ABSTRACT:

Patents are rights created by statute. Intellectual Property Rights (IPRs) have long played
important roles in the innovation
systems of most advanced economies. India, These are negative rights and stop everyone
except the inventor to get the
benefits of the invention. This paper explains about the effects of the legislative provisions
concerning enforcement and litigation under Indian Patents Act and its consequences . This
paper attempts to point out several changes that should be brought about in the system or
steps to be taken to provide better Patent protection to the inventors

KEYWORDS: PATENT, COPYRIGHT LAW,INFRINFEMENT, COPYRIGHT

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ITRODUCTION:

Infringement is the unauthorized use of an invention claimed in a valid patent. Patent

infringement is an unauthorized act of selling, manufacturing, offering to sell, importing or
using in-force patented invention without the permission of a patented owner.

Patent infringement proceedings can only be initiated after grant of patent in India but may
include a claim retrospectively from the date of publication of the application for grant of the
patent. Infringement of a patent consists of the unauthorized making, importing, using,
offering for sale or selling any patented invention within India. Under the (Indian) Patents
Act, 1970 only a civil action can be initiated in a Court of Law.

Sections 104 to 114 of the Indian Patents Act 19701 provide guidelines relating to patent
infringement.
According to Section 53, the validity of a patent is 20 Years from the date of filing a patent
application. In the absence of a strong enforcement framework, Intellectual Property rights
are meaningless. Though TRIPS Agreement has brought about harmonization as far as the
substantive provisions of the Patent law are concerned, procedures for enforcement of patent
rights have been left to the Individual states subject to certain broad guidelines. The
enforcement mechanisms must, however, be fair and equitable. Equally important is the
requirement that such procedures should not be unnecessarily complicated or costly or
entailing unreasonable time limits or unwarranted delays.

The Indian Patents Act 1970 does not specifically define activities that constitute
infringement of patents. Section 48 of the Indian Patents Act 1970, however, confers
exclusive rights upon the patentee to exclude third parties from making, importing, using,
offering for sale or selling the patented invention, patented product or patented process. It can
therefore be concluded that violation of aforementioned monopoly rights would constitute
infringement of a patent.
Where the infringer has taken all the essential features claimed in the patent , while
manufacturing an article, it will

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INDIAN PATENT ACT,1970

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be a direct infringement.Where the infringer uses all features claimed in the patent but alters
one or more unessential features then also it will be an infringement but since it is indirect it
is called colourable imitation.Copying the essential features of the invention is some
times referred to as taking the pith and marrow of the invention.

Indian Patents Act, 1970 also considers falsification of entries in register, claiming patent
rights in an unauthorized way etc. to be punishable criminal offences.

Such penalties are mentioned under chapter XX of the Indian Patents Act, 1970. Though the
Indian Patents Act, 1970 doesn’t specifically mention about the consequences of patent
infringement but in Section 48 rights conferred to the patentee are mentioned. These are:

-Where the subject matter of the patent is a product, the exclusive right to prevent third
parties, who do not have his consent, from the act of making, using, offering for sale, selling
or importing for those purposes that product in India;

-Where the subject matter of the patent is a process, the exclusive right to prevent third
parties, who do not have his consent, from the act of using that process, and from the act of
using, offering for sale, selling or importing for those purposes the product obtained directly
by that process in India.2

As per the provisions mentioned in the Indian Patents Act, 1970; following amount as an act
of Patent Infringement:

The colorable imitation of the invention

Mechanical Equivalents

Carrying essential features of the invention

Immaterial variation in the invention

2
http://www.ssrana.in/Intellectual%20Property/Patents/Remedies-Against-Patent-Infringement-in-India.aspx

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WHAT IS INFRINGEMENT::

Infringement is the unauthorized use of an invention claimed in a valid patent. Patent

infringement is an unauthorized act of selling, manufacturing, offering to sell, importing or
using in-force patented invention without the permission of a patented owner.

Patent infringement proceedings can only be initiated after grant of patent in India but may
include a claim retrospectively from the date of publication of the application for grant of the
patent. Infringement of a patent consists of the unauthorized making, importing, using,
offering for sale or selling any patented invention within India. Under the (Indian) Patents
Act, 1970 only a civil action can be initiated in a Court of Law.

Sections 104 to 114 of the Indian Patents Act 1970 provide guidelines relating to patent
infringement.
According to Section 53, the validity of a patent is 20 Years from the date of filing a patent
application.

Limitation

Indian Limitations act governs the period of limitation for bringing a suit for infringement of
a patent, which is for 3 years from the date of infringement.

If the patent has ceased to have an effect due to non-payment of renewal fee, then the
patentee will not be entitled to institute the proceedings for infringement committed between
the date on which the patent ceased to have an effect and date of publication of the
application for restoration of patent.

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Jurisdiction

A Patent holder can file a suit in a district court or high court. However where counter-claims
for revocation of the patent is made by the defendant, the suit along with counter-claims are
transferred to the high court for a decision on validity of a patent.

According to Section 19 of the Civil Procedure Code, the patentee can bring the suit for
infringement in the court which has jurisdiction in area where he/she resides or carries on a
business or personally works for the gain. The Patentee can also bring the suit for
infringement in a court which has jurisdiction in the area where infringing activity took place.

A suit for infringement can be instituted only after the patent has been sealed. But damages
sustained in respect of infringement committed during the period between the date of
advertisement of acceptance of complete specification and the date of sealing may be claimed
in the suit.

The right to sue for infringement belongs to the patentee. An assignee is entitled to file a suit
if the application for registration of the assignment has been filed before the date of filing of
suit. A co-owner may also bring a suit for infringement.

In India only High Courts have the power to deal with matter of both infringement and
invalidity simultaneously. A specialized forum is now been established as the Intellectual
Property Appellate Board (IPAB).The Patents (Amendment) Act 2002 was enacted to bring
our patent regime in line with the TRIPS agreement. The IPAB was conferred by this Act
with the jurisdiction to hear all cases against any order or decision of the controller and all
cases pertaining to revocation of patent other than on a counter claim in a suit for
infringement and rectification of registers and all such cases which were pending before the
High Court’s stood transferred to the IPAB by S.117-G of this Act

The IPAB has its headquarters at Chennai. The Registry is situated at Chennai, where sittings
are also held. Circuit sittings are held at present at Delhi, Mumbai, Kolkata and Ahmedabad.

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Rights of Patentees

Section 48 confers exclusive rights upon the patentee to exclude third parties from making,
importing, using, offering for sale or selling the patented process. The right a patentee
acquires is a monopoly to him personally to manufacture the patented chattel. Without the
Patent Act

As per provisions of Section 48: the following actions would amount to infringement –

In case of a product patent, the following actions would amount to infringement:

 Making,
 Using
 Offering for sale,
 Selling, or
 Importing for these purposes, the product in India without the permission of patentee.

In case of a process patent, the following actions would amount to infringement:

 Using,
 Offering for sale,
 Selling, or
 Importing for these purposes, the process in India without the permission of patentee.

Any person who without the consent of patentee performs the above activities infringes the
patent.

In patent infringement suits, the damages are not granted for the use of the patented invention
during the period prior to the date of acceptance of the patent application.

In a patent infringement action, the defendant can file a counterclaim for a revocation of the
patent. Consequently, the main suit and the counterclaim are heard together.

Relief in case of groundless threats

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Section 106 of the Indian Patents Act 1970 grants power to the court to grant relief in case of
groundless threats of infringement proceedings.

In such an action the plaintiff can pray for a declaration to the effect that the threats are
unjustified; he can ask for an injunction against the continuance of the threats and also
damages if any, he may have sustained thereby.

In such a suit, unless the defendant proves that there is, in fact a threat of infringement of his
patent or any other right arising from the publication of the complete specification in respect
of the patent the court may not grant relief to the plaintiff.

Under the common law, the main remedy available against such unfair acts is by action for
the tort of trade libel.

Trade libel is defined as the publication of a false statement of fact that is an intentional
disparagement of the quality of the services or products of the plaintiff’s business and that
result in pecuniary damages to the plaintiff.

Royal Baking Powder Co. v Wright, Crossley & Co.[1]

 That the statements complained of were untrue;

 That they were made maliciously, i.e. without just cause and excuse; and
 That the plaintiffs have suffered special damage thereby.

RELIEF AVAILABLE TO PATENTEE FOR INFRINGEMENT

Section 108 (1) of the Patents Act, 1970 provides for the Reliefs in suit for infringement. It
states that – “The reliefs which a court may grant in any suit for infringement includes an
injunction (subject to such terms, if any, as the court thinks fit) and, at the option of the
plaintiff, either damages or an account of profits.”

The reliefs that are available to a patentee in suit for patent infringement against an infringer
are:-

 Permanent injunction;
 Temporary / Interlocutory injunction;
 Ex-parte injunction;

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  Damages or an account of profits;
 Seizure, forfeiture or destruction of infringing products / goods and / or materials and
implements predominantly used in the creation of the infringing products / goods

Temporary Injunction/Interlocutory Injunction

For grant of temporary injunction in a suit for infringement, the court should consider that-

1. There is a prima facie case that the patent is valid and infringed;
2. The balance of convenience is in favour of injunction being granted;
3. The plaintiff will suffer irreparable loss.[2]

It is a rule of practice that if a patent is new one, an interim injunction will readily be granted.
If the patent is sufficiently old and has been worked, the court may well presume the patent to
be valid and grant injunction.[3]

Case Law –

Symed Labs vs. Glenmark Pharmaceuticals[4]

In this case Symed Labs Ltd. had sued Glenmark Pharmaceuticals Laboratories before the
Delhi High Court for allegedly infringing two of its patents: IN213062 & 213063. First patent
was granted for “Novel intermediates for Linezolid and related compounds” while the ‘063
patent was granted for “A novel process for the preparation of Linezolid and related
compounds.

While declaring the judgment on 9th Jan 2015, the judge was convinced that the Plaintiff has
got good prima facie case in favour of Symed. He further decided that protection to the patent
processes ought to be granted to the Plaintiff as damages will not be an efficacious remedy.

Thus, there will be irreparable loss and injury because of the long uninterrupted use of
patents, the balance of convenience also lies in favour of the Plaintiff. Thus the judge granted
an ad interim injunction restraining Glenmark from manufacturing, selling, offering for sale,
advertising or directly or indirectly dealing in the production of Linezolid manufactured in a
manner so as to result in infringement of the Plaintiff’s registered Patents.

Roche vs. Cipla

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Roche was granted Indian Patent No. IN ‘774 in February 2007, under which as per Claim 1,
they had patent rights over the Erlotinib Hydrochloride (EH) molecule (which has
demonstrated breakthrough capabilities as an Epidermal Growth Factor Receptor (EGFR)
inhibitor which spiked survival benefit in non-small cell lung cancer (NSLC) patients). Based
on media reports declaring Cipla’s intention to launch a generic version of Roche’s drug in
January 2008, Roche moved the Delhi High Court seeking injunction to stop Cipla from
marketing Erlocip. Cipla forwarded a counterclaim, claiming that Roche’s patent was invalid.
The judgment deals with two key issues:

[1] Whether the manufacture of Erlocip infringes Roche’s IN ‘774 patent and

[2] Whether Roche’s IN ‘774 patent ought to be revoked as being invalid.

The court concluded that –

1. The manufacture, marketing and sale of Cipla’s generic version of the Roche’s
patented product do not infringe Roche’s Indian Patent 196774.
2. Roche’s Indian Patent 196774 is valid against the grounds raised by Cipla in its
written statement and counter-claim.
3. A permanent injunction is denied to Roche.
4. The counter-claim proves that Roche’s subsequent US Patent 6900221 is directed at
the compound of claim No.1 of the suit patent is a mixture of the two, Polymorph A
and B Compound and need to be separated to perform and get the claimed compound
for acceptable efficacy.

PERMANENT INJUNCTIONS

Permanent Injunctions are granted post trial of the patent infringement suit. Once the interim
injunction is issued, the lawsuit continues as normal. If the plaintiff wins at the trial, the
preliminary injunction usually becomes permanent. If the defendant wins, the preliminary
injunction is dissolved, and the defendant can seek recovery against the bond as discussed.

The US Supreme Court in eBay, Inc. v. MercExchange L.L.C. has set a four-factor test
which a plaintiff must demonstrate in order to seek a permanent injunctive relief from the
court.

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‘A plaintiff must demonstrate –

 That it has suffered an irreparable injury,

 That remedies available at law, such as monetary damages, are inadequate to
compensate for that injury,
 That, considering the balance of hardships between the plaintiff and defendant, a
remedy in equity is warranted,
 That the public interest would not be disserved by a permanent injunction,

Canadian and English courts not only have the power and discretion to grant an injunction
but also to require infringers to “deliver up” and destroy any goods in relation to the
infringing innovation.[5]

Even under the US Patent Code, the patentee shall have a remedy by civil action for
infringement of his action.[6]According to Section 283, ‘The several courts having jurisdiction
of cases under this title may grant injunctions in accordance with the principles of equity to
prevent the violation of any right secured by patent, on such terms as the court deems
reasonable’

Damages

Once the suit is decided in favour of the plaintiff, the Court can either award damages or
direct the defendant to render an account of profits. The two remedies are alternative and not
concurrent in nature.

In a suit for infringement of patent, damages shall not be granted against the defendant who
proves that at the date of infringement he was unaware and had no reasonable grounds for
believing that the patent existed or where an amendment of a specification had been allowed
after the publication of the specification, and the infringement action is in respect of the
specification before the date of publication unless the Court is satisfied original specification
was made in god faith and with reasonable skill and knowledge.[7]

There are two recognized form of compensable damages for patent infringement-

1) Lost Profits

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Lost profits damages may be measured based upon the causation factors set forth in Panduit
Corp. v. Stahlin Bros. Fibre Works, Inc

Under the Panduit test, the patentee must prove four factors to establish lost profits. The four
factors are:

(1) A demand for the products covered by the patent;

(2) An absence of acceptable non-infringing substitutes to the patented product or process;

(3) The manufacturing and marketing capabilities to exploit the demand; and

(4) The amount of profit the patentee would have made had the infringement not occurred.

2) Reasonable Royalty

When actual damages cannot be proved, or are not sought for reasons of proof, trial strategy
or otherwise, the patent owner is entitled to not less than a reasonable royalty as damages.
The purpose of the royalty alternative is not to direct the form of compensation, but to set a
floor below which damage awards may not fall.

Reasonable royalty was defined in Panduit Corp. v. Stahlin Bros. Fibre Works as “an amount
which a person desiring to manufacture and sell a patented article, as a business proposition,
would be willing to pay as a royalty and yet be able to make and sell the patented article in
the market at a reasonable profit.

This can be illustrated from the Ericsson v. Micromax judgment where the Delhi High Court
directed the respondents to pay interim royalty to the plaintiff.

Ericsson v. Micromax[9]

In March 2013, Ericsson filed a patent infringement suit against Micromax claiming Rs. 100
crores (1billion) in damages. Ericsson alleged that Micromax had infringed on 8 of its
standard essential patents (SEP’s) registered in India.

In November 2013, Micromax filed a complaint with Competition Commission of India

(CCI) claiming that Ericsson had abused its dominant position in the market by imposing

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exorbitant royalty rates. The CCI determined prima facie that Micromax’s claim was valid
and ordered an investigation which was challenged by Ericsson in the Delhi High Court.

The court declared that CCI cannot interfere in an ongoing patent infringement law suit. The
Delhi High Court granted an ex-parte injunction restraining Micromax from selling,
importing, or manufacturing mobile devices that implemented 3G, AMR and EDGE
standards. Micromax and Ericsson later entered into an agreement in which the former would
pay interim royalty. In November 2014, while deciding the interim injunction application in
Ericsson v. Micromax, the Delhi High Court had directed Micromax to continue paying
quarterly royalty to Ericsson at the rates specified by the Court ranging from 0.8% to 1.3% on
sales of per unit.

What does not constitute Infringement?

Section 107A in the act incorporates bolar provision and provision for parallel imports.
Section 107A states that the following acts do not constitute infringement:

 Any act of making, constructing, using, selling or importing a patented invention

solely for uses reasonably related to the development and submission of information
required under any Indian law, or law of a country other than India, that regulates the
manufacture, construction, use, sale or import of any product;
 The importation of patented products by any person from a person who is duly
authorized by the patentee under the law to produce and sell or distribute the products.

Bolar provision allows manufacturers to begin the research and development process in time
to ensure that affordable equivalent generic medicines can be brought to market immediately
upon the expiry of the product patent.

Parallel import provisions are provided in section 107 A (b) of the Patents Act, which says
that importation of patented products by any person authorized by the Patentee will not be
considered as an infringement. Therefore it is possible to import the patented products from
the licensee of the patentee in any country without the permission of the Patentee. The
purpose of Parallel import is to check the abuse of patent rights and meant to control the price
of patented product.

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