Fork in the road – Revocation of patents in India
In a country like India where a patent is granted after fighting tooth and nail, “revocation” is arguably the most dreaded term for any patent-holder. A patent granted in India can sought to be revoked for more than one reason and statutorily in more than one forum.
Seeking revocation of patents in India
A petition for revocation can be filed with the Intellectual Property Appellate Board (IPAB). A revocation can also be counter-claimed in an infringement suit. Generally, a suit for infringement is filed at least at the district court level. However, given the pecuniary jurisdictional limits of various courts, a suit for infringement, more often than not, is filed with the High Court. In any event, per Section 104 of the Patents Act, if a counter-claim for revocation is made, then the suit for infringement and the counter-claim would be transferred to the High Court, having jurisdiction in the matter, for its decision. Thus, revocation proceedings can happen at the IPAB as well as at the High Court.
Litigants with vested interests and deep pockets exploit this statutory provision which appears to allow approaching two different fora simultaneously.
A recent decision of the Indian Supreme Court (SC), brought to the fore this misuse of the justice system. The case deals with a business arrangement gone sour. Dr. Aloys Wobben was a holder of certain patents in the field of wind turbine generators, and wind energy converters. As a holder, he licensed the technical know-how protected by the patents to Enercon India Limited (EIL). The events that led to this case are as follows:
- December 2008 – The license to EIL was terminated owing to breach of contract by EIL. EIL, however, continued to use the technical know-how despite the termination of license.
- January 2009 – Rubbing salt into wounds, EIL filed 19 revocation petitions before the IPAB against Dr. Wobben’s patents.
- Later half of 2009 and the year 2010 – Dr. Wobben filed 10 patent infringement suits against EIL before the High Court of Delhi (HC). EIL responded to these infringement suits by filing counter-claims for revocation.
- In 2010 and 2011 – EIL filed 4 more revocation petitions with the IPAB against Dr. Wobben’s patents.
The SC noted that while the IPAB had decided some of the revocation petitions, EIL had “re-agitated” the same issues in its counter-claims before the HC. At this point it is understood from the SC judgment that these 10 infringement suits by Dr. Wobben covered at least some of the patents sought to be revoked by EIL before the IPAB.
Provision of law
The provision for revocation of patents under Section 64 of the Patents Act goes like this:
“[S]ubject to the provisions contained in this Act, a patent, whether granted before or after the commencement of this Act, may, be revoked on a petition of any person interested or of the Central Government by the Appellate Board or on a counter-claim in a suit for infringement of the patent by the High Court on any of the following grounds that is to say……”
According to the SC, it is therefore evident that revocation of patent can be sought by either filing a revocation petition before the IPAB or through a counter-claim in suit for infringement. It was argued that EIL had approached both of these fora simultaneously. Accepting the argument, the SC said that availing one of the above remedies would disentitle the person from availing the other.
It was further argued that a counter-claim is a cross-suit which is essentially to be treated as an independent suit. Since EIL’s revocation petitions were pending with the IPAB, it was barred by the principle of res subjudice (i.e., a principle in civil procedure to avoid simultaneous trying of suits between the same parties on the same issues in courts of concurrent jurisdiction).
Decision of SC
The SC then formulated the following to discourage such instances in the future:
- If a suit for infringement had been filed and a counter-claim for revocation made, the High Court would decide upon revocation. The defendant in the suit for infringement was disentitled from filing a revocation petition with the IPAB in the same matter.
- Conversely, if a revocation petition was filed with the IPAB against a patent, and a suit for infringement was filed for the same patent, the defendant in the suit was disentitled from seeking revocation of patent while filing his counter-claim. The revocation petition with the IPAB would be decided.
Concerns and questions
This decision of the SC does not clarify certain obvious questions which come to mind. In a scenario where a revocation petition is filed first and the suit for infringement next, the defendant in the infringement suit is now obviously disentitled from counter-claiming revocation. This then means that he is limited to only defending against infringement. Is that good enough?
If avoiding multiplicity of proceedings was the basis for this case, should not infringement suits filed after the revocation petitions against the same patents be stayed? Also should not the revocation petitions filed after the infringement suits for the same patents be stayed? It would only be logical to stay such second-in-line proceedings to avoid conflicting decisions.
We would have to wait to see how this decision impacts patent litigation.