Boehringer Ingelheim International GmbH Vs. Eris Lifesciences Limited

Introduction
In the dynamic realm of pharmaceutical innovation, where intellectual property rights safeguard groundbreaking discoveries, the case of Boehringer Ingelheim International GmbH vs. Eris Lifesciences Limited, decided by the High Court of Himachal Pradesh on May 30, 2024, emerges as a pivotal chapter. This dispute, centered on Indian Patent No. 268846 for the drug Empagliflozin, underscores the delicate balance between protecting patent rights and ensuring public access to affordable medicines. Boehringer Ingelheim, a global pharmaceutical titan, sought to restrain Eris Lifesciences, an Indian company, from manufacturing and selling an allegedly infringing product under the brand "Linares-E." The case delves into complex legal questions surrounding patent validity, infringement, and the criteria for granting interim injunctions in patent disputes. By navigating the interplay of Indian patent law, international precedents, and equitable principles, the court’s ruling not only resolves the immediate conflict but also sets a significant precedent for handling patent disputes in India’s commercial courts. This case study offers an in-depth exploration of the factual and procedural nuances, legal issues, parties’ arguments, judicial precedents, the court’s reasoning, and the broader implications of the decision, painting a vivid picture of innovation under legal scrutiny.

Detailed Factual Background
Boehringer Ingelheim International GmbH, a Germany-based pharmaceutical giant, and its Indian subsidiary, Boehringer Ingelheim (India) Pvt. Ltd., are renowned for their contributions to human and veterinary medicine. The plaintiffs hold Indian Patent No. 268846 (IN ‘846), granted on September 18, 2015, for “Glucopyranosyl Substituted Benzenol Derivatives,” a pharmaceutical innovation covering Empagliflozin, a sodium-glucose co-transporter-2 (SGLT2) inhibitor used to treat type 2 diabetes mellitus. Empagliflozin, marketed under brand names like Jardiance, Jardiance Duo, and Glyxambi, was introduced in India in 2015 and 2018, achieving significant commercial success. The patent, valid until March 11, 2025, grants Boehringer exclusive rights under Section 48 of the Patents Act, 1970, to prevent unauthorized manufacture, use, sale, or importation of the patented product. Boehringer’s global R&D expenditure, exceeding 3.3 billion Euros in 2020, underscores its commitment to innovation, with Empagliflozin being a cornerstone of its metabolic disease portfolio. The plaintiffs emphasized that no pre-grant or post-grant oppositions were filed against IN ‘846, and the patent is registered in over 70 countries, reinforcing its robustness.

Eris Lifesciences Limited, a publicly listed Indian pharmaceutical company with operations in Himachal Pradesh, Assam, and Gujarat, markets a product under the brand “Linares-E,” containing Empagliflozin and Linagliptin (25 mg/5 mg). Boehringer alleged that this product infringes IN ‘846, as it replicates the patented Empagliflozin formulation without consent. The plaintiffs discovered Linares-E in the market and argued that Eris’s actions constituted a blatant violation of their exclusive patent rights, causing substantial financial harm. They further noted that Eris’s manufacturing and sales activities occurred within the territorial jurisdiction of the Himachal Pradesh High Court, justifying the court’s authority to hear the case. Boehringer highlighted its vigilance in protecting IN ‘846, citing prior successful legal actions against other infringers in courts in Himachal Pradesh, Vadodara, and Dehradun.

Eris, in response, did not dispute manufacturing and selling Linares-E but challenged the validity of IN ‘846, arguing that it lacked inventive step and was vulnerable to revocation. Eris pointed to prior art documents—WO2001027128 (D1, Dapagliflozin Genus) and WO2003099836 (D2, Dapagliflozin Species)—claiming that Empagliflozin was obvious to a person skilled in the art (POSA). Additionally, Eris alleged that Boehringer concealed the revocation of a corresponding patent in China, accusing the plaintiffs of approaching the court with unclean hands. Eris further emphasized the public interest, noting that Linares-E, priced at Rs. 25 per tablet compared to Boehringer’s Rs. 86 per tablet, enhances affordability for diabetic patients, a critical factor given diabetes’s chronic nature.

Detailed Procedural Background
The dispute unfolded through multiple legal filings before the High Court of Himachal Pradesh. Boehringer filed Civil Suit (COMS) No. 09 of 2023 and COMS No. 02 of 2024, seeking a permanent prohibitory injunction to restrain Eris from infringing IN ‘846, alongside other reliefs such as damages. Concurrently, Boehringer filed OMP No. 409 of 2023 under Order XXXIX, Rules 1 and 2, read with Section 151 of the Code of Civil Procedure (CPC), 1908, requesting an interim injunction to halt Eris’s manufacture, sale, and marketing of Linares-E during the suit’s pendency. Eris responded with counterclaims (COMS No. 01 of 2024 in COMS No. 09 of 2023 and COMS No. 07 of 2024 in COMS No. 02 of 2024), challenging the validity of IN ‘846 under Section 64 of the Patents Act, 1970, and opposing the interim injunction.

The court, presided over by Justice Ajay Mohan Goel, reserved the matter on May 3, 2024, and delivered its judgment on May 30, 2024. The plaintiffs were represented by Senior Advocates Ashok Aggarwal and Vinay Kuthiala, supported by a team of advocates, while Eris was represented by Senior Advocate Chander Lall and his legal team. The court’s task was to determine whether Boehringer had established a prima facie case, balance of convenience, and irreparable harm to justify an interim injunction, while also assessing Eris’s claim that IN ‘846 was vulnerable to revocation. The procedural complexity was heightened by Eris’s counterclaims, which sought to leverage prior art and international patent invalidations to undermine the plaintiffs’ case.

Issues Involved in the Case
The case raised several critical legal issues at the intersection of patent law and interim relief:
Whether Boehringer established a prima facie case of patent infringement by demonstrating that Eris’s Linares-E product violated the exclusive rights under IN ‘846.
Whether Eris raised a credible challenge to the validity of IN ‘846, rendering it vulnerable to revocation, thereby negating the plaintiffs’ entitlement to an interim injunction.
Whether the non-disclosure of the revocation of a corresponding patent in China constituted suppression of material facts, affecting Boehringer’s claim to equitable relief.
Whether the balance of convenience favored Boehringer, considering the commercial impact of infringement, or Eris, given the public interest in affordable medicines.
Whether the absence of an interim injunction would cause irreparable harm to Boehringer, or whether monetary damages could adequately compensate any loss.
How the court should weigh public interest arguments, such as access to affordable drugs, against the statutory protections afforded to patentees under the Patents Act, 1970.

These issues required the court to balance the proprietary rights of a patentee against the defendant’s right to challenge patent validity, all while considering equitable principles and public welfare.

Detailed Submission of Parties
Boehringer’s counsel argued that IN ‘846, valid until March 11, 2025, conferred exclusive rights under Section 48 of the Patents Act, 1970, which Eris infringed by manufacturing and selling Linares-E. They emphasized the patent’s registration in 70 countries, its commercial success since 2015, and the absence of pre-grant or post-grant oppositions in India, underscoring its strength. The plaintiffs highlighted Empagliflozin’s technical superiority, with a selectivity for SGLT2 (~2500) surpassing prior art compounds like Dapagliflozin (~1200) and WO’128’s Example 12 (~900), establishing inventive step. They dismissed Eris’s prior art claims, noting that these were examined by patent offices globally without challenging IN ‘846’s validity. On the China revocation, Boehringer clarified that a re-trial petition was pending before China’s Supreme People’s Court, and patent laws vary by jurisdiction, rendering the revocation irrelevant to India. The plaintiffs argued that Eris’s lower pricing was an attempt to exploit Boehringer’s R&D investments, and public interest was safeguarded by the Patents Act’s provisions for compulsory licensing, which Eris had not pursued. Boehringer asserted a prima facie case, balance of convenience, and irreparable harm, citing long-term market damage if infringement continued.

Eris’s counsel countered that IN ‘846 was vulnerable due to lack of inventive step, relying on prior art documents WO2001027128 and WO2003099836, which disclosed Glucopyranosyloxy-Substituted Aromatic Groups as SGLT2 inhibitors. They argued that Empagliflozin was obvious to a POSA, supported by an expert affidavit from Dr. Prabuddha Ganguli. Eris accused Boehringer of concealing the China revocation, claiming this breached the clean hands doctrine, especially since the same prior art underpinned the revocation. On public interest, Eris highlighted Linares-E’s affordability (Rs. 25 vs. Rs. 86 per tablet), arguing that an injunction would disrupt patient access to cost-effective treatment for a chronic condition like diabetes. They contended that Boehringer’s licensing of IN ‘846 to Torrent, Lupin, and Cipla indicated a monetary value, suggesting damages could compensate any loss. Eris asserted that a credible challenge to patent validity negated the need for an injunction, as the court need only find vulnerability at the interim stage, not definitive invalidity.

Detailed Discussion on Judgments Cited by Parties
The court’s analysis was informed by a robust array of Indian and international precedents, shaping its approach to patent validity, interim injunctions, and the clean hands doctrine. The key judgments, their complete citations, and their context in the case are as follows:

M/s Bishwanath Prasad Radhey Shyam vs. Hindustan Metal Industries, (1979) 2 SCC 511: The Supreme Court held that the grant of a patent does not guarantee its validity, which can be challenged in revocation or infringement proceedings, as expressly provided by Section 13(4) of the Patents Act, 1970. The court used this to affirm Eris’s right to challenge IN ‘846’s validity despite its registration.
Dalpat Kumar and Another vs. Prahlad Singh and Others, (1992) 1 SCC 719: The Supreme Court outlined the triple test for interim injunctions—prima facie case, irreparable injury, and balance of convenience—emphasizing that irreparable injury need not be physically irreparable but material, and damages may not suffice. The court applied this to assess Boehringer’s entitlement to relief.
Ten XC Wireless Inc. and Others vs. Mobi Antenna Technologies (Shenzhen) Co. Ltd., 2011 SCC OnLine Del 4648: The Delhi High Court summarized principles for patent injunctions, noting no presumption of validity under Sections 13(4), 64, and 107, and that a credible challenge to validity precludes injunction. The court adopted this to evaluate Eris’s challenge.
Natco Pharma vs. Novartis AG and Anr., FAO(OS) (COMM) 178/2021, decided on 24.04.2024 (Delhi High Court): The Division Bench clarified that there is no statutory presumption of validity, and a defendant need only raise a credible challenge at the interim stage, not prove invalidity. The court used this to set the threshold for Eris’s challenge.
F. Hoffmann-La Roche Ltd. & Anr. vs. Cipla Ltd., ILR 2009 Supp (2) Del 551: The Delhi High Court held that a defendant’s credible challenge to patent validity, raising a serious question, suffices to resist an interim injunction, without requiring a stronger case than the plaintiff. The court relied on this to assess the strength of Eris’s challenge.
UCB Farchim SA vs. Cipla Ltd. & Ors., 2010 SCC OnLine Del 523: The Delhi High Court reiterated that Section 13(4) negates any warranty of validity from pre-grant investigations, supporting the court’s view that IN ‘846’s grant did not presume validity.
Standipack Pvt. Ltd. vs. Oswal Trading Co. Ltd., AIR 2000 Del 23: The Delhi High Court emphasized that patent validity is tested at trial, not interim stages, guiding the court to limit its inquiry to vulnerability.
Bilcare Ltd. vs. Amartara Pvt. Ltd., (2007) 34 PTC 419 (Del): The Delhi High Court underscored the need for a substantial challenge to validity, which the court applied to Eris’s prior art arguments.
Surendra Lal Mahendra vs. Jain Glazers, 1980 SCC OnLine Del 219: The Delhi High Court reinforced that validity challenges are permissible in infringement suits, supporting Eris’s counterclaim.
Beecham Group Ltd. vs. Bristol Laboratories Pty Ltd., (1967-68) 118 CLR 618 (Australia): The Australian High Court held that a defendant alleging invalidity need only show a serious question to be tried, a principle the court adopted for interim relief.
Australian Broadcasting Corporation vs. O’Neill, (2006) 229 ALR 457 (Australia): The Australian High Court reiterated the “serious question” standard, aligning with the court’s approach to Eris’s challenge.
Hexal Australia Pty Ltd. vs. Roche Therapeutics Inc., 66 IPR 325 (Australia): The Australian court held that invalidity at the interim stage requires showing a triable question, which the court used to evaluate Eris’s prior art.
Abbot Laboratories vs. Andrx Pharmaceuticals Inc., No. 05-1433 (U.S. Court of Appeals, Federal Circuit, 22.06.2006): The U.S. court held that vulnerability, not actual invalidity, is the issue at the preliminary injunction stage, requiring less proof than at trial. The court applied this to Eris’s burden.
Helifix Ltd. vs. Blok-Lok Ltd., 208 F.3d 1339 (Fed. Cir. 2000): The U.S. court clarified that a substantial question of invalidity suffices at the interim stage, guiding the court’s analysis.
Erico International Corp. vs. Vutec Corp., No. 2007-1168 (Fed. Cir.): The U.S. court emphasized a substantial question of invalidity to show vulnerability, reinforcing the court’s standard.
Satish Khosla vs. M/s Eli Lilly Ranbaxy Ltd., MANU/DE/0763/1998: The Delhi High Court stressed the clean hands doctrine, requiring full disclosure of material facts, which the court used to assess Boehringer’s non-disclosure of the China revocation.
S.P. Chengalvaraya Naidu vs. Jagannath and Others, MANU/SC/0192/1994: The Supreme Court held that a litigant withholding vital documents to gain advantage commits fraud on the court, informing the court’s clean hands inquiry.
Arunima Baruah vs. Union of India, MANU/SC/7366/2007: The Supreme Court emphasized that suppression of material facts impacts equitable relief, relevant to Boehringer’s conduct.
Charanjit Thukral and Ors. vs. Deepak Thukral and Ors., MANU/DE/1814/2010: The Delhi High Court held that plaintiffs must disclose all material facts, and failure to do so justifies denying injunction, guiding the court’s analysis.
Aura Synergy India Ltd. vs. New Age False Ceiling Co. Pvt. Ltd., 2016 SCC OnLine Del 1109, approved in 2016 SCC OnLine Del 7530-DB: The Delhi High Court held that suppression in IP disputes can preclude injunction, but the court distinguished this due to procedural differences.
FMC Corporation vs. GSP Crop Science Private Limited, 2022 SCC OnLine Del 3784: The Delhi High Court recognized suppression as a ground to challenge injunctions, but the court found it less applicable absent specific rules.
Bayer Healthcare LLC vs. Natco Pharma Limited, 2023 SCC OnLine Del 4458: The Delhi High Court denied an injunction for concealment, but the court noted the absence of similar patent rules in Himachal Pradesh.
Gujarat Bottling Co. Ltd. vs. Coca Cola Co., (1995) 5 SCC 545: The Supreme Court held that equitable relief depends on the plaintiff’s conduct, supporting the court’s clean hands scrutiny.
Freebit AS vs. Bose Corporation, No. 18-2365 (U.S. Court of Appeals, 08.10.2019): The U.S. court invalidated a patent, cited by Eris to argue vulnerability, but the court found it less relevant to India.
Bose Corporation vs. Freebit AS, [2018] EWHC 889 (Pat) (U.K.): The U.K. Patent Court invalidated a patent, but the court deemed it jurisdiction-specific.
Freebit AS vs. Exotic Mile Private Limited, FAO(OS) (COMM) 15/2024 (Delhi High Court, 31.01.2024): The Division Bench upheld denial of injunction due to non-disclosure of international invalidations, but the court distinguished it due to procedural differences.
Wander Ltd. vs. Antox India (P) Ltd., 1990 Supp SCC 727: The Supreme Court held that appellate courts should not interfere with discretionary injunction rulings unless arbitrary, guiding the court’s approach.

These precedents provided a comprehensive framework for evaluating patent vulnerability, interim relief, and equitable conduct.

Detailed Reasoning and Analysis of Judge
Justice Ajay Mohan Goel delivered a nuanced judgment, meticulously applying the triple test for interim injunctions—prima facie case, balance of convenience, and irreparable harm—while addressing Eris’s challenge to IN ‘846’s validity. The court began by acknowledging the undisputed fact of IN ‘846’s registration on September 18, 2015, with an expiry date of March 11, 2025, and Eris’s admission of manufacturing Linares-E without a patent. The absence of pre-grant or post-grant oppositions bolstered Boehringer’s prima facie case, as did the patent’s registration in 70 countries and its commercial success.

On Eris’s vulnerability argument, the court adopted the principles from Bishwanath Prasad and Natco Pharma, recognizing that patent grants carry no presumption of validity under Section 13(4). However, it held that Eris’s reliance on prior art (WO2001027128 and WO2003099836) and the expert affidavit did not sufficiently establish a credible challenge. The court noted Boehringer’s rebuttal that Empagliflozin’s superior selectivity (~2500 vs. ~1200 for Dapagliflozin) demonstrated inventive step, and prior art was considered by global patent offices without undermining IN ‘846. The court, guided by F. Hoffmann-La Roche and Ten XC Wireless, concluded that Eris’s challenge lacked the substantiality required to render the patent vulnerable at the interim stage, as it did not raise a serious question for trial.

The court addressed the China revocation, a cornerstone of Eris’s clean hands argument, by distinguishing Freebit AS and Satish Khosla. Unlike the Delhi High Court, which operates under the Patent Suits Rules, 2022, requiring disclosure of international patent statuses, Himachal Pradesh lacked such rules. The court held that non-disclosure of the China revocation, where a re-trial was pending, was not a material suppression under Order XI, Rule 1 of the CPC, as amended by the Commercial Courts Act, 2015. It emphasized that patent laws are jurisdiction-specific, and invalidation in one country (China) did not inherently affect IN ‘846’s validity in India, especially given its registration in 70 other jurisdictions. The court rejected Eris’s claim that Boehringer’s conduct disentitled it to equitable relief, finding no intent to mislead.

On public interest, the court dismissed Eris’s affordability argument, noting that the Patents Act’s provisions for compulsory licensing (Chapter XVI) and government use (Chapter XVII) address public access in emergencies, which had not been invoked. Citing Gujarat Bottling, the court held that commercial rivals like Eris could not leverage public interest to justify infringement, as this would undermine the statutory framework. The court found the balance of convenience favored Boehringer, given its established market and R&D investments, and that continued infringement would cause irreparable harm by eroding market share and goodwill, which damages could not fully remedy (Dalpat Kumar).

The court concluded that Boehringer satisfied the triple test, while Eris failed to demonstrate IN ‘846’s vulnerability. It granted the interim injunction, restraining Eris from infringing IN ‘846 pending the suit’s resolution, ensuring the plaintiffs’ rights were protected without prejudicing a full trial on validity.

Final Decision
The High Court of Himachal Pradesh allowed OMP No. 409 of 2023 on May 30, 2024, granting an interim injunction. Eris Lifesciences Limited, its directors, licensees, stockists, distributors, and agents were restrained from infringing Indian Patent No. 268846 by manufacturing, advertising, selling, importing, or exporting Empagliflozin in any form, including under the brand “Linares-E,” until the civil suit’s disposal.

Law Settled in this Case
The judgment clarified several principles for patent infringement and interim relief in India:
A registered patent establishes a prima facie case of validity, but defendants may challenge its vulnerability at the interim stage without proving actual invalidity, requiring only a credible, substantial question (Natco Pharma, F. Hoffmann-La Roche).
Non-disclosure of international patent invalidations does not automatically constitute suppression of material facts absent specific procedural rules, and jurisdiction-specific patent laws limit the relevance of foreign revocations (distinguishing Freebit AS).
Public interest arguments, such as drug affordability, cannot override patent rights unless supported by statutory mechanisms like compulsory licensing, as commercial rivals are not entitled to invoke public welfare to justify infringement.
The triple test for interim injunctions—prima facie case, balance of convenience, and irreparable harm—applies rigorously in patent cases, with irreparable harm encompassing long-term market damage beyond monetary compensation (Dalpat Kumar).
In the absence of a credible challenge to patent validity, a patentee with a registered patent and evidence of infringement is entitled to interim protection to preserve its exclusive rights pending trial.

Case Title: Boehringer Ingelheim International GmbH Vs. Eris Lifesciences Limited
ate of Order: May 30, 2024
Case No.: COMS No. 09 of 2023
Neutral Citation: Not provided in the document
Name of Court: High Court of Himachal Pradesh, Shimla
Name of Judge: Justice Ajay Mohan Goel

Disclaimer:The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman,IP Adjutor [Patent and Trademark Attorney] ,High Court of Delhi

Banyan Tree Holding (P) Limited Vs. A. Murali Krishna Reddy

Mere accessibility of a defendant’s website in the forum state does not confer jurisdiction

Introduction

In the rapidly evolving digital landscape, where websites transcend geographical boundaries, the question of territorial jurisdiction in intellectual property disputes has become a legal conundrum. The case of Banyan Tree Holding (P) Limited vs. A. Murali Krishna Reddy, decided by the Delhi High Court on November 23, 2009, stands as a landmark judgment that addresses this challenge head-on. This case grappled with the critical issue of whether a court can assume jurisdiction over a trademark passing-off action based solely on the accessibility of a defendant’s website in the forum state, particularly when neither party is located within the court’s territorial limits. By reframing and answering three pivotal questions, the court not only clarified the principles governing jurisdiction in internet-related disputes but also set a precedent that balances the global reach of the internet with the localized nature of legal authority. This detailed case study delves into the factual and procedural intricacies, legal issues, parties’ submissions, judicial precedents, the court’s reasoning, and the broader implications of the decision, offering a compelling narrative of law meeting technology.

Detailed Factual Background

Banyan Tree Holding (P) Limited, a Singapore-based company, is part of a conglomerate renowned for its hospitality business, particularly luxury resorts and spas. Since 1994, it has used the word mark “Banyan Tree” and a distinctive banyan tree device, claiming that these marks have acquired secondary meaning due to extensive and continuous use, becoming synonymous with its brand. The company operates websites, www.banyantree.com and www.banyantreespa.com, accessible globally, including in India, since 1996. Although Banyan Tree’s trademark application in India was pending, it had been operating 15 spas in collaboration with the Oberoi Group since 2002, establishing a presence in the Indian market.

The defendants, A. Murali Krishna Reddy (Defendant No. 1) and his company (Defendant No. 2), were based in Hyderabad, India, and engaged in real estate development. In October 2007, Banyan Tree discovered that the defendants had initiated a project named “Banyan Tree Retreat,” advertised on their website, www.makprojects.com/banyantree. The defendants’ project used a word mark and device allegedly deceptively similar to Banyan Tree’s, prompting accusations of passing off. Banyan Tree alleged that the defendants’ use of the mark was a deliberate attempt to capitalize on its goodwill and reputation, likely causing confusion among consumers. Notably, neither Banyan Tree nor the defendants were located in Delhi, and Banyan Tree did not hold a registered trademark in India, relying instead on its common law rights for the passing-off action.

Banyan Tree’s primary contention was that the defendants’ website was accessible in Delhi, and its interactive features, such as feedback forms and contact information, suggested that the defendants were soliciting business in Delhi. Additionally, Banyan Tree cited an instance where the defendants sent a brochure to a Delhi resident for property sales, further supporting its claim that the defendants targeted Delhi’s market. These factors, according to Banyan Tree, gave rise to a cause of action within Delhi’s jurisdiction under Section 20(c) of the Code of Civil Procedure (CPC), 1908, despite the absence of a physical presence of either party in Delhi.

Detailed Procedural Background

The dispute culminated in Banyan Tree filing a suit, CS (OS) No. 894/2008, before the Delhi High Court, seeking a permanent injunction to restrain the defendants from using the “Banyan Tree” mark and device, alongside other reliefs for passing off. The plaintiff invoked Section 20(c) CPC, asserting that part of the cause of action arose in Delhi due to the accessibility of the defendants’ website and their alleged business solicitation in the city. The defendants contested the court’s territorial jurisdiction, arguing that their operations were confined to Hyderabad and that mere website accessibility did not confer jurisdiction on the Delhi High Court.

On August 11, 2008, the learned Single Judge, recognizing the complexity of the jurisdictional issue in the context of internet-based disputes, referred the matter to a Division Bench for an authoritative determination. The Single Judge formulated four questions, focusing on the interplay between trademark law, the CPC, the Information Technology Act, 2000, and the standards for jurisdiction based on website activity or trap transactions. The Division Bench, comprising Chief Justice A.P. Shah and Justice S. Muralidhar, reframed these into three precise questions: (1) the circumstances under which a universally accessible website lends jurisdiction to a forum court in a passing-off action where the plaintiff does not conduct business in the jurisdiction; (2) the extent of the plaintiff’s burden to establish prima facie jurisdiction based on website accessibility; and (3) the permissibility of using trap orders or transactions to establish such a case.

The referral order highlighted the peculiarity of the case: neither party was located within Delhi’s territorial limits, and the plaintiff relied on common law passing-off rather than statutory trademark infringement, as it lacked a registered mark in India. This distinguished the case from scenarios covered by the “long arm” provisions of Section 134(2) of the Trademarks Act, 1999, or Section 62(2) of the Copyright Act, 1957, which apply only when the plaintiff conducts business within the court’s jurisdiction. The Division Bench’s task was to establish a framework for jurisdiction in the absence of such statutory provisions, relying solely on Section 20(c) CPC.

Issues Involved in the Case

The case presented several critical legal issues, centered on the intersection of territorial jurisdiction and internet-based activities:

• Under what circumstances does hosting a universally accessible website by a defendant confer jurisdiction on a forum court in a passing-off action, particularly when the plaintiff does not conduct business within the court’s jurisdiction?
• What is the extent of the plaintiff’s burden to prima facie establish that a forum court has jurisdiction based on the defendant’s website accessibility in the forum state under Section 20(c) CPC?
• Is it permissible for a plaintiff to rely on trap orders or transactions to establish a prima facie case for jurisdiction, especially when the defendant’s intent to target the forum state is not otherwise evident?
• How do common law principles, particularly the “purposeful availment” and “effects” tests from U.S. jurisprudence, apply to Indian courts in the absence of a long arm statute?
• What role does the interactivity of a website play in determining jurisdiction, and how should courts balance the global nature of the internet with localized legal authority?

These issues required the court to navigate uncharted territory in Indian law, drawing on international precedents to craft a solution that aligned with procedural fairness and the realities of digital commerce.

Detailed Submission of Parties

Banyan Tree argued that the Delhi High Court had jurisdiction under Section 20(c) CPC because part of the cause of action arose in Delhi. Their submissions focused on three factors: the nature of the defendants’ website, the defendants’ intention to market their services in Delhi, and the effect of their actions in Delhi. The plaintiff classified websites as passive, interactive, or active, asserting that the defendants’ website was “passive plus” or interactive, as it allowed users to submit feedback and access contact information. They argued that the absence of “purposeful avoidance” (e.g., geo-blocking Delhi users) implied that the defendants targeted all viewers, including those in Delhi. Banyan Tree further contended that even a passive website could confer jurisdiction if its effects were felt in the forum state, such as harm to the plaintiff’s goodwill. The brochure sent to a Delhi resident was cited as evidence of the defendants’ commercial activity in Delhi, reinforcing the claim of purposeful availment. The plaintiff relied on a plethora of foreign and Indian precedents, including U.S. cases like Zippo Mfg. Co. v. Zippo Dot Com, Inc. and Indian cases like Casio India Co. Limited v. Ashita Tele Systems Pvt. Limited, to argue that website accessibility and interactivity were sufficient to establish jurisdiction.

The defendants, while their specific submissions are not detailed in the judgment, contested the court’s jurisdiction, arguing that their operations were confined to Hyderabad and that mere website accessibility did not create a cause of action in Delhi. They likely emphasized the lack of evidence showing specific targeting of Delhi residents or substantial commercial activity in the city, challenging the plaintiff’s reliance on a single brochure and the website’s universal accessibility. The defendants’ position aligned with U.S. cases like Cybersell, Inc. v. Cybersell, Inc., which required clear evidence of purposeful availment for jurisdiction.

Detailed Discussion on Judgments Cited by Parties

The court’s analysis was enriched by an extensive survey of judicial precedents from the U.S., Canada, the U.K., Australia, and India, which provided a comparative framework for addressing internet-based jurisdiction. The key judgments cited, their complete citations, and their context in the case are as follows:

• International Shoe Co. v. Washington, 326 U.S. 340 (1945): This U.S. Supreme Court decision established the “minimum contacts” test for jurisdiction over non-resident defendants, requiring that they “purposefully avail” themselves of the forum state’s privileges and that exercising jurisdiction aligns with fair play and substantial justice. The court used this to underscore the need for a defendant’s deliberate connection with the forum state.
• Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985): The U.S. Supreme Court held that jurisdiction could be exercised over a non-resident defendant whose actions were “purposefully directed” toward the forum state, even without physical presence, if a substantial connection existed. The court applied this to emphasize that random or fortuitous contacts do not suffice for jurisdiction.
• Asahi Metal Industries v. Superior Court, 480 U.S. 102 (1987): The U.S. Supreme Court ruled that merely placing a product into the stream of commerce does not constitute purposeful availment unless the defendant’s actions are directed toward the forum state. The court used this to caution against assuming jurisdiction based solely on the global reach of a website.
• Inset Systems Inc. v. Instruction Set Inc., 937 F. Supp. 161 (D. Conn. 1996): A U.S. District Court held that a defendant’s website with a toll-free number constituted purposeful availment in Connecticut, given its accessibility and advertising. The court noted this early, liberal approach but contrasted it with stricter subsequent rulings.
• Bensusan Restaurant Corp. v. King, 937 F. Supp. 295 (S.D.N.Y. 1996): A New York court declined jurisdiction over a Missouri defendant’s passive website, holding that creating a website accessible globally does not equate to purposeful availment. The court endorsed this stricter approach, aligning it with the need for targeted activity.
• Ballard v. Savage, 65 F.3d 1495 (9th Cir. 1995): The U.S. Court of Appeals clarified that purposeful availment requires deliberate action or continuing obligations in the forum state. The court used this to define the threshold for jurisdiction.
• CompuServe, Inc. v. Patterson, 89 F.3d 1257 (6th Cir. 1996): The U.S. Court of Appeals found jurisdiction where the defendant transmitted products to the plaintiff’s Ohio-based system, constituting purposeful availment. The court cited this to illustrate commercial activity via the internet.
• Maritz, Inc. v. CyberGold, Inc., 947 F. Supp. 1328 (E.D. Mo. 1996): A Missouri court held that a defendant’s website encouraging users to subscribe to a mailing list constituted purposeful availment. The court noted this as an example of an interactive website triggering jurisdiction.
• Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997): This seminal U.S. District Court decision introduced the “sliding scale” test, classifying websites as passive, interactive, or integral to business, with jurisdiction depending on the level of interactivity and commercial activity. The court adopted this framework to assess the defendants’ website.
• Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414 (9th Cir. 1997): The U.S. Court of Appeals declined jurisdiction over a passive website, emphasizing that mere accessibility does not constitute purposeful availment. The court heavily relied on this to reject jurisdiction based solely on website access.
• Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883 (6th Cir. 2002): The U.S. Court of Appeals held that a website’s interactivity must reveal specific intent to interact with forum state residents, but jurisdiction also depends on other contacts. The court used this to emphasize the need for targeted activity.
• Calder v. Jones, 465 U.S. 783 (1984): The U.S. Supreme Court developed the “effects” test, allowing jurisdiction where a defendant’s actions are expressly aimed at the forum state, causing harm there. The court adopted a tighter version of this test, requiring specific targeting.
• UJEF et LICRA v. Yahoo! Inc. et Yahoo France, Tribunal de Grande Instance de Paris, No RG:00/0538, May 22, 2000 and November 22, 2000: A French court asserted jurisdiction over Yahoo! for hosting Nazi memorabilia, applying the effects test due to harm in France. The court discussed this to illustrate the application of the effects test in internet disputes.
• Morguard Investments Ltd. v. De Savoye, [1990] 3 SCR 1077: The Canadian Supreme Court emphasized a “real and substantial connection” for jurisdiction. The court cited this to support a balanced approach to jurisdiction.
• Pro-C Ltd. v. Computer City Inc., [2000] OJ No. 2823 (Ont. Sup. Ct.): An Ontario court found jurisdiction based on the defendant’s targeting of Canadian consumers via its website. The court used this to highlight targeting as a jurisdictional criterion.
• Patrick Desjean v. Intermix Media Inc., 2006 FC 1395: A Canadian court declined jurisdiction over a U.S. defendant, finding no substantial connection with Canada. The court cited this to underscore the need for a strong forum connection.
• 1-800 Flowers Inc. v. Phonenames, [2002] FSR 12 (CA): The U.K. Court of Appeal held that mere website accessibility does not constitute trademark use in the U.K. unless actively targeted. The court endorsed this to reject jurisdiction based on passive websites.
• Dow Jones & Company Inc. v. Gutnick, [2002] HCA 56 (10 December 2002): The Australian High Court upheld jurisdiction based on a long arm statute and harm in Victoria. The court distinguished this due to India’s lack of a similar statute.
• Casio India Co. Limited v. Ashita Tele Systems Pvt. Limited, 2003 (27) PTC 265 (Del): A Delhi High Court decision held that website accessibility alone conferred jurisdiction in a passing-off action. The court overruled this, finding it overly broad.
• Independent News Service Pvt. Limited v. India Broadcast Live LLC, 2007 (35) PTC 177 (Del): A Delhi High Court decision required interactivity and targeting for jurisdiction, doubting Casio. The court approved this stricter approach.
• Various U.K. and Australian cases on trap orders (e.g., California Fig Syrup Co. v. Lilley’s Strand Pharmacy, (1897) 14 RPC 564; Carr & Sons v. Crisp & Co Ltd., (1902) 19 RPC 497; Ward Group Pty Ltd. v. Brodie & Stone Plc, [2005] FCA 471): These cases emphasized fairness in trap transactions, requiring multiple transactions and notice to defendants. The court relied on these to set standards for trap orders in internet disputes.

These precedents shaped the court’s framework, blending U.S. tests like purposeful availment and effects with common law principles of fairness and targeting.

Detailed Reasoning and Analysis of Judge

The Division Bench delivered a meticulous judgment that synthesized international jurisprudence with Indian procedural law. The court began by rejecting the notion that mere website accessibility in Delhi could confer jurisdiction, overruling the earlier Casio decision as overly broad. It emphasized that a passive website, without evidence of targeting the forum state, does not vest the court with jurisdiction, aligning with Cybersell and 1-800 Flowers.

The court adopted the U.S. “purposeful availment” test from International Shoe and Burger King, requiring the plaintiff to show that the defendant deliberately directed activities toward the forum state. It further incorporated the Zippo sliding scale test, classifying websites as passive, interactive, or integral, but clarified that interactivity alone is insufficient without evidence of commercial transactions targeting the forum state. The court also applied a “tighter” version of the Calder effects test, requiring the plaintiff to demonstrate that the defendant’s website specifically targeted Delhi viewers, resulting in harm to the plaintiff’s goodwill or reputation in Delhi.

For the burden of proof under Section 20(c) CPC, the court held that the plaintiff must prima facie show that the defendant’s website was targeted at Delhi for commercial transactions, causing injury within the forum state. This required pleading specific facts and producing material evidence, such as actual commercial transactions with Delhi users, not merely potential accessibility or feedback forms. The court rejected Banyan Tree’s “purposeful avoidance” argument, placing the initial burden on the plaintiff to prove purposeful availment, with avoidance (e.g., geo-blocking) being a defensive consideration.

On trap transactions, the court drew heavily on U.K. and Australian precedents, emphasizing fairness and the need for multiple, genuine transactions. A solitary trap transaction, engineered by the plaintiff, was deemed insufficient to establish purposeful availment, as it lacks the defendant’s independent intent to target the forum state. The court required plaintiffs to unambiguously plead trap transactions and provide supporting material to demonstrate fairness and commercial reality, citing cases like California Fig Syrup and Ward Group.

The court’s analysis was grounded in the absence of a long arm statute in India, distinguishing cases like Dow Jones where such statutes existed. It adopted a balanced approach, ensuring that the global nature of the internet did not erode localized jurisdictional principles, while acknowledging the need for courts to adapt to digital commerce. The judgment thus crafted a rigorous yet practical framework for internet-based disputes, prioritizing evidence of intent and harm over mere technological accessibility.

Final Decision

The Division Bench answered the reframed questions and referred the case back to the learned Single Judge to determine whether Banyan Tree could prima facie establish the Delhi High Court’s jurisdiction based on the principles laid down. The court did not decide the merits of the passing-off claim, limiting its ruling to the jurisdictional issue. The matter was listed before the Single Judge on December 7, 2009, for further proceedings.

Law Settled in this Case

The judgment established several key principles for territorial jurisdiction in internet-based trademark disputes:

• Mere accessibility of a defendant’s website in the forum state does not confer jurisdiction in a passing-off or infringement action where the plaintiff does not conduct business in the jurisdiction and no long arm statute applies.
• The plaintiff must prima facie show that the defendant “purposefully availed” itself of the forum state’s jurisdiction by specifically targeting its website at viewers in the forum state for commercial transactions, resulting in harm to the plaintiff within the forum state.
• For Section 20(c) CPC, the plaintiff bears the burden of pleading and producing material to demonstrate that the defendant’s website, whether passive plus or interactive, was targeted at the forum state, leading to commercial transactions and injury.
• Trap transactions are permissible to establish jurisdiction, but a solitary trap transaction does not suffice. Multiple, fair, and genuine commercial transactions, not engineered solely by the plaintiff, are required, with clear pleading and supporting evidence.
• The “purposeful availment” and “effects” tests, combined with the Zippo sliding scale, apply in Indian courts, requiring specific targeting and harm in the forum state, adapted to the absence of a long arm statute.

Case Title: Banyan Tree Holding (P) Limited Vs. A. Murali Krishna Reddy

Date of Order: November 23, 2009

Case No.: CS (OS) No. 894/2008

Citation: MANU/DE/3072/2009

Name of Court: High Court of Delhi

Name of Judges: Chief Justice A.P. Shah and Justice S. Muralidhar

Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

Bajaj Auto Ltd. Vs. TVS Motor Company Ltd.

Introduction

In the fiercely competitive world of Indian automobile manufacturing, intellectual property disputes often ignite significant legal battles, as exemplified by the case of Bajaj Auto Ltd. vs. TVS Motor Company Ltd., decided by the Madras High Court on October 4, 2010. This case centered on a procedural tussle over who should lead evidence first in two interconnected patent lawsuits involving allegations of infringement and groundless threats. The core issue was the interpretation of the "right to begin" under Order XVIII of the Code of Civil Procedure (CPC), a question that tested the boundaries of civil jurisprudence and patent law. This detailed case study explores the factual and procedural intricacies, the legal issues, the parties’ submissions, the judicial precedents, the court’s reasoning, and the broader implications of the decision, offering a compelling narrative of legal strategy and procedural fairness.

Detailed Factual Background

Bajaj Auto Ltd. and TVS Motor Company Ltd. are titans in India’s two-wheeler industry, known for their innovative motorcycles and robust market presence. The dispute arose from Bajaj’s patent no. 195904, which covered a twin-spark plug technology (DTSi) for internal combustion engines, particularly in motorcycles with a bore size of 45 mm to 70 mm. This technology was integral to Bajaj’s product line, notably its 125 CC Bajaj XCD, set for launch on September 9, 2007. Meanwhile, TVS unveiled its 125 CC TVS Flame motorcycle on August 30, 2007, which utilized two spark plugs with a screw-fitted sleeve and three valves, positioning it as a competitor to Bajaj’s offering.

The launch of TVS Flame sparked controversy when Bajaj, on September 1 and 3, 2007, publicly alleged through media channels that TVS had infringed its patent by copying the DTSi technology. Bajaj’s representatives claimed that TVS Flame’s engine construction was a near-identical replication and threatened legal action to halt its production. These statements, widely broadcasted, were perceived by TVS as groundless threats designed to undermine the Flame’s market entry and tarnish TVS’s brand reputation. TVS responded on September 2, 2007, demanding that Bajaj retract the statements or face legal consequences, asserting that their product did not infringe Bajaj’s patent.

The public spat had significant commercial implications, as TVS Flame’s launch overshadowed Bajaj’s planned unveiling, denting the latter’s market hype. TVS alleged that Bajaj’s threats were a strategic move to gain an unfair advantage in the competitive 125 CC motorcycle segment, especially as TVS announced its entry into the three-wheeler market, a domain dominated by Bajaj. This set the stage for a legal showdown, with TVS seeking to protect its reputation and product, while Bajaj aimed to safeguard its patented technology.

Detailed Procedural Background

The legal battle unfolded through two suits filed before the Madras High Court. The first suit, C.S. No. 979/2007, was instituted by TVS in October 2007 against Bajaj, seeking multiple reliefs: a declaration that Bajaj’s threats of infringement were unjustified, a declaration that TVS Flame did not infringe Bajaj’s patent no. 195904, a permanent injunction to restrain Bajaj from issuing further threats, and damages of Rs. 1 crore for the harm caused by the alleged groundless threats. TVS argued that Bajaj’s media statements had demoralized its customers, employees, and investors, adversely affecting the Flame’s launch and the TVS brand’s value.

Bajaj filed a written statement in December 2007, denying the issuance of threats and asserting that its statements were merely to protect its statutory patent rights. Bajaj contended that TVS’s suit was procedurally flawed, as it failed to comply with Section 105 of the Patents Act, 1970, which requires a plaintiff to seek written acknowledgment of non-infringement from the patentee before filing a suit for declaration. Bajaj also argued that the suit was barred under Order II Rule 2 of the CPC, as TVS had already filed a defamation suit (No. 3132/2007) in the Bombay High Court based on the same cause of action, without obtaining leave to pursue additional reliefs.

On December 16, 2007, Bajaj filed a counter-suit, C.S. No. 1111/2007, seeking a permanent injunction to restrain TVS from infringing patent no. 195904, a preliminary decree for rendering accounts of profits from TVS Flame sales, damages of Rs. 10.5 lakh, and delivery of infringing articles for destruction. Bajaj claimed that preliminary tests, including one by TUV Rheinland, confirmed that TVS Flame’s engine infringed its patent, particularly as the third valve in TVS’s design was allegedly non-functional under Indian Driving Cycle conditions.

TVS responded with a written statement in September 2009, reiterating non-infringement and challenging the validity of Bajaj’s patent, citing prior art such as the Honda patent (US4534322) and Indian patent applications (678/MUM/2001 and 82/MUM/2001). The suits proceeded to the trial stage, and on November 24, 2009, the learned Single Judge framed issues for both cases, covering jurisdiction, the existence and nature of Bajaj’s threats, infringement, patent validity, and entitlement to reliefs.

When the suits were ripe for trial, a preliminary issue arose: who should lead evidence first? The Single Judge, after hearing arguments, issued an order on March 10, 2010, directing Bajaj (the defendant in C.S. No. 979/2007 and plaintiff in C.S. No. 1111/2007) to begin presenting evidence, reasoning that infringement was the central theme in both suits. Aggrieved, Bajaj filed two original side appeals (O.S.A. Nos. 132 and 133 of 2010) under Clause 15 of the Letters Patent, challenging the Single Judge’s order.

Issues Involved in the Case

The primary issue before the Division Bench was whether the Single Judge erred in directing Bajaj to lead evidence first, contrary to the principles of Order XVIII Rules 1 and 2 of the CPC. This raised several sub-issues:

• Is the "right to begin" under Order XVIII Rule 1 a discretionary privilege or a legal obligation for the plaintiff to prove their case first?
• Did the interconnected nature of the two suits justify a departure from the normal rule that the plaintiff leads evidence first?
• Was the Single Judge’s order maintainable as a “judgment” under Clause 15 of the Letters Patent, rendering the appeals admissible?
• Did the burden of proof in a suit for declaration of non-infringement and groundless threats under Sections 105 and 106 of the Patents Act, 1970, shift to the defendant when a counter-suit for infringement was filed?
• Did the Single Judge’s order prejudice Bajaj by compelling it to disclose its evidence prematurely, potentially allowing TVS to tailor its case?

These questions required the court to balance procedural fairness with the unique dynamics of patent litigation.

Detailed Submission of Parties

Bajaj, represented by Senior Counsel Mr. T.V. Ramanujan and Mrs. Nalini Chidambaram, argued that the Single Judge’s order was fundamentally flawed. Their submissions were:

• In C.S. No. 979/2007, TVS, as the plaintiff, bore the burden of proving the issuance of groundless threats and non-infringement, especially since Bajaj denied making threats. Directing Bajaj to lead evidence first was contrary to Order XVIII Rule 1, which places the initial burden on the plaintiff unless the defendant admits the plaintiff’s facts.
• TVS’s suit for declaration required it to adduce evidence first, as Bajaj contested both the threats and the non-infringement claim. The Patents Act does not shift the burden to the defendant in such cases.
• The Single Judge’s direction violated civil jurisprudence, as the plaintiff must succeed or fail based on its own case, not the defendant’s weaknesses. Forcing Bajaj to lead evidence risked allowing TVS to adjust its strategy, causing prejudice.
• The issues framed, particularly those on jurisdiction and the bar under Order II Rule 2 CPC, placed a heavy burden on TVS to justify the suit’s maintainability, reinforcing that TVS should lead evidence.
• TVS’s explicit undertaking in the plaint to prove non-infringement and groundless threats obligated it to present evidence first.
• The order was appealable under Clause 15 of the Letters Patent, as it affected Bajaj’s valuable right to procedural fairness and caused irreparable prejudice, which could not be corrected later.

TVS, represented by Senior Counsel Mr. A.L. Somayaji and Mr. P.S. Raman, countered with the following arguments:

• The Single Judge’s order was not a “judgment” under Clause 15 of the Letters Patent, as it was a procedural direction, not a final determination of rights, rendering the appeals non-maintainable.
• While TVS undertook to prove non-infringement and groundless threats in C.S. No. 979/2007, Bajaj’s subsequent suit (C.S. No. 1111/2007) for infringement shifted the burden, as infringement became the central issue. The Single Judge correctly directed Bajaj, as the plaintiff in the infringement suit, to lead evidence first.
• The interconnected issues in both suits, particularly infringement, justified a pragmatic approach, allowing the court to take evidence in the infringement suit first to streamline the trial.
• The order did not prejudice Bajaj, as evidence in C.S. No. 1111/2007 would naturally precede that in C.S. No. 979/2007, given the overlapping issues.

Detailed Discussion on Judgments Cited by Parties

The court’s analysis was grounded in several judicial precedents, which provided the framework for interpreting the burden of proof and the right to begin. The key judgments cited, along with their context, are:

• Anil Rishi v. Gurbaksh Singh, (2006) 5 SCC 558: Cited by the court to emphasize that the burden of proof rests on the party asserting the affirmative of an issue, per Section 101 of the Evidence Act, 1872. The Supreme Court clarified that the right to begin follows the onus probandi, and the plaintiff must lead evidence first unless the defendant admits the plaintiff’s facts. In this case, the court applied this principle to hold that TVS, as the plaintiff in C.S. No. 979/2007, bore the initial burden to prove non-infringement and groundless threats, especially since Bajaj denied the allegations.
• A. Raghavamma v. A. Chenchamma, 1964 (2) SCR 933: Referenced to distinguish between the burden of proof and the onus of proof. The Supreme Court noted that the burden of proof remains with the party asserting a fact and never shifts, while the onus may shift during evidence evaluation. The court used this to argue that TVS’s burden to prove non-infringement and groundless threats persisted, regardless of Bajaj’s counter-suit.
• State Bank of India v. Ranjan Chemicals Ltd., (2007) 1 SCC 97: Cited to support the possibility of a joint trial when suits involve common issues or arise from the same transaction. The Supreme Court held that a joint trial is justified to avoid overlapping evidence and ensure efficiency. The court noted that, while a joint trial was not explicitly ordered, the Single Judge’s direction to Bajaj implied a preference for starting with the infringement suit, which was permissible but required justification.
• Shah Babulal Khimji v. Jayaben D. Kania, (1981) 4 SCC 8: Invoked to address the maintainability of the appeals. The Supreme Court held that an interlocutory order qualifies as a “judgment” under Clause 15 of the Letters Patent if it affects vital rights or causes serious injustice that cannot be corrected later. The court applied this to find that the Single Judge’s order prejudiced Bajaj by altering the normal course of evidence, justifying the appeals.

These precedents shaped the court’s interpretation of procedural rules and patent law, emphasizing the plaintiff’s primary burden and the need for procedural fairness.

Detailed Reasoning and Analysis of Judge

The Division Bench delivered a comprehensive judgment that dissected the procedural nuances of the case. The court began by framing the central question: whether the “right to begin” under Order XVIII Rule 1 CPC is a discretionary right or a legal obligation. Drawing on Anil Rishi, the court clarified that the term Right to begin is not merely a privilege but a duty for the plaintiff to prove their case first, as the plaintiff’s success depends on their own evidence, not the defendant’s weaknesses. Order XVIII Rule 1 allows the defendant to lead evidence first only if they admit the plaintiff’s facts and raise a legal or additional factual defense, which Bajaj did not do, as it denied TVS’s allegations of threats and non-infringement.

The court examined the Patents Act, 1970, particularly Sections 105 and 106, which govern suits for non-infringement and groundless threats, respectively. Section 105 requires the plaintiff to seek acknowledgment of non-infringement from the patentee, a step TVS did not explicitly follow, but the court focused on Section 106, which permits relief for groundless threats. The court found no provision in the Act shifting the burden to the defendant in a non-infringement suit, reinforcing that TVS bore the initial burden to prove its claims.

The interconnected nature of the suits was acknowledged, as both centered on infringement of patent no. 195904. The court cited State Bank of India to note that a joint trial could be ordered for efficiency, but the Single Judge’s order lacked clarity on whether a joint trial was intended. The absence of a specific finding on joint trial or special circumstances justifying a departure from the normal rule (plaintiff leads first) was a critical flaw. The court emphasized that TVS’s suit was prior in time and sought declarations, placing a heavy burden on TVS to prove non-infringement and groundless threats, as admitted in its plaint.

The court also addressed the issue framed on Order II Rule 2 CPC, noting that TVS’s earlier Bombay suit raised a preliminary objection about the maintainability of C.S. No. 979/2007. This issue required TVS to prove that the causes of action were distinct, further burdening TVS to lead evidence first. The Single Judge’s direction to Bajaj to begin was deemed a reversal of this burden, compelling Bajaj to prove the negative (infringement) prematurely, which prejudiced its defense strategy.

On the maintainability of the appeals, the court relied on Shah Babulal Khimji, holding that the Single Judge’s order was a “judgment” under Clause 15, as it affected Bajaj’s right to procedural fairness and caused prejudice that could not be rectified later without re-recording evidence. The court rejected TVS’s argument that the order was merely procedural, emphasizing the significant impact on Bajaj’s trial strategy.

Final Decision

The appeals were allowed, and the Single Judge’s order dated March 10, 2010, was set aside. The court directed TVS, as the plaintiff in C.S. No. 979/2007, to lead evidence first. No costs were awarded, and the trial court was instructed to decide the suits on merits, uninfluenced by the appellate observations, which were limited to the procedural issue.

Law Settled in this Case

The judgment clarified several principles in civil procedure and patent litigation:

• The “right to begin” under Order XVIII Rule 1 CPC is a legal obligation for the plaintiff to lead evidence first, unless the defendant admits the plaintiff’s facts and raises a defense, as per Section 101 of the Evidence Act.
• In suits for declaration of non-infringement and groundless threats under Sections 105 and 106 of the Patents Act, the plaintiff bears the initial burden to prove its claims, absent statutory provisions shifting the burden to the defendant.
• A trial court may order a joint trial for interconnected suits, but any departure from the normal rule of plaintiff leading evidence first requires clear justification.
• An interlocutory order affecting a party’s valuable rights or causing irreparable prejudice qualifies as a “judgment” under Clause 15 of the Letters Patent, making it appealable.
• The burden of proof remains with the party asserting the affirmative, and procedural fairness must ensure that a defendant is not compelled to disclose evidence prematurely.

Case Title: Bajaj Auto Ltd. Vs. TVS Motor Company Ltd.

Date of Order: October 4, 2010

Case No.: O.S.A. Nos. 132 and 133 of 2010

Name of Court: High Court of Judicature at Madras

Name of Judges: Justice Elipe Dharma Rao and Justice K.K. Sasidharan

Disclaimer:The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman,IP Adjutor [Patent and Trademark Attorney] ,High Court of Delhi

Avery Dennison Corporation Vs. Controller of Patents and Designs

• A significant time gap between prior art and the invention, coupled with a lack of intervening solutions, supports non-obviousness.

Introduction

In the realm of intellectual property law, the concept of an "inventive step" often serves as the crucible in which patent applications are tested. The case of Avery Dennison Corporation vs. Controller of Patents and Designs, decided on November 4, 2022, by the Delhi High Court, exemplifies this intricate legal scrutiny. At its core, this appeal challenged the refusal of a patent for a "Notched Fastener" on the grounds that it lacked an inventive step under the Indian Patents Act, 1970. The case delves into the nuances of patentability, the evaluation of prior art, and the judicial approaches to determining obviousness, offering a compelling narrative of technical innovation pitted against legal rigor. This detailed case study explores the factual and procedural backdrop, the legal issues, the arguments of the parties, the judicial reasoning, and the broader implications of the court's decision.

Detailed Factual Background

Avery Dennison Corporation, a global leader in branding and labeling solutions, has been a prominent name since its inception in 1935 as Kum Kleen Products, later merging with Dennison Manufacturing Company in 1990 to adopt its current identity. The corporation specializes in manufacturing labeling materials designed to enhance brand packaging and convey product information. The subject of this dispute was a patent application titled "Notched Fastener," bearing Application No. 5160/DELNP/2013, filed in India on June 10, 2013, as part of the national phase entry of a PCT application (PCT/US2011/062189) dated November 28, 2011. The invention aimed to improve fastener stock used in industries for attaching tags or labels, addressing issues of inconsistency in cutting and wastage in conventional systems.

The fastener stock in question was designed to ensure uniform dispensing and consistent cutting through specific features: the strategic positioning, shape, and orientation of notches. These notches, described as rectangular or square and aligned with desired cut locations, facilitated precise severance of fasteners from the stock, reducing variations caused by the elasticity of materials in traditional systems. The invention promised economic significance by simplifying manufacturing processes and enhancing the reliability of fastener application.

Detailed Procedural Background

The procedural journey of the patent application began with its filing in India, followed by a request for examination. On April 25, 2018, the Controller of Patents issued a First Examination Report (FER), raising objections primarily on the ground of lack of inventive step under Section 2(1)(ja) of the Patents Act, 1970. The FER cited three prior art documents:

• D1: GB2053296A (published February 4, 1981), related to fastener guns.
• D2: WO 94/10044A1 (published May 11, 1994), an earlier application by Avery Dennison concerning an apparatus for dispensing fasteners from ladder stock.
• D3: US4456123A (published June 26, 1984), another document on fastener mechanisms.

In response, Avery Dennison amended its claims and submitted arguments to counter the objections. However, the Controller remained unconvinced, leading to a hearing on March 1, 2021. The applicant filed written submissions on March 16, 2021, but the Controller, in an order dated August 12, 2021, refused the patent application under Section 15 of the Act, citing a lack of inventive step based primarily on prior art documents D2 and D3. Aggrieved by this decision, Avery Dennison appealed to the Delhi High Court under Section 117A(2) of the Patents Act, seeking to set aside the Controller’s order.

Issues Involved in the Case

The central issue in this case was whether the subject patent application for the "Notched Fastener" lacked an inventive step under Section 2(1)(ja) of the Patents Act, 1970, in light of the cited prior art, particularly D2. Subsumed within this issue were several critical questions:

• Did the specific features of the notch (its position, shape, and orientation) constitute a technical advancement over the prior art?
• Was the invention obvious to a person skilled in the art, given the disclosures in D2 and other prior art documents?
• Did the Controller adequately analyze the prior art and the subject invention to justify the refusal?
• Could the invention be dismissed as a mere workshop improvement or an attempt at evergreening an earlier patent?

These questions required the court to navigate the complex interplay of technical innovation, legal standards for patentability, and judicial precedents on obviousness.

Detailed Submission of Parties

The appellant argued vehemently that the subject patent embodied an inventive step. The key submissions were:

• The invention’s novelty lay in the notch’s creation, position, shape (rectangular or square), and orientation relative to cross-pieces, which collectively addressed the problem of inconsistent cutting due to the elasticity of fastener stock.
• The technical advancement was evident in achieving uniform dispensing and precise severance, reducing wastage and enhancing economic efficiency.
• Prior art document D2, while relevant, was distinguishable. D2 used triangular notches engaged by a pawl mechanism, which was less efficient and more complex to manufacture compared to the subject patent’s direct engagement with the feeding system.
• D3 was irrelevant as its notches were positioned for cutting rather than engaging the feeder mechanism, effectively teaching away from the subject invention.
• The appellant emphasized that the invention’s simplicity should not negate its patentability, and the economic significance of the notched fastener justified its protection.

In contrast Controller, defended the refusal, arguing:

• The notch’s features in the subject patent were obvious variations of D2, which already disclosed the use of notches for fastener stock movement. A change in shape or position was a mere workshop improvement, not an inventive step.
• The engagement mechanism (pawl vs. direct) was irrelevant to the inventive step analysis.
• As D2 was also filed by Avery Dennison, the subject patent appeared to be an attempt at evergreening an earlier invention.
• The appellant failed to provide substantial data to support claims of economic advantage.
• The Controller relied on judicial precedent, notably Bristol-Myers Squibb Holdings Ireland Unlimited Company v. BDR Pharmaceuticals International Pvt. Ltd., (2020) SCC OnLine Del 1700, to argue that minor modifications do not warrant patent protection.

Detailed Discussion on Judgments Cited by Parties

The court’s analysis was enriched by a robust discussion of judicial precedents, which both parties and the court invoked to frame the inventive step inquiry. The key judgments cited, along with their context, are:

• Bristol-Myers Squibb Holdings Ireland Unlimited Company v. BDR Pharmaceuticals International Pvt. Ltd., (2020) SCC OnLine Del 1700: Cited by the Controller to argue that minor changes, such as the notch’s shape or position, constitute workshop improvements rather than inventive steps. The court in Bristol-Myers emphasized that structural similarities in prior art must provide motivation for the claimed invention, and mere modifications do not suffice for patentability.
• F. Hoffmann-La Roche Ltd. and Ors. v. Cipla Ltd., 2016(65) PTC 1 (Del): Referenced by the court to discuss the problem-solution approach to obviousness. This case modified the Windsurfing test by adding a step to assess whether differences between prior art and the invention involve ordinary application or multiple complex steps, emphasizing the need to avoid hindsight.
• Windsurfing International Inc. v. Tabur Marine Ltd., [1985] RPC 59: A seminal UK case cited by the court, laying down a four-step test for obviousness: identifying the inventive concept, imputing common general knowledge to a skilled person, identifying differences between prior art and the invention, and determining if those differences were obvious. This test formed the foundation for the court’s analysis.
• Pozzoli Spa v. BDMO SA, [2006] EWHC 1398 (Ch): Cited to refine the Windsurfing test, emphasizing the identification of the person skilled in the art and the inventive concept. The court used this to structure its comparison of the subject patent with D2.
• Actavis Group PTC EHF v. ICOS Corporation, [2019] RPC 9: Referenced for its comprehensive list of considerations for assessing obviousness, including whether the invention was obvious to try, the routine nature of research, and the motive of the skilled person. The court found these factors relevant to evaluate the non-obviousness of the notched fastener.
• Human Genome Sciences v. Eli Lilly, [2012] RPC 6: Cited alongside Actavis to underscore the need for a nuanced approach to obviousness, tailored to the specific technology and prior art.
• Johns-Manville Corporation, [1967] R.P.C. 479: Mentioned to reinforce the importance of considering the skilled person’s knowledge at the priority date.
• KSR International v. Teleflex, 550 U.S. 398 (2007): A U.S. Supreme Court case cited to discuss the Teaching-Suggestion-Motivation (TSM) test, cautioning against its rigid application. The court used this to argue that obviousness should not be assessed narrowly.
• Vickers v. Siddell, (1890) 7 R.P.C. 292: Invoked to emphasize that simplicity does not negate inventiveness. The House of Lords’ observation that simple inventions can be groundbreaking was pivotal in countering the Controller’s dismissal of the notch’s modifications as superficial.
• Pope Appliance Corp. v. Spanish River Pulp & Paper Mills Ltd., (1929) 46 R.P.C. 23: Cited to reinforce that simplicity and bold conception can justify patentability, particularly when addressing long-standing problems.
• Brugger v. Medic-Aid Ltd., [1996] R.P.C. 635: Referenced via Terrell on Law of Patents to highlight the “long felt want” concept, suggesting that a significant time gap between prior art and the invention indicates non-obviousness if the improvement was not previously adopted despite a known need.
• Agriboard International LLC. v. Deputy Controller of Patents & Designs, [C.A.(COMM.IPD-PAT) 4/2022, dated March 31, 2022]: A recent Delhi High Court decision cited to stress that a rejection for lack of inventive step must include a detailed analysis of prior art, the subject invention, and the obviousness to a skilled person. This precedent guided the court’s critique of the Controller’s cursory analysis.
• 3M Innovative Properties Ltd. and Ors. vs. Venus Safety and Health Pvt. Ltd., FAO (OS) 292/2014 & CM No. 10651/2014: Referred to for its approach to comparing prior art with the claimed invention from the perspective of a skilled person, emphasizing technical advancement.

These precedents collectively shaped the court’s framework for evaluating the inventive step, balancing simplicity, time gaps, and technical advancement against the Controller’s objections.

Detailed Reasoning and Analysis of Judge

Court's judgment is a meticulous exposition of patent law principles, blending technical analysis with legal reasoning. The court began by outlining the various approaches to assessing inventive step, including the obvious-to-try, problem-solution, could-would, and TSM tests, as well as the Windsurfing and Pozzoli frameworks. It emphasized that no single test should be applied rigidly; instead, the court adopted a flexible approach tailored to the fastener technology and prior art.

The inventive concept of the subject patent was identified as residing in three features: the position of the notch (aligned with cut locations for consistent severance), the shape of the notch (rectangular or square for linear movement), and the direction of the notch relative to cross-pieces (enabling efficient feeding). The court compared these features with D2, the closest prior art, which used triangular notches engaged by a pawl mechanism. The court noted that D2’s mechanism was less precise, leading to irregular cutting due to elasticity, a problem explicitly addressed in the subject patent’s specification.

Applying the Windsurfing/Pozzoli test, as modified by F. Hoffmann-La Roche, the court found significant differences between D2 and the subject patent. The subject patent’s notches ensured uniform dispensing and precise cutting, overcoming the disadvantages of D2’s rotary feed system. The court rejected the Controller’s characterization of these differences as “superficial,” citing Vickers and Pope to argue that simplicity does not negate inventiveness. The 18-year gap between D2 (filed in 1993) and the subject patent (filed in 2011) was a critical factor. The court invoked Brugger’s “long felt want” principle, noting that no other prior art or third party had addressed D2’s shortcomings in this manner, suggesting the invention’s non-obviousness.

The court also addressed the Controller’s evergreening argument, finding it inapplicable since the subject patent offered a distinct technical advancement. The grants of corresponding patents in the USA, Japan, South Korea, and China further bolstered the appellant’s case. Critically, the court relied on Agriboard to fault the Controller for failing to provide a detailed analysis of how the subject invention was obvious, rendering the refusal order deficient.

Final Decision

The Delhi High Court allowed the appeal, setting aside the Controller’s order of August 12, 2021. The court directed that the patent proceed for grant, with the case listed before the Patent Office on November 14, 2022, for completion of formalities. No costs were awarded.

Law Settled in this Case

This case reinforces several key principles in Indian patent law:

• Simplicity in an invention does not preclude patentability if it addresses a technical problem with unpredictable advantages.
• A significant time gap between prior art and the invention, coupled with a lack of intervening solutions, supports non-obviousness.
• The Controller must provide a reasoned analysis of prior art, the subject invention, and obviousness to justify a refusal under Section 2(1)(ja).
• The Windsurfing/Pozzoli test, as modified by Indian precedents, is a robust framework for assessing inventive step, but courts may adopt a flexible approach combining multiple tests.
• Evergreening objections require evidence of mere extension rather than technical advancement.

Case Title: Avery Dennison Corporation Vs. Controller of Patents and Designs

Date of Order: November 4, 2022

Case No.: C.A. (COMM. IPD-PAT) 29/2021

Neutral Citation: 2022/DHC/004697

Name of Court: High Court of Delhi

Name of Hon'ble Judge: Justice Prathiba M. Singh

Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

Visage Beauty and Healthcare Pvt Ltd Vs. Registrar of Trade Marks

Background

The appeal was filed by Visage Beauty and Healthcare Pvt Ltd in the Delhi High Court under Section 91 of the Trade Marks Act, 1999, challenging an order dated September 19, 2024, by the Assistant Registrar of Trade Marks. The order declared the appellant’s trademark application (No. 4309324) for the mark "Oganic" abandoned, citing a time-barred counter statement to a notice of opposition.

Appellant's Trademark Application

Visage Beauty, operating under the O3+ mark since 2005, adopted the "Oganic" mark in 2019 as part of its O3+ family of marks. The application, filed on October 1, 2019, sought registration in Class 44 for beauty and health services on a proposed-to-be-used basis. The application faced objections, underwent hearings, and was accepted and advertised in December 2023.

Opposition and Procedural Issue

On February 7, 2024, respondent no. 2 filed an opposition to the application. The appellant claimed it was unaware of the opposition until a routine status check on May 2, 2024, despite the Trade Marks Registry’s E-Register indicating service on February 20, 2024. The appellant filed a counter statement on May 6, 2024, but received a show cause notice on June 29, 2024, for filing it beyond the two-month period prescribed under Section 21(2) of the Trade Marks Act. The appellant’s affidavit, filed after a July 31, 2024, hearing, stated non-service of the opposition notice, but the Registrar’s order ignored this and deemed the application abandoned.

Court’s Analysis

The Delhi High Court, presided over by Justice Amit Bansal, examined Section 21(2) of the Trade Marks Act, which requires a counter statement within two months of receiving the opposition notice, and Rule 18 of the Trade Marks Rules, 2017, which deems service complete upon sending. The court noted a conflict between these provisions, citing the Madras High Court’s ruling in Samsudeen A v. Registrar of Trade Marks, which advocated a purposive interpretation aligning Rule 18 with Section 21(2). The court also referenced prior Delhi High Court decisions, including Mars Incorporated v. The Registrar of Trade Marks, emphasizing that the time period starts upon actual receipt. The Registrar’s failure to acknowledge the appellant’s affidavit and the absence of service records due to a technical glitch supported the appellant’s claim of non-service.

Outcome

The court set aside the impugned order, finding no evidence of service of the opposition notice. The matter was remanded to the Trade Marks Registry, with directions to accept the appellant’s counter statement, serve it on respondent no. 2 within four weeks, and proceed with the opposition as per the Act and Rules. The court ensured compliance by directing the order’s transmission to the Controller General’s office.

Case Title: Visage Beauty and Healthcare Pvt Ltd Vs. Registrar of Trade Marks
Date of Order: April 9, 2025
Case No.: C.A.(COMM.IPD-TM) 84/2024
Neutral Citation: 2025:DHC:2733
Name of Court: High Court of Delhi at New Delhi
Name of Judge: Hon’ble Mr. Justice Amit Bansal

TRDP Happy World Private Limited Vs Shri Balaji Chemfood Industries

Background

The case involves a trademark and copyright infringement dispute filed by M/s TRDP Happy World Private Limited against M/s Shri Balaji Chemfood Industries in the Delhi High Court. The plaintiff sought a permanent injunction to restrain the defendant from using the "MARIO" trademark and related artistic works, alleging infringement and passing off.

Plaintiff's Claims

M/s TRDP Happy World Private Limited, a manufacturer of food products like rusks and biscuits, adopted the "MARIO" and "TRDP MARIO" trademarks in 2011, securing registrations in India and internationally. The plaintiff also held copyright registrations for the artistic elements of its packaging, featuring a distinctive chef with a mustache. The plaintiff claimed significant goodwill and reputation, supported by substantial sales figures, with Rs. 329.74 crore in India for 2021-2022, and extensive advertising efforts.

Defendant's Actions

The defendant, M/s Shri Balaji Chemfood Industries, was accused of adopting an identical "MARIO" mark and deceptively similar packaging for its salt products. Discovered by the plaintiff in March 2023, the defendant's mark replicated the plaintiff's font, color scheme, and chef device, causing potential consumer confusion and harm to the plaintiff’s reputation.

Court Proceedings

The Delhi High Court issued summons and an ad-interim injunction on April 10, 2023, restraining the defendant from using the infringing mark. A Local Commissioner was appointed to inspect the defendant’s premises, where evidence of infringing goods was found, including half-burnt packaging. The defendant failed to file a written statement within the permissible period, leading to the ad-interim injunction being made permanent on November 19, 2024. The defendant also repeatedly failed to file a response to the plaintiff’s application under Order VIII Rule 10 of the CPC, resulting in the court proceeding without their defense.

Court's Findings

The court, presided over by Justice Amit Bansal, found that the plaintiff’s verified plaint and supporting documents were unopposed, deeming all averments admitted. The defendant’s mark was identical to the plaintiff’s, with similar artistic elements, targeting overlapping consumers through identical trade channels. The court concluded that the defendant’s actions constituted trademark and copyright infringement and passing off, causing irreparable harm to the plaintiff. The defendant’s failure to contest the suit and the Local Commissioner’s findings of mala fide conduct, such as burning infringing packaging, further supported the plaintiff’s case.

Relief Granted

The court granted a permanent injunction restraining the defendant from using the "MARIO" mark or similar packaging. Additionally, compensatory damages and costs of Rs. 5,00,000 were awarded to the plaintiff, based on the principle of "rough and ready calculations" and the defendant’s dubious conduct. Other reliefs sought by the plaintiff were not pressed.

Case Title: TRDP Happy World Private Limited Vs Shri Balaji Chemfood Industries

Date of Order: April 16, 2025

Case No.: CS(COMM) 197/2023

Neutral Citation: 2025:DHC:2788

Name of Court: High Court of Delhi

Name of Judge: Hon’ble Mr. Justice Amit Bansal

Swikriti Travels Vs. Mini Pocket OPC Pvt. Ltd.

Background

This case involves an appeal filed by M/s Swikriti Travels in the Delhi High Court challenging an order dated February 12, 2025, passed by the District Judge (Commercial Court) in a suit (CS DJ 1511/18) filed by M/s Mini Pocket OPC Pvt. Ltd. The Commercial Court had allowed the appellant’s application under Order IX Rule 13 of the Code of Civil Procedure, 1908, to set aside an ex parte decree but imposed a condition requiring the appellant to deposit the entire decretal amount of Rs. 38 lakhs as a fixed deposit.

Procedural History

The Commercial Court proceeded ex parte against the appellant on July 25, 2023, due to repeated non-appearances and passed an ex parte decree on October 10, 2023. The appellant filed an application under Order IX Rule 13, citing miscommunication by their previous counsel as the reason for non-appearance. The Commercial Court accepted this explanation but conditioned the setting aside of the decree on the deposit of Rs. 38 lakhs to safeguard the plaintiff’s interests.

Appellant’s Challenge

The appellant contested the condition of depositing the full decretal amount, arguing it was excessive and unjustified. Relying on the Supreme Court’s judgment in Tea Auction Ltd. v. Grace Hill Tea Industry, the appellant contended that such conditions must be reasonable and not oppressive, and the impugned order lacked reasoning for imposing the deposit.

Court’s Analysis

The Delhi High Court, presided over by Justices C. Hari Shankar and Ajay Digpaul, reviewed the impugned order and found it deficient in reasoning. The court noted that the Commercial Court accepted the appellant’s explanation for non-appearance but failed to justify the deposit condition with specific circumstances, as required by Tea Auction. The Supreme Court’s ruling emphasized that conditions under Order IX Rule 13 should not be unreasonably harsh, and any deposit requirement must be supported by clear reasons, particularly in special circumstances.

Outcome

The High Court set aside the impugned order’s deposit condition and remanded the matter to the Commercial Court to reconsider the conditions, if any, for allowing the Order IX Rule 13 application. The court directed that the application could not be rejected and instructed the Commercial Court to align any conditions with the principles in Tea Auction. The matter was scheduled for rehearing on April 30, 2025, and execution proceedings were adjourned pending the outcome.

Case Title: Swikriti Travels Vs. Mini Pocket OPC Pvt. Ltd.
Date of Order: April 17, 2025
Case No.: FAO (COMM) 81/2025
Neutral Citation: 2025:DHC:2737-DB
Name of Court: High Court of Delhi
Name of Judges: Hon’ble Mr. Justice C. Hari Shankar and Hon’ble Mr. Justice Ajay Digpaul

Marelli Europe S.P.A. Vs. The Deputy Controller of Patents and Designs

Background

This case involves an appeal filed by Marelli Europe S.P.A. in the Delhi High Court under the Patents Act, 1970, challenging the order dated December 28, 2023, issued by the Deputy Controller of Patents and Designs. The order rejected the appellant’s Indian Patent Application No. 495/DEL/2013, filed on February 21, 2013, for an invention titled "Hydraulic Servo-Control of a Servo-Controlled Gearbox," with a priority date of February 22, 2012, from an Italian application.

Grounds of Rejection

The respondent rejected the patent application on the ground of lacking an inventive step under Section 2(1)(ja) of the Patents Act, 1970, citing five prior art documents (D1 to D5). The impugned order was issued after the First Examination Report, the appellant’s response, a hearing on January 10, 2023, and post-hearing submissions.

Appellant’s Grievance

Marelli Europe S.P.A. argued that the impugned order was mechanically passed without reasoned justification. The section explaining why the invention lacked inventiveness merely reproduced extracts from prior art documents without analyzing how they applied to the subject invention. The appellant’s detailed submissions distinguishing the prior arts were ignored, and the Controller’s observations lacked any substantive reasoning.

Legal Precedent

The court referenced Agriboard International LLC v. Deputy Controller of Patents and Designs, which mandates that rejecting a patent for lack of inventive step requires analyzing the prior art, the subject invention, and the obviousness to a person skilled in the art. The court also cited Art Screw Co., Ltd. v. The Assistant Controller of Patents and Designs, emphasizing that rejecting an invention for lack of inventive step is a serious finding requiring thorough evaluation.

Respondent’s Position

The respondent introduced new material in their counter affidavit, alleging suppression by the appellant. However, this material was not referenced in the impugned order, and the court held that it could not consider new averments raised for the first time in the affidavit, as the appeal was confined to the record before the Patent Office.

Court’s Findings

The Delhi High Court, presided over by Justice Amit Bansal, found the impugned order deficient for failing to provide reasoned analysis. The Controller’s mere reproduction of prior art extracts and conclusory statement on lack of inventive step did not meet the standards of natural justice or statutory requirements. The court deemed the order mechanically passed and unsustainable under judicial scrutiny.

Outcome

The court set aside the impugned order and remanded the matter to the Patent Office for fresh consideration by a different officer. The Controller was directed to provide a fresh hearing, include any new material in the hearing notice for the appellant’s response, and decide the application within three months, given its filing date in 2013. All contentions were kept open.

Case Title: Marelli Europe S.P.A. Vs. The Deputy Controller of Patents and Designs

Date of Order: April 16, 2025

Case No.: C.A.(COMM.IPD-PAT) 21/2024

Neutral Citation: 2025:DHC:2789

Name of Court: High Court of Delhi

Name of Judge: Hon’ble Mr. Justice Amit Bansal