2021 (5) TMI 1072 - HC - Indian Laws

Infringement, by the defendants, of certain Standard Essential Patents (SEPs), held by the plaintiff and registered in their name - whether the Wuhan Court was justified in granting anti-suit injunction, vide its order dated 23rd September, 2020, and, secondly, whether this Court would be justified in injuncting the respondent from enforcing that order against the plaintiffs? - HELD THAT - The surviving considerations, in the order of the Wuhan Court, are (i) that the acts of the plaintiffs indicated disrespect to the procedure of the Wuhan Court, and an intention to interfere with the said proceedings, (ii) that the plaintiffs, despite being put on notice, had not responded, or caused appearance before the Wuhan Court, (iii) instead, the plaintiffs were seeking, by initiating the present proceedings before this Court, to exclude the jurisdiction of the Wuhan Court and deliberately interfere with the Wuhan proceedings, (iv) there was a possibility of an adjudication conflict, were both proceedings to be allowed to continue side by side and (v) grant of anti-suit injunction would not prejudice the plaintiffs in the present proceedings, except to the extent of delay in obtaining relief. Even as regards the main complaint and the documents filed by the defendants, in that regard, the Wuhan Court records, candidly, that service of the complainant and the documents were still in process, but that it was nevertheless proceeding to issue the anti-suit injunction directly , in a sense of behavior preservation . Whether the Wuhan Court was justified in doing so, or not, is not for me to comment on, in the present proceedings. Suffice it to state that, in the circumstances, the contention that the order of the Wuhan Court was passed after due notice to the plaintiffs is obviously unacceptable. The record reveals, rather, that it was only during the pendency of these proceedings in this Court that the plaintiffs were ever made aware of the fact that the defendants had filed an anti-suit injunction application in the Wuhan Court. The failure, of the plaintiffs, to enter appearance consequent to notice being issued by the Wuhan Court in the complaint filed by the defendants, i.e. consideration, cannot be treated as relevant for the purposes of granting anti-suit injunction, restraining the plaintiffs from prosecuting the present proceedings. The remaining considerations which prompted the Wuhan Court to pass the order dated 23rd September, 2020 require, in order for their proper appreciation, a juxtaposed view of the case of the plaintiffs in the present suit, vis- -vis the case of the defendants in the complaint before the Wuhan Court. It is obviously disingenuous, on the part of the defendants, to contend that the order of the Wuhan Court merely suspends, and does not altogether foreclose, the plaintiffs from pursuing the present claim for injunction against the defendants. There being no other forum before which the plaintiffs could agitate their claim against infringement, it is totally unthinkable that a forum which has no jurisdiction in that regard could injunct the plaintiffs from agitating the issue before the only forum which has. Such injunction cannot be allowed to continue even for a single day - The defendants have not chosen to undertake not to use the technology, involving the allegedly infringed suit patents, during the pendency of the Wuhan proceedings. What the defendants suggest is, therefore, that the plaintiffs should sit back and helplessly watch continued infringement of their suit patents by the defendants (as the plaintiffs would allege) without being able to lift a finger to prevent it, even while legal remedies, for redressal, continue to remain available in this country under the Patents Act. This would, clearly, render the Patents Act, and the statutory guarantees available thereunder, both otiose and impotent. Damages are but poor solace, once the damage itself is done. The submission that, in order to avoid an unseemly race to obtain a decree, the prayer for anti-enforcement injunction of the plaintiff sought to be rejected, fails to impress. The question of an unseemly race would arise where the nature of the reliefs sought by the plaintiffs in the defendants is similar. It is not so in the present case. The plaintiffs seek injunction against infringement of their suit patents, whereas the defendants seek fixation of a global FRAND rate, for the entire portfolio of the plaintiffs' patents. The plaintiffs and the defendants are not, therefore, racing towards the same goal. Thus, to conclude, it is totally impermissible for a Court in one sovereign jurisdiction to injunct the party before it from pursuing its cause against infringement of its intellectual property before another sovereign jurisdiction, where such latter jurisdiction is the only forum competent to adjudicate the claim of infringement, save and except where continuation of the infringement proceedings are vexatious or oppressive to the proceedings pending before the former, injuncting, court. The mere fact that one or other aspect of the controversy may overlap cannot be a ground to grant such injunction. Nor can the consideration of the two courts arriving at differing decisions on that part of the issue which may overlap be regarded as sufficient to grant such injunction, which would result in denying the plaintiff seeking injunction against infringement the right to agitate such claim before the only forum competent to adjudicate thereon. Such injunction would be ex facie destructive of the principle of comity of courts. This application is allowed in the following terms and to the following extent (i) The ad interim injunction granted by this Court on 9th October, 2020 is made absolute, pending disposal of CS (COMM.) 295/2020. The defendant shall remain restrained, during the pendency of the present suit, from enforcing, against the plaintiffs, the order dated 23rd September, 2020, passed by the Wuhan Court. (ii) In the event of any orders been passed by the Wuhan Court, or any other measures being taken, against the plaintiffs, towards deposit of the fine of RMB 1 million per day, as directed by the order dated 23rd September, 2020 of the Wuhan Court, the defendants shall, within one week of passing of the said order (which period may be reduced or extended at that stage, if necessary), secure such amount of fine, imposed on the plaintiffs, by depositing, with the Registrar General of this Court, an equivalent amount, by way of crossed cheque/demand draft, and the plaintiff shall be entitled, on such deposit, to withdraw the said amount, or have been transferred to the account of the plaintiffs. (iii) As the plaintiffs have not pressed the prayer, in this application, for a direction to the defendants to withdraw the complaint filed by them before the Wuhan Court, no orders are being passed on the said prayer which is, accordingly, disposed of.

Summary

Issues Involved:
1. Injunction against enforcing anti-suit injunction order from Wuhan Court.
2. Direction to withdraw the case filed in Wuhan Court.
3. Direction to withdraw the anti-suit injunction application filed in Wuhan Court.
4. Imposition of costs on defendants equivalent to potential costs imposed by Wuhan Court.

Detailed Analysis:

1. Injunction Against Enforcing Anti-Suit Injunction Order from Wuhan Court:
The plaintiffs sought an injunction to restrain the defendants from enforcing an anti-suit injunction order dated 23rd September 2020, issued by the Wuhan Intermediate People's Court. The court analyzed the nature of the plaintiffs' suit, which alleged infringement of certain Standard Essential Patents (SEPs) by the defendants. The plaintiffs argued that the Wuhan Court's order was oppressive as it restrained them from prosecuting their infringement claims in India, the only jurisdiction competent to adjudicate on the infringement of Indian patents. The court agreed, noting that the Wuhan Court's order effectively denied the plaintiffs their right to seek legal redress for patent infringement under Indian law. The court emphasized that patent rights are territorial and the infringement of Indian patents could only be addressed by Indian courts. Therefore, the court found a prima facie case for granting the injunction and held that the balance of convenience and irreparable loss considerations also favored the plaintiffs. Consequently, the court made the ad interim injunction, granted on 9th October 2020, absolute, restraining the defendants from enforcing the Wuhan Court's order against the plaintiffs.

2. Direction to Withdraw the Case Filed in Wuhan Court:
The plaintiffs initially sought a direction for the defendants to withdraw Case No. (2020) E 01 Zhi Min Chu No. 169.1 filed in Wuhan Court. However, during the proceedings, the plaintiffs' counsel clarified that they were not pressing this prayer and had no objection to the defendants pursuing their suit/complaint in Wuhan Court. Therefore, this issue was not adjudicated by the court.

3. Direction to Withdraw the Anti-Suit Injunction Application Filed in Wuhan Court:
The plaintiffs also sought a direction for the defendants to withdraw the anti-suit injunction application filed in Wuhan Court. The court examined whether a case for such an injunction existed when the application was still pending. The court found that the defendants had not disclosed the filing of the anti-suit injunction application to the plaintiffs or the court, thereby resorting to unfair practices. The court held that the defendants' concealment and lack of transparency justified the plaintiffs' claim for an anti-enforcement injunction. However, since the anti-suit injunction application had already been decided by the Wuhan Court, the court did not pass any orders on this prayer.

4. Imposition of Costs on Defendants Equivalent to Potential Costs Imposed by Wuhan Court:
The plaintiffs sought imposition of costs on the defendants equivalent to the fine imposed by the Wuhan Court for continuing to prosecute their application for injunction in India. The court found merit in this prayer, noting that the defendants' actions had led to the passing of the Wuhan Court's order, which imposed a fine of RMB 1 million per day on the plaintiffs. The court directed that in the event of any orders being passed by the Wuhan Court for the deposit of the fine, the defendants must secure the amount by depositing an equivalent sum with the Registrar General of the Delhi High Court. The plaintiffs would be entitled to withdraw this amount to indemnify themselves against the fine imposed by the Wuhan Court.

Conclusion:
The court allowed the plaintiffs' application to the extent of restraining the defendants from enforcing the Wuhan Court's order against the plaintiffs and directed the defendants to indemnify the plaintiffs for any fines imposed by the Wuhan Court. The court did not pass any orders on the prayer for withdrawal of the Wuhan complaint or the anti-suit injunction application, as the plaintiffs were not pressing these prayers.