SC order on IPR violations may have left door open for misuse

SC order on IPR violations may have left door open for misuse

New Delhi: In moving to strike at the practice of using the judicial system to conduct proxy corporate battles, the Supreme Court (SC) may have closed the door on individuals and companies seeking immediate relief in cases of violation of intellectual property rights (IPR), say legal experts.

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They were reacting to the judgement of the apex court on 16 September in the nearly two-year-old dispute involving TVS Motor Co. and Bajaj Auto Ltd. The two companies have been locked in a patent dispute over the use of a twin-spark plug engine technology, with Bajaj Auto claiming that it had a patent on it. These spark plugs result in fuel burning more efficiently, which leads to greater mileage.

The judgement delivered by justices Markandey Katju and Asok Kumar Ganguly lifted the injunction which prevented TVS from selling its motorcycle pending the decision of the Chennai high court, where the initial complaint was filed.

The apex court also signalled its intent to fast-track trials of such IPR disputes by referring to a recent SC order which directed all courts in the country to avoid giving temporary injunctions and instead close out the case within a maximum period of four months of the filing of the complaint.

Analysts believe that while in this case the apex court had ruled well, extending the principle behind the verdict to all IPR disputes may be counterproductive and in some cases even a miscarriage of justice.

Normally in IPR violations, the plaintiff moves court seeking a temporary injunction or a restraining order against the alleged violator. The court only grants the temporary injunction when it is convinced that there is a clear case of IPR violation and that it would cause material injury to the party seeking relief.

“I have to take issue with the rather absolute way in which the judge has stated his view, making it appear that one could never obtain an injunction in any IP (intellectual property) case whatsoever. My own view would be that such a position ought to be adopted only when the matter is complex (such as the Roche v. Cipla patent matter) and it is near impossible to make a meaningful determination of the relative merits of the case at the prima facie level," Shamnad Basheer, professor in intellectual property law at the National University of Juridical Sciences, said.

Basheer further argued that in matters such as music or movie piracy, where there is evidence of literal copying by the defendant, there is no reason why the court should not take a quick prima facie view of the merits of the case and grant a temporary injunction in favour of the plaintiff.

“The party seeking relief against alleged IPR violation prefer temporary restraining order to detailed hearing at the trial stage because delays are endemic to the Indian legal system. Decisions in suits can take anywhere between four to 14 years," Chander Lall, managing partner of IPR law firm, Lall and Sethi, said in an email interview.

Arguing similarly, Varun Singh, a patent lawyer, said, “A newspaper columnist may find that a rival newspaper is violating his copyright. In those circumstances, his first concern would be to seek temporary relief through an injunction against any further violation, rather than slug it out through regular court trials, which may take years."

The concerns of the two justices stem from the massive backlog in litigation in various courts.

Estimates peg this backlog at over 30 million. At a conference of the chief justices and chief ministers of various states on 16 August in New Delhi, Supreme Court Chief Justice K.G. Balakrishnan revealed that as of 30 June, the total number of pending lawsuits before the Supreme Court was 52,592; before high courts, 4.01 million; and before subordinate courts, 27.12 million.

In fact, experts believe this backlog would impede the ability of high courts in discharging the latest orders of the apex court.

Lall says that at present the nation’s courts have only 10.5 judges for every million people, compared with 107 judges per million people in the US.

Agrees Pratibha Singh, IPR lawyer. “In some cases it would be impractical as experts have to be called for proper evaluation of the alleged IPR violation, which could be time-consuming."