What is Patent Infringement?
Patent is one of the most important forms of Intellectual Property (IP). It is a set of exclusive rights granted by the Government to an inventor or its assignee for a limited period (typically 20 years from the date of filing of the first patent application), in exchange for a public disclosure of the invention. “Patent Infringement” in simple words means intrusion or encroachment upon the patent rights of patent holder or patentee, where the patent is valid and legally enforceable in a given jurisdiction (patent rights are territorial and the patent granted in a specific jurisdiction is valid and enforceable only in that jurisdiction). In India, the law governing patents is the Patents Act, 1970, which was amended in 1999, 2002 and 2005 to adhere to the WIPO and TRIP guidelines on Patents. Since 2005 amendments, there are many litigations on patent right infringements and therefore patent jurisprudence has evolved over the years with various judgements on many patent related cases by the High court and Supreme court. The patent validity is being tested for innovativeness and patentability of patent.
What acts constitute Infringement?
Section 48 of the Patents Act, 1970 grants the following rights to the patentee:
In case of a product patent, the following sections would amount to infringement – making, using, offering for sale, selling or importing for these purposes, the product in India without the permission of the patentee.
In case of a process patent, the following would amount to infringement – using, offering for sale, selling or importing for these purposes the product obtained directly by that process in India without the permission of the patentee.
Any person who, without the consent of the patentee performs the above activities, infringes the patent.
Types of Patent Infringement
Direct infringement - which is the most apparent and common type of infringement. This type of infringement includes marketing, sale or commercial use of an exact patented item or invention that performs substantially identical functions. Direct infringement may be literal or nonliteral (also known as the doctrine of equivalents). Literal infringement occurs when each and every component in the patent specification has been used in the alleged infringing product/device or process; while Non-Literal infringement occurs when the infringing device or process may be similar or equivalent to the claimed invention (performs substantially the same function; in substantially the same way and to achieve substantially the same result – Triple Identity Test).
Indirect infringement is when infringement does happen but the direct infringement is facilitated by someone else. Indirect infringement are of two types, inducted infringement wherein one actively induces the other person to infringe a patent by encouraging, assisting, aiding, inducing him/her to do so and contributory infringement, wherein there is an intentional participation/assistance by one party in an act of infringement to the other party making them vicariously liable for the acts of the infringer.
What acts do not constitute Infringement?
There are certain acts which do not constitute/result in infringement. Section 107A states that the following acts do not constitute infringement -
Any act of making, constructing, using, selling or importing a patented invention solely for uses reasonably related to the development and submission of information required under any Indian law or law of a country other than India, that regulates the manufacture, construction, use, sale or import of any product.
The importation of patented products by any person from a person who is duly authorised by patentee under the law to produce and sell and distribute the products.
Once the patent specifications are made available to the public, third parties are permitted to use such information to conduct experiments for the purpose of doing further developments on the patent (this provision is also called bolar provision which allows manufacturers to begin the research and development process in time to ensure that affordable, equivalent generic medicines can be brought to market immediately upon the expiry of the product patent), typically useful in case of drug manufacturers. Moreover, it is not considered as infringement if a patented product is imported into a country by a party from another, who is authorised to do such act (this provision is also known as parallel imports wherein a machine though patented in India, can be imported (without the consent of the patentee) from the patentee’s agent, say, China, who manufactures it at a lower cost with the consent of the patentee.
Burden of Proof in case of Patent Infringement
In any suit for infringement of a process patent, the defendant may be directed to prove that the process used by him to obtain the product that is identical to the product of the patented process, is different from the patented process. Such direction may be passed by the court, if, the subject matter of the patent is a process for obtaining a new product; or, there is a substantial likelihood that the identical product is made by the process, and the patentee or a person deriving title or interest in the patent from him, has been unable through reasonable efforts to determine the process actually used. However, before obtaining such a direction, the plaintiff (claimant) has to prove that the product is identical to the product directly obtained by the patented process. In patent infringement suits the damages are not granted for the use of the patented invention during the period prior to the date of acceptance of the patent application.
Remedies in case of Infringement
The claim of patent by the patentee during the lawsuits are being tested for innovativeness and patentability of the patent. If the court is not convinced with these aspects, in many cases, the patent claim of patent applicant was dismissed by Indian judiciary. However, if the patent right is established by the patentee, by establishing three essential elements like prima facie case, irreparable injury and balance of convenience, in such cases, injunction orders were passed by the courts to prevent the infringement; and suitable remedies to protect the patent rights were also passed in various patent infringement.
In the case of infringement of the patent, there can be a suit filed in the appropriate court, which may be a District Court or a High Court. In case a patent infringement suit is filed in a district court and a counter claim is filed by a defendant, the patent infringement suit is transferred to a High Court. In the infringement suit, the plaintiff can seek an injunction and damages or order for an account for profits from the potential infringer of the patent. Where the defendant proves that at the time of infringement, he was not aware of and had no reasonable grounds to believe that the patent existed, an order for damages or accounts for profits is not granted. Therefore, the patentee should take steps to convey to the general public that his product or process is patented. In an infringement suit, infringing goods, materials, and equipment used for their production can be seized, forfeited, or destroyed. The courts can appoint suo motu or on application of a party to the suit, scientific advisors to assist the court or to submit a report on a specified question. The Patents Act does not provide for criminal action in case of patent infringement.
The period of limitation for instituting a suit for Patent infringement is three years from the date of infringement.
Division and Commercial Appellate Division of High Courts Act 2015, this average timeline is expected to be reduced further to one to two years. The courts in India, especially the High Court of Delhi, have warmed to the idea of fast-track litigation in intellectual property matters. This trend of fast-track litigation is becoming increasingly common in patent litigation in view of the relatively lower chances of obtaining an interim injunction as well as the limited term of exclusivity available under the patent regime. There have been several instances where the cases were disposed of within a few months, for example, Bajaj Auto Limited v TVS Motor Company Limited, 2009, F Hoffmann-La Roche Ltd & Anr. v Cipla Limited, 2009, B Braun v Rishi Baid (2010) and Bristol-Myers Squibb v Ramesh Adige (2011)
Patent litigation can be an extremely expensive and risky affair, so extreme caution must be exercised and since it is possible to assess the chances of patent infringement, it is worth doing this exercise in advance, right at the stage of starting the new project. However, in extreme scenarios, there may be "essential patents" that cannot be avoided for developing certain types of products or for meeting certain technical standards. In such cases, one has to proceed very carefully and strategically by exploring option of seeking permission to use such essential patents from the patent holder (s) or bypassing the patent claims or even waiting for expiration of such patents, as the case may be.
How much does it cost to sue for patent infringement?
The typical range of costs in a suit for patent infringement would be:
For the filing of a suit, approximately US$50,000 to US$60,000 not including stamp duty and court fees, which will be based on the amount of damages sought by the plaintiff;
During the trial, the fee may range between US$150,000 and US$300,000, depending on the complexity of the case and the fee of the senior advocate engaged; and
For an appeal to the Supreme Court, the fee may range between US$350,000 and US$650,000.
The fees mentioned above may vary depending on the complexity of the case and the number of court appearances. The Bar Council of India prohibits advocates from charging fees to their clients contingent on the results of litigation or paying a percentage or share of the claims awarded by the court.