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Temporary Injunctions In Matter Of Intellectual Property

The capacity to obtain adequate redress in situations of intellectual property infringement is critical to the worldwide patent protectionist regime's success. The Patent Act of 1970 (hereafter referred to as the act) establishes the legislative basis for the functioning of the Indian patent system.

Section 108 of the act specifies the types of relief that a court may provide in patent infringement cases. Essentially, it provides two types of remedies: the first is the award of an injunction against the patent infringer, and the second is the proper damages that the patentee has suffered as a result of his patent being infringed. After the infringement has been determined, both of these remedies are provided.

This type of situation frequently makes it difficult for the patent owners to preserve and keep infringement-related damages until the real guilt is established. As a result, the patentee usually asks for an interim injunction as a quick and temporary remedy. The legislation is largely silent on temporary injunctions, but courts have interpreted section 108 liberally in the past, allowing interim injunctions to be granted.

In addition Article 50 of the Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement, to which India is a member, gives power to court systems to issue temporary injunctions. General provisions for the award of interim injunction are found in Order 39- Rule 1&2 of the Code of Civil Procedure 1908, Section 151 of the Code of Civil Procedure, and Section 37 of the Special Relief Act 1963.

These provisions are widely relied upon by courts when granting temporary relief. In the previous four decades, the jurisprudence surrounding interim injunctions in IPR has gone through many phases. As a result, understanding these steps is critical in grasping the concept of temporary injunction in its broadest sense.

Analysis of Temporary Injunctions

In Specific Relief Act 1963, temporary injunctions are defined in Section 37 which states 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." Order XXXIX of the Civil procedure Code, 1908, lays forth the procedure for obtaining a temporary injunction.

The Hon'ble Supreme court has maintained in a series of decisions, including the landmark Gujarat Bottling Co. Ltd. Case[1], that when considering an application for a temporary injunction, the Court must follow specific guidelines, many of which are briefly described below:
  • The applicant for a temporary injunction must prove his case prima facie. For this purpose, the Court will look at the basic facts that show the applicant has a prima facie case to contest, rather than the merits of the matter. The petitioner must then demonstrate that the claims in the temporary injunction application are justified.
  • The court will also investigate the applicant's activity, which should be done even before a move to set aside an order is made under Order 39 Rule 4 of the CPC, 1908.
  • If the order is not issued, the court must weigh the balance of convenience, or the comparative damage sustained by the applicant and respondent.
  • The court will first consider the degree of the loss that would be suffered by the applicant if the order is not granted, as well as whether the loss is recoupable through monetary compensation. The party who stands to lose the most is said to have the balance of convenience on their side, and the court will either grant or deny the order.
  • If directed, the court might further ask the party to post compensation security or give an assurance to pay the compensation.

In circumstances of extraordinary exigency, Order 39 Rule 3 of the Code of Civil Procedure, 1908 allows for an ex-parte temporary injunction. However, Rule 3 does not require a new application for an ex-parte injunction; instead, such an application should be filed as part of a bi-parte interim injunction application, and the applicant must establish necessity in order for an ex-parte injunction/order to be granted. The Court has a mandate under Order 39 Rule 3A of the CPC, 1908, to continue the bi-parte procedures and dispose of the application within 30 days after passing such an ex-parte order.


Temporary Injunctions under TRIPS Agreement

The TRIPs Agreement, unlike other intellectual property treaties, contains comprehensive measures for intellectual property enforcement. Infringement of intellectual property rights is punishable by civil, administrative, and criminal means under the Agreement. Members are required under the Agreement to develop fair and equitable processes for enforcing intellectual property rights.

Furthermore, the procedures should not be overly complicated or expensive, nor should they include arbitrary time limitations or unjustified delays. According to Article 44 of the Agreement, a Member State's judicial authorities have the ability to require a party to stop infringing. Inter alia, to prevent imported items involving the infringement of an intellectual property right from entering the channels of commerce in their jurisdiction promptly after customs clearance. Article 50 of the Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement, to which India is a member, gives power to court systems to issue temporary injunctions.

Important Components of Temporary Injunctions

There are 3 important components that should be proved before availing the grant of temporary injunctions:
  1. Prima Facie
    In Wander Ltd. And Anr. vs Antox India P. Ltd[2]., the Supreme Court discussed the purpose of giving an interlocutory injunction, stating that while the plaintiff's rights and violations are ambiguous, the court must act on well-established principles. The purpose, according to the court, is to protect the plaintiff in the event that damages are insufficient to recompense him. The tests established in the American Cynamid [3]and Series 5 cases have been followed by Indian courts. According to the former, one must look at the entire case to determine if there is a question to be tried, and if there is, one must consider the balance of convenience between the parties, keeping in mind that there are solid reasons to keep the status quo. It was also said that proving a probability, even a high probability, is not required. In the latter instance, the court was of the opinion that if it is clear from the evidence that one party's case is significantly stronger than the other, the court should not overlook it.
     
  2. Balance of Convenience
    In general, the balance of convenience is considered relative, which means that one party's loss and hardship should be higher than the other's. As a result, unless the balance of the case favours one party, the Court is unlikely to grant an injunction for the apparent reason that the other party will suffer as a result of the Court's decision.
     
  3. Irreparable Injury
    In a case involving infringement or passing off, it is necessary to ensure that no further harm is done to a party who has established the occurrence of a prima facie case and balance of convenience, irreparable injury is considered from the plaintiff's perspective to determine whether refusing to grant an injunction will result in irreparable injury or loss.

Temporary Injunctions in case of Patents

If a patentee's exclusive patent rights are infringed upon, the Patents Act of 1970 grants the patentee the right to sue. The Limitation Act sets a three-year statute of limitations for filing a lawsuit when a patent is infringed upon. In most cases, the plaintiff bears the burden of proof in showing that the defendant infringed on the plaintiff's patent, though the burden of proof may be decided at the court's discretion in specific cases. In India, both district and high courts have the authority to consider patent infringement claims.

However, if the defendant files a counterclaim for revocation of the patent, only the High Court has jurisdiction to consider the matter. The court will issue a temporary injunction in the early stages of the plaintiff's lawsuit. This law was enacted to keep the defendant from benefitting from the usage of other patented goods. A patentee must show that the patent is valid and that the defendant has infringed on it in order to get a temporary injunction. Furthermore, the subsequent violation of his patent rights has cost him a sum of money that he will never be able to recoup.

India's history with interim injunctions in high-tech patent disputes is extensive and thorny. Despite all of the difficulties raised, and despite the fact that courts have stated that it should be used judiciously, few observers are surprised to find it being used excessively. While there has been considerable agreement that temporary injunctions should only be given in extraordinary circumstances, the reality is less apparent.

There are usually three criteria that the court must look into while considering these grants:
  1. prima facie case,
  2. balance of convenience,
  3. irreparable injury.

Temporary injunction applications are often decided ex parte, or without the presence of the defendant, in a relatively short period of time. In terms of 'public interest,' the audi alteram partem concept is sadly difficult to apply in this context, because civil rights have public interest ramifications. This leaves it up to the court to keep an eye on any irreversible harm to the greater public interest, particularly individuals whose lives (or deaths) are dependent on the medications in question. It's also important to be aware of smart litigation techniques that may be used.

The number of pharma patent lawsuits filed against individuals as the first defendant, rather than the allegedly infringing generic company, has increased in recent years. In most circumstances, courts are not expected to immediately assume patent validity and the same is also stated in Section 13(4) of the Patent Act 1970. For example, in circumstances where there are serious patent oppositions are pending, a judge could order the plaintiff to re-defend the patent.

In other circumstances, where there are little to no doubts about the validity of the patent, the court is entitled to assume it is valid. Ex-parte temporary injunctions are almost always more difficult to obtain, especially in complex patent matters.

Ramrameshwari Devi v. Nirmala Devi
[4]established the conditions under which ex-parte relief might be granted. Experience demonstrates that ex-parte temporary injunction orders in some circumstances can create havoc, and getting them overturned or amended in our existing legal system is a headache, the Supreme Court wrote in that case.

The court must 'make an endeavour' to dispose of the ex-parte application inside 30 days on the day it is granted, according to Order 39 Rule 3A of the CPC. However, pharmaceutical patent issues involve exceedingly complicated scientific and technological concerns that are difficult to settle in such a short period of time, leaving margin for error.

We'll look at some potential defences against these ostensibly incorrect temporary injunctions. The Delhi High Court discussed in Shenzen OnePlus Technology Co. Ltd. v. Micromax Informatics Ltd[5]. that:
A delicate balance has to be struck between the right of the plaintiff and the right of the defendant at the stage of granting an ad-interim injunction. Only if a Court were to find that so grave and so irreparable is the injury that even a day's delay cannot be brooked, and so strong is the prima facie case made out, only then would a Court be justified in granting an ad-interim injunction.

It would still be a big assumption to presume that everything is well now. For example, in Novartis Ag v. Sun Pharma Industries (2020), the Delhi High Court issued an interim injunction despite finding that the three elements had been proved. However, the court did not record its reasoning for reaching this determination, nor did it mentioned the public interest aspect.

Temporary Injunctions in case of Trademark:

The first step is to register a trademark. What's more difficult is being mindful of all the competing brands out there in the market attempting to create a unique identity for themselves. The two most common reliefs sought in a trademark infringement or passing-off lawsuit are an injunction and secondly damages.

To begin, it is important to remember that the Supreme Court has been instrumental in ensuring that trademarks, copyrights, and patents are handled with in a timely manner on several occasions. In Bajaj Auto Ltd vs Tvs Motor Company Ltd[6]., they claimed that most intellectual property disputes are contested between parties purely for the intention of finding a temporary injunction, and that the process drags on for years until the case is eventually heard.

Instead of simply granting or refusing to grant injunction, the Bench emphasised that such matters should be handled by the Trial Court very quickly, usually within 4 months from the date of filing. Obtaining a court order for a temporary injunction, on the other hand, isn't easy. The plaintiff must establish a case that includes the following components.

Temporary Injunctions in case of Copyright

The copyright holder, in most cases, wants prompt and effective remedies to prevent further infringements of his copyright and damage to his business, and he cannot afford to wait years for a full trial. As a result, the law grants the plaintiff interim relief in the form of a temporary injunction. The plaintiff who obtains a temporary injunction has a significant advantage over the defendant since he is halted in his tracks.

The trial court has sole authority over whether or not to grant this remedy. The court's discretion is judicial in nature, and it is governed by norms. It is not arbitrary, vague, or fantastical, but rather legal and consistent. In a case for granting an temporary injunction in the United States, a standard four-part criteria was established.
  • If the injunction is not ordered, whether the plaintiff will have an appropriate legal remedy or will be irreparably affected.
  • Whether the risk of harm to the plaintiff outweighs the risk of harm to the defendant from the injunction.
  • Whether or not the plaintiff has a substantial chance of succeeding on the merits.
  • Whether an interlocutory injunction will be in the public interest if it is granted.

In the United Kingdom, the standard method was to evaluate whether the plaintiff had established a prima facie case of copyright infringement, taking into account the apparent merits of the defence that the defendant intended to present at trial. If a prima facie case has been made, the court must decide whether the balance of convenience favours restricting the defendant until the trial or allowing the plaintiff to recover damages for any infringements by the defendant during that time.

In cases involving infringement, Indian courts have used a similar three-pronged criteria to grant interlocutory or temporary injunctions.

Temporary Injunctions in case of Design

The owner of a registered design right has the exclusive right to work on that design or one that is similar to it. A design right infringement occurs when a third party manufactures, sells, or uses the registered design or a similar design for commercial reasons (private or domestic usage is not included), and the third party is not licenced to do so by the owner of the registered design right.

The request provided with the application for design registration, as well as the related designs, specify the details of a registered design right. Because a design right covers both the registered design and any similar design, the resemblance of the design (whether it is similar or not) is a factor in determining whether or not it is infringing.

It is usual for two designs to be regarded similar after comparing them and recognising resemblance when making an actual judgement about similarity:
  • Both designs' unique constitutions as well as the broader dominating constitution
  • The design's distinguishing characteristic (distinctive invention, standout feature when the article is used, etc.)
  • Both designs share the same dominant composition
  • Only a minor change in dominating constitution exists between the two designs, or the difference is insignificant.

Encroachment of design is defined by the Design Act of 2000 as piracy of a registered design. Any fraudulent or evident duplication of a design that has previously been registered without the approval of the registered owner or proprietor of the registered design is illegal, according to Section 22 of the Designs Act, 2000.

Importing any substance or material that bears a strong resemblance to a design that has already been registered is also prohibited under this section. If the registered proprietor shows a prima facie case in its favour under the heading "Balance of Convenience," the registered proprietor may seek an interlocutory injunction under CPC Order 39, Rules 1 and 2.

Temporary Injunctions in case of Geographic Indications

A geographical indication is a mark that identifies a product as being from a specific geographic location and has attributes, a reputation, or other features that are unique to that area or origin.

Example: Kanjeevaram Silk, Drajeeling Tea etc. Section 22 of the act outlines the laws governing violation of geographical indications, and this section should be read in conjunction with section 2 of Article 22 of the TRIPS Agreement, which states that members should provide protection under the law to interested parties to prevent infringement of geographical indications by:
  • use of any means in the identification or representation of a good that shows or implies that the good in issue originates in a geographic area different than the genuine place of origin, causing public confusion
  • any use that contains an act of 'unfair competition' under the Paris Convention's Article 10 (1967).

For the revelation of records, the protection of infringing objects, paperwork, or other facts pertaining to the subject-matter of the complaint, an injunction may be given as a temporary or permanent injunction. An injunction is issued to prevent the defendant from disposing of assets that could jeopardise the plaintiff's capacity to recover damages, costs, or any monetary remedies that may be granted in the future.

In the years 2004-2005, Darjeeling Tea was India's first GI-labelled product. Darjeeling tea has a long history dating back to the 1830s. It was regulated by the government as part of the tea industry starting in 1933 and subsequently with the Tea Act 1953. Through different directives, the Tea Board has the ability to oversee all stages of tea production, packaging, and sale.

Darjeeling Tea has a very well taste and freshness that has attracted the attention and approval of discerning consumers all over the world. Darjeeling Tea's GI designation[7] has been the subject of several legal battles. On the grounds of their registered GIs, the Tea Board took steps against ITC Limited. Since 2003, ITC Limited has operated a premium executive lounge at their ITC Sonar Hotel called "Darjeeling Lounge."

In 2010, the Board launched a civil complaint in Calcutta High Court, requesting a temporary injunction to prevent ITC Limited from using the mark Darjeeling Lounge. They claimed that ITC infringed on their registered GIs and certification trademarks by using the term "Darjeeling."

They further claimed that using the name 'Darjeeling Lounge' is unfair competition because it causes confusion among customers who visit Darjeeling Lounge, leading them to believe that there is some connection to Darjeeling Tea. Darjeeling is largely a place name, according to the defendant, and tea is not the most important aspect of Darjeeling. Because its monopoly ends at 'tea,' the Tea Board has no right to claim singularity over 'Darjeeling.'

The complaint was also argued to be barred by limitation because the use of the 'Darjeeling Lounge' began prior to the GI Act's implementation and there was a delay in filing the suit. The action brought by the Tea Board was dismissed, and the lawsuit was decided in favour of ITC. The Plaintiff's registered GI and Certification trademarks are limited to tea, and the protection provided by them does not extend to lounge services, according to the Court.

Temporary Injunctions in case of Trade Secrets

For a variety of reasons, trade secrets have lately become a much more useful form of intellectual property protection. Trade secret legislation can provide protection for a wide range of topics that aren't covered by conventional IP rights. Employee mobility, globalisation, increased interconnection and networking and reliance on data kept in "the cloud" are all increasing the danger of trade secret misappropriation in the workplace.

There are basically three ways to secure your Trade Secrets namely legal measures such non-disclosure agreement (NDA), non-compete agreement, digital security and physical security. Typically, a third person that acquires trade secrets having knowledge or reason to know that they were delivered in violation of trade secret law is accountable.

Third parties that get trade secrets inadvertently and without knowledge are less usually held accountable, but they can nonetheless face injunctions in certain jurisdictions. In general, trade secret protection includes civil remedies such as damages and injunctions. Injunctive relief is partially a question of national practise, but it's also an issue of how much proof is required.

Conclusions
In light of the foregoing, it could be concluded that a party cannot demand a temporary injunction as a matter of right, nor can the Court deny it arbitrarily. The Court's discretion, on the other hand, is informed by the principles outlined above and is dependent on the circumstances and facts of the case. The party requesting temporary injunction must show not only that he has a prima facie case, but also that he would suffer irreparable harm if relief is denied, and that the balance of convenience favours him.

In the case of M. Gurudas and Ors[8]., the rationale behind Order 39 of the CPC, 1908 can be summarised as follows: "While considering an application for injunction, the Court would pass an order thereon having regard to prima facie, balance of convenience, and irreparable injury."

References
  • Code of Civil Procedure by S.C.Sarkar and P.C. Sarkar, 12th edition
  • https://www.britannica.com/story/what-is-an-injunction
  • CPC Approach of Trail Court by Adv. S.L. Deshpande and Adv. Jayant Jaibhave, edition 2016
  • Interim Injunctions: What's the Damage? A Summary, (September 2, 2020), https://spicyip.com/2020/09/interim-injunctions-whats-the-damage-a-summary.html
  • The grant of interim injunctions in lawsuits (31 May 2020), https://www.asiaiplaw.com/article/the-grant-of-interim-injunctions-in-lawsuits
  • Types of Injunction, https://sagaciousresearch.com/blog/types-injunction/
  • Ex Parte Interim Orders: Ex Parte Relief (26 May, 2020), https://www.khuranaandkhurana.com/2020/05/26/ex-parte-interim-orders-ex-parte-relief/

End-Notes:
  1. AIR 1995 SC 2372
  2. 1990 (2) ARBLR 399 SC
  3. [1975] 2 WLR 316
  4. (2011)162PLR32
  5. MANU/DE/3534/2014
  6. 3 SCC(Civ) 882
  7. MANU/WB/0277/2019
  8. AIR 2006 SC 3275

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