Groundless Threats For Patent Infringement: Analysing S.106 Of Patents Act,1970

INTRODUCTION

A groundless threat is one when a party threatens another party with legal proceedings without having a basis for the threats. The threat could be produced in the form of either written communication or orally. For instance, if a threat to prosecute for infringement is made where there has been no infringement, or the IP right of the owner is invalid, then the threat is held to be groundless.

PROTECTION AGAINST GROUNDLESS THREATS

To curb the problem of groundless threats, the Intellectual Property Laws has incorporated regulations which prohibit the owners of IP rights from making such aimless threats against individuals and businesses. Section 106 of the Patents Act, 1970 provides for a mechanism to protect the interests of individuals and companies against such baseless threats. Any aggrieved person who is being threatened can bring a claim for seeking relief against such a threat.

The aggrieved party of such a groundless threat may bring forward an action in the form of a suit in the Court against the acts as being unjustifiable and baseless. The Court after hearing the contentions made by the Plaintiff on the groundless threats may rule the following:

1) A declaration in the judgement by the court that the threats are groundless and unjustifiable to be faced by the aggrieved.

2) An interim or permanent injunction against the continuance of any groundless threats.

3) Any damages in lieu of monetary losses incurred or reputation being damaged by such groundless threats can be claimed in the Court of Law to be rewarded.

The court may grant all or any one of the reliefs as it may deem fit.

In such a suit, originally the burden of proof lies on the plaintiff to establish that the defendant’s IP rights are invalid. If the aggrieved party fails to establish the invalidity of the Patent, then the burden of proof shifts on the defendant. The defendant then has the responsibility to prove that the alleged infringer encroached upon the IP rights and committed infringement of the Patent thereof. If the defendant fails to prove any act of infringement on the part of the plaintiff, then the plaintiff is entitled to the remedies.

 BATA INDIA LIMITED V. VITAFLEX MAUCH GMBH[1]

Background of Facts

Vitaflex is a distributor of shoes marketed under the brand “Nach Dr. Mauch. The shoe was manufactured for five-point pressure of foot and the patent application was also awaiting for this product. On the other hand, Bata was producing shoes that had six pressure point formation. A notice was issued by Vitaflex to Bata contending that there was infringement of Vitaflex’s IP rights.

This s a case of groundless threats by Vitaflex against Bata, and the plaintiff brought into the notice of the Delhi High Court that the threats were unjustified and no IP rights of the defendant were being violated. Bata further claimed damages for the groundless threats made by Vitaflex.

Bata argued that the patent filed by Vitaflex is still pending and is not yet registered to be infringed.

Judgement

The Delhi HC ruled that the threats made by Vitaflex in the form of legal notices were unjustifiable and wrong and Bata was entitled to seek injunction against any such threats under section 106 of the Patents Act, 1970.

BAJAJ AUTO LTD V. TVS MOTOR COMPANY LTD[2]

Background of Facts

TVS Motor launched its TVS Flame 125 CC Bike which eroded the excitement generated by plaintiff’s product Bajaj XCD 125 CC planned to launch on 9 September 2007, i.e. 10 days after unveiling of TS Flame. Bajaj Auto Ltd filed a suit under Section 108 of Patents Act, 1970 alleging that TVS Motor was infringing their patented technology by using the technology in manufacturing TVS Flame Bike. In the said suit, Bajaj Auto demanded for an injunction restraining TVS from infringing their patent in any manner.

In response to this suit, TVS filed another suit under Section 106 of the patents Act, 1970 stating that Bajaj Auto is making unjustified and groundless threats against them. They asked for permanent injunction forbidding the defendant from continuing the issuance of any such threats and demanded that the defendant should not interfere with the manufacturing, marketing, launch and sale of their new product TVS Flame. Additionally, they directed the defendant to compensate them by way of damages in lieu of the losses sustained by them due to the groundless threats.

Judgement

While pronouncing the judgement, the factors considered by the Honourable Supreme Court were- Whether TVS infringed Bajaj Auto’s patented technology and whether Bajaj Auto made groundless threats for acquiring monopoly over the automobile market.

The Court held that if the exact technological combination as patented was copied by TVS, then it would have amounted to infringement but since there were considerable improvements made, it was not to be considered as infringement[3].

The Court further ruled that even if a slightest variation or modification is made in the technology used, then it can not amount to infringement and hence ruled in favour of TVS Motor holding the threats made by Bajaj Auto as unjustified and groundless.

CONCLUSION

Groundless threats in IPR can hamper the research and development process and hence to protect individuals and businesses from such abuse, this provision of Patents Act, 1970 exists. It protects legitimate legal right of the aggrieved parties and promotes innovations and inventions among them without any scope of hesitation.

Author: Rushika Bakshi, an intern at Khurana & Khurana, Advocates and IP Attorney., in case of any queries please contact/write back to us via email vidushi@khuranaandkhurana.com.

References:

[1] 2015 SCC OnLine Del 11505

[2] LNIND 2010 Mad 431

[3] Milind Parekh, Analysis on TVS Motor Company Limited v/s Bajaj Auto Limited (2009) Supreme Court, Legal Services India, https://www.legalserviceindia.com/legal/article-3886-analysis-on-tvs-motor-company-limited-v-s-bajaj-auto-limited-2009-supreme-court.html (Last Visited March 01, 2022, 4 PM)

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