Bajaj Auto Limited’s Case:
A Ray of Hope For Intellectual Property Rights Holders
The present article deals with a landmark judgment, given by the Supreme Court, on September 16, 2009, in Bajaj Auto Limited v. TVS Motor Company Limited. The primary object of this article is to explain the importance of the leading judgment and how it will change the scenario in matters relating to intellectual property, as the judgment explicitly directs all the courts and tribunals, in India, to dispose of cases, relating to trademarks, copyright and patents, within four months from the date of filing the suit.
The decision expressed the court's concern regarding the slow adjudication of Intellectual property matters that remain, pending for several years and the need for such matters to be expedited, has come as a ray of hope for IP rights holders that are considering civil litigation as a remedy.
Before heading towards the case and evaluating the judgment, let us first understand what intellectual property is.
Intellectual Property (“IP”)
IP generally means the legal rights which result from intellectual activity in the industrial, scientific, literary and artistic fields. It refers to creation of mind, i.e., inventions, industrial designs for article, literary and artistic work, symbols, etc., used in commerce. In each case it consists of a bundle of rights in relation to certain intangible property created by the owner.
The Intellectual property law aims at safeguarding creators and other producers of intellectual goods and services by granting them certain time-limited rights to control the use made of those productions. Those rights do not apply to the physical object in which the creation may be embodied but instead to the intellectual creation as such. It regulates the creation, use, and exploitation of mental or creative labour.
Types of Intellectual Property
Intellectual property is divided into two categories: industrial property, which includes inventions (patents), trademarks, industrial designs, and geographical indications of source: and Copyright which includes literary and artistic works such as novels, poems, plays, films and musical works, etc.
According to the TRIPS (Agreement on Trade Related Aspects of Intellectual Property Rights), IP has been classified into – Patents, Industrial designs, Trademarks, Copyright, Geographical Indications, Layout Designs of Integrated Circuits, Protection of Undisclosed Information/Trade Secrets. Different IP rights vary in the protection they provide.
The important types of intellectual property are explained briefly below:
Meaning of the term ‘patent’
It refers to a grant of some privilege, property or authority made by the Government or the Sovereign of the country to one or more individuals. The instrument by which such grant is made is known as ‘Patent’.
Objective behind a Patent law
Patents are granted to encourage inventions. Patents play a major role in the economies of developed countries. In the case of Bishwanath Prasad Radhey Shyam v. Hindustan Meatal Industries, it has been held by the Supreme Court that,” the object of patent law is to encourage scientific research, new technology and industrial progress.”
Patent Law in India
India too has begun to pay greater attention to patent protection. This is evident in the amendments made to India’s Patents Act to make it TRIPS compliant.
The term ‘Patent’ acquired statutory meaning in India when the Patents Act, 1970 was enacted. Patent, under the Act, is granted by the Controller to the inventor for a period of 20 years. It is the exclusive right to make use, exercise and vend his invention. After the expiry of the duration of the patent, anybody can make use of the invention.
A patentable invention must be:
1. a new product or process,
3. useful, and
4. capable of industrial application.
Remedies against infringement of patent
To protect a registered patent, the following remedies can be resorted to:
2. damages or account of profits.
Meaning of ‘Trade Mark’
“Mark” includes a device, brand, heading, label, ticket, name, signature, word, letter, shape of goods, packaging or combination of colours or any combination thereof.
“Trade mark” means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours.
Thus, trade mark is a visual representation attached to goods for the purpose of indicating their trade origin. For example, the trade mark ‘Lakme’ distinguishes the goods of Lakme Lever from those of the ‘Revlon’, which is a separate trade mark which distinguishes the goods of Revlon.
The functions of a Trade Mark
The following are the four important functions of a trade mark:
1. It identifies the product and its origin,
2. It guarantees its quality,
3. It advertises the product, and
4. It creates an image of the product in the mind of the consumer.
How is a trade mark protected in India
The Trade Mark Law in India is contained in the provisions of the Trade Marks Act, 1999. The trademark will be registered for a period of 10 years; however it may be renewed from time to time in accordance with the provisions of section 25 of the said Act.
Remedies against infringement of trademark
To protect a registered trademark, the following remedies can be resorted to:
1. Civil remedies,
2. Criminal proceedings,
3. Administrative remedies
Meaning of Copyright
Copyright means the exclusive right to do or authorise other(s) to do certain acts in relation to:-
1. Literary, dramatic or musical works;
2. Artistic work;
3. Cinematograph film; and
4. Sound recording.
The author of the work is the first owner of the copyright in the work. The originator of an idea is not the owner of a copyright, copyright belongs to the person who gives a concrete form to the idea.
Copyright provides exclusive rights to creators to use or authorise others to use their works. The creator of a work can prohibit or authorise its reproduction in various forms, including printing, recording, broadcasting, public performance, translation or adaption.
Copyright basically provides economic rights to creators which allow them or their heirs to benefit financially for a period of lasting 60 years after the creator’s death.
Indian Copyright Law
The Act presently in force was legislated in the year 1957 and is known as Copyright Act, 1957 as amended by copyright (Amendment) Act, 1999. It adopted many principles and provisions contained in the U.K. Act of 1956.
Remedies against infringement of copyright
There are 3 kinds of remedies namely:-
1. Civil remedies,
2. Criminal proceedings,
3. Administrative remedies.
Bajaj v. TVS Patent infringement case
In December 2007, Bajaj Auto Limited filed a suit before the Madras High Court for an injunction against TVS Motor Company Limited for the infringement of Bajaj's Patent 195904. The patent was entitled "An improved internal combustion engine working on a four stroke principle". The patent publication stated that the invention particularly related to the:
"use of twin spark plugs for efficient combustion of lean air fuel mixture in small bore ranging from 45 [millimeters] to 70 mm internal combustion engine working on 4 stroke principle."
In December 2007, TVS launched its 125-CC motorcycle 'FLAME', powered by a lean-burn internal combustion engine of bore size 54.5mm with a twin spark-plug configuration, which, according to Bajaj, infringed Bajaj's patent. On February 16 2009, the Madras High Court granted an interim injunction, restraining TVS from selling its two and three-wheelers using the patented technology.
TVS appealed against the injunction before the Division Bench of the Madras High Court. On May 18, 2009, on the contentions and evidence put forward by TVS, the court stated that TVS's technology had a distinctive feature of a different operation that comprised a three-valve provision and a twin-plug operation. According to the court, the three-valve operation of the engine produced a distinctly different result in its operation. Further, while the twin plug in operation in Bajaj's internal combustion engine may have resulted in improved internal combustion, TVS's three-valve technology with a twin-plug provision produced a distinctive product of its own, which was different from Bajaj's claimed invention. Therefore, the appeal was allowed and the single judge's interim injunction was vacated by the division bench of the high court.
Bajaj appealed to the Supreme Court, challenging the impugned revocation of the interim injunction.
After hearing the parties at length, the Supreme Court declared its displeasure at the pendency of suits relating to IP matters. The court expressed its dissatisfaction over the fact that the matter had been pending before the high court since December 2007 at the interlocutory stage and yet no written statement had been filed. Without going into the merits of the case, the court directed the respondent and defendant to file a written statement and requested that the single judge commence the hearing of the suit on a day-by-day basis.
The Supreme Court made an important observation about the length of time that IP matters are left pending and also observed that the litigation between the parties is fought mainly on the temporary injunction, quoting from its earlier decision in Shree Vardhman Rice & Gen Mills v Amar Singh Chawalwala, wherein it was stated that:
"in our opinion, in matters relating to trademarks, copyright and patents the proviso to Order XVII Rule 1(2) [of the Code of Civil Procedure] should be strictly complied with by all the Courts, and the hearing of the suit in such matters should proceed on a day to day basis and the final judgment should be given normally within four months from the date of the filing of the suit."
Relying on the recently decided above-mentioned special leave petition, the Supreme Court held that experience has shown that in India, suits relating to IP matters are mainly fought over injunctions. The court went on to say that:
"This is a very unsatisfactory state of affairs, and hence we had passed the above quoted order in the above-mentioned case to serve the ends of justice. We direct that the directions in the aforesaid order be carried out by all courts and tribunals in this country punctually and faithfully."
Importance of the judgment
The Supreme Court's observations and strict comments signal a welcome move for IP litigators. Often suits relating to IP matters are left pending adjudication and the interim injunction stays for longer than expected. Hence, in effect, the interim injunction constitutes the final word. The court further suggested that in the present case arguments were advanced at length, and that instead of deciding the case at the interlocutory stage, the single judge should have disposed of the suit at an earlier date.
It is evident that the value and benefits out of most of the intellectual properties lies in the initial phase of its creation. For instance a Patent when brought to the market has the ‘milking period’ during initial couple of years or even months only. In such a situation a pending litigation against the infringement of same would in effect take away that initial gain period or, at the least, would hamper its prospects. After the said initial phase, the value of intellectual property diminishes as it is overshadowed by the new improved and improved creations. So when the matter remains in the Court for the long time it is obviously shortening the life as well as the return on the intellectual creation. When the matter remains in the Courts, the parties or the right holders may not effectively bar and restrain others from infringement(s). The longer the suit lasts the more the inventor/patentee/right holder has to wait to reap benefits out of its intellectual creation.
Moving to the other side, many entities might just use this ‘delay’ defect in our adjudication system as a shield to restrict others to enter into competition. For example if a temporary injunction is granted in favour of the Plaintiff and after couple of years the Plaintiff’s claim over the said intellectual property is not substantiated to that effect and the final order is against the Plaintiff, the other party would have been restrained from making use of the said intellectual property during the peak period of demand, which actually could have been used by it in all legal sense.
It can be safely said that in IP cases the timeline decides the invention’s value. Taking cue from the said observation by Supreme Court the Tribunals and Courts adjudicating the IP matters should endeavor to decide the cases in shorter possible time, and pass the final order if possible under the given facts and submissions, instead of giving interlocutory orders. This Supreme Court decision to expedite IP cases and dispose of them in a much quicker fashion is a radical change that has been wholeheartedly embraced by all IP rights holders.
Taking a leaf from Japan’s Book
The efficiency and speed with which the Japanese government has sought to reform its IP system is worthy of appreciation. If India is to put into operation the above judgment, given by the Apex Court, it too must revamp its IP system.
Japan’s IP High Court
The swiftness and determination with which the IP High Court was established in Japan is rarely displayed by governments in bringing about reforms and has surprised many. The IP judicial system in Japan dates back to 1950, when the ‘Intellectual Property Division’ was first established in the Tokyo High Court. It specialized in suits against the decisions taken by the Appeal/Trial Board of the Japan Patent Office (JPO) and appeals from district courts on IP actions. In July 2003, the idea of an IP High Court was mooted in the ‘Promotional Plans for Intellectual Properties of 2003’. The IP High Court Law which was enacted on 11 June 2004 was promulgated on 18 June and made effective from 1 April 2005. The IP High Court was formally established with four divisions and one Special Division known as the Grand Panel in the Tokyo High Court as a ‘special branch’ with highly independent authority.
This Court has a Chief Judge, an Administrative Office, and has autonomy over its administrative matters which are decided by its own judicial conference. Unlike the other High Courts which have regional jurisdiction, the IP High Court has national jurisdiction. However, its decisions may be appealed in the Supreme Court, which also supervises its judicial administration. While some countries do have courts specializing in IP matters with nation-wide jurisdiction, such as the US Court of Appeals for the Federal Circuit, the Federal Patent Court of Germany, and the Patent Court of Korea, the Japanese initiative is much more sophisticated with potentially far-reaching consequences. For example, the IP High Court personnel include judicial research officials and expert commissioners. Judicial research officials conduct research on technical matters required to conduct proceedings and render judgments. Expert commissioners, who are part-time officials, are appointed by the Supreme Court to assist judges by providing explanation of technical knowledge in cases where their expertise is needed to clarify issues or to facilitate progress of the proceedings. The commissioners are selected from among experts such as university professors and researchers from public research institutes, who have expertise in various scientific fields which shows that the judicial system truly wishes to gain the confidence of contesting parties and provide quality judicial service.
The daily support provided by the research officials and the case-by-case assistance provided by the expert commissioners have made the IP High Court well equipped to resolve highly technical cases.
Comparing the Indian System
Patent disputes in India are classified either as patent administrative cases or as patent infringement cases. The court may appoint an independent scientific adviser, who plays a role similar to that of an expert commissioner in Japan. Despite the hierarchical similarities between the Indian and the Japanese systems, there are significant operational differences. The most important difference is in access to and means of assimilating technology-related knowledge by the judges. Japan is more advanced in this respect.
The District Courts are not experienced and well versed with IP laws and precedents. As the Judicial officers of the High Courts are well versed in IP laws, there are advantages in filing civil IP cases before a High court. However, only the following Indian High Courts have been vested with power to decide original suits: the High Courts of Delhi, Mumbai, Calcutta, Chennai and Jammu Kashmir. While these Courts also act as appeal Courts in relation to cases originally decided by the District Courts, suits over which the Court has territorial jurisdiction can also be directly filed with these Courts provided the relief sought is at least INR 2000,000.
Until 2003, there was no board of appeals against decisions of the controller of patents in India. The Intellectual Property Appellate Board (IPAB) was constituted under the Trademarks Act (1999) and the Geographical Indications of Goods Act (1999), but it could be brought into force only in 2003. The Patent Amendment Acts 2002 and 2005 brought cases related to patents under the jurisdiction of the IPAB. But, as a technical member was not appointed, it could not handle cases related to patents until 2007.
To put into force the above landmark judgment of the Supreme Court, Indian lower courts need to be well versed with IP laws. Further, the number of Indian High Courts vested with power to decide original suits in IP cases should be increased, also experts should be appointed to assist the judges. The wisdom and speed with which the Japanese government has sought to reform its IP system to compete in the new world tied together in a global economy, is worthy of emulation. The IP High Court of Japan was functional within a span of 2 years from the time of conception, with excellent technical and judicial staff. If India is to take its rightful place in this global economy, it too must revamp its IP system. This necessarily includes modernization of its judicial system. Japan has shown that this can be done without undue delays.
# ‘Intellectual Propety Law’, P. Narayan, 3rd edn.,7th Impression, 2009, p.3
# Supra Note 1
# Section 83(a) of the Patents Act, 1970
# (1979) 2 SCC 511
# Section 2(1)(m) of the Trade Marks Act, 1999
# Section 2(1)(zb) of the Trade Marks Act, 1999
# Section 14 of the Copyright Act, 1957
# Section 17 of the Copyright Act, 1957
# Sections 22-29 of the Copyright Act, 1957
# MIPR 2009(2) 139, 2009(40)PTC 689(Mad)
# 2009(41) PTC 397 (SC)
# Order XVII Rule 1(2) Costs of adjournment.—In every such case the Court shall fix a day for the further hearing of the suit, and [shall make such orders as to costs occasioned by the adjournment or such higher costs as the court deems fit]:
# 3[Provided that —
(a) when the hearing of the suit has commenced, it shall be continued from day-to-day until all the witnesses in attendance have been examined, unless the Court finds that, for the exceptional reasons to be recorded by it, the adjournment of the hearing beyond the following day is necessary,
(b) no adjournment shall be granted at the request of a party, except where the circumstances are beyond the control of that party,
(c) the fact that the pleader of a party is engaged in another Court, shall not be a ground for adjournment,
(d) where the illness of a pleader or his inability to conduct the case for any reason, other than his being engaged in another Court, is put forward as a ground for adjournment, the Court shall not grant the adjournment unless it is satisfied that the party applying for adjournment could not have engaged another pleader in time,
(e) where a witness is present in Court but a party or his pleader is not present or the party or his pleader, though present in Court, is not ready to examine or cross-examine the witness, the Court may, if it thinks fit, record the statement of the witness and pass such orders as it thinks fit dispensing with the examination-in-chief or cross-examination of the witness, as the case may be, by the party or his pleader not present or not ready as aforesaid.]
# Katsumi, S., AIPPI J., September 2006;http://www.ip.courts.go.jp/eng/documents/pdf/conference/200609.pdf
# ‘Lessons from Japan in intellectual property reforms’, Dileep K. Paturu, Abhilasha Aswal and H. Mohd. Imaduddin ;http://www.ias.ac.in/currsci/dec102007/1479.pdf
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