2001 (11) TMI 1038 - HC - Companies Law

Summary

Issues Involved:
1. Locus standi to institute the suit.
2. Lapsing of design registrations.
3. Functional shapes or mechanical devices as subject matter of design registration.
4. Validity of patents as obvious improvements.
5. Acquiescence, estoppel, delay, and laches.
6. Expenditure on development of allegedly infringing products.
7. Lifting the corporate veil and real partners of the joint venture.
8. Working of patents and commercial exploitation.

Issue-wise Detailed Analysis:

1. Locus Standi to Institute the Suit:
The respondent's locus standi was challenged on the grounds of inconsistent claims regarding ownership of patents and alleged concealment of material facts. The original proprietor of the designs was LTE, which transferred rights to the respondent. The court held that these issues could only be decided after evidence was led and that the respondent, being the registered owner of the patent, had prima facie locus standi to maintain the suit.

2. Lapsing of Design Registrations:
The appellant contended that the design registrations had lapsed. However, the learned Single Judge found that the renewals made the patents current up to date, establishing a prima facie case for the validity of the registrations.

3. Functional Shapes or Mechanical Devices as Subject Matter of Design Registration:
The appellant argued that the products were purely functional and not subject to design registration. The respondent countered that the products had visible features and had been registered for over eight years without challenge. The court found that the products had visible features and that a prima facie case existed for the design registration's validity.

4. Validity of Patents as Obvious Improvements:
The appellant claimed the patents were invalid as they were mere workshop improvements. The court analyzed conflicting expert reports and noted the appellant's significant expenditure on research and development. The court concluded that the appellant failed to make a prima facie case that the D2 range was merely a workshop improvement.

5. Acquiescence, Estoppel, Delay, and Laches:
The appellant argued that the respondent had acquiesced to the manufacture and marketing of the D2 range. The court found that the respondent had consistently refused to grant rights to the D2 range and that the appellant's development efforts did not equate to a license to copy. The court also found no material delay that would disentitle the respondent to relief.

6. Expenditure on Development of Allegedly Infringing Products:
The appellant claimed to have spent Rs. 4 crores on developing the D2 range. The court found discrepancies in the appellant's financial statements and concluded that the expenditure did not justify the infringement of the respondent's patents.

7. Lifting the Corporate Veil and Real Partners of the Joint Venture:
The court found no significance in this plea, as the findings on other issues rendered it moot.

8. Working of Patents and Commercial Exploitation:
The appellant argued that the respondent's patents were not commercially exploited. The court found that the respondent had provided evidence of commercial exploitation and that the patents were being used, thus rejecting the appellant's plea.

Conclusion:
The court upheld the learned Single Judge's findings, concluding that the respondent had a prima facie case, the balance of convenience lay in granting the temporary injunction, and irreparable loss and injury would be suffered by the respondent due to the appellant's patent infringement. The appeal was dismissed with costs of Rs. 5,000, and interim orders were vacated.