CHAPTER VII INFRINGEMENT AND REMEDIES

61. Meaning of Infringement: The infringement of patent is a technical subject. In common parlance it means infringement by a person of the rights of the patent holder. Rights of the patent holder are the rights of monopoly exclusive to him in the patent. He, who breaches the monopoly, is said to infringe the rights of the patent holder. The rights of monopoly granted to the patent holder consists in his exclusive right, to make, use, exercise, sell or distribute the articles manufactured in accordance with the patent or manufactured in accordance with the patented process. Nobody else can use patented invention or patented process for manufacturing the articles or substances.

The purchaser of patented goods can sell or distribute them. That will not amount to infringement. The person who sells or distributes counterfeit patented goods commits infringement. A person who uses the patented invention or a patented process or the person who produces the articles and substances, for which there exists a patent, commits infringement. A person or institution which uses the patented invention for research purposes does not commit any infringement.

Innocent infringement is not an infringement. If the alleged infringer proves that on the date of the infringement he was not aware of the existence of the patent, he will not be liable to any damages or for accounts.

Infringement of patent is not a criminal offence. The infringer is not liable to be prosecuted in any criminal court. Infringement of copyright, trade mark and design are offences punishable with imprisonment and fine. But patent infringement is not made an offence, perhaps for the reason that the determination of infringement is beset with serious problems of interpretation both technical and legal.

In order to ascertain whether there is any infringement or not it has to be first found out what is the extent of monopoly the patent holder has and that can be determined only on a reading of the claims made by the patent holder in his compete specification on the basis of which patent has been granted. Thereafter it is necessary to decide whether what the infringer has done amounts to making, using , exercising, selling or distributing the product where the patent is a product patent or whether it amounts to using or exercising the process of manufacture where the patent a process patent. In either case it is incumbent on the authority enquiring into the infringement to look into the claims and whether the infringer has infringed any of the claims. Claims made in the specification are of two kinds; essential integers i.e., completed factors and non-essential integers. Broadly stated infringement occur only when the essential integers and the combinations involved in achieving the result of the invention, are either copied or used in the infringing model. Non-essential integer unless their omission will frustrate the results, can be ignored. (AIR 1978 Delhi 9, AIR 1969 Bombav 255 )

If the infringer is found to have adopted in substance the patented invention, he commits infringement notwithstanding any apparent omission in one or more of the steps in the procedures or processes involved in manufacture. Similarly where an infringer adopts all essential integers and alters only some of the non-essential integers by substituting mechanical or chemical equivalents, he is said to have resorted to colourable imitation and hence liable to be proceeded against for infringement. Where the holder of a patent manufactures his articles achieving the results by using certain chemicals and if another manufacturer uses quite different chemicals either known or

unknown at the time of the original patent and achieves the same results, the later manufacturer cannot be faulted with as having committed infringement.

62. Acts of Infringement: If, what is patented is a machine, to manufacture and use of such machine by another amounts to infringement of patent by that another. If, what is patented is a machine which manufactures only a designated articles, the manufacture and use of the machines and the designated articles and their sale are all acts of infringement. If what is patented is a machine capable of manufacturing a variety of articles and which can carry out multifarious functions, the manufacture and use of that machine only is infringement and not the manufacture of articles from that machine. This question whether manufacture, use and sale of patented machine only constitutes an infringement or whether the articles made out of the infringing machine also form part of acts of infringement depends upon the facts of each case.

If the patent relates to article of manufacture the use and sale of the patented article by another is an infringement irrespective of the methods and the manner adopted for its manufacturer or the material used for its manufacture.

Where the patent relates to the process, of manufacture it is called the process patent. In case of process patent, the infringement consists in adopting, exercising the patented method for achieving the results contemplated under the process patent. Here the manufacture of the Product does not amount to infringement. Where a product is manufactured by a process different from the patented process it is no Infringement to manufacture, use or sale of the product so manufactured.

When the patent relates to both the product as well as the process, the act of manufacturing, exercising. using and citing the product as well as the process come within the scope of infringement.

Thus, every person who uses the patented invention, manufactures and sells the patented articles so manufactured and every person who uses the patented process infringes the patent. Every other person either directly or indirectly helps or abets the act of infringement is also an infringer. Inducing a person to commit infringement, procuring the manufacture of infringed articles are also acts of infringement of patent. While a person who sells certain machinery items which enable the infringer a manufacture the patented article is himself not an infringer, the person who sells dismantled parts of the patented machine to enable another infringer to reassemble them into a patented machine comes within the scope of infringer. Similarly one may repair a patented machine, but he can not under the guise of repairing make a fully conditioned machine by putting together parts procured from other machines. While consignee of infringed articles can be proceeded against as infringer, the carriers and warehouse owners can not be proceeded against in an action for infringement

63. Suit against infringement: Primarily the right to sue for infringement belongs to registered patent holder. Since the exclusive licencee comes within the definition of patent holder, exclusive licencee can also sue for infringement.

Licencee can not sue for infringement unless the terms of the licence granted to him authorise the licencee to do so.

Licence holder under compulsory licence and licence holder under the licences of right cannot sue the infringer unless the terms of the grant give them that right. However, the holder of a compulsory licence can call upon the patent holder to take action against the infringer by a notice issued to him and if the patent holder fails to take action against within two months from the demand made by the compulsory licencee, the licencee under compulsory licence can take action against the infringer making the patent holder also a party defendant.

The assignee of the patent can take action in infringement from the date when his assignment is registered with the Controller for infringement committed after that date. In case of infringements which have taken place prior to assignment or where action against infringer the is pending, the assignee may be added as a co- plaintiff. Where there are more than one patent owner, all the co-owners shall join in the action against the infringer and if one only initiates proceedings the others shall be joined as party defendants.

Where several infringers commit infringements jointly, they all can be proceeded together as joint trespassers and where infringers are numerous and they are all independently acting, instead of proceeding against all of them by filling different suits, it will be convenient to file infringement action against the principle infringer and take action against others after giving them a notice of the pending actions stating that they fail to comply with the demand, action will be taken against them. Infringement action can be taken against those also who are residing outside the jurisdiction of the Court and also those who are residing abroad. When the infringer includes third parties claiming rights through others, it is better if such third party infringers are also added as parties to the action launched against direct infringer so that the third parties may not claim any internal guarantees between and among them.

64. Defence Against infringement : Registration of a patent does not by itself guarantee the validity of a patent. Even though the patent is granted after due notice to the public, notification made in the Gazette and after due consideration at the highest administrative level and after due consideration of all the matters connected with the grant of patent in proceedings in opposition, it is still open to infringer to take all or any of the objections which are open to the objector in the opposition proceedings and in addition he can take the following additional objections to meet the charge of infringement.

(1) That the person suing is not entitled to sue in as much as he has already assigned his complete rights or that the person suing is a mere licencee not authorised to take action.

(2) That the acts complained of do not constitute infringement leaving the patent holder to prove as to how the acts complained of come within the purview of infringements

(3) That there is an implied licence to use or deal in patented article or patented invention.

(4) When the use of article is covered by Section 47 i.e. right of the Government to use the patented articles and the process, the action questioned falls within the provisions of that section.

(5) When the infringer is a licencee he may claim that the conditions imposed by the patent holder are invalid and the act of infringement alleged against him being one which falls under the invalid conditions, does not amount to infringement.

(6) That the acts complained of are committed during the period when the patent is not in force or lapsed.

(7) That the infringement is innocent and the infringer is prepared to take out licence.

(8) That the patent itself is liable to be revoked subject to the infringer claiming it as a counter claim.

(9) If he does not claim the revocation of patent setting the grounds required therefore, this defence will not be available to the infringer.

(10) That the patent holder is estopped from proceeding with the infringement action by reason of the court orders in another action, that the acts are of the class of acts complained against are not infringement. If what is decided in earlier proceedings is that a particular act in the circumstance of that case did not constitute an infringement, the patent holder is not prevented from agitating the same act as an act of infringement in a different set of circumstances.

In Infringement proceedings every ground which an objector to the grant of patent can raise may be taken by the defendant, in a suit.

65. Reliefs: The patent holder can sue the infringer for permanent injunction. He can also ask for ex parte interim injunction on the date of filing the suit which if granted will be in force initially for a period of one month and thereafter continued or withdrawn in accordance the orders that may be made by the court. The patent holder can ask for damages or for a direction to render an account for profits. As a matter of fact the suit is only one in which all the reliefs can be asked for including delivery of and destruction of infringed articles.

The act does not require that any previous notice is necessary before action is taken against the infringer. If there are circumstances which warrant the issue of notice hopefully with a view that the defendant may settle the matters out of Court, a notice may be issued. Where injunction is an immediate necessity there should not be any delay in filing the suit.

The above reliefs are subject to certain restrictions.

(1)If the infringement of patent is in relation to a patent which is endorsed with words “licences of right’, if the infringer is ready to take a licence, court may not issue an injunction against such infringer and award damages to the patent holder at double the amount of damages which could have been claimed against the licencee from the date of the first act of infringement to the date of the grant of licence.

(2)When the infringement is innocent injunction only will be granted and no damages will be awarded to the patent holder.

(3)If the infringement is innocent, injunction only will be granted and no damages wil be awarded to the patent holder

(4)When the infringement takes place during the period when the application of amendment of patent is pending, the question of damages depends upon the nature of amendment and whether such amendments are implied in the complete specification.

(5)When the court holds some only and not all the claims of the patent holder as invalid, the damages have to be confined to those claims only which are held valid.

The first principle the court has to follow in granting injunction is that if there is a clear breach of right, it is not permissible for the court to invoke any equitable bar to refuse injunction. The patent holder must first prime facie establish the legal title to the patent, his right to apply to the court, the balance of convenience whereby he should show that the losses he will suffer are immeasurable and cannot be compensated and the damages, loss of business and market reputation he will suffer will be irreparable. Unless these essentials are satisfied the court will not issue injunction against the infringer. A defiant and defying infringer cannot seek the shelter of equity of balance of convenience.

Patent is a very valuable property. Infringement shall not be looked at lightly. Before obtaining the patent there is an enquiry of substantial nature by a high level statutory authority vested with powers to grant or refuse patent. Even though obtaining the patent is called registration of patent, it is in fact preceded by a grant on the basis of which only patent is registered and sealed. The fact that the Act itself declares that the grant of patent does not guarantee its validity, the presumption of its validity cannot be displaced easily by mere allegations until they are otherwise substantially established. Therefore, the Court may not easily refuse to grant injunction when infringement is clearly established.

Even though case law seems to favour the infringer whenever he comes out with a proposal to pay compensation or take out licences, the problem still remains that the patent holder's claim for exclusive use to exploit his patent cannot be lightly treated. Except when the patent holder approaches the Court after a long delay or laches which amounts to acquisance, the patent holder shall in all circumstances be entitled to injunction. It may also be noted that if injunction is refused it may encourage others to commit infringement and try to seek advantageous terms thereafter with the patent holder.

Since it shall be duty of the Court to prevent infringement particularly when it is not made an offence punishable under the Act, mere allegations made against the credentials or ability of the patent holder shall not influence the Court, for there are other-ways of redeeming such defects if any in the working of the patent, than permitting illegal acts of infringements.

Injunction can be issued even in cases where there is no actual act of infringement. The threats to commit infringement or intention to commit infringement on the part of the defendant also warrant issuance of injunction. The fact that he has been guilty of infringement is evidence that he intends to continue infringement, but whether he has actually infringed the patent or not, it will be sufficient if he has threatened to infringe it. Actual infringement is merely evidence upon which the Court implies an intention to continue in the same course (AIR 1954 Patna 492).

The intention to infringe can be inferred from the infringement committed by the defendant during the period when the act complained of was not actionable (i.e. say during the period when the patent lapsed) but subsequently becoming actionable after the patent is restored. In such

circumstances the Court will be justified in granting injunction restraining the defendant from committing potential infringement.

In addition to the relief of injunction the other relief the patent holder can claim against the infringer is damages or an account of profits and not both. Whether he claims damages or account of profits it is left to the choice of the patent holder. When he prefers one or the other he cannot change his preference later. The method of determination of damages and the method of calculating the account of profits differ radically. The nature of enquiry and of evidence required to assess them and the points of law required to be considered differ from each other.

The damages are the cash equivalent of the injury and loss sustained by the patent holder by the reason of infringement. The account of profits have to be taken for determining the profits made or ought to have been made by the infringer by using, exercising and selling the patented invention. Loss of the patent holder must be real and direct and not remote. It is the sum of money which will put the patent holder in the same position as he was, had there been no infringement. The easiest way of fixing the amount is the amount of profit the patent holder would have made on each of the units multiplied by the number of items the infringer has sold where the numbers of items sold by the infringer are well ascertained. If the patent holder has been granting licences, the amount calculated with reference to the royalty payable by the licencee would serve as certain guide to fix the amount of damages suffered by the patent holder. In some cases it may become necessary that several other factors such as the prevailing rates of royalties in similar trade, the nature of business analogous with the patented goods, expert opinion on the measure of profits, profitability of the patented invention may have to be considered. If there be evidence of prior offers to the patent holders relating to grant of permissions and licences the same may also be considered by the Court. If the patent holder can establish his losses by showing the extent of cut his business suffered by proving the number of article less sold by him as a consequence of infringement, the court may accept such evidence also for determining the damages suffered by him. Every infringement gives an independent cause of action and hence wherever infringement occurs whether it occurs in range of business not accessible to the patent holder or in areas where the patent holder could not dream of even reaching, the patent holder is entitled to sue and recover the damages from the infringer. Even though there are no means of ascertaining damages and the extent of infringement indulged in by the defendant cannot also he precisely estimated, still the patent holder shall be granted a notional reasonable equivalent to the measure of damages suffered by him.

To grant the Patent holder nominal damages on the ground of lack of means to make estimates of damages, is illegal. In such circumstances the profitability of patent becomes relevant and the damages may be ascertained on that basis. Where the patent is a complex one and the infringement relates only to either parts of it are accessories, damages shall to be estimated with reference to which infringement takes place. When infringement refers to essential parts of patented machine the infringement shall be treated as one applicable to the whole of it and full measure of damages shall be allowed. The fact that the infringer has suffered lossess and has not gained by the infringement is of no concern and the damages shall have to be calculated on extent or infringement, the number of articles manufactured and quantum of business done by the infringer. Even in the case where patent is revoked either as a result of the infringement proceedings or otherwise the infringer is still liable to pay the damages to the patent holder unless the act complained of is on facts held to be no infringement.

If the patent holder elects to receive profits on account of the unauthorised use of the invention, he is entitled to the profits earned there from by the infringer. Such profits shall be limited to and attributable to the use of plaintiff’s invention and not all other competitive goods in which the infringer may be dealing. For the purposes of estimating profits it is necessary that plaintiff shall be entitled to issue interrogatories, seek discovery of the documents have from the infringer. The patent holder can also be entitled to the appointment of the Commissioner to examine the accounts of the infringer. In the course of this enquiry, it may be necessary that the infringer may be called upon to file the list of his customers. What is ultimately required to be assessed is how many articles the infringer must have produced and sold and to whom they have been sold and in which market and at what price. When the offer of a specified sum towards damages is made, by either of the parties appears reasonable, but one of them refuses the offer and calls for enquiry into the profits, the one who calls for enquiry will be held liable for the costs of the enquiry. Irrespective as to who is made responsible for cause of enquiry at the trial Court, in the appeal whoever wins will get the costs of enquiry unless he was the party who had already been awarded such costs in the first Court.

At the conclusion of the trial of the suit filed against the infringer by the patent holder for injunction and the damages or damages ascertained in terms of profit earned by the infringer, there remain still two more issues on which the Court has to turn its attention. The first one is whether the infringing articles and goods should be delivered up to the patent holder or should they be left with the infringer? The second issue is whether such infringing articles and goods should be destroyed? On both these issues the question to be considered is whether it is necessary either one or the other orders to prevent the infringer to repeat the acts of infringement. If the court finds that the delivery of the infringed goods or machines to the patent holder is necessary to prevent further infringement, the Court may order its delivery to the patent holder. If such an order is not necessary, the Court may refrain from making any order as regards the delivery of the infringed goods to the patent holder. Similarly if the Court finds that the circumstances of the case, a destruction of infringing goods is necessary for the purpose of preventing the infringer to repeat the acts of infringement the Court may so order the destruction of the infringed goods. If the finding is to the contrary the Court may refuse to make the order of destruction.

Here it may be noted that notwithstanding anything stated in the Act about infringement whether it is unauthorised or illegal. The property in the infringing goods vests with the infringer only. To treat them under any circumstances as goods of the patent holder is not correct. Viewed in this context, it is not easy for the Court to transfer the infringing goods from the ownership of the infringer to that of the patent holder unless there are compelling grounds to do so.

Where the Court directs the delivery of the infringing goods to the patent holder, the value of the goods so delivered to him shall not be set off in the amount of damages the infringer may be held liable to pay the patent holder. Under the patent law this seems to be the only penalty to which the infringer is made liable to suffer when the infringement is not made an offence punishable with either fine or imprisonment.