.

•       Combustion of lean air fuel mixtures;

•       Using a pair of spark plugs to ignite the air fuel mixture at a predetermined instant

•       In the first eight months of the that financial year, Bajaj manufactured and marketed 814,393 two wheelers with “DTS-i Technology” out of a total of 1,501,241 two wheelers sold. Therefore, the said “DTS-i Technology” stated to have been invented by Bajaj has accounted to 54.25% share of Bajaj two wheelers.

•       TVS launches FLAME- the Bone of Contention

•       The Respondents, M/s. TVS Motor Company Limited announced to launch motor  bikes of 125-CC on 14^th December 2007 under the trade mark 'FLAME'. The motorcycle was powered with a lean burn internal combustion engine of bore size54.5 mm with a twin spark plug configuration, which according to the Bajaj Auto Ltd., infringes its patent.

•       Therefore, before the launch of motor bikes, the applicants have brought the suit before the court to protect their intellectual property.

•       Pleadings by TVS Motor Company Ltd.

•       The concept of two spark plugs being prior art: The respondent places reliance on various published papers to substantiate its claim They also plead that the use of twin spark plugs in lean burn engines is known as US Patent No. 5320075 titled “Internal Combustion Engine with Dual Ignition for a lean burn”.

•       Use of two spark plugs in engines with narrow bore size of 45mm-70mm being  prior art: The respondent has also referred to Takegawa Cylinder heads and Honda Bros, NC 25E. Kawasaki KZ 1000 SI and Kawasaki KZ 1000 SI have the configuration of two valves per cylinder with twin plugs, cylinder bore size is 69.4mm. Honda NT 400, as per the specification stated in the advertisement, contains 2 cylinders with each cylinder has a bore size of 64mm with 2 spark plugs per cylinder.

•       The third valve arrangement of the respondent is protected by patent licensed to it by AVL List GMBH: According to the respondent, the spark plugs in the engine in its vehicle “FLAME” are arranged in a different way in comparison to what is claimed by the applicant's patent.

•       Synopsis of the facts of the case

•       In  Dec 2007 Bajaj claimed TVS had infringed the Patent and filed an infringement suit at Chennai HC against TVS.  Single Judge of the Madras HC issued a temporary injunction  on 16th February, 2008 of the Manufacture and sale of TVS Bikes with alleged infringed twin spark plug.

•       TVS appealed against this decision at the Division Bench of the Chennai HC against the injunction and the Division Bench Madras HC on 18 May, 2009 had decided prima facie that there was no infringement by TVS and allowed TVS to manufacture and sell the bikes.

•       Bajaj then appealed at the Supreme Court against the Madras Division bench decision and the Supreme Court issued an interim order (dt 08th June, 2009) allowing TVS to manufacture but restrained it from selling till the final order is passed.

•       On 16^th September 2009 the  Supreme Court pronounced the judgment on the Bajaj v. TVS’s appeal. The bench consisting of Justice Markandey Katju and Justice AK Ganguly judged that:

•       The matter is to be disposed on merits at the Chennai HC, with directions to complete the full trial and pronounce orders latest by 30th November 2009.

•       TVS has been allowed to sell its bikes with Twin Spark Plugs, with a Court Receiver being appointed to maintain accounts of Profit.

•       Issues directive for lower courts for IP litigation.

•       November 25, 2009- Issues were framed by the Single Judge of Mad HC

•       March 10, 2010- Single Judge of Madras HC ordered Bajaj to prove its case first.

•       October 4, 2010- Bajaj again appealed to the DB against the order dated March 10, 2010. In the appeal, the DB of Madras HC ordered TVS to prove its case first since it was the first party to file C.S.No.979 of 2007. In other words, since it was the plaintiff in the suit for groundless threats of infringement (which was filed first), the onus was on TVS to prove non-infringement of Bajaj’s patent. Therefore, TVS had to first lead evidence of non-infringement.

•       September 21, 2011- TVS’s application under Order 18, Rule 3 of the Code of Civil Procedure and application for joint trial were allowed by the Single Judge of the Madras HC.