India



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*    IN THE HIGH COURT OF DELHI AT NEW DELHI

Pronounced on: 20^th February, 2025

+    CS(COMM) 423/2016 & I.As. 18701/2014, 20810/2014, 3550/2021

KONINKLIJKE PHILIPS N.V.	.....Plaintiff
Through:	Mr. Pravin Anand, Ms. Vaishali Mittal, Mr. Siddhant Chamola, Ms. Shraddha Singh Chauhan and Ms. Pallavi Bhatnagar, Advocates.
versus
MAJ(RETD) SUKESH BEHL & ANR	.....Defendants
Through:	Mr. J. Sai Deepak, Mr. N. K. Bhardwaj, Ms. Kashima Chadha, Mr. Avinash K. Sharma and Mr. Bikash Ghorai, Advocates.

+    CS(COMM) 499/2018 & I.As. 3258/2017, 3509/2021

KONINKLIJKE PHILIPS N.V.	.....Plaintiff
Through:	Mr. Pravin Anand, Ms. Vaishali Mittal, Mr. Siddhant Chamola, Ms. Shraddha Singh Chauhan and Ms. Pallavi Bhatnagar, Advocates.
versus
G.S KOHLI & ORS	.....Defendants
Through:	Mr. J. Sai Deepak, Mr. N. K. Bhardwaj, Ms. Kashima Chadha, Mr. Avinash K. Sharma and Mr. Bikash Ghorai, Advocates.

+    CS(COMM) 519/2018 & I.As. 10541/2012, 16494/2018, 3549/2021

KONINKLIJKE PHILIPS N.V.	.....Plaintiff
Through:	Mr. Pravin Anand, Ms. Vaishali Mittal, Mr. Siddhant Chamola, Ms.Shraddha Singh Chauhan and Ms. Pallavi Bhatnagar, Advocates.
versus
SURINDER WADHWA & ORS	.....Defendants
Through:	Mr. J. Sai Deepak, Mr. N. K. Bhardwaj, Ms. Kashima Chadha, Mr. Avinash K. Sharma and Mr. Bikash Ghorai, Advocates.

CORAM:
HON’BLE MR. JUSTICE SANJEEV NARULA

JUDGMENT

SANJEEV NARULA, J.:

TABLE OF CONTENTS

THE PARTIES

THE SUIT PATENT

THE PATENT DISPUTE: CLAIMS AND COUNTER-CLAIMS

I. THE CONTROVERSY IN BRIEF

II. OVERVIEW OF THE CASE SET UP BY THE PARTIES

PROCEDURAL ORDERS AND FACTS OF SIGNIFICANCE

I. CASE MANAGEMENT PROCEEDINGS

II. ISSUES

III. THE CONDUCT OF TRIAL

ISSUE-WISE ANALYSIS AND FINDINGS

I. WHETHER PLAINTIFF IS LIABLE TO BE NON-SUITED FOR LACK OF AUTHORIZATION?

II. WHETHER PLAINTIFF IS THE OWNER OF THE SUIT PATENT?

III. WHETHER THE SUIT PATENT IS INVALID?

III.I. Whether the Suit Patent is subject to revocation under Section 64(1)(m) of the Patents Act?

III.I.I.  Evaluation of Defendants’ allegations concerning corresponding patent applications in Malaysia, Turkey, Taiwan, the US, and Europe

III.II.  Whether the invention claimed in the Suit Patent is publicly known, not new, or publicly used under Section 64(1)(e) of the Patents Act?

III.III.  Whether the Suit Patent is liable to be invalidated on the ground of suppression and

fraud under Section 64(1)(j)?

III.III.I. Re: Parent and Divisional Applications

III.III.II. Re: Overlap in the claims of the Parent Application and the consequential divisional applications

III.IV. Whether the claims of the Suit Patent lack clarity and whether the complete specification fails to sufficiently and fairly describe the invention or disclose the best method of performing it, thereby rendering the patent liable for revocation under Section 64(1)(h) and (i) of the Act.

III.IV.I. Sufficiency of Disclosure under Section 64(1)(h) and claim scope and fair basis under Section 64(1)(i)

III.V. Whether the claims of the complete specification of the Suit Patent are not patentable or not an invention under Section 64(1)(k) and Section 64(1)(d)?

III.V.I. The claimed invention does not fall under the embargo of Section 3(m) of the Patents Act

III.V.II. The claimed invention does not fall under the embargo of section 3(k) of the Act

Findings on the objections relating to the plea of invalidity of the Suit Patent

IV. WHETHER PLAINTIFF’S EVIDENCE DEMONSTRATE ESSENTIALITY OF THE SUIT PATENT?

V. WHETHER THE DEFENDANTS HAVE INFRINGED THE SUIT PATENT?

V.I. Understanding the Defendants’ defence in the suits

V.II. Infringement Analysis

V.II.I Claim construction of the Suit Patent

V.II.II. The Replication Process of the Defendants

V.II.III. Is the Defendants’ replication process covered by Suit Patent claims?

V.II.IV. Discerning the extent and implication of Defendant’s infringment

V.II.V. Does procuring pre-encoded stampers from a licensed entity absolve infringement allegations?

A. Inconsistencies between the Defendants’ pleaded and argued case

B. The effect of replication process outsourced to Moser Baer?

VI. RELIEF

VI.I. FRAND/Royalty rates for the Suit Patent

VI.II. Effect of Defendants’ pre-suit and trial conduct on damage assessment

VI.II.I Correspondences preceding the suits

VI.II.II. Defendants are unwilling licensees of the Suit Patent

VI.II.III. Non-disclosure of production and sales data in relation to DVDs replicated by the Defendants

VI.II.IV. Effect of the Defendants’ wilful withholding of information

VI.II.V. Assessment of production of DVDs

VI.II.VI. Currency exchange rate

VI.II.VII. Award of interest

VI.II.VIII.  Aggravated damages for wilful infringement

VI.III.  Computation of damages and terms of Decree

VI.III.I.  CS (COMM) 423/2016

VI.III.II.  CS (COMM) 519/2018

VI.III.III.  CS (COMM) 499/2018

VI.IV. Litigation costs

Findings

DIRECTIONS

1. This judgment resolves three inter-connected suits filed by the Plaintiff relating to the infringement of Indian Patent No. 218255, which pertains to a ‘Method of Converting Information Words to a Modulated Signal.’¹ The Plaintiff contends that the Defendants have unlawfully exploited their patented technology, specifically, the Eight-to-Fourteen Modulation Plus coding,² which forms an essential and integral industry standard in the manufacturing, storage, and replication of data in digital formats, such as in Digital Versatile Discs.³ The Defendants, though distinct legal entities, mount a common defence, challenging both the infringement claim and the very validity of the Suit Patent. Through their respective counter-claims, they seek revocation on multiple grounds, including insufficiency of disclosure, lack of novelty, and alleged misrepresentation. Beyond being a dispute over patent infringement, these cases raise broader questions about the enforcement of Standard Essential Patents,⁴ the obligations of licensees and implementers in the digital storage industry, and the legal implications of a patentee’s disclosures before the Patent Office.

2. Although separate trials were conducted in the three suits, the core issues in each case remain substantially the same, revolving around the same patented invention and raising similar claims of infringement. The evidence relied upon by the parties also overlaps to a significant extent. Accordingly, with the consent of all counsel, these matters are being decided through a common judgment.

THE PARTIES

3. For ease of reference, the parties to the three suits and their inter-se relationships are depicted in the following tabular chart:

THE SUIT PATENT

4. The subject matter of all the three suits is the Plaintiff’s Indian Patent No. 218255, titled “Method of Converting Information Words to a Modulated Signal.” The Suit Patent, filed as a divisional conventional application under Section 16 of the Patents Act, 1970,⁸ arises from the parent application No. 136/CAL/1995 dated 13^th February, 1995.⁹ The Parent Application was later deemed to be abandoned under Section 21(1) of the Patents Act. The bibliographic details of the Suit Patent are set out below:

5. The Suit Patent comprises thirteen claims. Claims 1 to 11 and 13 involve a method of converting a series of m-bit information words into a modulated signal, where ‘m’ is an integer. Each information word is converted into an n-bit code word, where ‘n’ is greater than ‘m.’ These code words are used to generate a modulated signal, per the rules of conversion to satisfy a pre-determined criterion. This technology is integral to EFM+ coding, an essential feature in modern DVD systems. The EFM+ modulation enables encoding of 8-bit information words into 16-bit code words, thus providing an efficient system of transmitting information. The Suit Patent entails additional elements, including the process for recording, storage, transmission, and decoding of information.

6. Claim 12 of the Suit Patent, which is central to the controversy at hand, covers the record carrier on which the modulated signal obtained by the method claimed in claims 1 to 11 is provided in a track.

THE PATENT DISPUTE: CLAIMS AND COUNTER-CLAIMS

I. THE CONTROVERSY IN BRIEF

7. The Plaintiff filed these suits in 2012, seeking a permanent injunction prohibiting the Defendants from infringing the Suit Patent along with ancillary reliefs of damages, rendition of accounts, delivery up etc. They allege that the Defendants, engaged in large-scale DVD replication, have been using the patented technology without a license. The Plaintiff asserts that the Suit Patent concerns a transformative development in DVD production: the encoding of data into binary format using EFM+ technology, which facilitates higher data storage capacity on DVDs compared to earlier methods, like Video Compact Discs.¹⁰ The Plaintiff claims that this innovation has been crucial to the global standardization of DVD production, ensuring universal compatibility with DVD players regardless of the manufacturer. This channel modulation technology forms an indispensable component of DVD replication and qualifies as an SEP within the DVD standard. The Plaintiff emphasises that the replication process adopted by the Defendants directly involves the Plaintiff’s patented EFM+ encoding, and constitutes a wilful and deliberate infringement of the Suit Patent.

8. The Defendants, on the other hand, acknowledge replicating DVDs in significant volumes, but deny any infringement of the Plaintiff’s patent. They argue that claims of the Suit Patent essentially entail a process for compression of data applied in the manufacturing of an original DVD, that is distinct from replication process deployed by them, which is purely a mechanical process. The Defendants maintain that their replication process does not involve the steps claimed in the Suit Patent, and assert that they have obtained necessary documentation, including copyright permissions from content owners to reproduce the copies. Their defence also hinges on the argument that the EFM+ encoding process, which is one of the steps in their replication process is outsourced to third parties, thus denying that their own activities amount to infringement. In addition to the above, the Defendants have also filed counter-claims challenging the validity of the Suit Patent. They argue that the Suit Patent was wrongly granted, raising allegations of fraud, concealment, and non-compliance with the stipulations of the Patents Act.

9. In response, the Plaintiff asserts that the Defendants cannot absolve themselves of liability by allegedly outsourcing critical components of the replication process, which are covered by the Suit Patent. Without prejudice, they also rely on the principles of vicarious liability and joint tort-feasorship as the Defendants have admitted directing third parties to undertake steps covered by the Suit Patent. Furthermore, the Plaintiff contends that as an SEP, the infringement of the Suit Patent can be demonstrated indirectly by showing that the Defendants’ products comply with the standardized DVD specifications, which inherently include EFM+ encoding. On the issue of validity of the Suit Patent, the Plaintiff argues that the Defendants’ challenges lack substance. They highlight that although the Defendants raised objections to the enforceability of the patent, they have failed to provide substantial evidence or any convincing arguments during final submissions.

II. OVERVIEW OF THE CASE SET UP BY THE PARTIES

10. Given the similarity in the factual matrix and contentions raised, for clarity and convenience, during final arguments, the counsel predominantly referred to the pleadings and oral and documentary evidence in CS(COMM) 423/2016. Accordingly, the submissions advanced in CS(COMM) 423/2016 are recounted in this segment. The facts and contentions, where they deviate, are also delineated in this segment.

II.I. On behalf of the Plaintiff

11. The facts and contentions presented by the Plaintiff are as follows:

11.1. The Plaintiff’s commercial activities:

11.1.1. Koninklijke Philips N.V. (formerly, Koninklijke Philips Electronics N.V.), a company incorporated in Netherlands, is a globally recognized leader in electronics. Known by its trademark “PHILIPS,” the corporation has revolutionized consumer electronics for decades. With operations spanning over sixty countries, its product portfolio includes consumer electronics, domestic appliances, and healthcare devices. The Plaintiff’s innovations have positioned it at the forefront of digital technology in fields such as television displays, video compression, and optical storage solutions.

11.1.2. Through substantial investment in research and development, the Plaintiff has pioneered several groundbreaking technologies. These include the compact cassette system, laser-based optical disc systems such as CD-Audio, CD-ROM, Video-CD, CD-R/RW, SACD, and various other formats of DVDs and Blu-ray discs. The Plaintiff’s continuous efforts spanning decades culminated in the creation of the Compact Disc¹¹ and DVD. At the time of filing of the suits, the Plaintiff held an extensive portfolio of intellectual property, including approximately 55,000 patent rights, 33,000 trademark registrations, 49,000 design registrations, and 2,600 domain names.

11.1.3. Among the Plaintiff’s patents is Indian Patent No. 175971, titled “Digital Transmission System,” which played a crucial role in VCD replication technology.¹² This patent was valid until 27^th May, 2010.

11.1.4. The DVD, though physically similar to a CD, offers significantly enhanced storage capacity. As an optical storage medium, data on a DVD is replicated using a series of ‘lands’ and ‘pits’ – elevated and recessed areas on the disc’s surface, readable by laser – that allow for far greater data storage in its pre-recorded format. DVDs require specialized playback devices capable of interpreting this stored information.

11.2. The essentiality of the Suit Patent:

11.2.1. The Suit Patent pertaining to channel modulation is one of the nine essential patents utilised in the production and replication of DVDs in India. An essential patent is one that discloses and claims an invention indispensable for practicing a given industry standard. The essentiality of a patent implies that it is technically impossible, based on normal technical practices and the available state of the art, to produce, sell, lease, or operate equipment or methods compliant with a standard without infringing upon the specific patent. In the present cases, the essential nature of the Suit Patent has been affirmed by an independent patent evaluator.

11.2.2. The Suit Patent is indispensable to the technology underlying the replication of DVDs, as defined in the ‘DVD Specifications for the Read-Only Disc-Part 1 – Physical Specifications ROM Standard.’¹³ This standard was established by the DVD Forum, an international consortium of hardware manufacturers, software developers, content creators, and other key players in DVD technology. The Forum comprises prominent industry leaders, including IBM, Microsoft, Paramount Pictures, Walt Disney, Lenovo, Yamaha, Sony, Pioneer, and others. The purpose of the Forum is to facilitate the exchange and dissemination of ideas and information concerning the DVD format, its technical capabilities, and potential improvements and innovations. By promoting the broad acceptance of DVD products worldwide across the entertainment, consumer electronics, and IT industries, the DVD Forum ensures that standards of technology used in DVDs are consistent and interoperable across different manufacturers and countries.

11.2.3. The scope of claims of the Suit Patent corresponds to the claims in its related US and European patents, which have undergone essentiality analysis in relation to the DVD ROM Standard. Thus, the Suit Patent has been acknowledged as a core component of DVD Standard technology framework, establishing its essentiality within the industry’s technological ecosystem.

11.2.4. The Plaintiff enjoys statutory rights under the Patents Act in respect of the Suit Patent in India. This includes the exclusive right to make, use, sell, and license the Suit Patent, as well as the negative right to restrain others from engaging in such activities without authorization.

11.3. Licensing regime vis-à-vis the Suit Patent:

11.3.1. In addition to their core business of manufacturing and marketing electronic products, the Plaintiff also engages in the licensing of their patents to third parties. In this context, manufacturers and replicators of DVDs and VCDs across the world, including India, have obtained licenses from the Plaintiff to lawfully conduct mass replication of these products.

11.3.2. The replication, manufacture, sale, lease, and import of DVDs require licenses for the use of all essential patents involved in the process, including the Suit Patent, from within the relevant patent pools. The Suit Patent is essential for adhering to the DVD Standard. Thus, the replication of DVDs invariably requires the use of the Suit Patent.

11.3.3. Plaintiff provides comprehensive licensing information through its website, www.ip.philips.com, which includes details about the Optical Storage Licensing Programme, covering DVD Video and DVD ROM discs, among other products.

11.3.4. The Plaintiff initiated a worldwide, non-discriminatory licensing program under which licenses for patents essential to the DVD Standard were offered. Under this program, the Plaintiff provided two types of patent licenses for DVD Video Disc and DVD ROM Disc replication: (a) a “Philips Only” version, covering only the patents held by the Plaintiff, and (b) a “Joint License,” which included patents from Plaintiff, Sony, Pioneer, and LG (who together form the 4C patent pool). This regime continued until 30^th June, 2012, whereafter the Plaintiff authorised “One-Red, LLC,” a company based in the United States to execute license arrangements with interested entities.

11.3.5. The applicants have the exclusive discretion to choose between the “Philips Only” and “Joint” patent licenses. The Plaintiff’s licensing policies and schemes are transparent, fully described, and publicly available on their website. The Plaintiff follows a global policy of basing their licensing activities on fair, reasonable, and non-discriminatory principles, ensuring that licensing fee is commercially viable for all manufacturers. The Plaintiff’s licenses are accessible to any applicant on standard terms, and each license grants the licensee the right to globally market the licensed product.

11.3.6. The Plaintiff’s patents are widely recognized, with replicators across the world and in India, including Moser Baer India Limited,¹⁴ Jet Speed Audio Private Limited, KRCD (India) Private Limited, and Aftab Electronics Private Limited, obtaining licenses for its essential patent to replicate DVDs. As on the date of filing of the suits, the Plaintiff had issued approximately 220 DVD Video and DVD ROM Disc Patent Licenses worldwide.

11.4. The impugned activities of the Defendants:

In CS (COMM) 423/2016

11.4.1. Defendant No. 2 is a proprietorship of Defendant No. 1, Maj (Retd.) Sukesh Behl. It is an entity engaged in the engineering, manufacturing, and replication of optical storage devices, including VCDs and DVDs. Through an agreement dated 28^th January, 2005, Pearl Engineering obtained a license from the Plaintiff to use its patents relevant to VCD technology, including the VCD Patent, which was integral to the replication and manufacturing of VCDs.¹⁵

11.4.2. Under the terms of the VCD License Agreement, Pearl Engineering was obligated to submit quarterly statements detailing the manufacture, replication, and sales of VCDs, pay royalties to the Plaintiff based on the reports, and submit audited statements to the Plaintiff. However, Pearl Engineering only sporadically submitted royalty reports, with the last report being for the April-June 2007 quarter. They also made intermittent royalty payments, with no payments made since April 2009. Thus, they were clearly in breach of the VCD License Agreement dated 28^th January, 2005.

11.4.3. During the subsistence of the VCD License Agreement, the Plaintiff learnt that Pearl Engineering had purchased/ acquired a DVD disc replication line. The Plaintiff addressed a letter dated 31^st August, 2006 to Pearl Engineering, informing them of its patents pertaining to DVD Video and DVD-ROM Disc technology. The Plaintiff requested a confirmation regarding the acquisition of the DVD replication line and advised Pearl Engineering to obtain the necessary patent license for DVD replication. A follow-up letter was sent on 27^th September, 2006, reiterating the Plaintiff’s earlier request.

11.4.4. In response, Pearl Engineering, via an e-mail dated 31^st May, 2007 confirmed that they had procured a DVD replication line and requested the relevant documents to apply for a DVD Disc Patent License Agreement from the Plaintiff. The Plaintiff replied to this request on 01^st June, 2007, where it shared an application for obtaining a DVD Disc Patent License Agreement.

11.4.5. Subsequently, the Plaintiff received a partially filled Application Form from Pearl Engineering, albeit without a covering letter. In an e-mail dated 19^th July, 2007, the Plaintiff acknowledged receipt of the form, but pointed out that it was incomplete and incorrectly filled out. Plaintiff requested Pearl Engineering to correct the errors and provide the missing information. As no response was received, the Plaintiff sent a second e-mail on 30^th July, 2007, reiterating the request to rectify the application form. Despite these communications, Pearl Engineering failed to provide the necessary information or obtain the requisite DVD Disc Patent License Agreement.

11.4.6. In the meantime, given the continued breach of the VCD License Agreement, the Plaintiff issued notices of default to Pearl Engineering on 29^th April 2010, and again on 06^th May, 2010. Since Pearl Engineering failed to respond to the default notice, the Plaintiff terminated the VCD License Agreement on 14^th July, 2010.

11.4.7. Pearl Engineering continued to manufacture DVDs without obtaining the requisite license. Consequently, on 28^th October, 2010, a representative of the Plaintiff purchased several DVDs manufactured by Pearl Engineering from a retail store in New Delhi. Upon further investigation, the Plaintiff uncovered that Pearl Engineering is manufacturing and replicating DVD Video/ ROM discs using the coding mechanism protected under the Suit Patent. Upon examination of three DVDs produced by Pearl Engineering, namely, ‘Fairy Tales – Vol. 3,’ ‘Grade,’ and ‘Best of the Best Rhymes,’ it became evident that they are utilizing the EFM+ Modulation technology disclosed in the Suit Patent. These findings are also supported by an affidavit of the Plaintiff’s technical expert, Mr. Johannes P.J.G. Van Liempd.

11.4.8. Pearl Engineering is thus, persistently infringing the Plaintiff’s patent rights.

CS (COMM) 499/2018

11.4.9. Defendants No. 1 and 4 are the Directors of Defendants No. 2 and 3. The Defendants are together engaged in the business of manufacturing and replicating storage devices, such as VCDs and DVDs.

11.4.10. In 2007, the Plaintiff learnt that Defendants No. 1 and 2 were manufacturing and replicating DVDs. Consequently, they addressed a letter dated 25^th April, 2007 to the Defendants, informing them of the Plaintiff’s patents pertaining to DVD Video and DVD-ROM Disc technology. The Plaintiff offered to execute a DVD Disc License Agreement with Defendants No. 1 and 2 and shared a copy of the application along with the necessary details. However, they never responded to the Plaintiff’s communication.

11.4.11. Since Defendants No. 1 and 2 continued to replicate and manufacture VCDs and DVDs without a license, the Plaintiff issued another communication dated 08^th February, 2010, requiring them to obtain an appropriate license from the Plaintiff. Similar communications were issued on 10^th March, 2010 and 03^rd November, 2010 to Defendants No. 1, 2 and 4, reiterating the Plaintiff’s position.

11.4.12. Upon learning of Defendant No. 3’s involvement in the impugned activities, the Plaintiff addressed four letters dated 28^th April, 2010, 19^th May, 2010, 08^th September, 2010, and 29^th October, 2010 to Defendant No. 3. In these communications, the Plaintiff informed Defendant No. 3 that they had procured samples of DVDs titled ‘Bhavnao ko samjho’ and ‘3-in-1 movie’ replicated by Defendant No. 3 for Eagle Home Entertainment Private Limited and Shemaroo Entertainment Private Limited, respectively. However, no response was received from the Defendants.

11.4.13. On 08^th November, 2010, the Plaintiff’s representatives procured samples of infringing DVDs produced by Defendants No. 2 and 3 from a retail store in New Delhi. Upon examination of the DVDs ‘Bheja Fry,’ ‘Tintin and Shooting Star,’ and ‘Tintin and the Picaros,’ the Plaintiff ascertained that the Defendants were utilising the EFM+ Modulation disclosed in the Suit Patent. The findings of infringement of the Suit Patent are supported by the affidavit of the technical expert Mr. Johannes P.J.G. Van Liempd.

CS (COMM) 519/2018

11.4.14. The Defendants, Siddharth Optical, are manufacturers, replicators, and sellers of VCDs and DVDs. They were earlier voluntary licensee of the Plaintiff’s VCD Patent under a VCD License Agreement dated 27^th August, 2003. Under the terms of the VCD License Agreement, Siddharth Optical was obligated to submit quarterly royalty reports, make payments to the Plaintiff within sixty days from the end of the respective quarter, and submit audited statements to the Plaintiff. However, Siddharth Optical repeatedly defaulted in fulfilling their obligations under the VCD License Agreement. The Plaintiff addressed multiple correspondence between 09^th October, 2003 to 18^th May, 2005, requesting Siddharth Optical to submit royalty reports, but to no avail.

11.4.15. Given the continued breach of the VCD License Agreement, the Plaintiff issued notices of default to Siddharth Optical on 26^th August, 2005, 20^th September, 2005, and on 31^st October, 2005. While Siddharth Optical responded to the Plaintiff’s communications, it failed to comply with its obligations. Consequently, the Plaintiff terminated the VCD License Agreement on 02^nd August, 2006.

11.4.16. Despite termination, Siddharth Optical continued to manufacture and replicate VCDs. The Plaintiff issued cease-and-desist notices dated 14^th August, 2006 and 25^th August, 2006 to Siddharth Optical, demanding them to obtain fresh license from the Plaintiff. In response, Siddharth Optical acknowledged using the Plaintiff’s VCD Patent, but refused to procure a license. A meeting was also held between the representatives of the parties in September, 2006 that did not fructify into a license arrangement.

11.4.17. The Plaintiff addressed letters dated 05^th February, 2010 and 10^th March, 2010 to Siddharth Optical, informing them of the Suit Patent and advising them to obtain the necessary patent license for DVD replication.

11.4.18. In their response dated 16^th March, 2010, Siddharth Optical denied that they are replicating the DVDs due to inviable market conditions and low demand. The Plaintiff refuted these assertions in their letter dated 25^th March, 2010.

11.4.19. From the Annual Reports of Siddharth Optical, it is evident that they have manufactured and sold 49,48,503 DVD Discs between 2006 and 2009. Simultaneously, the Plaintiff also issued communications to customers of Siddharth Optical.

11.4.20. On 16^th June, 2010, Siddharth Optical confirmed that they had purchased second-hand machinery to manufacture DVDs and were unaware of the license requirements. They further cited commercial difficulties and undertook to cease manufacturing of DVDs till the market recovered.

11.4.21. Despite these assurances, Siddharth Optical continued to manufacture DVDs without obtaining the requisite license. Consequently, on 08^th November, 2010, a representative of the Plaintiff purchased several DVDs manufactured by Siddharth Optical from a retail store in New Delhi. Upon further investigation, the Plaintiff uncovered that Siddharth Optical is manufacturing and replicating DVD Video/ ROM discs using the EFM+ modulation protected under the Suit Patent. From an examination of three DVDs produced by Siddharth Optical, namely, ‘Jungle,’ ‘Ankhen,’ and ‘Maachis,’ it is evident that they are utilizing the EFM+ Modulation technology disclosed in the Suit Patent. These findings are also supported by an affidavit of the technical expert, Mr. Johannes P.J.G. Van Liempd.

II.II. The defence raised by the Defendants

12. The facts and contentions raised by the Defendants in their written statements and counter-claims are summarised below:

12.1. On the aspect of infringement of the Suit Patent:

12.1.1. The Defendants are well-regarded in the industry and replicate the DVDs only after securing the necessary copyright documentations from the rightful owners. They have invested substantial resources and labour to build their standing. The Plaintiff, fully aware of Defendants’ market position, has initiated these lawsuits solely to damage their reputation and disrupt their business.

12.1.2. Defendant’s DVD replication business does not infringe on any of the Plaintiff’s rights. They are conducting lawful and legitimate businesses, while the Plaintiff is attempting to enforce rights that are either inapplicable or likely to be revoked. The suits have been filed with the intent to harass and extract unwarranted financial gains from the Defendants, and therefore, the suits are not maintainable.

12.1.3. The suits are barred by delay, laches, and acquiescence. Admittedly, the Plaintiff has been aware of the activities of Siddharth Optical, Pearl Engineering, and Powercube Infotech since 09^th May, 2005, 31^st August, 2006, and 25^th April, 2007, respectively. Yet, the Plaintiff chose to file these suits between May-September, 2012, after a delay of nearly six years. The Plaintiff has offered no explanation for this extended delay. This inaction amounts to acquiescence, rendering the suits unsustainable, and liable to be dismissed.

12.1.4. The Suit Patent, which relates to channel modulation, neither discloses a process nor a product necessary for the replication of DVDs or the DVDs resulting from the replication process in India. The Defendants have detailed their replication processes, outlining each step involved, which shall be discussed later in this judgment. The Defendants contended that at no stage, either directly or indirectly, do they utilize the methods disclosed in the claims of Suit Patent.

12.1.5. Taking into account the technical practices used in the industry and the state of the art, the Suit Patent does not contain any claims that are essential to the practice of DVD replication. In this regard, the Defendants disputed the opinion of the patent evaluator relied upon by the Plaintiff, which suggests that Suit Patent is necessary for the execution of even a single step of the DVD replication process.

12.1.6. The Defendants denied that the claims of the Suit Patent have been analysed for essentiality in relation to DVD specifications, particularly for Read-Only discs.

12.1.7. The Defendants are not bound by the Plaintiff’s licensing program as they do not use the method claims covered by the Suit Patent, which makes the licensing program inapplicable to them. They further disputed the legitimacy of the alleged licensing program of the Plaintiff, arguing that the alleged licensing company, One-Red, and the website www.one-red.com was found to be non-functional. Further, manufacturers and replicators of DVDs and VCDs worldwide, including in India, have not obtained relevant licenses from the Plaintiff for mass replication, as alleged. The Plaintiff has concealed the fact that a significant number of replicators have resisted the Plaintiff’s so-called licensing requirements and considerable litigation on this issue is pending globally.

12.1.8. Pearl Engineering and Siddharth Optical executed the VCD Patent License Agreements under misconception, threat, and inducement by the Plaintiff. They were threatened by the Plaintiff of civil and criminal action seeking significant damages and imprisonment. The Plaintiff assured that by obtaining a license and paying royalties, these Defendants could freely manufacture VCDs without further risk. Therefore, Pearl Engineering and Siddharth Optical were compelled to sign the agreement and obtain the license.

12.1.9. Nonetheless, the VCD Patent previously held by the Plaintiff, has expired and is now in the public domain and can therefore, be utilised by any entity without a license.

12.2. On the aspect of invalidity of the Suit Patent

12.2.1. Non-compliance with the requirements of Section 8 of the Patents Act: the Plaintiff failed to furnish the required information to the Controller of Patents,¹⁶ as mandated under Section 8 of the Patents Act. The application for the Suit Patent, numbered 312/MAS/1999,¹⁷ was filed on 17^th March, 1999, at Patent Office, Chennai with the title “Method of Producing a Record Carrier Recorded with a Modulated Signal and Record Carrier Produced in the Method.” In terms of Section 8, the Plaintiff filed Form 4 along with the application claiming that the relevant details were set out in the annexure, but no annexure was enclosed with the application until the objections were raised in the Preliminary Examination Report.

12.2.2. Subsequently, the Plaintiff filed an annexure to Form 4 on 13^th March, 2002 containing a list of all corresponding applications filed outside India, which was later revised on 31^st August, 2004 after nearly five years. There were several inconsistencies between the annexures submitted on these two occasions. The list submitted on 31^st August, 2004 did not mention the patent applications filed in Malaysia, Turkey, and Taiwan, which were earlier shown in the annexure filed along with the application. Additionally, the Plaintiff furnished false information to the Patent Office and concealed material facts. They did not disclose the filing of the several patent applications before the Patent Office, which were same or substantially same to the Suit Patent application. Therefore, the Suit Patent is liable to be revoked under Section 64(1)(m) of the Patents Act.

12.2.3. The patent was obtained on a false suggestion or representation: the Suit Patent was obtained through suppression of material facts, by misleading and misguiding the Patent Office. The Divisional Application was filed four years after the Parent Application before the Chennai branch of the Patent Office. Both the Parent and Divisional Applications ought to have been filed before the same branch of the Patent Office. Further, these applications are identical, with no new claims being introduced in the Divisional Application. Therefore, the Suit Patent is liable to be revoked under Section 64(1)(j) of the Patents Act.

12.2.4. The Suit Patent is revocable under Section 64(1)(k), 64(1)(d), and 64(1)(e) of the Patents Act: The claims of the Suit Patent describe a method of performing a mental act by a person of average intelligence. The Suit Patent is thus barred by Section 3(m) of the Patents Act.

12.2.5. The Suit Patent is barred under Section 3(k) of the Patents Act and could not have been granted as it is merely a computer program. Section 3(k) excludes mathematical methods, business methods, computer programs per se, and algorithms from patentability, as they fall under the purview of the Copyright Act, 1957.

12.2.6. The method allegedly patented under the Suit Patent relates to the translation of 8-bit information into 16-bit coded words, which are sequentially placed on DVDs to produce a modulated signal. This concept of block encoding was conceived by the same inventor in as early as 1981 and is covered by US Patent No. 4501000, where m-bit information words are encoded into n-bit coded words using the d,k constraint, with the signal then modulated as an NRZ-M signal. This process is identical to the alleged invention in the Suit Patent. Hence, the Suit Patent is not new under Section 64(1)(e) of the Patents Act.

12.2.7. Invalidity under Section 64(1)(h) and Section 64(1)(i) of the Patents Act: The complete specification of the Suit Patent does not sufficiently and fairly describe the invention. As it fails to adequately describe the invention in a manner that would enable a person skilled in the art to replicate it, the Suit Patent is invalid under Section 64(1)(h) and Section 64(1)(i) of the Patents Act.

PROCEDURAL ORDERS AND FACTS OF SIGNIFICANCE

I. CASE MANAGEMENT PROCEEDINGS

13. After summons were issued in the suits, the Defendants, along with their written statements, filed counter-claims questioning the validity of the Suit Patent. The Plaintiff disputed the allegations raised in the counter-claims in their written statement, to which, the Defendants also filed a replication, except in CS (COMM) 499/2018, leading to closure of their right through order dated 03^rd October, 2013.

14. In CS (COMM) 499/2018, Defendants No. 2 and 4 viz. Balaji Optical Disc Private Limited and Mr. Jaspal Singh Chandhok, did not enter appearance despite service through substituted modes. Accordingly, they were proceeded ex-parte on 06^th November, 2013.

15. Admission/denial of documents was conducted in the suits as follows:

a. In CS (COMM) 423/2016, Pearl Engineering denied all documents of the Plaintiff. The Plaintiff, however, admitted certain documents filed by Pearl Engineering pertaining to the record of the Patent Office in respect of the Suit Patent.

b. In CS (COMM) 519/2018, Siddharth Optical admitted thirty-five documents of the Plaintiff, which are marked as Exhibit P-1 to Exhibit P-35. Plaintiff admitted documents marked as Exhibit D-1 to Exhibit D-25 produced by Siddharth Optical.

c. In CS (COMM) 499/2018, the Plaintiff admitted Exhibits D-1 to D-34 of Powercube Infotech, while Powercube Infotech denied all the documents of the Plaintiff.

16. Based on the pleadings filed in the instant suits, both parties filed applications under Order XII Rule 6 of the Code of Civil Procedure, 1908,¹⁸ seeking a judgment on admissions in their favour, and against the other party.¹⁹ The Defendants contended that the Plaintiff had admitted to its failure to disclose the relevant information to the Patent Office, as required by Section 8 of the Patents Act. Consequently, they asserted that the Suit Patent was subject to revocation under Section 64(1)(m) of the Patents Act and sought a judgment on this ground. The Plaintiff, on the other hand, argued that the Defendants, in their written statement, had failed to effectively rebut the allegations of infringement. Relying on this omission, the Plaintiff sought a judgment in their favour through their applications.

17. Pearl Engineering’s application under Order XII Rule 6 was dismissed by the order dated 06^th November, 2013, in CS(COMM) 423/2016. In their application, Pearl Engineering relied on the Plaintiff’s communications to the Patent Office and the affidavit of Mr. D.J. Solomon, the Plaintiff’s patent agent, filed in these proceedings, to argue that non-compliance with Section 8 of the Patents Act had been admitted. The Plaintiff refuted this claim, asserting that the omission of information regarding corresponding foreign applications was an inadvertent oversight by its patent agent during filing. The Court observed that while the Plaintiff did not deny that the information had not been supplied, the issue of whether this omission constituted wilful suppression of information was a triable matter. Consequently, the Court held that the question of whether the Suit Patent is liable to be revoked on this ground could only be determined after evaluating the evidence presented during the trial. On the same date, the Plaintiff withdrew their application under Order XII Rule 6.

18. The decision dated 06^th November, 2013 was assailed before the Division Bench of this Court in FAO (OS) 16/2014 by Pearl Engineering. The Division Bench dismissed the appeal on 07^th November, 2014, holding that non-compliance with Section 8 may trigger Section 64(1)(m) for patent revocation, but such revocation is not automatic. It observed that while compliance with Section 8(1) of the Patents Act is mandatory, the use of the word “may” in Section 64(1) indicates that revocation is discretionary. In the case at hand, the Court will have to determine whether the omission was intentional or merely a clerical and bona fide error, after assessment of the evidence. Thus, revocation under Section 64(1)(m) would require proof of deliberate omission. Consequently, the Division Bench held that in absence of an unequivocal admission by the Plaintiff, a judgment under Order XII Rule 6 of the Code could not be issued without evaluating evidence from both parties. Pearl Engineering’s appeal [bearing SLP (C) 6615/2015] against the order of the Division Bench was dismissed by the Supreme Court on 24^th April, 2015.

19. Following the judgment of the Division Bench, the Plaintiff approached this Court seeking dismissal of applications under Order XII Rule 6 of the Code filed by Siddharth Optical and Powercube Infotech in CS (COMM) 519/2018 and CS (COMM) 499/2018, respectively. On 07^th January, 2015 and 26^th November, 2014, the parties’ respective applications were dismissed as withdrawn.

20. In the meantime, the Plaintiff-company underwent a change of name from Koninklijke Philips Electronics N.V. to Koninklijke Philips N.V. on 15^th May, 2013. Accordingly, the Plaintiff preferred applications to bring on record this development. The applications were accompanied with the relevant certificate and document evidencing the filing of an application to reflect this change in the records of the Patent Office. Considering the above, the Plaintiff’s applications bearing I.A. 11788/2014, I.A. 11783/2014, and I.A. 11897/2014 in CS (COMM) 423/2016, CS (COMM) 499/2018 and CS (COMM) 519/2018, respectively, were allowed on 18^th July, 2014 and 07^th January, 2015.

II. ISSUES

21. During the course of the proceedings, and before the framing of issues, the Plaintiff expressly abandoned the relief of rendition of accounts and instead, opted to pursue a claim for damages against the Defendants.²⁰

The relevant extracts of the orders are reproduced below:

Order dated 30th November, 2012 in CS (COMM) 423/2016:

“IA 21410/2012 (u/O.7 R.11 CPC)

The learned counsel for the plaintiff states that the plaintiff presses only for damages and does not press for rendition of accounts.

In view of the election made by the plaintiff, learned counsel for the defendant does not press this application, which is, accordingly, dismissed as not pressed.

It is made clear that in the event of succeeding, the plaintiff would be entitled only to damages.

IA stands disposed of.

Order dated 30th November, 2012 in CS (COMM) 499/2018:

“IA 21408/2012 (u/O.7 R.11 CPC)

The learned counsel for the plaintiff states that the plaintiff presses only for damages and does not press for rendition of accounts.

In view of the election made by the plaintiff, learned counsel for the defendant does not press this application, which is, accordingly, dismissed as not pressed.

It is made clear that in the event of succeeding, the plaintiff would be entitled only to damages.

IA stands disposed of.”

Order dated 27th November, 2012 in CS (COMM) 519/2018:

“At the outset, counsel for the plaintiff states that the relief in the present suit may be confined to prayers (i) to (iv) and (vi) to (viii) of para 48, which is the prayer clause in the plaint.

Leave, as prayed for, is granted. The relief in the suit is confined to the prayers (i) to (iv) and (vi) to (viii) of the prayer clause.”

22. On the basis of the pleadings, issues were framed on 26^th November, and CS (COMM) 499/2018, and order dated 27^th November, 2012 in CS (COMM) 519/2018. 2012, 27^th November, 2012, and 30^th April, 2014 in CS (COMM) 423/2016, CS (COMM) 519/2018, and CS (COMM) 499/2018, respectively. The issues, as framed, highlighting the overlap in the three cases are tabulated below:

23. Given that the suits progressed to the trial stage, as recorded in the orders dated 26^th November, 2012 and 26^th September, 2014 in CS (COMM) 423/2018 and CS (COMM) 499/2018, respectively, the Plaintiff decided not to press their applications under Order XXXIX Rules 1 and 2 of the Code. These applications were accordingly dismissed as withdrawn.

III. THE CONDUCT OF TRIAL

24. Post framing of issues, the parties filed their lists of witnesses and the trial commenced before the Local Commissioners appointed by the Court. The witnesses deposed by the parties are as follows:

25. During trial, Pearl Engineering and Powercube Infotech applied to the Court for permission to summon the concerned officials of the Patent Offices located at Chennai and Kolkata along with the record of the Suit Patent.²¹ These applications were allowed on 17^th November, 2014 and 15^th October, 2015, summoning the officials and the original records pertaining to the Suit Patent.

26. In CS (COMM) 423/2016, through I.A. 6548/2015, the Plaintiff sought production of: (a) the original sales/ purchase agreements concerning the DVD Video/ ROM Disc Replication Lines from 2006, (b) monthly excise and other statutory returns in relation to the manufacture and sale of DVD Video/ ROM discs commencing from January 2007, and (c) complete annual accounts from 2007, by Pearl Engineering. This application was allowed on 20^th July, 2015. Pearl Engineering challenged this order in FAO (OS) 458/2015, with no success.

27. Later, on 04^th March, 2016, Defendant No. 1 in CS (COMM) 423/2016, Maj. (Retd.) Sukesh Behl, submitted an affidavit, stating that the documents directed to be produced by the Court, are not in his power, possession, or control as the factory premises were closed.

28. The trial in all three suits stood concluded by 03^rd September, 2016. Thereafter, the Plaintiff filed an application bearing I.A. 12146/2016 in CS (COMM) 499/2018, requesting for a combined hearing of all the suits. While the parties concurred that the instant suits cannot be consolidated, given the congruence of the issues, law, facts, and counsel, they consented to matters being clubbed for joint hearing. Later, in its order dated 20^th February, 2024, this Court expressed its prima facie opinion that the suits can be disposed of by a common judgment.

29. After the trial was concluded, the Plaintiff filed I.A. 9425/2019 in CS (COMM) 519/2018, I.A. 9427/2019 in CS (COMM) 423/2016, and I.A. 9386/2019 in CS (COMM) 499/2018, seeking appointment of independent scientific advisors to assist the Court in the determination of infringement. Through the order dated 16^th July, 2019, a decision on these applications was deferred to the final hearing stage. The Plaintiff however did not press these applications at the final arguments stage.

30. In the meantime, in order to secure their claim for damages, the Plaintiff filed applications in the suits, seeking a direction to the Defendants to file their audited statements of all movable and immovable assets. The Plaintiff additionally sought a direction to the Defendants to ensure maintenance of sufficient funds or assets to cover the Plaintiff’s claim for damages.²² These applications are pending consideration.

31. Extensive arguments were subsequently advanced by the counsel for the parties, which finally stood concluded on 28^th May, 2024.

ISSUE-WISE ANALYSIS AND FINDINGS

I. WHETHER PLAINTIFF IS LIABLE TO BE NON-SUITED FOR LACK OF AUTHORIZATION?²³

32. Considering the foundational significance of these issues concerning the legality and propriety of the institution of CS (COMM) 423/2016 and CS (COMM) 519/2018, it is deemed fit to address them at the outset. The issue of maintainability, as framed in CS (COMM) 423/2016, is premised on the lack of authority of Mr. Farokh N. Bhiwandiwalla to institute, sign, and verify the plaint.

33. The Plaintiff is a company incorporated in Netherlands. The suits, CS (COMM) 423/2016 and CS (COMM) 519/2018, have been instituted by Mr. Farokh N. Bhiwandiwalla [PW-1] on their behalf. Mr. Bhiwandiwalla, a director of the company named One-Red India Licensing Private Limited,²⁴ was earlier engaged with Philips Electronics India Limited, the Plaintiff’s Indian subsidiary, as their licensing counsel. The Plaintiff submitted that since 01^st July, 2012, all their licensing operations were executed through One-Red LLC.

34. Mr. Bhiwandiwalla has signed and verified the pleadings as a constituted attorney of the Plaintiff authorized through Powers of Attorney dated 12^th December, 2011 and 28^th May, 2012 [Ex. PW-1/1 in CS (COMM) 423/2016 and CS (COMM) 519/2018, respectively] executed by Mr. E.P. Coutinho.²⁵ To establish Mr. Coutinho’s authority and competence, the Plaintiff relied upon extracts from the Trade Register of Netherlands, exhibited as Ex. PW-1/2.

35. Siddharth Optical and Pearl Engineering argued that CS (COMM) 519/2018 and CS (COMM) 423/2016 have been filed by an unauthorized person. They pointed out that PW-1 is admittedly not an employee, director, or an officer of the Plaintiff. Rather, he is a director of a different and distinct entity, One-Red LLC. During his cross-examination, PW-1 accepted that he had not seen the Board Resolution entitling Mr. Coutinho to further authorize PW-1 to institute the suits. PW-1 merely referred to the general powers of the secretary under the Dutch law and the ordinary business practices. Further, PW-1 vaguely alluded to the Articles of Association of the Plaintiff to explain Mr. Coutinho’s authority. These explanations, according to Siddharth Optical and Pearl Engineering, are speculative and lack substantiation through tangible evidence, such as the Articles of Association or relevant Board Resolutions. Accordingly, they contended that CS (COMM) 519/2018 and CS (COMM) 423/2016 are liable to be dismissed under Order XXIX Rule 1 of the Code.

36. The relevant extracts from the cross-examination of PW-1, relied upon by Siddharth Optical and Pearl Engineering, are reproduced below:

Cross-examination conducted on 25th July, 2013 in CS (COMM) 423/2016

“Q1 Please see the power of attorney dated 12^th December, 2011 in your favour. Who executed the same?

Ans: It was executed by Mr. E.P. Coutinho who is the General Secretary of the Plaintiff.

Q2 I put it to you that Plaintiff is a limited company.

Ans: Yes.

Q3 I put it to you that Mr. E.P. Coutinho has no power or authority to execute the power of attorney in your favour.

Ans: No, his authority can be seen from Ext. PW-1/2 where it is clearly specified that he has authority with power of substitution.

Q4 I put it to you that the Board of Directors of the Plaintiff company has never authorized Mr. Coutinho to execute the said power of attorney.

Ans: I understand that under the Dutch Law any senior executive having an authority in a limited company has to be recorded in the chamber company has to be recorded in the chamber of commerce trade register in the Netherlands. This has been done and is evidence by Ext. PW-1/2.

Q5. Please specify the specific provision of Dutch Law giving such an authority.

Ans: To make a responsible statement for the Hon’ble Court, I can cross-check and verify and come back with an answer on the next turn.

Q6 Have you brought minute book of the Plaintiff company to show the authority in favour of Mr. E.P. Coutinho or any Board Resolution to the effect?

Ans: No.

Q7 Does any minute book containing Board Resolutions exist or not?

Ans: Yes.

Q8 Have you seen those minute books with your own eyes?

Ans: No, but it is an accepted principle that limited companies would have minute books.

Q9. What are your technical qualifications?

Ans: I have no technical qualification. By educational qualification, I am a B.Com, LL.B.

Q10. What is the relationship between One-Red LLC, USA and the Plaintiff?

Ans: The plaintiff is one of the four shareholders of One-Red LLC, USA.

Q11. Who are the other shareholders apart from the Plaintiff in One-Red LLC, USA?
(Objected to being relevant)

Ans: Other shareholders are Sony Corporation of Japan, Pioneer Corporation of Japan and LG of South Korea.

Q12. What is the arrangement between One-Red LLC and One-Red India Licensing Pvt. Ltd.?

Ans: One-Red India Licensing Pvt. Ltd. is a subsidiary of One-Red LLC.

Q.13 With effect from 1^st July, 2012 who is authorized to conduct Plaintiff’s Optical Licensing activities of the Plaintiff in India?

Ans: One-Red LLC is authorized by Plaintiff and Sony to carry out optical licensing activities for CD technology. Further One-Red LLC is authorized by Plaintiff, Sony, Pioneer and LG as referred above to carry out optical licensing activities for DVD technology. For India region One-Red India Licensing Pvt. Ltd. carries out the above activities.

Q.14 Prior to 1^st July 2012 who was authorized to carry out the licensing activities for CD and DVD technologies of the patents of the Plaintiff in India?

Ans: The Plaintiff itself was carrying out that activity and was also carrying out activities for the other three companies i.e. Sony, Pioneer and LG as mentioned above.”

Cross-examination conducted on 22nd August, 2013 in CS (COMM) 519/2018

“Q.1 Do you know Mr. E.P. Coutinho?

Ans. Yes. He is the General Secretary of the Plaintiff.

Q.2 What are the powers of the General Secretary?

Ans. To my understanding, the powers of the General Secretary relate to the management of a company including ensuring that the company is able to institute and defend litigations in its interest.

Q.3 Where are these powers defined in favour of the General Secretary?

Ans. To my understanding, it is a normal business practice as the designation of “General Secretary” so suggests.

Q.4 Is it only a practice or is it codified under any law?
(The counsel for the Plaintiff objects to the said question as the question is a legal one and requires legal interpretation.)

Ans. My general knowledge suggest that probably the company’s Article of Association may state such authority.

Q.5 Your understanding and general knowledge is derived from where or it is your conjecture?

Ans. In my initial years in Philips Electronics India Limited, way back in 1986 onwards, I was assisting the company secretary of the said company and as such I have some general knowledge on the same.

Q.6 Have you ever gone through the Articles of Association of the Plaintiff Company?

Ans. No.

Q.7 Is it correct that the said Mr. E.P. Coutinho has executed a Power of Attorney in your favour for and on behalf of Plaintiff Company and you have signed and verified the plaint on account of that only?

Ans. Yes.

Q.8 The Plaintiff company is run by a Board of Directors. Is it correct?

Ans. Yes.

Q.9 Does the Board of Directors of the Plaintiff company hold regular Board meetings?

Ans. Probably yes.

Q.10 In the said board meetings, do they pass Board Resolutions?

Ans. Probably yes.

Q.11 You are not sure?

Ans. Board resolutions are passed at the board meetings.

Q.12 Was there any Board Meeting in which Mr. E.P. Coutinho was authorized to execute the power of attorney in your favour?

Ans. I am sure it would be there.

Q.13 Now tell me whether Mr. Coutinho has derived powers as General Secretary or by virtue of Board Resolution?

Ans. Mr. Coutinho would have inherent authorities based on his title of “General Secretary” and the Plaintiff Company would have also given him authority through a Board Resolution.

Q.14 Have you seen or gone through any such resolution of the Board of Directors authorizing Mr. Coutinho to execute power of attorney in your favour?

Ans. After my cross-examination by you in the other matter, I had checked this out with the legal colleague of the Plaintiff and he informs me that there is a board resolution. As such, 1 have physically not seen the Board Resolution yet.”

37. Further, on this issue, Siddharth Optical and Pearl Engineering placed reliance upon the judgments of this Court in Nibro Limited v. National Insurance Company Limited,²⁶ Ferruccio Sias and Anr. v. Jai Manga Ram Mukhi,²⁷ and State Bank of Travancore v. Kingston Computers (I) P. Ltd.²⁸

38. The Court has considered the objections raised by Siddharth Optical and Pearl Engineering relating to the maintainability of CS (COMM) 423/2016 and CS (COMM) 519/2018. The Plaintiff, a company, has the capacity to sue and be sued in its own name. Being a juristic entity, any company would necessarily act through individuals authorized to represent their interests in legal proceedings. Under Order XXIX Rule 1 of the Code, in cases involving corporations, the secretary, director, or other principal officers familiar with the facts of the case, are empowered to sign and verify pleadings on the company’s behalf. In terms of Order VI Rule 14, pleadings must be signed by the party and their pleader, if any. Additionally, de hors Order XXIX Rule 1, a company, as a juristic entity, may validly authorize any person to sign a plaint or written statement on its behalf, satisfying the requirements of Order VI Rule 14.

39. The procedural defect cited by Siddharth Optical and Pearl engineering does not, in the opinion of the Court, impact the maintainability of CS (COMM) 423/2016 and CS (COMM) 519/2018. The lack of an express authorization to institute, verify, and sign the pleadings or other legal documents can be remedied by a subsequent ratification by the corporation. The Supreme Court in United Bank of India v. Naresh Kumar and Ors.,²⁹ held that such a ratification can be explicit, such as resolutions of board of directors, or can be inferred from the conduct of the parties and circumstances of the legal proceedings.

40. The Plaintiff’s prolonged involvement in these suits for over a decade, exhibits their implied ratification of the actions of Mr. Bhiwandiwalla. Their endorsement is further manifest by the engagement of witnesses, specifically Mr. Bhiwandiwalla, submission of oral and documentary evidence, payment of court fee and consistent participation in the trial throughout the pendency of these suits. These factors lend credence to the authority of Mr. Bhiwandiwalla, which has been impliedly ratified by the Plaintiff.

41. The judicial precedents cited by Siddharth Optical and Pearl Engineering also recognize the principle of subsequent ratification. Therefore, the Court must recognize that procedural defects, such as questions surrounding the formal authorization of signatories, should not derail substantive claims unless a clear prejudice is demonstrated. The guiding principle is that justice should not be obstructed by technicalities, when the essence of authorization has been established through supporting documents and circumstances. Given these considerations, the challenge made to the competence of Mr. Bhiwandiwalla in instituting the suits and their maintainability, does not find favor with the Court.

Finding

42. The Court is satisfied that CS (COMM) 519/2018 and CS (COMM) 423/2016 have been instituted on behalf of the Plaintiff by a competent person, and the technical objections raised do not warrant dismissal. The Plaintiff has sufficiently proved that Mr. Farokh N. Bhiwandiwalla, who signed and verified the plaint, was duly authorized to institute these suits. Accordingly, issue No. 7 in CS (COMM) 423/2016 and issue No. 1 in CS (COMM) 519/2018 are answered in favor of the Plaintiff, and against Siddharth Optical and Pearl Engineering.

II. WHETHER PLAINTIFF IS THE OWNER OF THE SUIT PATENT?³⁰

43. The Plaintiff claims ownership of Indian Patent No. 218255 titled “Method of Converting Information Words to a Modulated Signal.” Section 2(1)(m) of the Patents Act describes “patent” as a patent for any invention granted under the Act. Section 2(1)(p) defines a “patentee” as the person entered on the Register as the grantee or proprietor of the patent. Therefore, to establish proprietorship, the Plaintiff must demonstrate that the Suit Patent is registered under the Patents Act, and they are recorded as the patentee in the Patents Register.

44. The Suit Patent was granted to the Plaintiff on 31^st March, 2008. PW-1 has substantiated the claim of ownership by duly proving the certified copies of the patent certificate and extracts of the Patent Register marked as Ex. PW-1/5 in CS (COMM) 423/2016 and CS (COMM) 519/2019. This evidence establishes the Plaintiff’s proprietorship of the Suit Patent.

45. On 15^th May, 2013, the Plaintiff-company underwent change of name from “Koninklijke Philips Electronics N.V.” to “Koninklijke Philips N.V,” as evidenced by Ex. PW-1/3 in CS (COMM) 499/2018. The Plaintiff filed an application to reflect this change in the records of the Patent Office on 28^th May, 2014, which has been approved. The e-Register of the Indian Patent Office [Ex. PW 1/4 in CS (COMM) 499/2018] reflected this change on 13^th June, 2014. Moreover, through orders dated 18^th July, 2014 and 07^th January, 2015, this Court also allowed Plaintiff’s applications recording the change in the name of the Plaintiff.³¹ The public records pertaining to the Suit Patent, which have also been produced as evidence, further affirm the lawful proprietorship of the Plaintiff, Koninklijke Philips N.V., over the Suit Patent.

46. Although the Defendants have raised challenges to the validity of the Suit Patent, these do not pertain to the question of ownership of the Plaintiff. Except for a bare denial, the Defendants have not presented any cogent challenge or evidence to disprove the Plaintiff’s claim of proprietorship. Thus, the Court concludes that Plaintiff is the owner of the Suit Patent.

Finding

47. The Plaintiff has proved the patent certificate granted in their favor, the accompanying specifications, and the revised entry in the Patent Register. The evidence submitted establishes the Plaintiff’s ownership over the Suit Patent. Accordingly, issue No. 1 in CS (COMM) 423/2016 and CS (COMM) 519/2018 and issue no (i) in CS (COMM) 499/2018 are decided in favor of the Plaintiff, confirming that Koninklijke Philips N.V. is the proprietor of the Suit Patent.

III. WHETHER THE SUIT PATENT IS INVALID?³²

48. In their written statements and counter-claims in all three suits, the Defendants have contested the validity of the Suit Patent, seeking its revocation on various grounds, including obtaining the registration by fraud. The Court accordingly proceeds with assessing the merits of the Defendants’ challenge to the validity of the Suit Patent, examining each ground in detail.

III.I. Whether the Suit Patent is subject to revocation under Section 64(1)(m) of the Patents Act?

49. Under Section 64(1)(m) of the Patents Act, a patent is liable for revocation if the applicant fails to disclose the information required by Section 8, or furnishes information which, in material particulars, was false to their knowledge. Section 8 of the Patents Act reads as under:

“8. Information and undertaking regarding foreign applications - (1) Where an applicant for a patent under this Act is prosecuting either alone or jointly with any other person an application for a patent in any country outside India in respect of the same or substantially the same invention, or where to his knowledge such an application is being prosecuted by some person through whom he claims or by some person deriving title from him, he shall file along with his application or subsequently within the prescribed period as the Controller may allow-

(a) a statement setting out detailed particulars of such application; and

(b) an undertaking that, up to the date of grant of patent in India, he would keep the Controller informed in writing, from time to time, of detailed particulars as required under clause (a) in respect of every other application relating to the same or substantially the same invention, if any, filed in any country outside India subsequently to the filing of the statement referred to in the aforesaid clause within the prescribed time.

(2) At any time after an application for patent is filed in India and till the grant of a patent or refusal to grant of a patent made thereon, the Controller may also require the applicant to furnish details, as may be prescribed, relating to the processing of the application in a country outside India, and in that event the applicant shall furnish to the Controller information available to him within such period as may be prescribed.”

50. The Defendants strenuously argued that the Plaintiff failed to disclose to the Patent Office the information required by Section 8 of the Patents Act. The instances of non-compliance pointed out by the Defendants are summarized below:

50.1. The application for the Suit Patent was filed on 17^th March, 1999 before the Patent Office, Chennai. Along with the application, the Plaintiff filed Form 4 in terms of Section 8 of the Patents Act. This form, as implicitly acknowledged by PW-2, already contained an application number before any number could be assigned by the Patent Office. Further, in Form 4, the Plaintiff claimed that the relevant details were set out in the annexure, but no such annexure was filed along with the application until an objection was raised in the Preliminary Examination Report.

50.2. Subsequently, the Plaintiff filed an annexure to Form 4 on 13^th March, 2002 containing a list of all corresponding applications filed outside India, which was later revised on 31^st August, 2004 after nearly five years. This annexure, filed much beyond the prescribed time period, disclosed several applications that had not been included in the original annexure provided in reply to the Preliminary Examination Report. Moreover, the applications filed before the patent offices in Malaysia, Turkey, and Taiwan, which were included in the list dated 13^th March, 2002, were deliberately omitted from the list dated 31^st August, 2004. These inconsistencies indicate that one of the statements made by the Plaintiff’s representatives must be inaccurate, raising serious questions about the Plaintiff’s compliance with the statutory obligations.

50.3. The list, as submitted on 31^st August, 2004, mentioned the following patent applications:

50.4. Contrary to their undertaking in Form 4, the Plaintiff intentionally and deliberately failed to disclose the filing details of the patent applications before the Patent Office. They did not disclose the filing of the following patent applications, which were the same or substantially similar to the Suit Patent application:

50.5. There are discrepancies in the numbers of the corresponding patent application in the United States of America³³ – the annexure submitted on 13^th March, 2002 mentioned the application number as 08/385533 with the filing date of 08^th February, 1995, whereas the annexure dated 31^st August, 2004 mentioned application number 09/899091 filed on 08^th February, 1995. Even this date is incorrect as the patent application in the US was filed on 05^th July, 2001.

50.6. The Plaintiff had filed a petition on 12^th November, 2004 in respect of the belated submission of details stipulated under Section 8 of the Patents Act. In this petition, the Plaintiff alleged that the requisite information was not available to them on 17^th March, 1999, and therefore could not be entered in Form-4. This submission is false and controverted by the record. The annexure submitted on 31^st August, 2004 clearly shows that most of the disclosed applications had been filed as early as 1995, with only one exception – Vietnam, which was filed in 1996 – well before the filing date of the application for the Suit Patent. These discrepancies, according to the Defendants, point to a deliberate suppression of material information, forming a valid ground for revocation under Section 64(1)(m) of the Patents Act.

51. In contrast, the Plaintiff argued that on 16^th July, 2004, they had furnished complete information in respect of filing and prosecution of patent applications across jurisdictions, spanning three pages, to their patent agent – Mr. D.J. Solomon working at M/s DePenning and DePenning [Ex. PW-2/D4 in CS (COMM) 423/2016 and Ex. PW-2/D9 in CS (COMM) 519/2018]. However, due to an inadvertent error by the paralegal of the patent agent, the complete list of the applications could not be filed before the Patent Office. This, the Plaintiff argued, is corroborated by the affidavit dated 14^th September, 2012 of Mr. Solomon submitted as Ex. PW-2/11 in CS (COMM) 519/2018. Therefore, the Plaintiff contended that the omission was not deliberate, and ought not to result in the revocation of the Suit Patent.

52. The Court has considered the submissions and evidence advanced by the parties. The preliminary assessment of Plaintiff’s compliance with Section 8 of the Patents Act was considered by this Court in the order dated 06^th November, 2016 in CS (COMM) 423/2016. In this order, while deciding Pearl Engineering’s application under Order XII Rule 6 of the Code, the Court observed that the alleged non-disclosure was a triable issue rather than an admitted violation. The matter was further examined in the appeal [FAO(OS) 16/2014] filed by Peal Engineering. The Division Bench, in its judgment dated 07^th November, 2014, while acknowledging the mandatory nature of compliance with Section 8(1) of the Patents Act, held that Section 64(1) confers a discretion upon the Court while assessing the question of revocation under Section 64(1)(m). The Bench emphasized that while discrepancies in disclosures could be material, the fact that the Plaintiff did submit corresponding foreign application details indicated that there was not a complete failure to meet the obligations under Section 8(1). The Court further noted that determining the nature of the alleged omission – whether intentional or inadvertent – would require a full trial to unearth the context and significance. The challenge to the afore-noted order before the Supreme Court was dismissed by order dated 24^th April, 2015 in SLP(C) 6615/2015.

53. In light of the judgment of the Division Bench and the applicable legal principles, the Court must now determine whether the Suit Patent is liable for revocation under Section 64(1)(m) of the Patents Act. This requires an examination of whether the Plaintiff’s omission to furnish complete information was deliberate or wilful, or indicative of an intent to mislead the Patent Office.

54. The Plaintiff provided the information to its legal representative, Mr. Solomon, who was responsible for prosecuting the Suit Patent before the Patent Office. The affidavit of Mr. Solomon [Mark PW-2/11 in CS (COMM) 519/2018] stated that he had submitted the required details to the Patent Office on three separate occasions: 17^th March, 1999, 13^th March, 2002, and 31^st August, 2004. These documents, enclosed as Annexure-B to Mr. Solomon’s affidavit, are reproduced below for context:

55. The affidavit of Mr. Solomon [Mark PW-2/11 in CS (COMM) 519/2018] reads as under:

56. Mr. Solomon, in his affidavit, stated that the Plaintiff provided their agent with the letter dated 16^th July, 2004, enlisting all the international applications corresponding to the Suit Patent. This letter, running into three pages, was printed on both sides. He clarified that due to an inadvertent lapse on the part of his office, the information contained on the reverse-side of the first page was not submitted to the Patent Office. On becoming aware of this lapse, the Plaintiff promptly submitted the affidavit dated 14^th September, 2012 of Mr. Solomon before the Patent Office, Chennai, enclosing therewith the complete particulars of all corresponding applications to the Suit Patent.

57. This assertion is corroborated by the responses given during the cross-examination of PW-2, where it was confirmed that the submissions to the Patent Office represented the status in the Plaintiff’s database at the time and were considered accurate and complete.

Cross-examination conducted on 05th August, 2014 in CS (COMM) 423/2016

“Q.242 In para No.18 of your affidavit Exh.PW2/A, you have stated on oath that the plaintiff has complied with his obligations under Section 8 of the Indian Patents Act, 1970, and submitted the details of corresponding foreign applications on the following three occasions - 17.03.1999, 13.03.2002, and 31.08.2004. If you look at your previous answer to Q.241, what were the details furnished and by whom to your local agent in connection with these corresponding applications on. 17.03.1999 and 13.03.2002?

(Objected to as the information and documents are already on record)

Ans. These details were provided by our IP support department, which details require regular update and those updated details were provided in 2004. Until 2009, we as a company were not cautioned by our attorneys nor by the press nor by our local office that the standard of disclosure is a strict one. It was only after a case which was decided in the Delhi High Court in 2009, which I believe is called Chemtura case that strict standards appear to be followed. Before the grant of the patent in suit, we supplied full, true and complete information regarding corresponding patent applications of the patent in suit to our local agent and we believed that this information was filed with the Patent Office. We did not know that there had been a photocopying error at our local agent resulting that some information was left out when our agent transmitted this information to the Patent office. We only became aware of this recently in 2012

Q.243 Will it be correct to say that apart from 17.03.1999, 13.03.2002 and 31.08.2004, no other Form-4 was ever filed in the suit patent during prosecution?

Ans. I only can confirm the three occasions and 1 do not know about other occasions.

Q.244 Will it be correct to say that whatever information was submitted by the Plaintiff on these three occasions as referred above, to the Patent office is true and correct?

Ans. At the moment of submission, this information represented the status in our database was true and correct. Regular updates are required because this information changes.”

[Emphasis Supplied]

58. The above evidence suggests that the Plaintiff’s intellectual property department supplied all details relevant to compliance of Section 8 of the Patents Act to their patent agent in 2004. They were apparently under the belief that this information had been filed with the Patent Office, and were not aware of the lapse at their prosecuting agent’s office. The testimony of PW-2 coupled with Mr. Solomon’s affidavit suggests that immediately upon learning of this failure in 2012, the Plaintiff undertook corrective measures to ensure that the complete record is placed before the Patent Office. Thus, before the grant of the Suit Patent, the Plaintiff had supplied full, true, and complete information regarding corresponding patent applications in 2004. The inadvertent lapse, in the Court’s view, does not equate to a deliberate omission or suppression of material facts.

59. During the trial, the Defendants shouldered the burden of proving that the Plaintiff, or its patent agent, intentionally withheld information from the Patent Office, and that such suppression was material to the grant of the Suit Patent. Rather than discharging this burden with substantive evidence, they merely attempted to cast doubts on the evidentiary value of Mr. Solomon’s affidavit [Mark PW 2/11 in CS (COMM) 519/2018], arguing that it constituted hearsay due to his absence from the witness stand.

60. Similarly, reliance on an ‘implicit acknowledgement’ by PW-2 that Form 4 filed with the Divisional Application mentioned an application number before registration by the Patent Office lacks force. The Defendants carried the onus to prove, with credible evidence, that the Plaintiff committed fraud on the Patent Office, which they have failed to do.

61. Additionally, the Defendants argued that the letter dated 16^th July, 2004 was also issued to the patent agent through e-mail. They contended that the information transmitted via e-mail would not involve physical page-turning, and thus, the missing data was inexcusable. This assertion also lacks substantiation through evidence. In this regard, the Court notes that PW-2 in his cross-examination, had stated as under:

Cross-examination conducted on 05th August, 2014 in CS (COMM) 423/2016

“Q.248 In para 18 of your evidence affidavit, you had stated that complete information regarding the corresponding foreign application for the suit patent were submitted by the Plaintiff to the attorney handing the portfolio. Please tell what was the mode of supply of this information?

Ans. I assume it must have been by regular mail post possibly by a confirmation by fax or e-mail or vice-a-versa.

xx    …    xx    …    xx

Q.257 I say that a soft copy of this letter containing information of the corresponding foreign applications to the suit was also transmitted to the attorney through e-mail.

Ans. As stated before, I assume this is the case, possibly by a confirmation by fax or e-mail or vice-a-versa.

xx    …    xx    …    xx

Q.260 Is it correct to say that neither you are aware nor you can answer about the transmission of e-mail copy of letter Exh.PW2/D4 containing the information of the corresponding foreign applications by the Plaintiff to the attorney and the confirmation of its receipt by the attorney?

Ans. If I read Exh.PW2/D4, I can say that this information has been received by the attorney completely. I must assume in view of the statement in the letter that the e-mail also was sent in addition to the postal transmittal.”

62. The above responses do not conclusively establish that the letter dated 16^th July, 2004 [Ex. PW-2/D4 in CS (COMM) 423/2016 and Ex. PW-2/D9 in CS (COMM) 519/2018] was also sent via e-mail by the Plaintiff, which is the foundation of the Defendants’ objections. Rather, they indicate that the Plaintiff’s communication with the prosecuting attorney included various modes of transmission, including mail and fax – both of which involved physical documents.

Conclusion

63. Section 64(1)(m) provides for the revocation of a patent on the ground that the patentee has failed to disclose to the Patent Office the required information, or has furnished materially false information. While the errors in handling the disclosures ideally should have been avoided, they cannot be construed as a deliberate act of suppression by the Plaintiff.

63.1 The Defendants, for their part, have failed to establish that any material information was knowingly withheld by the prosecuting attorney or that the omission was intended to mislead the Patent Office. More importantly, they have not demonstrated how the omitted details, if provided, would have altered the grant of the Suit Patent, particularly when the corresponding foreign applications remained valid and enforceable throughout the patent term.

63.2 In contrast, the Plaintiff has placed evidence on record showing that, at the time of filing, the disclosures made under Section 8 were based on the best available data within its internal records. Given the dynamic nature of patent portfolios across multiple jurisdictions, the process of updating such records is inherently complex and subject to administrative oversight.

63.3 A mere clerical or inadvertent error in updating foreign patent statuses, without any evidence of bad faith or intent to mislead, cannot be a ground for revocation.

63.4 For these reasons, the Court finds that the objections under Section 64(1)(m) are without merit and do not justify invalidating the Suit Patent.

III.I.I. Evaluation of Defendants’ allegations concerning corresponding patent applications in Malaysia, Turkey, Taiwan, the US, and Europe

Insufficient disclosure of patent applications in Malaysia, Tukey, and Taiwan

64. The Defendants placed significant emphasis on the inconsistencies in the annexures to Form 4 submitted by the Plaintiff on two separate occasions – 13^th March, 2002 and 31^st August, 2004. They argued that the corresponding patent applications filed in Malaysia, Turkey, Taiwan, which were disclosed in the list dated 13^th March, 2002, were intentionally excluded from the subsequent list of 31^st August, 2004. These discrepancies, according to the Defendants, point to a willful suppression of vital information and an intentional breach of undertaking regarding corresponding foreign applications.

65. In the Court’s opinion, the incongruencies between the annexures dated 13^th March, 2002 and 31^st August, 2004 and omissions by the Plaintiff have been adequately addressed through the testimony of PW-2. For brevity, the relevant portions from cross-examination conducted in CS (COMM) 423/2016 are extracted below:

“Q.201 In Exh. PW2/D8 on page 58, there is an entry which speaks of the country Turkey (application No. Unknown) and the status shown of the patent application in Turkey is shown as pending as on 17.03.1999. According to your information after studying the records of the Plaintiff in respect of filing this internationally, is this information true and correct?

(Objected to by ld. Counsel for the Plaintiff on the ground of Section 92 of the Indian Evidence Act).

Ans. I would have to check the records of my company but I can add that when it says that the number is not yet known, that means the said number has not been recorded in our database. It could well be that a number was already known to our patent agent in Turkey.

xx    …    xx    …    xx

Q.309 In your answer to Q.199, you were to look through the records of the Plaintiff and answer to the effect that on 17.03.1999 was the Plaintiff aware of the Indonesian Patent Application number and its status which you have provided as unknown in the annexure to Form-4 dated 17.03.1999.

(Objected to)

Ans. As I stated before the annexure to Form-4 in 1999 was identical to the annexure to Form-4 filed in 1995 and was not updated. The Indonesian patent application was granted on 20.07.2000 hence the status pending was correct in 1999. We did not update the application number as said before until 2004 where we filed a new annexure to Form-4.

Q.310 I put it to you that in the annexure to Form-4 dated 17.03.1999 in relation to the Indonesian Patent Application neither is the number given nor is the status provided and this was done deliberately to suppress material information to the Controller.

Ans. That is denied.

Q.311 In your answer to Q.197, you were to look through the records of the Plaintiff and answer to the effect that on 17.03.1999 was the Plaintiff aware of the status of Malaysian Patent Application number PI 9500357 and its status which was shown as pending in the annexure to Form-4 dated 17.03.1999. Are you now able to answer this question after looking through the records of the Plaintiff?

Ans. Yes. Malaysian application PI 9500357 was pending on 17.03.1999 and was granted on 30.04.2001. We have provided to our agent the correct and complete information regarding corresponding Malaysian Patent Application with the letter dated 16.07.2004, exhibited as Exh. PW2/D-4.

Q.312 In your answer to Q.201, you were to look through the records of the Plaintiff and answer to the effect that on 17.03.1999 was the Plaintiff aware of the status of Turkey Patent Application number shown as “unknown” and its status which was shown as pending in the annexure to Form-4 dated 17.03.1999. Are you now able to answer the question about the correctness of this information after looking through the records of the Plaintiff?

Ans. In our records, the Turkish Patent Application No. 95-0136 was pending on 17.03.1999 and was granted on 22.10.2002. We have provided to our agent the correct and complete information regarding corresponding Turkish Parent Application with the letter dated 16.07.2004, exhibited an Exh. PW2/D-4. There has not been any adverse decision by the Turkish Patent Office regarding the patentability of this patent application. The same holds for all other corresponding foreign patent applications by the respective foreign Patent offices.

Q.313 I put it to you that the Plaintiff was aware of the Turkish Patent Application No. 95-0136 and failed to provide this in that annexure to Form-4 filed on 17.03.1999 and on 31.08.2004.

Ans. That is denied.

Q.314 In your answer to Q.195, you were to look through the records of the Plaintiff and answer to the effect that on 17.03.1999 the Plaintiff aware of the status of Taiwan Patent Application No.84141360 and its status which was shown as pending in the annexure to Form-4 dated 17.03.1999. Are you now able to answer the question about the correctness of this information after looking through the records of the Plaintiff?

Ans. The said Taiwan Patent Application was granted an 15.04.1997. We have provided our agent with the correct and complete information about this corresponding patent with the letter of 16.07.2004 Exh. PW2/D-4.

Q.315 I put it to you that deliberately the status “pending” was given on the annexure to Form-4 dated 17.03.1999 and this status should have been “granted”.

Ans. That is denied.”

66. The letter dated 16^th July, 2004 [Ex. PW-2/D4 in CS (COMM) 423/2016 and Ex. PW-2/D9 in CS (COMM) 519/2018] addressed by the Plaintiff to their patent agent is crucial to ascertain the merits of the narrative put forth by the Plaintiff’s witness. Through this letter, the Plaintiff communicated their instructions to the patent agent in response to the Examination Report. With this letter, the Plaintiff inter alia, annexed the following list of corresponding patents:

67. The above extract reinforces the deposition of PW-2. It becomes evident that the Plaintiff had provided the status of all the corresponding applications, as recorded in their database, to the attorney responsible for filing it with the Patent Office. PW-2 further clarified that the Malaysian Patent Application No. PI 9500357, which was shown as pending in the annexure to Form 4 prepared on 17^th March, 1999, was granted on 30^th April, 2001. Thus, as on the date of filing Form 4 on 17^th March, 1999, this application was pending. Similarly, Turkish Patent Application No. 95-0136, shown as ‘pending’ in the annexure dated 17^th March, 1999, was granted on 22^nd October, 2002. The patent application filed in Taiwan, which was mentioned as ‘pending’ in the list dated 17^th March, 1999, was granted on 15^th April, 1997. Thus, the error in enlisting the status of corresponding patent applications prevalent at the time of submission of the annexure to Form 4, i.e., 13^th March, 2002, does not suggest an intent to mislead the Patent Office or prejudice the evaluation process of the Suit Patent. It is only an inadvertent oversight. This is established by the contents of letter dated 16^th July, 2004, which accurately depicts the status of applications pending before the Patent Offices in Taiwan, Malaysia, and Turkey. These circumstances demonstrate the Plaintiff’s efforts to ensure that true and correct information is furnished to the Patent Office. Moreover, the Defendants have not convincingly demonstrated that this omission weighed in the decision to grant the Suit Patent.

Discrepancy regarding US patent

68. The Defendants argued that the US patent application (08/385533) was granted on 09^th December, 1997 under US Patent No. 5696505, prior to the filing of the Divisional Application. However, they emphasised that this crucial fact was not disclosed to the Indian Patent Office in Form 4. Additionally, they contended that the subsequent re-examination of this US patent by the US Patent Office was also not brought to the attention of the Indian Patent Office, thereby constituting a failure to disclose material information under Section 64(1)(m) of the Patents Act.

69. The Defendants’ contention regarding the alleged non-disclosure of the status of US Patent No. 5696505 does not persuade the Court to invalidate the Suit Patent on this ground. The Indian Patent Office was first made aware of the existence of the corresponding US patent application in as early as 1995, when it was disclosed as a part of the Parent Application. This US application was subsequently granted in 1997 as US Patent No. 5696505. The alleged non-disclosure thus, pertains to the filing of the Divisional Application on 17^th March, 1999, where the Plaintiff did not expressly mention the grant of the corresponding US patent before the Patent Office. This omission appears to be a clerical oversight rather than a deliberate act of suppression. The Court also finds merit in the Plaintiff’s contention that there was no strategic or substantive advantage for the Plaintiff in withholding the fact of the US patent’s grant. If anything, disclosing that the US patent had been granted two years earlier in 1997 would have bolstered the Plaintiff’s case before the Patent Office, reinforcing the patentability of the claimed invention.

70. As for the Plaintiff’s failure to update the status of the US patent and disclose its re-examination in 2003, the evidence on record suggests that this omission was also inadvertent and not deliberate. In terms of the Patent Officer’s requisition, the patent agent requested the Plaintiff to provide the filing particulars and status of corresponding foreign applications that were ‘pending,’ ‘granted,’ or ‘refused.’ At the time of issuance of the Plaintiff’s response dated 16^th July, 2004, the US Patent had not been refused or invalidated by the US Patent Office. Therefore, the Plaintiff’s disclosure that the US patent application had been granted in December 1997 was accurate and does not suggest a material suppression by them. As discussed above, few pages of the list enclosed with Plaintiff’s communication dated 16^th July, 2004 that contained full particulars of granted foreign patents, including the US Patent, were mistakenly omitted by the office of the Plaintiff’s patent agent.

71. The affidavit of the Plaintiff’s patent agent coupled with the afore-noted responses of PW-2 during cross-examination confirm that the Plaintiff had indeed provided full details of their foreign applications, including the US patent application, to their agent.

72. The Defendants have not controverted the issuance of the communication dated 16^th July, 2004 [Ex. PW-2/D4 in CS (COMM) 423/2016 and Ex. PW-2/D9 in CS (COMM) 519/2018] by the Plaintiff to their prosecuting agent. They have also not brought forth any evidence to establish that the inadvertent omission by the Plaintiff’s agent materially impacted the grant of the Suit Patent. Contrastingly, the Plaintiff’s witness [PW-2] has proved that the particulars pertaining to all the corresponding applications to the Suit Patent were shared with their agent. While in certain instances, the Plaintiff’s records may not have reflected the recent status, there is no basis to conclude that such omission was deliberate, or with an intent to withhold material facts from the Patent Office.

Discrepancy regarding European Patent

73. Lastly, the Defendants pointed to the incomplete disclosures in respect of the European Patent Application No. 94200387.2 dated 15^th February 1994,³⁴ from which the Suit Patent claimed priority. This priority claim was also reflected in Form 4 accompanying the Parent Application. Subsequently, the EP application lapsed on 16^th June, 1994 due to non-payment of fees. The Defendants submitted that the Plaintiff intentionally depicted the status of the EP application as ‘pending’ at the time of filing of the Divisional Application in 1999. On the other hand, the Plaintiff explained that this error occurred due to manual record-keeping constraints, particularly as patent records were maintained by entering data from paper forms. They submitted that the details of the EP application from Form 4 of the Parent Application were replicated in the Divisional Application, which led to the inadvertent error. However, in the subsequent communication of 16^th July, 2004 to their patent agent, the Plaintiff did not mention the EP application.

74. Further, the Plaintiff explained that the EP application had no bearing on the Suit Patent beyond serving as a priority document. They informed that after the lapse of EP application, they filed a corresponding PCT application bearing IB95/00070 in 1995, claiming priority from the EP application. This PCT application designated several European countries, including Germany, France, United Kingdom, and Italy, and was eventually granted as EP 745254. Furthermore, PW-2 also confirmed when this PCT application matured into national grants, the Plaintiff disclosed these developments in its subsequent Form 4 filings. He also confirmed that the Suit Patent directly corresponded to the EP application resulting from the PCT filing.

75. The Court finds merit in the Plaintiff’s explanations, which are substantiated by the testimony of PW-2. Indisputably, the Plaintiff did not include the EP application in the updated foreign filing status report dated 16^th July, 2004, as this application was no longer surviving. This indicates that the Plaintiff acknowledged their earlier oversight and intended to provide a corrected record to the Patent Office. Given that the EP patent served only as a priority document, the non-disclosure of its lapse was, at best, an error lacking any mala fide.

Conclusion

76. In evaluating whether a patent holder has failed to comply with Section 8 of the Patents Act, the non-disclosure must be deliberate and substantial enough to have impacted the decision to grant the patent. The Defendants relied on the judgments in Chemtura Corporation v. Union of India,³⁵ and F. Hoffman-La Roche Ltd., Switzerland and OSI Pharmaceuticals Inc, New York v. Cipla Ltd.³⁶ to assert that compliance with Section 8 of the Patents Act is mandatory, and any deviation or inadequate disclosure leads to revocation of the patent. However, the jurisprudence on this issue has since evolved with the Division Bench’s judgment in Maj. (Retd.) Sukesh Behl and Anr. v. Koninklijke Philips Electronics N.V.³⁷, discussed above. The Court noted that the absence of complete compliance does not automatically imply that there was a deliberate violation of Section 8, particularly where some degree of disclosure was made. The Courts have consistently emphasized that a simple non-disclosure of information does not render the patent revocable under Section 64(1)(m). Instead, the violation must be “patent and manifest,” demonstrating a significant impact on the grant of the patent.³⁸

76.1. On this issue, it would be profitable to also refer to the US decision of Therasense, Inc. v. Becton, Dickinson & Co.,³⁹ which established the “but-for” materiality test. Under this test, a reference or withheld information is considered material only if the Patent Office would not have granted the patent had it been aware of the undisclosed information.

76.2. The evidence supports that the omission of certain particulars of corresponding foreign applications was not material and intentional, as required under Section 64(1)(m) for revocation of the patent. This oversight was subsequently rectified and brought to the attention of the Patent Office through an affidavit of the prosecuting agent, as detailed in Annexure D of Mr. Solomon’s affidavit dated 14^th September, 2012 [Mark PW-2/11 in CS (COMM) 519/2018]. The Defendants have not disputed the filing of this affidavit before the Patent Office. The submission of this affidavit indicates that the Plaintiff took corrective measures upon identifying the omission, reinforcing that there was no intent to mislead or suppress information. This is particularly relevant as there is no record of any invalidation ruling by a national court or adverse report from a national patent office against the Suit Patent during its term.

76.3. The inadvertent omission, attributable to a clerical error, does not meet the threshold of material suppression that would influence the grant of the Suit Patent. Jurisprudence on this issue has consistently held that honest mistakes or procedural lapses, absent proof of deceitful intent, do not justify patent revocation. There is no basis to conclude that the Indian Patent Office would have refused the Suit Patent had it been made aware of the re-examination of the US counterpart. The Plaintiff’s submissions, supported by affidavits and corroborated by testimony of their witness, establish that the requisite details were provided in a manner that met the statutory obligations.

76.4. The burden of proof on the Defendants for showing deliberate non-disclosure that prejudiced the grant of the Suit Patent, has not been met. In view of the oral and documentary evidence, the Court holds that Plaintiff acted in good faith in disclosure of the information under Section 8 of the Patents Act, thereby negating any inference that the Suit Patent is liable to be revoked under section 64(1)(m) of the Patents Act.

III.II. Whether the invention claimed in the Suit Patent is publicly known, not new, or publicly used under Section 64(1)(e) of the Patents Act?

77. The Defendants referred to the US Patent No. 5206646 titled “Digital Modulating Method” owned by Sony Group Corporation [Mark X-11 in CS (COMM) 423/2016],⁴⁰ to contend that the claims within the Suit Patent lack novelty and are, therefore, liable for invalidation under Section 64(1)(e) of the Patents Act. Their arguments and evidence in this regard are detailed below:

77.1. The Sony Patent predates and anticipates the Suit Patent. The subject matter of this earlier patent is nearly identical, with the only difference being the coding tables used. Specifically, they argued that the hardware and circuitry elements claimed in the Suit Patent were known in the public and were disclosed in the prior art – the Sony Patent. As is evident from the following comparison drawn in the evidence by way of affidavit of DW-2, Sony Patent also features an 8-to-16-bit converter, which overlaps significantly with the EFM+ coding technology claimed by the Plaintiff:

77.2. The foundation of the inventions claimed in the Suit and Sony Patents is the converter, where the conversion of information from 8-bit to 16-bit code word occurs. A comparison of the information words and corresponding coded words under the Suit Patent and Sony Patent reveals several identical conversions. For instance, the code word corresponding to information word “227” in the Sony Patent is the same as the code word selected from set V1 of the Suit Patent for information word “227” (from the first set of tables, ranging from 0 to 255). Similarly, the code word corresponding to information word “37” in the Sony Patent is identical to the code word selected from set V2 of the Suit Patent for information word “37” (from the first set of tables, ranging from 0 to 87). These similarities underscore the fact that Sony Patent anticipates and overlaps with the claims made in the Suit Patent.

77.3. Therefore, the primary difference between the converters entailed in the Suit Patent and the Sony Patent lies in the conversion rules – essentially, the algorithm or program governing the process. This aspect constitutes a mathematical method per se, which, under the law, does not qualify as a patentable invention.

77.4. The Defendants referenced to the cross-examination of PW-2, where he was confronted regarding the extent to which Sony Patent anticipated the EFM+ technology disclosed in the Suit Patent. They argued that PW-2 did not categorically refute the assertion that the Sony Patent encompassed significant aspects of the EFM+ technology. To support their contention, Defendants cited the following extracts from the cross-examination of PW-2:

Cross-examination conducted on 27th and 28th August, 2014 in CS (COMM) 423/2016:

“Q.461 As far as EFM+ reference is made to US Patent No. 5,206646 as being the patent associated with EFM+. Are you familiar with this patent?

Ans: I cannot say because I do not know patent numbers by heart.

Q.462 This US Patent No. 5,206646 was attached to the Defendants’ documents at page 618 Mark X-11 filed along with the Defendants’ List of documents dated 27^th August, 2012. Can you now identify this document?

Ans. No, I am not familiar with this document.

Q.463 Have you studied the contents of the document at any point of time?

Ans. No.

Q.464 I put it to you that this document Mark X-11 discloses in Fig.1 at page 619, the 8 -> 16 modulation and therefore the EFM+. What do you have to say on this?

(Objected to by the learned counsel or the Plaintiff on the ground that the prior art cited in the above question has been sufficiently distinguished in para 16(c) of parawise reply to the preliminary objections in the Replication and forms a part of the Court record).

Ans: I deny that this document discloses EFM + modulation according to the suit patent.

xx    …    xx    …    xx

Q.513 I now draw your attention to figure 1 of US patent no.5206, 646 which is marked as Mark X-11 where there is also shown a converter which receives 8 bit binary input signals and converts these signals to 16 bit output signals as shown. Would you say this converter is analogous to the converter 60 in that it also contains a logical circuitry with a number of gates & ports to carry out the conversion?

Ans: I would say this converter also contains logical circuitry but it will implement a different method of conversion. Furthermore, I draw your attention to the fact that this US patent no.5206,646 was cited as prior art during the prosecution of our patent US 5696505 meaning that the US Examiner has recognized that this patent US 5206, 646 is not material to the patentability of our US 5696505.

xx    …    xx    …    xx

Q.517 Would you therefore say that in respect of patent no.5206,646, the inventive step of this patent would also lie in the method as claimed in that patent and the logical circuitry that implements that method cannot be considered as such inventive?

Ans: I cannot answer this question because I have insufficient knowledge of this patent.”

Cross-examination conducted on 28th November, 2014 in CS (COMM) 519/2018:

“Q.454 I ask you to turn to Fig. 1 of this document (Ex. PW2/D10) where it shows an 8 bit information word being converted to a 16 bit code word using the converter marked with reference 3. Please look at Exh. PW2/3 filed with your affidavit of evidence under Index dated 12.03.2013 on page 88 and Fig 3.3-1. Is it not correct that the schemes shown in both figures are similar?

Ans. That is incorrect because I see 5 blocks in Fig.1 of patent US 5206646 and I see two blocks with different names in Fig. 3.3-1 on page 88 of Ex PW2/3.

Q.455 I put it to you that both schemes involve conversion of 8 bit information words to 16 bit code words.

Ans. As mentioned before, patent No.US5206646 is mentioned as prior art by the US Examiner to our corresponding US patents of the suit patent in India. The schematic diagram in Fig.1 of said US patent shows an 8 bit to 16 bit converter which must use a different method than the method used in the patent in suit. Our patent in suit also is about 8 bit to 16 bit conversion but as said before, the method which we use is new and inventive compared to the method used in US 5206646.

Q.456 Is it correct that in the suit patent the 8 bit to 16 bit conversion happens in blocks of 8 bit information words but one block at a time?

Ans. I believe in our suit patent two blocks at a time are processed but I am not completely sure about this.

xx    …    xx    …    xx

Q.467 I put it to you that the inventor Mr. Immink has himself stated that EFM+ has properties similar to those of EFM (para 2 lines 2 & 3 and column 2 paragraph 2 lines 1 & 2) and that both these codes are members of the family of DC 3 Run Length Limited Codes. For instance, in his article, "EFM coding: squeezing the last bits". The article is dated 3^rd August, 1997.

Ans. I can see that the inventor wrote it but I can also see that in para 2 he states "the strategy of EFMPIus (which is the same as EFM+) is much more refined and much more powerful than the original EFM. The complexity of EFM+ is also significantly greater.”

77.5. Further, Defendants argued that, in the Suit Patent, the conversion rules are stored in integrated circuit chips as look-up tables, and there is no requirement for additional hardware elements to perform the conversion steps. The Suit Patent does not claim a combination of hardware elements essential to the process of converting information words into code words. Even if the Plaintiff were to assert that the Suit Patent encompasses hardware elements, the replication process does not necessitate such hardware. Thus, the hardware elements cited by the Plaintiff are neither used, nor essential to the replication activities carried out by the Defendants, undermining any claim of infringement.

77.6. The underlying invention of the Suit Patent lacks any substantial improvement in hardware capability, and as such, cannot be considered a genuine technological innovation. Any hardware limitations referenced in the Suit Patent are incidental, and do not contribute to a technical advancement in the systems designed for encoding or decoding data on compact discs. This reinforces their claim that the core invention rests on the rules of conversion – a mathematical algorithm that, under the Patents Act, does not meet the criteria for patentability as a standalone invention.

78. The Plaintiff, on the other hand, controverted the allegations of the Defendants, arguing that the Suit Patent discloses a different invention from the Sony Patent. They submitted that a review of Figure 8 in the Suit Patent reveals that the core functions described in the preamble of claim 1 are executed within the converter block and a parallel-connected buffer memory. This converter block, which constitutes the essence of the claimed invention, operates by implementing rules of conversion. These rules, embedded as a computer program within the converter block, facilitate the conversion of a series of m-bit information words into a series of n-bit code words according to predefined conversion principles. The Plaintiff also emphasised that the Defendants, within their own submissions, have conceded that the Sony Patent involves a different mechanism compared to the claimed invention of the Suit Patent. This admission, according to the Plaintiff, contrasts their argument and affirms that the cited document neither anticipates the Suit Patent, nor renders it obvious.

Does the Sony Patent anticipate the Suit Patent?

79. The Court has examined the submissions and evidence on record. For a patent to be invalidated on the grounds that the invention claimed was not new, or was publicly known or used before the priority date, the prior art must comprehensively disclose or anticipate the claimed invention. Therefore, in assessing the Defendants’ challenge, it is essential to consider whether the Sony Patent discloses or anticipates the invention claimed in the Suit Patent, in its entirety. This means that the Sony Patent must disclose every feature of the Suit Patent, with the same arrangement and functionality.

80. The Sony Patent describes a digital modulation method that converts 8-bit data into 16-bit channel bits. This process uses successive 14-bit channel bits, similar to the Eight-to-Fourteen Modulation method,⁴¹ and includes two consecutive ‘0.’ Figures 2A-2G of the Sony Patent clearly illustrate this encoding process. In contrast, the Suit Patent introduces EFM+ encoding, a novel mechanism that addresses a key limitation of earlier EFM technologies, including the Sony Patent. Specifically, the Suit Patent resolves the ambiguity in decoding that arises when a 16-bit channel code corresponds to multiple 8-bit data words. This issue is inherent in the Sony Patent, but is not addressed or resolved therein. The Suit Patent, on the other hand, provides a unique solution through a method that ensures one-to-one correspondence between code words and data words, achieving unambiguous decoding. This feature is explicitly detailed in the specification and claims of the Suit Patent.

81. A fundamental difference between the two patents lies in the capacity of the Suit Patent to eliminate the decoding ambiguity present in the Sony Patent. In the Sony Patent, a 16-bit channel code may not uniquely identify a single 8-bit data word, leading to potential errors during decoding. The Suit Patent resolves this limitation by employing advanced classification and coding techniques, as described in its claims and look-up tables. This novel feature differentiates the Suit Patent from the Sony Patent, making it new. The Sony Patent is primarily focused on channel modulation, with its innovation residing in the specific arrangement of channel bits for the EFM process. While it may perform 8-bit to 16-bit conversion, it does not go beyond this to address challenges such as decoding precision and storage efficiency. In contrast, the Suit Patent provides a framework that not only encodes data but also ensures efficient storage and unambiguous decoding, making it distinct in both scope and functionality.

82. To better understand the distinction between the Suit Patent and the Sony Patent, we imagine a situation where one is translating a message into a secret code. In the Sony Patent, the translation process converts 8-letter words into 16-letter encoded words. However, some of these encoded words may correspond to more than one original 8-letter word, making it unclear which message was initially sent – a problem akin to receiving two identical keys for different locks. This ambiguity can lead to errors when decoding the message. In contrast, the Suit Patent introduces an innovative mechanism that ensures each encoded 16-letter word corresponds to only one unique 8-letter word. It achieves this by classifying and selecting code words in such a way that decoding is precise and unambiguous, akin to having a unique key for each lock. Furthermore, the Suit Patent achieves this while maintaining higher data efficiency, allowing more information to be stored on a DVD. This critical advancement solves the ambiguity problem and ensures the compatibility and reliability of DVDs, setting it apart from the Sony Patent.

83. The EFM+ modulation, which constitutes the heart of the Suit Patent, is more than just an 8-to-16-bit conversion. It involves a specific set of rules and processes for encoding that allow unique identification of information words during decoding – elements absent from the cited prior art. PW-2 categorically denied that the Sony Patent discloses the EFM+ modulation as claimed in the Suit Patent. He clarified that while the Sony Patent does disclose a converter that receives 8-bit binary input signals and outputs 16-bit signals, it implements a different method of conversion compared to the method claimed in the Suit Patent. This assertion reinforces the Plaintiff’s position that the specific conversion methodology in the Suit Patent is distinct and not disclosed by prior art. The testimony of PW-2 directly challenges the Defendants’ contention that the Sony Patent anticipates the claimed invention.

84. Furthermore, the Plaintiff highlights that the Sony Patent was cited as prior art during the prosecution of the Plaintiff’s corresponding US Patent No. 5696505. However, the US Patent Examiner, after due consideration, waived this objection, affirming that the Sony Patent did not compromise the patentability of US Patent No. 5696505. While this determination is not conclusive for assessing inventiveness under the Patents Act, it is nonetheless a persuasive factor. The fact that a comparable examination found the Sony Patent insufficient to negate novelty or inventive step lends weight to the Plaintiff’s argument that the Suit Patent is not anticipated. This reinforces the position that the Sony Patent does not disclose all essential elements of the invention claimed in the Suit Patent.

Conclusion

85. The jurisprudence on anticipation under Section 64(1)(e) of the Patents Act supports the Court’s analysis. For a patent to be invalidated on this ground, the prior art must disclose every element of the claimed invention in the same arrangement and functionality. A mere resemblance in certain aspects is insufficient unless the prior disclosure is complete and enabling. In Lava International Limited (Supra), a coordinate bench of this Court emphasized that anticipation requires complete and enabling disclosure. Furthermore, in Telefonaktiebolaget LM Ericsson v. Intex Technologies (India) Ltd.,⁴² it was clarified that technical advancements and practical application of standard-essential technologies must be considered while evaluating novelty and inventive step. Applying these principles, the role of the Suit Patent in the development of the DVD standard and its resolution of technical limitations present in prior art reaffirm its novelty. The Defendants have failed to demonstrate that any single prior art reference fully discloses the claimed invention with the same structure, operation, and effect. Consequently, the challenge under Section 64(1)(e) fails.

III.III. Whether the Suit Patent is liable to be invalidated on the ground of suppression and fraud under Section 64(1)(j)?

86. The Defendants’ arguments to seek invalidity of the Suit Patent under Section 64(1)(j) are summarized below:

86.1. The Suit Patent was initially presented as a Divisional Application stemming from the Parent Application bearing No. 136/CAL/1995, filed in 1995. The Divisional Application was filed four years later, this time before the Chennai branch of the Patent Office. The Parent Application was subsequently abandoned [Ex. PW2/D-1 in CS (COMM) 423/2016]. The Parent and Divisional Applications ought to have been filed before the same branch of the Patent Office.

86.2. Both the Divisional and Parent Applications are identical, with no discernible new claims being introduced in the Divisional Application, which is a prerequisite for filing a divisional patent under Section 16 of the Patents Act. The commonality of the claims is obvious from the drawings and the date of specification. The Plaintiff, or its agent, had cancelled certain dates on the documents, further suggesting procedural irregularities.

86.3. The Plaintiff filed five divisional applications – Indian Patent Nos. 184753,⁴³ 185349,⁴⁴ 221405,⁴⁵ 221406,⁴⁶ and 218255 (the Suit Patent) – originating from the Parent Application. In his cross-examination, PW-2 admitted that these divisional applications were aspects of the same invention, which was claimed in the Parent Application. Thus, there is no plurality of inventions, all the divisional applications are parts of the same alleged inventive concept. The claims covered in the corresponding European patent of the Plaintiff, are identical to the Parent Application, Suit Patent, and Patents No. 184753 and 185349. However, no divisional applications were filed in Europe, and where all claims were covered in a single application.

86.4. The extracts from the cross-examination of PW-2 relied upon by the Defendants, are reproduced below:

Cross-examination conducted on 06th - 07th August, 2018 in CS (COMM) 423/2016

“Q.282 In response to Q.215, have you got the two Patent numbers?

Ans. Yes. They are Indian Patent No.185349 i.e. for No.14.746IN-A and Indian Patent No.184753 i.e. for No.14.746IN-B.

Q.283 I put it to you that these two Patent Nos. 185349 and 184753 are divisional Patent applications to 136/CAL/95 the parent Patent application to the suit patent.

Ans. That is correct.

xx    …    xx    …    xx

Q.327 You have studied the records of the internal file reference No. 14.746 of which the suit patent forms the family. I put it to you that in India, this family consists of one parent patent application 136/CAL/1995, which was abandoned, and five Divisional Patents to the same invention being Patent Nos. 185349, 184753, 221405, 221406 and 218255?

Ans. That is correct. However, the divisional patents relate to different aspects of the same invention.

Q.328 I put it to you that the divisional status for the suit patent is vital to you without which you would not have been able to enjoy the priority date of the parent 136/CAL/1995 and without such a priority date, the suit patent would have lacked novelty.

Ans. I do not understand the question. A divisional automatically gets granted priority date of parent.

Q.329 If the suit patent did not enjoy a priority date as a divisional application, it would have lacked in novelty. Is it correct? (Objected to as being argumentative)

Ans. I cannot answer that question before seeing the prior art.

Q.330 Is it not correct that several of the corresponding patent applications were published prior to the filing of the Indian Patent Application and these would have constituted prior art had the suit patent not been considered as a divisional application to 136/CAL/1995?

(Objected to as being argumentative)

Ans. If the publication date is before the filing date of divisional application, that is correct. But, the divisional enjoys priority date of the parent application, so this is a non-relevant hypothetical question.

Q.331 Please refer to your answer to Q.327 where you stated that the divisionals related to the different aspects of the same invention. Were these different aspects of the same invention not present in the parent application 136/CAL/1995 which was abandoned?

Ans. They were all present in the parent application.

Q.332 Were these different aspects of the same invention not present in the European Patent No.745254?

Ans. They were present. In fact, the Indian Parent Application as filed is a copy of the European Patent Application.

Q.333 How many divisional applications did you file to the European Patent Application?

Ans. None. Because the European examiner granted all aspects of the invention in different claims in one patent.

Q.334 Have you studied the file and records of the parent patent application 136/CAL/1995 which was eventually abandoned for non-compliance of the objections by the Indian examiner of the Indian Patent Office?

Ans. As stated before I have read this file but not studied it. Furthermore, according to Indian practice, there is a non-extendable time limit before which the grant of the patent must have been accomplished and therefore, Plaintiff decided to file divisionals in order to safeguard its rights.

Q.335 Have you filed divisional patent applications to this invention in any other country beside India?

Ans. Yes.

Q.336 Could you name those countries?

Ans. I can name US and China and maybe more countries which I cannot remember.

Q.337 I put it to you that no divisional application was filed in the US?

Ans. Since I am not a US patent attorney, I may have answered by mistake that probably those applications were called continuations in part.

Q.338 I put it to you that you had not complied with the objections of the Indian examiner in 136/CAL/1995 and deliberately got this application abandoned?

Ans. That is denied.

Q.339 I put it to you that in the parent Application No.136/CAL/ 1995, your local agent was the Calcutta branch of the Cantwell & Co. and you deliberately and with ulterior motive appointed the Madras branch of De Penning and De Penning only because the alleged divisional application should not have been examined by the same examiner who had fatally objected to the claims of the parent Patent Application, thus taking undue advantage of the Indian patent system having multiple patent offices not interacting with each other at that time and played fraud on the Controller.

Ans. I pertinently deny all of this.

xx    …    xx    …    xx

Q.395 I am showing you Exh. PW2/D-18 the print out of Indian Patent No.184753, Exh. PW2/D-19 print out of Indian Patent No. 185349, Exh.PW2/D-20 print out of Indian Patent No.221405 with the file wrapper of this patent available on the Indian Patent Office website; Exh. PW2/D-21 print out of Indian Patent No.221406 with the file wrapper of this patent available on the Indian Patent Office website. I put it to you that each of these patents disclose different aspects of the same inventive concept as in 136/CAL/1995. (Objected to on the ground that the supporting 65-B affidavit is filed on behalf of Maj. (Retd.) Sukesh Behl (Defendant No. 1) without disclosing the complete URL, computer and printer used by him for taking the said print-out; Further, the document that the witness is now shown is multiple pages and the Defendants had time to file this in Court when they had the opportunity to do so and the witness has not identified the document).

Ans. That is correct.

Q.396 And therefore, the matter disclosed in the body of the specification of these patents is also similar to the matter disclosed in the body of the specification of the suit patent No. 218255.

Ans. That is correct.

Q.397 I put it to you that all six documents i.e. the patent specification of 136/CAL/1995, Indian Patent No.184753, Indian Patent No. 185349, Indian Patent No.221405, Indian Patent No.221406 and Indian Patent No.218255 contain claims which are overlapping each other in the respective documents.

Ans. The patent specification of the parent 136/CAL/1995 contained all claims relating to different aspects of the inventive concept, but has not been granted. Hence, this patent specification cannot be taken into account. The granted patents all contain different claims relating to different aspects of the same inventive concept, and as such, those claims all have different scopes and are not considered to be overlapping.”

[Emphasis Supplied]

Cross-examination conducted on 27th November, 2014 in CS (COMM) 519/2018

“Q.368 Is the patent specification of 185349 and its drawings almost identical to the specification and drawings filed in 136/CAL/1995 and the suit patent?

Ans. Apart from the claims, the title and the abstract, I believe they are almost identical.

Q.369 Is it correct that the claims of patent No. 185349 are part of the same inventive concept as disclosed in 136/CAL/1995?

(Counsel for the Plaintiff states that despite the objection on scope of claims, the counsel for the Defendants is continuing to question along the same lines and therefore seriously objected to.)

Ans. They are different inventions belonging to the same overall inventive concept.

Q.370 Is Indian Patent No. 221406 a divisional to 136/CAL/1995?

Ans. Yes.

Q.371 Is the patent specification of 221406 and its drawings almost identical to the specification and drawings filed in 136/CAL/1995 and the suit patent?

Ans. Apart from the claims, the title and the abstract, I believe they are almost identical.

Q.372 Is it correct that the claims of patent No.221406 are part of the same inventive concept as disclosed in 136/CAL/1995?

(Counsel for the Plaintiff states that despite the objection on scope of claims, the counsel for the Defendants is continuing to question along the same lines and therefore seriously objected to).

Ans. They are different inventions belonging to the same overall inventive concept.

Q.373 Is Indian Patent No. 221405 a divisional to 136/CAL/1995?

Ans. Yes.

Q.374 Is the patent specification of 221405 and its drawings almost identical to the specification and drawings filed in 136/CAL/1995 and the suit patent?

Ans. Apart from the claims, the title and the abstract, I believe they are almost identical.

Q.375 Is it correct that the claims of patent No.221405 are part of the same inventive concept as disclosed in 136/CAL/1995?

(Counsel for the Plaintiff states that despite the objection on scope of claims, the counsel for the Defendants is continuing to question along the same lines and therefore seriously objected to).

Ans. They are different inventions belonging to the same overall inventive concept.”

[Emphasis Supplied]

86.5. Basis the testimony noted above, Defendants argued that PW-2 has admitted that there is no material difference in the body of the specifications of the Suit Patent, the Parent Application, and the other four divisional applications. This indicates that there has been double patenting, where the same invention has been sought to be protected in the Parent Application and the divisional applications, including the Suit Patent. In accordance with Section 21 of the Evidence Act, 1872,⁴⁷ this statement must be considered as admission.

86.6. Further, the Defendants’ expert witness, Mr. Chirag Tanna [DW-2] has also affirmed in his evidence, that the specifications disclosed in the Suit Patent overlap with the claims in Indian Patent No. 184753 and 185349 and consequently, the claims of the Parent Application. These facts were concealed by the Plaintiff from the Patent Examiner at the time of examination of the Suit Patent.

86.7. Such discrepancies raise questions about the integrity of the filing process and suggest misrepresentation or concealment of facts. These facts should be considered as evidence of Plaintiff’s non-compliance with the statutory requirements for divisional applications and potential misrepresentation during the patent prosecution process. Therefore, the Plaintiff has deliberately acted in violation of the statutory rules for patent prosecution. The Plaintiff’s failure to make a full disclosure constitutes fraud under Section 64(1)(j) of the Patents Act, making the Suit Patent liable for revocation by this Court.

87. The Court has carefully considered the submissions and evidence presented by both parties. Since the Defendants seek revocation of the Suit Patent under Section 64(1)(j) on the ground that it was secured through false suggestions and misrepresentations concerning the Parent Application and the divisional applications derived from it, the burden of proof squarely rests on them. To succeed under this provision, the Defendants must establish that the patentee deliberately misled the Patent Office by knowingly making false statements or representations with the intent to deceive the examiner. An allegation under Section 64(1)(j) requires more than mere inadvertence, error, or oversight – it necessitates proof of a wilful act of misrepresentation or concealment, demonstrating that the patentee sought to secure an unfair advantage in the grant process. Thus, the onus lies on the Defendants to furnish clear and convincing evidence that the Plaintiff engaged in fraudulent conduct or material misrepresentation.

88. Bearing the above noted principles in mind, the Court now proceeds to evaluate the merits of the grounds put forth by the Defendants.

III.III.I. Re: Parent and Divisional Applications

89. The Suit Patent originated as a divisional application from the Parent Application filed before the Patent Office, Kolkata, in accordance with Section 16 of the Patents Act read with the Patent Rules, 1972.⁴⁸ A divisional application, once submitted, is independently examined by the Patent Office, separate from the parent application. It goes through the same examination process as any other patent application, and objections can be raised independently of the parent application.

90. Under Rule 4 of the 1972 Rules, the “appropriate office” for an applicant without a place of business in India is determined basis the address for service provided by the applicant. In this case, the Parent Application was filed in Kolkata, where the Plaintiff was represented by Cantwell & Co., listing the address for service in Kolkata. Conversely, the Divisional Application for the Suit Patent was filed before the Patent Office, Chennai with DePenning & DePenning as the agents on record, whose address for service was in Chennai. Pertinently, on the date of filing of the application for the Suit Patent, there was no embargo under the Patents Act or the 1972 Rules on filing of a divisional application before a different Patent Office. Since the jurisdiction for patent filings is determined by the address for service submitted by the applicant, the Plaintiff has adequately explained the reason for filing the Divisional Application before the Patent Office, Chennai. Consequently, this ground urged by the Defendants is found untenable.

91. The Defendants asserted that the Plaintiff deliberately withheld information regarding the abandonment of the Parent Application, alleging that while the Parent Application lapsed, the Plaintiff pursued the Divisional Application, ultimately securing the grant of the Suit Patent. However, this assertion is flawed. Under the framework of the Patents Act, a divisional application can be filed while the parent application is pending, and has not culminated in the grant of patent. The Parent Application in this case was filed on 13^th February, 1995 and was deemed abandoned on 22^nd March, 1999 under Section 21 of the Patents Act because the necessary procedural steps for its prosecution were not completed within the prescribed timeframe.

92. Clearly, the Parent Application lapsed after the Divisional Application had already been filed on 17^th March, 1999. Consequently, there was no legal impediment preventing the Plaintiff from filing the Divisional Application. Furthermore, the Defendants have also failed to provide cogent evidence, demonstrating the Plaintiff’s intent to circumvent the provisions of the Patents Act. Therefore, the subsequent abandonment of the Parent Application due to efflux of time has no bearing on the validity of the filing or scrutiny of the Divisional Application.

93. Further, the Plaintiff ensured that all necessary details regarding the Parent Application were available to the examiner during the scrutiny of the Suit Patent. This is evinced from the clear reference to the Parent Application in Form 1 of the Divisional Application. Far from suppressing this information, the Plaintiff explicitly informed the Patent Office on 18^th February, 2003 about the deemed abandonment of the Parent Application while prosecuting the Divisional Application. The letter dated 18^th February 2003, issued by the Plaintiff’s patent agent to the Patent Office is extracted below: