FAO No.2757 of 2009 1
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH.
F.A.O No.2757 of 2009
Date of Decision: 13th.08.2009
S. Ram Kumar
....Appellant
Versus
Micromax Informatics Limited
...Respondent
CORAM : Hon'ble Ms. Justice Nirmaljit Kaur
Present:- Mr. Ashok Aggarwal, Sr. Advocate
with Ms. Shwetasree Majumdar, Advocate
and Mr. Aashish Chopra, Advocate
for the appellant.
Mr. Puneet Bali, Advocate
and Mr. Amit Prashar, Advocate
for the respondent.
*****
1. Whether Reporters of Local Newspapers may be
allowed to see the judgment ?
2. To be referred to the Reporters or not ?
3. Whether the judgment should be reported in the
Digest ?
**
NIRMALJIT KAUR, J.
This is an appeal against the order dated 05-05-2009 passed
by District Judge, Gurgaon, vide which, an application under Order 39
Rules 1 and 2 read with Section 151 CPC filed by the respondent-plaintiff
was allowed.
Brief facts, in short, are that as per the appellant-defendant,
they conceived of a technology, whereby, Subscriber Identity Module
(here-in-after referred to as `SIM’) could work at the same time in a mobile
FAO No.2757 of 2009 2
phone. Prior to 2000, there was no Dual SIM technology. The Dual SIM
technology began with –
1. Cell phones where :
You could insert two SIM cards but only one
would work at a time.2. Then came cell phones where :
Both SIM cards would be active, but
You could call or receive a call only on one
SIM card at any given point of time.
(A call on the other SIM would at best go into
call waiting).As per the appellant-defendant, their invention is the next stage in
Dual SIM card technology and is as under :-
Both SIM cards are active.
Simultaneous calling is possible (in the form of
conferencing) and
More than one person can participate in he call
(the technology allows for unlimited participants –
physically speaking these participants can join in
through multiple ear phones connected to the
same device.
The appellant-defendant, thereafter, filed for a patent for these
technologies along with other mobile phone related innovative technologies in
the year 2002. The appellant-defendant was assigned Patent No.214388 dated
04-03-2002 as effective from the date of application in respect of technologies
including plurality of SIM cards as well as plurality of blue tooth devices which
work simultaneously. On account of the appellant-defendant being a registered
owner of the aforesaid patent, he, by virtue of the provisions of Section 48 of the
Indian Patents Act, 1970 has the legal and statutory right to prevent third parties,
who do not have his consent, from making, using, offering for sale, selling or
importing for those purposes, that product in India, for which he is a registered
owner. In order to give effect to the patentee’s right to prevent the infringing
import of a patented product or a product made through patented process, the
Government of India, Ministry of Finance, Department of Revenue, in exercise of
FAO No.2757 of 2009 3the powers conferred by sub-section (1) of Section 156 read with clauses (n) and
(u) of sub-section (2) of Section 11 of the Customs Act, 1962 has made
Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007.
The appellant-defendant, who is a patent holder, had sent a
representation dated 18-07-2008 to the Chief Commissioner of Customs,
Chennai and on December 8 2008 to the Chairperson of the Central Board of
Excise and Customs to take effective steps to seize dual SIM card mobile
phones which infringe his patent rights. On account of the said communication,
the Customs Authorities confiscated the consignment of Samsung and Spice in
Delhi, Mumbai and Chennai. At the same time, a notice dated 27-02-2009 was
issued by the Office of Commissioner of Customs, suspending the goods
imported by the respondent-plaintiff. Subsequently, it was released as the
appellant could not furnish the stipulated bank guarantee within the specific time.
This was sufficient to alarm the respondent-plaintiff who in fear that the goods
may not be confiscated again and may not become a regular feature, filed a suit
for declaration of non infringement of patent and for groundless threats under
Sections 105 and 106 of the Patents Act, 1970 along with an application under
Order 39 Rules 1 and 2 read with Section 151 CPC. The said application was
accepted under Order 39 Rules 1 and 2 and the interim orders dated
05-05-2009, restraining the appellant-defendant or their agents from adopting
any measure to prevent or hinder the import, sale and use of the dual SIM card
phones models was passed. They were further restrained from threatening the
plaintiff by circulars, advertisements or by communications etc.
Dissatisfied with the order dated 05-05-2009 passed by District
Judge, Gurgaon, accepting the application under Order 39 Rules 1 and 2, the
present appeal has been filed. When the case came up for hearing on
10-07-2009, the matter was adjourned on the joint request of learned counsel for
the parties in order to find out the status of the petition under Article 226 of the
Constitution of India, filed by the appellant-defendant before the Madras High
Court, seeking a writ of certiorari for quashing of order passed by the Intellectual
Property Appellate Board, granting stay of the operation of the Registered
FAO No.2757 of 2009 4
Patent No.214388 vide their order dated 13-07-2009. On the next date of
hearing, it was brought to the notice of this Court that the Writ Petition has been
disposed of vide consent order with the following observations :-
” XXX XXX XXX
3. In our view, those are all submissions, which
would be gone into when the revocation application as well
as the application for interim suspension should be
considered by the Appellate Board after hearing both the
parties. In view of the fair stand taken by Mr. Thiagarajan,
on instructions, we set aside the order dated 13-07-2009
passed by the Intellectual Property Appellate Board. The
writ petition is accordingly allowed. There will not be any
order as to costs. Consequently, the connected
miscellaneous petition is closed.
4. The Appellate Board has directed the
proceedings to be placed before it sometimes in September
2009. The respondent No.1 will make an application to the
Appellate Board to pre-pone the hearing and we record the
consent of Mr. Raman on behalf of the petitioner that the
petitioner will have no objection whatsoever to pre-pone the
proceedings. He also assures that the petitioner will remain
in Court on the subsequent dates and no such occasion will
arise hereafter. We request the Appellate Board that the
proceedings, when taken up on whichever is the pre-poned
date, should be heard and decided preferably within three
weeks thereafter.”
In view of the above, it would have been proper to adjourn the
matter and await the outcome but Mr. Ashok Aggarwal, learned Sr. Counsel
insisted that the same be disposed of on merits.
The matter has been heard at length and, therefore, learned
counsel for the parties agree that instead of just the application for stay, the
entire appeal be finally decided on merits.
Mr. Ashok Aggarwal, Senior Advocate, while impugning the order,
raised his first argument that the District Judge has ignored that the patent is
granted after an extensive and detailed process of examination and enquiry to
ensure that the technology sought to be patented is not anticipated i.e. It is not
FAO No.2757 of 2009 5
already disclosed by any prior patent technology and has rightly proceeded to
hold in relation to the patent of the appellant that collection of more than one
integers or things does not involve the exercise of any inventive faculty. It was
further submitted that the patent is granted after a thorough process, provided in
Chapters III, IV and V of the Patents Act, 1970, involving a long drawn
procedure of filing application with complete specifications which have to be
published under Section 11-A and examined under Section 12 and, thereafter, a
search of previous publications under Section 13, India and Abroad and, only
thereafter, a consideration of the said report by the Controller with inviting of
objections and opposition under Section 25 that the patent is finally granted
under Chapter VIII. It was further asserted that the District Judge has, therefore,
ignored all the provisions of the Intellectual Property Rights has erred in making
a observation to the invalidity of the appellant/defendant’s patent ad further
undermined the detailed technical process observed in the grant of a patent and
made a blanket and sweeping generalization to the effect that the appellant-
defendant is attempting to monopolize mobile phone technology. Learned
counsel for the appellant refer to Section 64 of the Patents Act, 1970 to submit
that it is only a suit filed by the owner of a patent that a counter claim can be
prayed for revocation and the Court, therefore, cannot say that the invention is
bad in the present proceedings under Sections 105 and 106 of the Patents Act,
1970.
In response to the first argument, learned counsel for the
respondent-plaintiff brought to the notice the provisions of Section 105(3) of the
Patents Act, 1970, which reads as follows :-
“105. Power of Court to make declaration as to non-
infringement
XXX XXX XXX
(3) The validity of a claim of the specification of
a patent shall not be called in question in a suit for a
declaration brought by virtue of this section, and
accordingly the making or refusal of such a declaration in
the case of a patent shall not be deemed to imply that the
patent is valid or invalid.”
FAO No.2757 of 2009 6
A perusal of the same shows that the validity while granting a
refusal and injunction under this Act, any observation made with respect to the
patent and specifications of a patent, the same will not “imply” that the patent is
valid or invalid. Thus, the appellant-defendant should have no grievance against
any such observations made by the District Judge while accepting the
application under Order 39 Rules 1 and 2. It is also not understood as to how
any such application under Section 106 can be granted or refused without
actually discussing the patent, at least to the extent of its specifications or to
know whether the article being used by the plaintiff amounts to the infringement
of the respondent or not. For this, Section 106 of the Patents Act 1970 is
reproduced below :-
“106. Power of court to grant relief in cases of
groundless threats of infringement proceedings.-(1)
Where any person (whether entitled to or interested in a
patent or an application for patent or not) threatens any
other person by circulars or advertisements or by
communications, oral or in writing addressed to that or any
other person, with proceedings for infringement of a patent,
any person aggrieved thereby may bring a suit against him
praying for the following reliefs, that is to say-
(a) a declaration to the effect that the threats are
unjustifiable;
(b) an injunction against the continuance of the
threats; and
(c) such damages, if any, as he has sustained
thereby.
(2) Unless in such suit the defendant proves that
the acts in respect of which the proceedings were
threatened constitute or, if done, would constitute, an
infringement of a patent or of rights arising from the
publication of a complete specification in respect of a claim
of the specification not shown by the plaintiff to be invalid
the court may grant to the plaintiff all or any of the reliefs
prayed for.”
A reading of Section 106 of the Patents Act, 1970 shows that a
defendant is rather called upon to prove that his act would not amount to an
infringement in respect of a claim of the specifications not shown by the plaintiff
FAO No.2757 of 2009 7
to be invalid. Thus, the impugned order has to be examined in the light of the
provisions of Sections 105 and 106 of the Patents Act 1970 and as such, no
fault can be found with the impugned order for having discussed the patent in
order to discuss whether the same amounts to infringement or not for the
reasons that the protection is already provided under Section 105 of the Patents
Act, 1970, as discussed above.
Learned counsel for the appellant has raised his second argument
that there was no cause of action as envisaged under Section 106 of the Patents
Act, 1970, in as much as, the respondent-plaintiff was not a “person aggrieved”
as no threat had been issued to them. Learned counsel for the appellant further
stated that the appellant herein, had merely exercised their right under Section
48 of the Patents Act, 1970 on account of its being owner of registered patent
and used his statutory right granted to him under the Act and it was, in this
context, a representation dated 18-07-2008 had been sent to the Chief
Commissioner of Customs, Chennai to take effective steps to seize dual SIM
card mobile phones which infringe his patent rights. He had merely availed the
statutory protection provided to him under Section 11 of the Customs Act, 1962
by registering its intellectual property rights and it was only in pursuance to this
that the custom authorities had seized the goods of various third parties that
infringed his patent. It was further asserted that the notices issued to the
Chairperson of the Central Board of Excise and Customs and the Chief
Commissioner of Customs, Chennai are the declaration of the rights of the
patentee which are clearly excluded from the purview of threat under the said
section by the explanation clause of the same section. Even replying to a
communication letter addressed to the appellant-defendant from the respondent-
plaintiff does not amount to a threat under the purview of the Section.
One therefore, needs to examine whether there was any threat
perception in the present case or not and whether any cause of action had
accrued to the plaintiff?
Learned counsel for the appellant has not denied the fact that it
was in pursuance to the representation dated 18-07-2008 to the Chief
FAO No.2757 of 2009 8
Commissioner of Customs, Chennai that the Custom Authorities started
confiscating dual SIM card mobile phones and a notice dated 27-02-2009 was
also issued by the Office of Commissioner of Customs, suspending the goods
imported by the respondent-plaintiff. They were released subsequently on
account of the failure of the appellant to furnish bank guarantee within a specific
time. The cause of action accrued to the respondent-plaintiff not only account of
the notice by the Customs Department with respect to the suspension of
shipment dated 27-02-2009 but also on account of the reply by the appellant to
the notice of acknowledgment. One would have believed the submission that
replying to a communication addressed to the appellant from the respondent-
plaintiff does not amount to a threat under the purview of the Section but for the
language and the tone of the reply sent by the appellant along with the
acknowledgment which reads as under and is self speaking :-
” to refrain from importing any mobiles phones
having plurality of sim sockets (including those specified in
your notice) without his consent, failing which you qualify
yourself as an infringer of our Client’s Registered Patent
technology. Such import cannot be considered as a lawful
business activity carried on by you. Our client states that if
you still insist to proceed further with your unlawful acts, our
Client has no other option but to initiate appropriate legal
action against you for infringement at your cost and you will
be solely liable for all consequence arising therefrom, as
well as the fact that the defendant-appellant, who is a
patent holder, had sent a representation dated 18-07-2008
to the Chief Commissioner of Customs, Chennai and on
08-12-2008 to the Chairperson of the Central Board of
Excise and Customs to take effective steps to seize dual
SIM card mobile phones which infringe his patent rights
which shows that the appellant had already initiated steps
under the provisions of Section 11 of the Customs Act,
1962 for confiscation/seizure of the goods being imported
by the plaintiff/respondent and similarly situated persons. In
pursuant to which, the Customs Authorities actually
confiscated the consignment of Samsung and Spice in
Delhi, Mumbai and Chennai. As far as the consignment of
the plaintiff/respondent is concerned, a notice dated
FAO No.2757 of 2009 9
27-02-2009 was issued by the office of Commissioner of
Customs (Imports and General) New Custom House, New
Delhi, in relation to the suspension of the goods being
imported by the plaintiff/respondent.”
The threat is further borne out from the grounds taken in the
present appeal, wherein, it is specifically mentioned that the specifications of the
products imported by the respondent appear to infringe the
defendant/appellant’s patent, irrespective of the number of earphone/headphone
jacks present and the mere absence of multiple earphone/headphone jacks
cannot take the plaintiff/respondent’s products outside the scope of the
defendant/appellant’s patent. At no stage of the entire proceedings, has the
appellant-defendant stated that it does not want seizure or confiscation of the
goods of the respondent/plaintiff. In the absence of such a statement, it is not
understood as to how the appellant can state that there is no cause of action for
the respondent to institute the suit or that there is no threat perception. The
respondent-plaintiff has suffered for suspension of their goods and have a threat
of a repeated action which, if allowed to re-occur, may subsequently result in a
seizure of the goods as resulting in a huge loss. Thus, there was enough cause
of action for the respondents to feel threatened under the purview of Section 106
of the Patents Act, 1970.
Taking up the third argument raised by learned counsel for the
appellant that the suit was not maintainable under Sections 105 and 106 as the
requirements of the Sections were not satisfied as a notice containing the “full
particulars in writing” of the respondent’s product was never furnished and that
mere physical model numbers cannot fulfill the requirement of Section 105(1)(a).
It was further asserted by learned counsel for the appellant that even the
specifications of the products sought to be imported by the respondent as
enumerated in the plaint were omissions and that even if the plaint was relied
upon for a description of the products of the respondent-plaintiff, they clearly
appear to infringe the appellant/defendant’s patent, irrespective of the number of
earphone/headphone jacks present and the mere absence of multiple
earphone/headphone jacks cannot take the respondent/plaintiff’s products
FAO No.2757 of 2009 10
outside the scope of the appellant/defendant’s patent. Further, the finding that
the respondent’s product is not infringing because it has one earphone and the
patent is for multiple earphones is flawed as the number of earphones is a
feature of the instrument. The patent is for the technology used in the
instrument. Physical features alone cannot result in a patentable invention.
In response, learned counsel for the respondents, submitted that
the invention of the appellant is not a new product of process and patent can
only be granted to a new invention. An inventive step means a feature of
invention that involves technical advancement. A new invention also, as defined
under Section 2(1)(I) means any invention or technology which has not been
anticipated by publication in any document, or is used in India or elsewhere in
the world with complete specifications. Chapter II contained in Patents Act, 1970
is on the subject of inventions not patentable. Section 3 further defines what are
not inventions. Section 3(f) reads as under :-
“Section 3(f) :- the mere arrangement or re-arrangement or
duplication of known devices each functioning independently
of one another in a known way;”
It was further submitted by learned counsel for the respondent that
what the appellant has done is in fact add two innocuous features to a mobile
phone and now wants to stop all importers and manufacturers of dual sim card
mobile phones to import, sale, manufacture, use such a product. In any case, it
was submitted that the phone of the respondent does not have this feature of
simultaneously two or more separate physical voice/audio paths and the
other main difference in the patented product and the phones which are being
imported by the respondent is that the respondent’s phone does not have the
plurality of Bluetooth device, which the patented product of the appellant do
have and neither the respondent is or will be importing the phones having the
same feature.
Thus, for adjudication, it would be necessary to understand the
distinguished features or similarity between the product of the appellant and that
of the respondent, the same would be evident from the following :-
FAO No.2757 of 2009 11
Sr.No. Appellant's phone Respondents' phone
1 There are two SIM cards There are two SIM cards
2 There are two SIM sockets There are two SIM sockets
3 Plurality of earphone/ Has only one earphone/
headphone jacks headphone jack
4 Plurality of blue tooth Has only one blue tooth device
device
5 Both SIM cards active Both SIM cards active
6 Simultaneously, calling is Does not have the feature of
possible and more than simultaneously two or more
one person can participate physical voice/audio paths
in the form of independent of each other,
conferencing. meaning thereby only one
physical voice/audio path is
available on phone.
Thus, the mere presence of some of the features of mobile phone,
such as provision of dual SIM card, dual SIM socket alone would not be
sufficient to decide that they are infringing the patent rights.
`From the arguments so addressed by learned counsel for the
parties and from a perusal of the plaint, the product imported by the respondent
does not have more than one head phone/ear phone jack and the jacks do not
accept more than one head phone/ear phone plugs and/ or blue tooth devices.
Therefore, the product of the respondent is not the exact specification of the
product patented by the appellant. In any case, it is necessary for the grant or
refusal of the relief under Section 106 of the Patents Act 1970 to record a finding
as to whether the product of the respondent is different from the product
patented by the appellant or not. Thus taking into account the fact that the
respondent does not have feature of simultaneously two or more physical
voice/audio paths and the absence of plurality of blue tooth device, which is
present in the product of the appellant, it seems that the imported mobile phone
of the respondent does not appears to be prima facie the same.
Learned counsel for the appellant raised his last and final argument
to state that the District Judge has erred in assuming jurisdiction in a matter,
where, there is a serious legal challenge to the jurisdiction of the District Court. It
was stated that the appellant was in Germany and not in India and the suit
could, therefore, not be instituted at the appellant’s place of residence. It was
further stated that an application under Order VII Rule 11 CPC was moved but
FAO No.2757 of 2009 12
the same was not decided before deciding application under Order 39 Rules 1
and 2. Learned counsel for the respondents, however, brought to the notice of
this Court the plea of jurisdiction mentioned in para 17 of the plaint and the reply
of the appellant to the same. The respondent raised the plea of jurisdiction in
para 17 of the plaint, which is reproduced as under :-
“JURISDICTION
17. The cause of action has arisen within the
jurisdiction of this Court under section 20 of the Code of
Civil Procedure 1098, as the cause of action has arisen
within the jurisdiction of this Court. The plaintiff’s business
within the jurisdiction of this Court is likely to be adversely
affected due to the dynamic effect of the threat of wrongful
seizure of plaintiff’s product.”
In reply to para 17 of the plaint, the appellant-defendant submitted
in para 14 of his written statement that “the jurisdiction of the Court is not in
dispute.”
In view of the above stand of learned counsel for the appellant, in
their written statement before the District Court and in the absence of any
amendment of the written statement, no fault can be found with the impugned
order having been passed by ignoring the application under Order VII Rule 11
read with Section 151 C.P.C. for the purpose of deciding the interim application
under Order 39 Rules 1 and 2. More so, when a direction to the effect to decide
the application under Order 39 Rules 1 and 2 expeditiously was passed in a
Revision Petition bearing No.2079 of 2009 filed by the appellants themselves.
Even otherwise, taking into account the fact that the Appellate
Board is already seized of the matter and there being time bound direction by
the Delhi High Court to decide within three months, the balance of convenience
is in favour of the plaintiff-respondents and great loss will accrue to the
respondents, if the injunction granted by the Court below is revoked at this stage.
In view of the discussion above, the appeal against the order dated
05-05-2009 passed by District Judge, Gurgaon, in an application under Order
39 Rules 1 and 2 read with Section 151 CPC is, accordingly, dismissed. It is,
FAO No.2757 of 2009 13
however, made clear that the observations made in this order, shall have no
bearing on the merits of the case.
(NIRMALJIT KAUR)
13th.08.2009 JUDGE
gurpreet