Case Comment- Advanced Course on Patent Law

Vringo Infrastructure Inc. &Anr. V. Indiamart Indermesh Ltd. & Ors.

M.P. Venkateshwara Perumal

BC0160053

Bench: Justice V.K. Shali

Citation: CS. (OS) No. 314 of 2014

Decided on: 5th August, 2014.

Introduction:

Expert Opinions are an integral part in examining and providing the evidence for
infringement of Patents. Therefore, naturally questions arise regarding the qualifications
required for that said expert. Though there are rules relating to the qualification, there has to
be a certain outline for the same. Also, the immediate relief provided for an infringement of
patent is an interim injunction. However, there are ambiguities in the essential factors
required for the grant of interim injunction.

Justification:

This case in hand gives a solid observation for the essential factors required to grant an
interim injunction and also elaborates on the qualifications and purposes for an expert
opinion.

Provisions involved:

 Section 68 of the Patents act, 1970

Parties of the case:

The plaintiff in this is Vringo Infrastructure Ltd, founded in 2012 which was mainly working
on developing and innovating new telecommunication technologies and has more than 25
patents in its own name including internet search, search advertising, handsets and wireless
communications. This company is a wholly owned subsidiary of the Vringo Incorporation
founded in 2006 which is indulged in distribution of mobile applications through partnerships
with the producers of handsets and network operators.

The defendants are Indiamart Intermesh Ltd. and ZTE telecom Private Ltd which is an Indian
company wholly owned subsidiary of ZTE Corporation of China. Both of these are indulged
in distribution of ZTE products in India. The main issue is infringement of a patent which is
used as Base Station Controllers by the defendants.

Subject matter of the case:

The alleged infringing patent is (No. IN’200572) “a method and a device for making a
handover decision in a mobile communication system” which is an invention for maintenance
of clarity in calls by mobile phones even when moving. This patent actually belonged to
Nokia Corporation and was assigned to them by a confidential patent purchase agreement.

The plaintiff approached the defendants for proper licensing by a notice but no response came
from their side. It came to be known by the plaintiff that not only this patent, but a number of
patents of the plaintiffs have been infringed and used in many countries like UK, Germany,
France, Netherlands and Malaysia, etc. Moreover, Countries like Germany, Brazil and
Romania has already passed injunction, preliminary or permanent, orders in favour of the
plaintiff.

The plaintiff filed a case in Delhi High Court with an affidavit of expert opinion which
showed the absence of difference between the products of plaintiff and defendant. The court
granted an ad interim injunction against the defendants and plaintiff approached for
permanent confirmation of the same.

Arguments put forth:

It was argued by the plaintiffs that they have got a prima facie good case, balance of
convenience was also in favour of plaintiffs, and the plaintiffs also suffered irreparable loss.
On these account, ad interim injunction was pleaded to stay.

The defendants argued that the technology they use is entirely different from the alleged
infringed product. They also argued on the points that the Vringo Company is guilty of
concealment of fact and that they are barred by limitation since the original predecessor-in-
interest (Nokia Telecommunication) knew that they use this product from 2002 itself.

Critical analysis:

The court analysed the three essential factors required for the grant of interim injunction:

1. Prima Facie case

Prima facie case:

Unlike the trademark act, the patent act states that the plaintiff has the burden of proof to
show prima facie evidence of validity and that subsequently the patent is infringed by the
defendants. The court relied upon the case of National Research Development Corporation of
India v. The Delhi cloth & General Mills Co. Ltd which held that for a proper evidence for
this purpose it must be shown by the previous trial that proved the patent’s validity or that the
patentee has enjoyed the patent without any disputable claims.

Even though, expert opinion by Mr. Regis Bates was submitted in the form of affidavit by the
plaintiff, the court did not look into it. The reason given by the court is that an expert must
have a minimum qualification in that field like a basic degree in telecommunication or
engineering and then only his opinion would be considered under the section 45 of the Indian
evidence act, 1872. But in this case, the so called expert was a management graduate and his
field of study is totally irrelevant to the mechanics of mobile phone. It was also added that he
did not have qualifications to be a scientific advisor of court under Section 115 of the Patents
Act, 1970. Thus, the court held that the plaintiff failed to provide a prima facie case of
evidence.

Balance of Convenience:

The court looked into the matter that the patent was granted in 2002 and was assigned by
Nokia in 2006 to the plaintiff. Nokia did not take any action on the ground of infringement
even though they were aware of the fact of usage by the defendants. Moreover, the court also
pointed out that the plaintiff had not disclosed that they were using the patents only in India
but only stated this fact in later course of proceeding in the rejoinder. This concealment of
fact during the initial stages of case required averments in their plaint itself that they were
commercially exploiting their patents through licensees because rejoinder is not a part of
pleadings and a party cannot argue a point which is not even pleaded.

Also, Section 109 of the Patents act talks about the exclusive licensee to take on for
infringement. In the instant case, No complaint has been made by the licensee to the original
patentee and no action was brought by the original patentee. Therefore, the court held balance
of convenience against the plaintiff.

Irreparable loss:

Irreparable loss means a loss which cannot be calculably compensated by money. This factor
means that in case of not granting an ad interim injunction, it would result in irreparable loss
to the plaintiffs. Section 48 of the patents act, 1970 provides for the exclusive right for usage
of patent by the patentee, his agents and the licensees. Section 108 of the Patent Act, 1970
states that an injunction can be granted by a court in case of infringement of the patent. The
court concluded that there will not be an irreparable loss to plaintiffs if the same can be
compensated my money.

Judgment:

The court ultimately vacated the order of ex parte ad interim stay since there was no prima
facie case, the balance of convenience was also against the plaintiffs and there was no
irreparable loss. For the fact that a FAO order has been passed already in relation to
trademark and copyright issue stating to pay for bank guarantee of rupees 5 crores, this court
ordered that the same will apply mutatis mutandis. The court also held that a panel of three
scientists shall be appointed who would look into the technologies of both parties separately
and give a report of the same. The court decided their fees would be rupees 1, 00,000 apart
from other expenses.

Commentary:

This landmark judgment makes a clear observation on the importance and concept of expert
witness and the qualifications required thereof. Even though many issues were brought up by
both sides such as concealment of facts, inadequate payment of stamp duty on the assignment
document, delay in filing suit, the court sternly told that only the main issue of ad interim
injunction and it’s parameters would be looked into and swept aside other petty issues. The
judgment is very clear in considering the procedural aspect of the suit and points out the
course in rejoinder.