Case Name: Hindusthan Lever Limited vs Godrej Soaps Limited And Others
Citation: AIR 1996 Cal 367
Quorum: N K Batabyal
Date of the Judgment: 11 April 1996
This case is a landmark judgment, pronounced by Calcutta High Court, wherein the laws related to grant of temporary injunction in case of potential patent infringement has been discussed in length.
The present case has the analysis of various provisions and judicial precedents and the requisites for granting such a temporary injunction. The concept of temporary injunction has far-reaching economical implications and also the reputation of the company is at stake, hence the law in this aspect needs to be settled and settled guidelines must be fixed so that it does not cause loss to any party in a discretionary manner.
The petitioner company Hindusthan Lever obtained a patent for their new composition to prepare soaps, the defendant which is a foreign company, a subsidiary company and a distributor was involved in the selling of soap under the brand name of ‘Vigil’. The petitioners have moved to the Calcutta High court on the basis of the direction given by the Apex court to procure a temporary injunction against the sales of the defendant’s product, so as to not cause any potential harm to the exclusive rights as possessed by the Patent holder.
The Primary Issue involved in the case is
• Whether a temporary injunction can be granted when the patent of the petitioner is in dispute
• Whether the balance of convenience in the case favours the plaintiff or the respondent in the current set of facts.
• Whether the requisites for granting a temporary injunction has been fulfilled in the current set of facts
Under the Indian laws, the law and procedure relating to injunction have been provided under Civil Procedure Code and Specific Relief Act, 1963.
An injunction is broadly divided into two categories, the first one being permanent injunction and the second one being temporary injunction. The motive behind obtaining the injunction to stop the other party from carrying the activities which are infringing or potentially infringing the right of the other party.
The permanent injunction debars the opposite party from carrying out the activity forever, whereas in the temporary injunction the defendants are not permitted to carry out the said activity until the case at hand is decided and the judgment is passed. The current case deals with the plea of a temporary injunction against the defendant’s product sold under the trademark ‘Vigil’ which is potentially infringing the plaintiff’s patent. Section 37 of the Specific Relief Act, 1963 provides that “temporary Injunction are such as are to continue until a specified time, or until the further order of the court, and they may be granted at any stage of a suit.” The procedure of obtaining such a temporary injunction has been mentioned under Order 42 of the Civil Procedure Code.
The implications of granting injunctions may deeply affect the reputation and economics of the concerned parties, hence the court must decide the case with due diligence, thus the legality, requirements and various aspects of the temporary injunctions has been discussed in various judgments as discussed below.
In the case of the Agricultural Produce Market Committee Case, the Supreme Court stated that a temporary injunction shall be granted only if the judges feel that the conclusive right claimed by the plaintiff is capable of ultimately being enforced in the manner of a permanent injunction.
In the landmark Supreme Court judgment Gujarat Bottling Co. Ltd. Case, the court laid down certain guidelines which the courts were expected to follow while deciding the matters on the temporary injunction. The guidelines laid under the case briefly mentioned below:
• The applicant seeking relief of temporary injunction shall have to establish a prima facie case in his favour. For this purpose, the Court will not examine the merits of the case rather only the basic facts on which it is established that the applicant has a prima facie case to contest.
Thereafter the applicant also has to establish that the allegations/averments made in the application on which the temporary injunction is sought are plausible.
• The court will also examine the conduct of the applicant and such conduct needs to be examined even at the stage where the application for setting aside an order under Order XXXIX Rule 4 of the Code of Civil Procedure, 1908 is filed.
• The court has to examine the balance of convenience i.e. the balance of comparative loss caused to the applicant and the respondent in the case of not passing the order.
• The court will, first of all, will examine what is the extent of loss that would be caused to the applicant if the order is not passed and also whether it is reparable by monetary compensation i.e. by payment of cost. Then it will examine the loss suffered by the respondent if the order is passed and thereupon it has to see which loss will be greater and irreparable. The party who would suffer greater loss would be said to be having a balance of convenience in his favour and accordingly, the court will pass or refuse to pass the order.
• The court has the power also to ask the party to deposit security for compensation or to give an undertaking for the payment of the compensation if ordered.
Thus in a nutshell it can be understood that a temporary injunction shall be granted to the parties who have exclusive rights over the subject matter on the subsisting date and not something which arises in the future.
In the case of Dalpat Kumar v Pralhad Singh, the Apex Court settled that for grant of temporary injunction three factors have to be satisfied which are prima facie case, the balance of convenience and irreparable loss. Thus the court shall grant a temporary injunction if all these 3 requirements are satisfied in the case.
In the case of Seema Arshad Zaheer Case the court while determining the scope and meaning of the Prima facie case for obtaining temporary injunction stated that the arguments placed forth by the petitioner are capable of showcasing a prima facie violation of rights and the probable harm that might be caused to the plaintiff’s if the same is not being stopped, if the court is not convinced that there lies a case on the side of the plaintiff, then the court shall not grant an injunction to the plaintiff.
The Court in the case of Best Sellers Retail India (P) Ltd. Case, stated that an important aspect the court needs to ponder upon while deciding upon the granting of a temporary injunction is to determine whether the probable loss is quantifiable or if that can lead to irreparable loss to the plaintiff, this is one of the most important considerations which the judge must analyse before deciding upon the grant of injunction.
The Supreme Court in the landmark case of Morgan Stanley Case while laying certain guidelines which shall be used to determine the grant of temporary injunctions stated that:
• Where irreparable or extremely serious injury will be caused to the applicant, ex-parte order can be passed;
• The court shall examine the time when the plaintiff got notice of the act complained;
• If the plaintiff has acquiesced to the conduct of the respondent then ex-parte temporary injunction shall not be passed;
• The applicant shall be acting in utmost good faith; and
• Such an order shall be for a temporary period.
In one of the most famous common law case of the American Cyanamid Company case, the court stated several important guidelines for a temporary injunction to be granted in case of potential patent infringement, this precedent was relied upon majorly while determining the current case at hand, the guidelines laid under this case are as follows:
(i) That there was no rule of law that precluded the grant of an interim injunction Unless upon the; evidence adduced by both parties, the applicant had satisfied the court that on the balance of probabilities the acts of the other party sought to be enjoined, if committed, would violate the applicant’s legal rights;
(ii) Unless the material available to the court at the hearing of the application for an interlocutory injunction failed to disclose that the plaintiff had any real prospect of succeeding in a claim for a permanent injunction at the trial, the Court should go on to consider whether the balance of convenience lay in favour of granting or refusing the relief that was sought;
(iii) That the grant of interlocutory injunctions in patent infringement actions was governed by the same considerations as in other actions;
(iv) In contrast with the former practice in relation to interlocutory relief in patent infringement cases, the grant of a patent was in present times a good prima facie reason for supposing a patent to be valid in this context.
The Indian cases which discuss temporary injunction in case of patent infringement also take similar views as laid in the case of N. R. D. Corpn. of India v. D.I.C. & G. Mills Ltd . it has been held that for the grant of the temporary injunction, principles applicable to the infringement of patent actions are that there is a prima facie case, that the patent is valid and infringed, that the balance of convenience is in favour of the grant of injunction and that the plaintiff will suffer an irreparable loss.
In this case, the court also evaluated the validity of the patent, as it is a prominent rule of the injunction that the plaintiff in the first place should be holding exclusive rights over the matter in the subsisting time, thus the court after analyzing the patent in question, its composition was not satisfied it to be a novel invention, rather a rearrangement of already known techniques and chemicals with minimalistic changes in its composition etc…
The Court while relying on the famous Gillette plea case which essentially stated that if the plaintiff’s patent in itself is not novel or makes it incapable of obtaining a patent, then his subsequent plea on injunction based on that patent shall not be entertained. It is also a well-established principle that the grant of a patent does not conclusively establish the validity of the patent. Section 13 (4) of the Patents Act, expressly provides that the examination and investigation conducted under the Act, shall not in any way deemed to warrant the validity of the Patents . The court in the case of Bilcare Ltd v Supreme Industries Ltd held that the two years of use of patent cannot be figured as sufficiently old and that there exist tangible grounds for suspicion of the alleged invention. It was also held in the case of M/s Standipack Pvt Ltd v Oswal Trading Co Ltd.  by the Delhi High Court section 13(4) of the Act provides an examination and investigations required under section 12 and 13 shall not be deemed in any way to warrant the validity of the patent and proved that grant of patent in any manner does not guarantee the validity of the patent. Thus there was a prima facie dispute regarding the validity of the patent for the court itself.
On the basis of all the available factual matrix and the provisions involved in the given case, the court reached to a conclusion that the grant of preliminary injunction shall be prejudicial to the rights of the defendants as there are certain disputes which need to be analysed in detail manner and preventing the defendants to carry on their business shall be unjust in the eyes of law. The court directed the defendants to maintain the sales log of the company properly and submit the same to the authorities in regular intervals as the same can be used to determine the damages if the defendants are found at fault while deciding the case.
Thus it can be concluded that the current case has high significance for the disputes related to the Patent infringement cases wherein the court has analysed and deliberated upon various provisions, precedents to finally conclude the legal aspect of granting temporary injunction in case of potential Patent infringement. It is of no doubt that there cannot be a straightjacket formula laid to determine whether temporary injunction should be granted or not, however by application judicial mind in such a efficient manner, the court can ultimately decide the case which is in the best interest of justice.
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