Delhi HC directs patent infringer to deposit Rs 54 crore to evade injunction

After a prima facie finding of patent infringement, the Delhi High Court has directed an alleged infringer to make an interim deposit of around Rs. 54 crores with the High Court Registry to continue the sale of products manufactured through the patent technology..The Court has clarified that in case of non-compliance, the infringer shall be restrained from manufacturing, selling, or offering for sale any such products..The order was passed by a Single Judge Bench of Justice Prathiba M Singh in a patent infringement suit by the plaintiff, Communication Components Antenna INC against Ace Technologies Corp and its related entities and subsidiaries (defendant) in connection with its patent titled “Asymmetrical Beams for Spectrum Efficiency” (suit patent)..As per the plaintiff, the patent was for an antenna which has an asymmetrical beam pattern and other features as detailed in the specification. Although the patent is not a standard-essential patent, the plaintiff has licensed it to various parties. In 2017, the plaintiff discovered that the defendant was infringing its patent..After the plaintiff approached the Court, the defendants were directed not to offer for sale any such antennae to any cellular operators in India till the next date of hearing. The orders for imports were, however, allowed subject to the filing of the accounts relating to the same..The plaintiff argued that its patent was novel and its purpose was to achieve greater efficiency without compromising on quality. It was thus submitted that the suit patent was a validly granted patent which introduced asymmetrical beam patterns in split-sector fixed beam antennae..It was further submitted that although its antenna is described as a “smart antenna” and a large number of them were supplied by its predecessor in India, in recent times, several third parties had started supplies of infringing antennae in India which resulted in an erosion of the plaintiff’s market..The defendant, on the other hand, alleged that the plaintiff concealed material information from Court. It was stated that validity of the suit patent was already a subject matter of another pending litigation before the Court. In that suit, the Court had expressed a prima facie opinion that since there was a credible challenge to the validity of the patent, an injunction could not be granted..Based on this ground, the defendants argued that the injunction order ought to be vacated..The defendant also challenged the suit on the ground that the suit patent was not a valid patent in view of Section 3(a),(c),(d) and (f), of the Patents Act and should thus be revoked under Section 64 of the Patents Act..It was also claimed that “asymmetrical beam patterns” were known in “prior art” at the time of the grant of the patent to the plaintiff in India..It also rebutted the plaintiff’s claim of “worldwide protection” on the ground that the plaintiff had made “additional limitations” to the corresponding patent claims in the United States which would make the patent registered in India “obvious”..After hearing the parties, the Court at the outset rejected the contentions with respect to suppression as the plaintiff had already placed the judgment with respect to the pending suit on record..While adjudicating on the issue of “additional limitations” in the US patent with respect to the determination of the true purport, meaning and purpose behind the invention in India, the Court observed that the language of the patent claims in different jurisdictions, after it is granted in various domestic jurisdictions, would usually never be identical..It stated,.“While determining infringement in India, the variation in the language of the claims in different jurisdictions, cannot be examined in a minute fashion. For the purposes of ascertaining infringement of a patent granted in India, the claims of the patent granted in India, need to be seen along with the complete specification. The language of the claims in corresponding foreign patents can be looked at to ensure that broadly the invention is the same and no substantive claims have been either deleted or withdrawn.. However, the granted claims in foreign jurisdictions cannot be read as though they are etched in stone.”.The Court, therefore, concluded that the additional language in the claims of the US patent could not be read as a limitation but as merely highlighting another aspect of the patented invention..“This addition of language does not render the suit patent invalid, but in fact strengthens yet another novel feature of the suit patent.”.The Court further added that a patent specification and the claims have to be interpreted not literally, but purposively..The Court also rejected the defendant’s contention on prior art..“ (The Article indicating prior art) seeks to inform how the use of an asymmetrical antenna could lead to advantages. However, a perusal of the article shows that there are no details whatsoever as to the manner in which the result is to be achieved. For an invention to be prior published, and to be hit by prior art, it has to be viewed from the point of view of a skilled addressee as to whether the document would by itself, without the disclosure in the patent specification, be sufficient to anticipate the invention.”.The Court further recorded that the defendants “withheld” and did not disclosed the beam patterns of their antennae..“It was quite convenient and easy for the Defendants to produce the beam patterns of their antenna to argue that they do not infringe the patent of the Plaintiff. The bare denial being given shows that the Defendants have deliberately chosen not to produce the beam patterns.“.It added,.“In a patent infringement action, once the Plaintiff, prima facie establishes infringement, the onus shifts on the Defendants, to disprove the same. The complete silence by the Defendants shows that there is, in fact, withholding of relevant and crucial information from the court.”.The Court also distinguished the case from the earlier which one in which the interim injunction was denied in 2007 and listed how the circumstances were now different..It thus opined,.“It is the settled legal position that a previous order under Order XXXIX Rules 1 and 2 CPC can be varied in the same suit, owing to subsequent circumstances. Such an order does not operate as `res judicata’.”.Based on the perusal of the claims, complete specification, and the beam patterns and two expert reports, the Court prima facie found the defendant guilty of patent infringement..The Court thus opined that the defendants are liable to deposit some amounts in order to continue the sale of these antennae in India..“Insofar as the sales made prior to date of suit to the tune of $64,405,583, which, at the current rate of exchange (1USD = approx. Rs.68) comes to Rs.437,95,79,644/- the Defendants are directed to give a Bank Guarantee for a sum of Rs.40 crores, which is approximately ten percent of the above amount. 82. Insofar as the sales made during the pendency of the suit are concerned, the total sales are to the tune of $21,835,000, which come to Rs.148,47,80,000/-, ten percent of which is approximately Rs.14.5 crores.”.The Court, therefore, directed the defendants to deposit a bank guarantee for a total sum of around Rs. 54 crore with the Registrar General within one month from the date of the order..In case the defendants fail to comply with these directions, the Court clarified that they shall stand restrained from manufacturing, selling, or offering for sale any models of antennae which infringe the suit patent..The matter will be heard next on October 17..The plaintiff was represented by Senior Advocate CS Vaidyanathan with Advocates Sidhant Goel, Mohit Goel, Samik Mukherjee, Deepankar Mishra, Aditya Goel and Anirudh Gupta. .The defendant was represented by Senior Advocate Arun Kathpalia with Advocates Shantanu Tyagi, Dev Robinson, Apoorva Murali and Surabhi Bhandari. .[Read Judgement]