LG Electronics India Pvt Ltd vs Bharat Bhogilal Patel & Others

Jurisdiction of Customs Authority in Patent Disputes

Introduction:This case revolves around the interpretation and application of the Patents Act, 1970, and the Customs Act, 1962, concerning the actions of customs authorities in suspending the clearance of imported goods alleged to infringe a patent. The plaintiff, LG Electronics India Pvt Ltd, contested the actions of the customs authorities and the patent holder, Bharat Bhogilal Patel, arguing that such actions amounted to groundless threats under Section 106 of the Patents Act.

Background:The case involves a dispute between LG Electronics India Pvt Ltd (plaintiff), a well-known electronics manufacturer, and Bharat Bhogilal Patel (defendant no. 1), the holder of a patent for a process involving laser engraving. The customs authorities (defendants no. 2 and 3) acted on a complaint filed by the patent holder, leading to the interdiction of the plaintiff's imported goods.

Brief Facts of the Case: Bharat Bhogilal Patel filed a complaint with customs authorities alleging infringement of his patent (No. 189027) by LG Electronics' imported goods. Customs authorities acted on the complaint, interdicting the plaintiff’s consignments. The plaintiff argued that:The customs authority lacked jurisdiction to determine patent infringement. The patent in question lacked novelty and inventive step. The plaintiff filed a suit for:Declaration that the customs actions were void. Injunction against further groundless threats. Damages for alleged harm caused by the interdiction.

Issues Raised: Jurisdiction: Whether the Delhi High Court had territorial jurisdiction to entertain the suit. Authority of Customs: Whether customs authorities could act on a patent holder's complaint without judicial determination of infringement. Groundless Threats: Whether the actions of the patent holder and customs authorities constituted groundless threats under Section 106 of the Patents Act.

Plaintiff's Submissions:The customs authority acted beyond its jurisdiction as it cannot adjudicate patent infringement.The patent lacked novelty, and a revocation petition had been filed before the Intellectual Property Appellate Board (IPAB).Actions by the customs authority were causing irreparable harm to the plaintiff’s business.

Defendants' Submissions: The customs authority was acting within its powers under the Customs Act and the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007. The Delhi High Court lacked territorial jurisdiction as the primary actions occurred in Mumbai. The plaintiff had alternative remedies under the Customs Act. 

Judgments Referred and Their Context:

Jawahar Engineering Co. v. Jawahar Engineers Pvt. Ltd. (1983 PTC 207):

Established that courts can entertain suits based on threatened infringement. Relevant to the plaintiff’s argument on jurisdiction.

Pfizer Products Inc. v. Rajesh Chopra (2006 (32) PTC 301): Discussed jurisdiction based on apprehensions of harm. Supported the plaintiff’s claim that jurisdiction could be invoked in Delhi.

Exphar SA v. Eupharma Laboratories Ltd. (2004) 3 SCC 688: Affirmed that jurisdiction should be tested based on averments in the plaint.

Reasoning of the Judge:

Territorial Jurisdiction: The court relied on the principles laid down in Jawahar Engineering and Pfizer Products to hold that the apprehension of harm in Delhi provided a valid basis for jurisdiction.

Role of Customs Authorities: Customs authorities are primarily implementing bodies under the IPR Rules, 2007, and cannot adjudicate patent infringement. The court emphasized that infringement disputes must be resolved by civil courts or the IPAB.

Groundless Threats: The actions of the patent holder and customs authorities were deemed to cause unnecessary harm to the plaintiff, amounting to groundless threats.

Decision: The Delhi High Court Held that it had jurisdiction to entertain the suit. Issued an injunction restraining customs authorities from interdicting the plaintiff’s consignments based on the patent holder’s complaint. Directed that the customs authority could only act upon a judicial determination of infringement.

Case Title: LG Electronics India Pvt Ltd vs Bharat Bhogilal Patel & Others

Date of Order: 13 July 2012

Case No.: CS (OS) No. 2982/2011

Court: Delhi High Court

Judge: Hon’ble Mr. Justice Manmohan Singh

Advocate Ajay Amitabh Suman

[Patent and Trademark Attorney]

High Court of Delhi

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