layout: post title: “Grant of Injunctive Relief in Patent Infringement Cases: A Comparative Analysis” date: 2023-02-15 11:17:11 +0000 categories: [Tech, Personal] featured: true image: https://pin.it/3PLLj86Sx

—Grant of Injunctive Relief in Patent Infringement Cases: A Comparative Analysis

By Nivrithi Kailash

​Introduction:

An injunction is a judicial process whereby a party is required to do, or to refrain from doing, any particular act. The TRIPS agreement sets out the minimum standards of protection of IPR to be provided by each member. The agreement also allows the grant of injunctions as remedy for enforcement of IPR, but does not mandate its availability, thus recognizing that the grant of injunction is discretionary. It mandates fair and reasonable procedures for enforcement of IPR, without unreasonable delay.

​This article will explain and analyse the discretion exercised by courts in the grant of injunctions in cases of patent infringement in two member countries: India and US, with the focus being on Indian jurisprudence.

**India:

Section 108** of the Patents Act includes the grant of injunctions as a relief for cases of patent infringement, subject to such terms as the court thinks fit. Thus, the grant of injunctions is a discretionary remedy, and is subject to sections 37 and 38 of the Specific Relief Act. Both temporary and permanent injunctions are provided for. A temporary injunction may be granted at any stage of the suit, while a permanent injunction can only be granted upon the merits of the suit.

Temporary Injunctions

Temporary injunctions are governed by the CPC, and are generally granted before the case has been decided on merits. Therefore, the principles of equity would apply which requires that: First, a prima facie case has been made out; Second, the defendant demonstrates a risk of irreparable injury, i.e. the plaintiff cannot be adequately compensated in monetary damages; Third, the balance of convenience must be in favour of the plaintiff, i.e. that plaintiff’s need for such protection must be weighed against the corresponding need of the defendant to be protected from injury resulting from being prevented from exercising his legal right. The court may also keep in mind other special factors to be taken into consideration in the particular circumstances of individual cases. Thus, room is left open for various considerations exclusive to patent infringement.

In Franz Xaver Huemer, the court while observing the serious effect of such practices on the Indian market and economy, held that a plaintiff who has registered a patent in India but has not used it in India cannot, in equity, be granted a temporary injunction. Sandeep Jaidka further posited that as the patent had not been utilized in the commercial market, but the defendant had been manufacturing and supplying the product and had made considerable investment, the balance of convenience would tilt in his favour. Therefore, there exists a clear jurisprudential proclivity to limit the exercise of this discretionary remedy to those situations where the plaintiff utilizes the patent in the domestic market.

In Novartis Ag, a case dealing with life-saving pharmaceuticals, the court included larger public interest as a facet of balance of convenience. However, this doctrine could not be a complete exception to the equitable principles, as otherwise the patent-holders rights would be undermined, and the injunction was granted.

The case of Sterlite technologies granted an interim injunction despite observing that it was not possible to form a prima facie opinion. The court explained how the rights of both parties would be balanced, by saying that the defendant has two available defences : 1) proving its product or process to be different and , 2) challenging the validity of the patent. If the first defence is taken, the interim order would not cause harm. If the second defence is taken, interim order can be made subject to the condition that no consequences of violating the order would follow if he succeeds. However, if he fails, plaintiff would also be able to claim the consequences of violation of interim order. No authorities were cited for this reasoning and it was emphasized that such experimentation was the need of the hour. However, in a subsequent suit this reasoning was disapproved of.

Permanent Injunctions:

Section 38, specific relief act, provides that permanent injunctions may be granted where, there is no standard for ascertaining damage caused, or likely to be caused; and where monetary compensation would not afford adequate relief.

However, there is no real clarity of these or any other considerations taken into account by the courts while exercising their discretion for grant of permanent injunctions in cases of patent infringement, as the cases where permanent injunctions have been granted are far and few. In both the cases of Merck v. Glenmark and Shogun Organics Ltd, a reading of the judgement would reveal that the courts have only decided, on merits, that the patentee’s rights have been infringed. After coming to this conclusion, permanent injunction was granted. Further, in Cipla Ltd, though infringement was established, an injunction was not granted as the patent was going to expire in less than 5 months, and injunction had not been granted at the interim stage. Instead, damages were awarded.

United States:

The US Patent Act provides for the grant of inunctions in accordance with the principles of equity, on the terms deemed reasonable by the court. However, an empirical study revealed that the US courts prior to the eBay case granted a permanent injunction automatically upon resolving the suit in favour of the patentee on merits. In this case, the US supreme court held that the four considerations would need to be satisfied for an order of injunction: First, the plaintiff suffers an irreparable injury; Second, that the remedies available at law are inadequate; Third, the balance of convenience is in favour of the plaintiff; Fourth, public interest would not be disserved. Post the eBay case, courts in the US do not grant injunctions automatically unless the test of the eBay case is met and injunctions have been granted only 72.5% of the time.

US courts tailored reliefs to avoid inequitable results in particular cases. For instance, while granting injunctions, the court would delay the date from which it would be effective – thereby avoiding the hardships that would be caused by the injunction coming into effect immediately. Other examples include stay of the injunction to allow for redesigning, or a sunset provision allowing the infringer to sell into an existing market. Particularly in cases where there is a significant public interest, such as medical equipment or pharmaceuticals, the court may grant an ongoing royalty to compensate for future infringement.

Analysis and Comparison:

In India it is abundantly clear that courts rely heavily on interim relief. A study, found that in more than 60% of the cases between 2000 and 2016, interlocutory injunction was granted.

Jurisprudential preferences of courts in different jurisdictions is also apparent in how they deal with each of the individual prongs of the tripartite equitable test. For instance, in relation to the establishment of a prima facie case, the leading English case of American Cyanamid Co has said that all that needs to be determined is if “there is a serious question to be tried”. However, Indian courts have not followed such a rigid approach, but have looked for prima facie validity of the patent and prima facie proof of infringement. This approach is in line with a slew of English cases which state that such rigid fulfilment of principle of prima facie might disproportionately affect poor companies. Despite this, one commentator, observing the frequent grant of injunction at the interim stage, and that subsequently permanent injunction is granted only in 30% of the cases, has suggested that there needs to be even stricter thresholds with establishment of prima facie case.

Further, given the inordinate delays of the court system, interim injunctions subsist for the majority of the lifetime of the patent, and are granted after exhaustive judgements. This trend has also been observed by the SC in Ms. Az Tech. This amounts in reality to a mini-trial being held at the interim stage and virtual decision on merits.

On the other hand, permanent injunctions are rarely granted in India and are granted without discussion of equitable principles. This may be due to the extensive analysis of such principles which has already happened at the interim stage, and/or an automatic assumption arising in relation to intellectual property due to its nature as the right to exclude, and the difficulties associated with calculating damages. It is with regard to this that major differences can be observed between the two jurisdictions. In the US, subsequent to the eBay case, there is no doubt that courts must satisfy the tests of equity set out before granting permanent injunctions. Further, the US Patent Act itself mandates that permanent injunctions must be granted on the basis of equitable principles, whereas the Indian Patent Act imposes no such condition, leaving it entirely to the discretion of the court . Moreover, as explained above, US courts tailors the grant of injunctive reliefs in many cases in the interests of equity, which is not done by courts in India. In the case of Novartis Ag, the court noted the possibility of moulding relief by granting ongoing royalty (instead of injunction) in cases of outweighing public interest. However, with regards to the case before it, the court failed to do so on the ground that the defendant had not placed adequate material on record. There seems to have been an attempt at moulding of injunctive relief in Sterlite, but that ruling of the single judge has been disapproved of by a double bench.

Conclusion:

Indian courts have looked extensively at the parameters for the grant of injunction, including those specific to patent infringement, atleast at the interim stage. The robustness of the patent litigation framework could be bolstered by bearing in mind the following considerations: First, Indian courts should aim at expediting patent matters by ensuring that the interlocutory or interim stage does not subsist for a prolonged period of time. Second, courts could attempt to identify and articulate a threshold for the grant of permanent injunctions; this would serve as a productive guiding principle for courts in dealing with infringement applications. A natural corollary of this would be a greater synergy between the Indian patent framework and the TRIPS Agreement. Moreover, Indian courts could look to American courts and mould the reliefs granted depending on the specific fact situation, especially in light of the emphasis laid by the courts on factors like public interest and the effect of non-user on the Indian market and economy.