Maj. (Retd.) Sukesh Behl & Anr. v. Koninklijke Philips Electronics

High Court of Delhi at New Delhi | Decided: 7 November 2014 | FAO(OS) No. 16 of 2014

Background

Koninklijke Philips Electronics, the Dutch multinational corporation, had filed an application for a patent in India on 13 February 1995 for an invention described as a “method for converting information words to a modulated signal.” The patent, bearing registration number 218255, was ultimately granted on 13 February 2008 for a term of twenty years from the date of the original application. On 24 July 2012 Philips instituted a suit being CS(OS) No. 2206 of 2012 before a learned Single Judge of the Delhi High Court, seeking a permanent injunction restraining the defendants from infringing its essential DVD Video and DVD ROM Disc Patents, with particular reference to Patent No. 218255 and for other incidental reliefs. The defendants in the suit were Maj. (Retd.) Sukesh Behl and another, who were alleged to be dealing in products that infringed the suit patent.

The defendants did not confine themselves to merely contesting the infringement allegations. In their written statement they went further and mounted a counter-claim for revocation of the suit patent under Section 64(1)(m) of the Patents Act, 1970, on the specific ground that Philips had failed to comply with the disclosure obligations prescribed under Section 8 of the Act read with Rule 12 of the Patents Rules, 2003. These provisions require a patent applicant in India to inform the Controller of Patents about any corresponding patent applications filed by the same applicant in foreign countries for the same or substantially the same invention. The defendants alleged that Philips had deliberately withheld material information regarding such corresponding foreign filings from the Indian Patent Office during the prosecution of the suit patent and that this non-disclosure rendered the patent liable to be revoked.

After the written statement and counter-claim were filed, a significant development occurred on 14 September 2012 when the Patent Attorney of Philips wrote directly to the Controller of Patents at the Patent Office in Chennai. In this letter the Patent Attorney disclosed that certain details regarding corresponding foreign filings had not been submitted during the prosecution of Patent No. 218255 and requested that an enclosed updated status list of corresponding foreign applications be taken on record. The Patent Attorney simultaneously filed an affidavit before the Controller of Patents explaining the circumstances of the omission. He stated that he had received instructions from Philips along with a three-page updated status list of corresponding applications on 27 July 2004 and that the information printed on the reverse of the first page of that list had been inadvertently missed by his paralegal while preparing the documents for submission. He stated unequivocally that the omission was purely accidental and that there had been no intention to withhold any information from the Patent Office.

The defendants treated this letter and affidavit as a significant concession. On 23 November 2012 they filed I.A. No. 21411 of 2012 under Order XII Rule 6 of the Civil Procedure Code, 1908, contending that the Patent Attorney’s own letter constituted a clear and unequivocal admission of suppression of vital information, directly attracting the revocation provisions under Section 64(1)(m). They argued that no full trial was necessary and that a decree revoking the suit patent ought to be passed immediately on the basis of this admission. Philips contested this application, maintaining that the communication to the Controller of Patents did not amount to any admission of wilful suppression and that the omission was inadvertent, partial and immaterial to the grant of the patent.

The learned Single Judge dismissed I.A. No. 21411 of 2012 by order dated 6 November 2013, holding that whether the omission was wilful and whether the information withheld was material to the grant of the patent were triable issues that could not be resolved at a pre-trial stage. The Single Judge specifically held that it was not possible at that stage for the court to form a definitive opinion on those aspects and that any determination would have to await the conclusion of the trial. Aggrieved by this order, the defendants preferred the present appeal before the Division Bench of the Chief Justice and Justice Rajiv Sahai Endlaw.

Issues for Determination

1. Whether the letter dated 14 September 2012 written by the Patent Attorney of Philips to the Controller of Patents, together with the accompanying affidavit acknowledging that certain details of corresponding foreign filings were not submitted during prosecution, constitutes a clear, unambiguous and unequivocal admission within the meaning of Order XII Rule 6 of the Civil Procedure Code, 1908, sufficient to entitle the defendants to a pre-trial decree on their counter-claim for revocation of the suit patent.
2. Whether non-compliance with the mandatory disclosure obligations under Section 8 of the Patents Act, 1970 read with Rule 12 of the Patents Rules, 2003 automatically and invariably leads to revocation of a patent under Section 64(1)(m) of the Patents Act or whether the power of revocation vested in the court under that provision is discretionary in nature.
3. Whether the word “may” employed in Section 64(1) of the Patents Act, 1970 ought to be construed as “shall” or as a word of command, having regard to the mandatory character of the obligation imposed by Section 8 and the grounds for revocation enumerated in Section 64(1)(m).
4. Whether an omission to furnish a portion of the required information regarding corresponding foreign applications, which the patent holder explains was inadvertent, accidental and immaterial to the grant of the patent, is sufficient to attract the revocation jurisdiction of the court under Section 64(1)(m) without a full evidentiary trial.

Key Holdings of the Court

1. The Division Bench held that the power to revoke a patent under Section 64(1) of the Patents Act, 1970 is discretionary and not mandatory. The word “may” in Section 64(1) is plain and unambiguous and must be given its ordinary grammatical meaning. The mere fact that Section 8 imposes a mandatory obligation of disclosure upon patent applicants does not by itself render the power of revocation under Section 64(1)(m) mandatory or automatic. The two provisions operate on different planes and must be read independently.
2. The court held that revocation under Section 64(1)(m) does not follow automatically upon proof of non-compliance with Section 8. Even where a failure of disclosure is established, the court is required to exercise its judicial discretion and must consider, among other relevant factors, whether the omission was intentional or deliberate and whether the information withheld was material to the grant of the patent in question. Revocation would follow only upon a finding that the omission was deliberate and that the withheld information was material.
3. The court held that the affidavit filed by Philips’ Patent Attorney before the Controller of Patents does not constitute a clear, unequivocal and unambiguous admission sufficient to found a decree under Order XII Rule 6 of the Civil Procedure Code. The affidavit disclosed only a partial omission accompanied by a detailed explanation of inadvertence and a specific plea that the omitted information was not material to the grant of the suit patent. These circumstances raised genuine triable issues of fact that could not be resolved summarily.
4. The court distinguished and limited the precedent value of Chemtura Corporation v. Union of India, 2009 (41) PTC 260 (Del), observing that in that case the court was concerned only with the continuation of an interim injunction and had recorded only a prima facie finding regarding non-compliance with Section 8(1). The question of whether revocation under Section 64(1) is discretionary or mandatory had never arisen for consideration in that decision and it could not therefore be read as authority for the proposition that revocation is automatic.
5. The court upheld the order of the learned Single Judge and dismissed the appeal, finding no infirmity in the dismissal of I.A. No. 21411 of 2012 and affirming that the question of revocation must await the conclusion of the trial.

Statutory Provisions Involved

Section 8 of the Patents Act, 1970 is the central provision examined in this judgment. It imposes a mandatory obligation upon an applicant for an Indian patent to file, along with the application or within the period prescribed by the Controller, a statement setting out detailed particulars of any corresponding patent application being prosecuted in a foreign country for the same or substantially the same invention. The applicant is further required to give an undertaking to keep the Controller informed of such details from time to time up to the date of grant. This provision is designed to ensure complete transparency before the Patent Office and to enable the Controller to assess the patentability of an invention with the benefit of any examination conducted by foreign patent offices on the same or a closely related invention.

Rule 12 of the Patents Rules, 2003 prescribes the procedural framework for compliance with Section 8(1). It requires the statement and undertaking to be filed in Form 3 within six months from the date of filing the application. It further prescribes that the applicant must keep the Controller informed of the details of subsequently filed foreign applications within six months of each such filing. Rule 12 was relevant in this case to determine the time-frame within which Philips was obligated to furnish the updated status of its corresponding foreign applications and to assess whether the partial omission on 31 August 2004 constituted a breach of the continuing undertaking given under Section 8(1)(b).

Section 64(1) of the Patents Act, 1970 confers jurisdiction upon the High Court to revoke a patent on a counter-claim in a suit for infringement on any of the grounds enumerated in clauses (a) to (r) thereof. Clause (m) specifically provides that a patent may be revoked if the applicant has failed to disclose to the Controller the information required by Section 8 or has furnished information which in any material particular was false to his knowledge. The provision opens with the word “may,” and the court’s construction of this word as conferring a discretionary and not a mandatory power of revocation is the central legal contribution of this judgment.

Order XII Rule 6 of the Civil Procedure Code, 1908 empowers the court to pass judgment on admissions of fact, whether made in the pleadings or otherwise, at any stage of the suit, either on the application of any party or on its own motion, without waiting for a determination of any other question between the parties. The provision is designed to facilitate speedy justice to the extent of clearly admitted claims. The court reaffirmed in this case that a decree under Order XII Rule 6 can only be passed where the admission is clear, unambiguous, unconditional and unequivocal and that the power conferred is discretionary and not a matter of right.

Section 58 of the Patents Act, 1970, though not adjudicated upon in depth in this judgment, was raised by Philips to point out that since the omission was unintentional and clerical in nature, the plaintiff could be permitted to amend the patent specifications at any stage of the proceedings and that this possibility further undermined the case for outright revocation at a pre-trial stage.

Reasoning of the Court

The Division Bench approached the question of statutory construction by anchoring itself firmly in the well-established rule of literal or grammatical interpretation. Relying on a consistent line of Supreme Court authority including Kanai Lal Sur v. Paramnidhi Sadhukhan, Heera Lal Ratan Lal v. STO, Swedish Match AB v. SEBI and Gurudevdatta VKSSS Maryadit v. State of Maharashtra, the court held that the first and primary obligation of a court is to give the words of a statute their natural, ordinary and grammatical meaning. If the words are plain and capable of only one construction, no other construction is permissible regardless of what the alleged object or policy of the legislation might suggest. Applying this principle the court found that the word “may” in Section 64(1) is unambiguous and must be given its ordinary meaning as conferring discretion upon the court.

The court specifically addressed and rejected the argument that because Section 8 is mandatory in character, its non-compliance must necessarily trigger a mandatory outcome under Section 64(1)(m). The court drew a clear conceptual distinction between the nature of the obligation imposed by Section 8 upon a patent applicant and the nature of the remedial power conferred by Section 64(1) upon the court. The mandatoriness of the former is a question of conduct during patent prosecution. The character of the latter is a question of judicial remedy in adversarial proceedings. These are two distinct enquiries and the mandatory quality of one does not automatically import the same quality into the other. The court further observed that construing Section 64(1) as discretionary does not in any way dilute or undermine the rigour of the Section 8 obligation. It merely preserves the court’s role as an adjudicatory body capable of calibrating its response to the full facts of each case.

On the Chemtura Corporation precedent heavily relied upon by the defendants, the court carefully examined the actual ratio of that decision and found that it had been fundamentally misread. In Chemtura, the court was dealing with the narrow question of whether an interim injunction granted in favour of a plaintiff patentee ought to be continued, given a prima facie finding of non-compliance with Section 8(1). That was a purely interlocutory question governed by the balance of convenience and prima facie considerations under Order XXXIX Rules 1 and 2 of the Code. The question of whether the power of revocation under Section 64(1) is discretionary or mandatory had never arisen for consideration or adjudication in that case at all. The court found that the learned Single Judge had been entirely right to distinguish and limit the precedential scope of Chemtura to its specific interlocutory context.

Turning to the question of whether the Patent Attorney’s affidavit amounted to an admission capable of sustaining a decree under Order XII Rule 6 of the Code, the court examined the factual record with care. The records established that Philips had in fact filed details of its corresponding foreign applications on three separate occasions, being 17 March 1999, 13 March 2002 and 31 August 2004. This was not therefore a case of total or wholesale non-compliance with the undertaking given under Section 8(1)(b). The omission in question was confined to a portion of the information that was to have been submitted along with the filing of 31 August 2004. The explanation given in the affidavit, that a paralegal had overlooked information printed on the reverse side of the first page of a three-page document, was a specific and credible account of an inadvertent clerical error. Critically, Philips also specifically pleaded that the omitted information was not material to the grant of the suit patent.

The court then restated the settled legal standard for a decree under Order XII Rule 6, drawing upon Uttam Singh Duggal and Co. Ltd. v. United Bank of India, Parivar Seva Sansthan v. Dr. Veena Kalra and Jeevan Diesels and Electricals Ltd. v. Jasbir Singh Chadha, to the effect that an admission must be clear, unambiguous, unconditional and unequivocal before it can found a pre-trial judgment. An admission qualified by an explanation of inadvertence, accompanied by a specific and uncontroverted plea of immateriality, does not meet this threshold. The court concluded that the questions of whether the omission was deliberate and whether the omitted information was material to the grant were genuine triable issues of fact and law and that no pre-trial decree of revocation could be passed without a full evidentiary examination of both.

Doctrinal Significance

This judgment makes a foundational and lasting contribution to Indian patent law by definitively resolving the question of whether non-compliance with the disclosure obligations under Section 8 of the Patents Act, 1970 automatically results in revocation of the patent under Section 64(1)(m). The court’s answer is an unequivocal no. By holding that the word “may” in Section 64(1) confers a discretionary and not a mandatory power of revocation, the Division Bench establishes that revocation is a judicial remedy to be exercised after a full consideration of the facts and not a mechanical consequence to be triggered upon proof of any technical breach of Section 8. This is a principle of enduring importance in Indian patent litigation, particularly as disputes involving foreign filing disclosures have become increasingly common.

The judgment is equally significant for the analytical framework it establishes for the exercise of this discretion. By holding that the court must examine whether the omission was deliberate or inadvertent and whether the withheld information was material to the grant of the patent, the Division Bench identifies the two central enquiries that must guide any Section 64(1)(m) revocation proceeding. This framework directly protects bona fide patent holders from losing their registered rights on account of clerical errors or inadvertent omissions by patent attorneys, while still preserving the court’s power to revoke patents where deliberate and material suppression is proved.

From the perspective of patent prosecution practice, this judgment sends a clear and important message. Compliance with Section 8 is a serious obligation and its breach is a ground for revocation. But the courts will not treat every imperfect compliance as grounds for automatic invalidation of an otherwise valid patent. The nature of the non-disclosure, the intent behind it and its practical significance to the grant are all factors that the court will weigh. This encourages patent applicants and their attorneys to come forward proactively to correct inadvertent omissions, as Philips did in this case, without fearing that any such disclosure will be weaponised as an admission leading to instant revocation.

The judgment also makes a valuable and precise contribution to the procedural law on admissions under Order XII Rule 6 of the Civil Procedure Code in the patent context. It firmly holds that a qualified, partial and contextually explained acknowledgment of an omission does not constitute the kind of clear and unequivocal admission upon which a pre-trial decree can be founded, particularly where the admission is accompanied by a specific plea of immateriality. This reinforces the safeguard that Order XII Rule 6 is not a mechanism by which a litigant can obtain a summary decree in technically complex matters involving questions of intent and materiality that genuinely require evidence.

Finally the judgment correctly distinguishes and limits the reach of the Chemtura Corporation decision, which had been cited by defendants in patent cases as authority for the proposition that any non-compliance with Section 8 defeats the patentee’s rights entirely. By confining Chemtura to its specific interlocutory context, the court prevents that decision from being over-read and misapplied in revocation proceedings, thereby restoring analytical discipline to this area of patent law. This clarification is of considerable practical value to patent practitioners and litigants navigating the intersection of Section 8, Section 64(1)(m) and the procedural provisions of the Code.

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