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Infringement proceedings involve high costs of litigation in defending the same with the possibility that any temporary injunction granted in the due course thereof would lead to revenue loss, loss of employment and several other impediments to the business. Moreover, embroilment in infringement proceedings or the mere possibility thereof leads to disrepute of the business. Thus, keeping in mind the serious effects and consequences associated with infringement proceedings for which no person should unnecessarily be subjected to baseless threats of infringement, groundless threats of Infringement has been kept as a civil wrong or offence.
Groundless Threat of Infringement
Groundless threat, also connoted to as unjustified/wrongful threat is a threat whereby the owner or any person (depending on the statute) threatens another with legal proceedings without basing the threat on any reasonable basis. IP laws provide protection to the victims of unjustified threats, by preventing the person(s) making the threats from doing the same. Examples of such provisions in IP statutes include Section 60 of the Copyright Act, 1957, Section 142 of the Trademark Act, 1999 and Section 106 of the Indian Patents Act, 1970.
Relief under Patents Act, 1970: –
The Court has the power to grant relief in cases of groundless threat of patent infringement under Section 106 of the Indian Patents Act, 1970. The scope of this provision includes a threat given by any person (who is entitled to or interested in a patent or not) to any other person by circulars or advertisements or by communication, oral or in writing with proceedings for infringement of a patent. It is important to note that a mere notification of the existence of a patent does not constitute a threat of proceeding within the meaning of this section. The person aggrieved thereby may bring the suit praying for the following reliefs:
- a declaration to the effect that the threats are unjustifiable;
- an injunction against the continuance of the threats; and
- such damages, if any, as he has sustained thereby.
LG Electronics India Pvt. Ltd. v. Bharat Bhogilal Patel & Others
In this case the plaintiff approached the Hon’ble Delhi High Court on the premise that complaint preferred by Defendant No. 1, Bharat Bhogilal Patel, against the Plaintiff before Defendant No.2, Customs Office, on the basis of which said Customs department is acting upon and interdicting the goods imported by the plaintiff without approaching the Court in accordance with Patents Act, 1970 amounts to groundless threats. The defendant claimed to have obtained a patent in respect of “Process of manufacturing engraved design articles on metals or non-metals”.
Upon receiving show cause notice from defendant no. 2 Customs department, the plaintiff requested for the documents pertaining to the impugned patent and on perusing the same, found that the claims of CS(OS) No.2982/2011 Page No.3 of 10 the impugned patent allegedly lacked novelty as well as any inventive step. Accordingly, plaintiff filed revocation petition before the Intellectual Property Appellate Board (IPAB) challenging validity of the impugned patent. The Customs department continued interdicting the consignments of the plaintiff despite having been informed of the pendency of revocation proceedings. Subsequently, the case came up for hearing and the Court passed interim order in favour of plaintiff, staying the operation of complaint of Defendant No. 2 the Customs office.
Clause 4 of IPR (Imported Goods) Enforcement Rules, 2007: –
“It is pertinent to mention that while the mandatory obligations under Articles 51 to 60 of the TRIPS dealing with border measures are restricted to Copyright and Trade Marks infringement only, the said Rules deal with Patents, Designs and Geographical Indications violations as well, in conformity with the practice prevailing in some other countries, notably EU countries. While it is not difficult for Customs officers to determine Copyright and Trade Marks infringements at the border based on available data/inputs, it may not be so in the case of the other three violations, unless the offences have already been established by a judicial pronouncement in India and the Customs is called upon or required to merely implement such order. In other words, extreme caution needs to be exercised at the time of determination of infringement of these three intellectual property rights”.
Order passed by the Court: –
The Court explained the role of Customs officer in view of clause 4 of IPR rules and under para 95 of the judgement, “I do not agree with the statement made in the written statement by the Defendant No.2 Custom department that unless the stay orders are passed in the Revocation petition, they can proceed with the complaint filed by the owner of patent despite of any merit or demerit in the Revocation proceedings”.
The Court further explained the aspects of groundless threat and stated that “the custom shall act on the notice of the court, therefore if any proprietor or the right holder issues a notice to the custom officials and the custom officials act upon the same by causing restricting the imports of consignments of any party without the determination (prima facie or otherwise) of the factum of infringement of patent by the appropriated designated authority which is civil court under the governing law, then such notice by the right holder to the third party which is customs and the actions thereof by the customs either in the form of notice to that party or otherwise calling upon the party to explain its stand which no such position exists in law are all unnecessary illegal threats to that party”.
From the above discussion, it is clear that complaint to Customs and show cause notice sent by Customs Authority without adjudication of quantum of infringement by Civil Court amounts to groundless threat of patent infringement in light of clause 4 of aforesaid IPR (Imported Goods) Enforcement Rules, 2007.