Back
2012 Supreme(Del) 2205
DELHI HIGH COURT
A.K.Sikri,Rajiv Sahai Endlaw, JJ.
Telefonaktiebolaget Lm Ericcson Torshamnsgatan, 23 Kista - Appellant
Versus
Union of India & Ors. - Resopndent
LPA 1104 of 2011
Decided On : 13-07-2012
For the Appellant :Mr. Jayant Bhushan, Sr. Advocate with Mr. Anil Dutt, Mr. Ayush Sharma, Mr. Adarsh Ramanujam, Advocates.
For the UOI:Mr. A.S. Chandhiok, ASG with Mr. Atul Batra, Mr. Sumit Jidani, Advocates.
For the Respondent Nos 2, 3:Mr. Satish Kumar, Advocate.
For the Respondent No. 4:Mr. Sudhir Chandra, Sr. Advocate with Mr. Harishankar K, Mr. Vikas Singh fangra, Mr. A Shreekumar, Advocates.
The main legal point established in the judgment is that the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 apply to all intellectual properties, and the Deputy Commissioner of Customs has the jurisdiction to suspend clearance of goods infringing intellectual property rights, exercising extreme caution in complex cases, and providing specific 'reasons to believe' when passing suspension orders.
Headnote:
IPR Rules - Validity and Interpretation of Rule 7(1)(a) - Patents Act, 1970 - Copyright Act, 1957 - Trade Marks Act, 1999 - Designs Act, 2000 - Geographical Indications of Goods (Registration and Protection) Act, 1999 - Summary: The judgment concerns the validity and interpretation of Rule 7(1)(a) of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007, which empowers Custom Authorities to suspend the clearance of imported goods infringing intellectual property rights. The court discussed the application of the IPR Rules to patents, copyrights, trademarks, designs, and geographical indications, and the authority of the Deputy Commissioner of Customs to determine infringement without a judicial pronouncement. The court held that the IPR Rules apply to all intellectual properties and that the Deputy Commissioner has the jurisdiction to suspend clearance, exercising extreme caution in complex cases. The court also emphasized the need for the Deputy Commissioner to record 'reasons to believe' when passing suspension orders. The judgment set aside the original order and directed the Deputy Commissioner to pass fresh orders with specific reasons to believe, allowing both parties to present their arguments.
Fact of the Case:
The appellant, a patent holder, registered its patents under the IPR Rules and requested the Deputy Commissioner of Customs to suspend the clearance of imported goods infringing its patents. The Deputy Commissioner suspended the clearance of goods without providing specific 'reasons to believe'. The respondents challenged the order, leading to the present case.
Finding of the Court:
The court found that the Deputy Commissioner's order did not demonstrate an application of mind and lacked specific 'reasons to believe'. The court set aside the original order and directed the Deputy Commissioner to pass fresh orders with specific reasons to believe, allowing both parties to present their arguments.
Issues: The issues revolved around the validity and interpretation of Rule 7(1)(a) of the IPR Rules, the authority of the Deputy Commissioner to determine infringement without a judicial pronouncement, and the requirement for specific 'reasons to believe' when passing suspension orders.
Ratio Decidendi: The court held that the IPR Rules apply to all intellectual properties, and the Deputy Commissioner has the jurisdiction to suspend clearance, exercising extreme caution in complex cases. The court emphasized the need for the Deputy Commissioner to record 'reasons to believe' when passing suspension orders.
Final Decision: The court set aside the original order and directed the Deputy Commissioner to pass fresh orders with specific reasons to believe, allowing both parties to present their arguments.
1. Under the scanner of judicial review is the validity and/or interpretation of Rule 7 (1)(a) of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 (hereinafter referred to as the IPR Rules). These IPR Rules are promulgated by the Central Government in exercise of powers conferred on it vide sub-Section (1) of Section 156 of the Custom Act, 1962 (hereinafter referred to as the Act). These IPR Rules, inter alia, empower the Custom Authorities to suspend the clearance of those imported goods which infringe Intellectual Property Rights namely in breach of the intellectual rights in India and outside India and which are sought to be imported without the consent of the right holder or a person duly authorized to do so by the right holder. After the suspension, the Custom Authorities allow a right holder and the importer or their duly authorized representative to examine the goods, supply the information to the right holder as well as the importer and determine as to whether the goods are infringing the Intellectual Property Rights of the right holder. If on determination, it is found to be so, then such goods confiscated under Section 111(d) of the Act can be destroyed by the Customs Authorities after obtaining `no objection’ or concurrence of the right holder or his authorized representative. This is the gist and purport of the aforesaid Rules.
2. As far as Rule 7 is concerned, it deals with `suspension of clearance of imported goods’, detailed note whereof shall be taken alongwith other relevant Rules after stating the contextual facts of the case as that would provide better understanding.
3. The appellant herein is the registered owner of patents bearing No. 203036, 203034, 203686, 213723 and 234157 relating to certain models of G’Five brand of mobile phones and thus claims exclusive right in the said technology. After the aforesaid IPR Rules, 2007 were notified vide Notification dated 8th May. 2007, the appellant registered its aforesaid five patents with the Commissioner of Customs, Deputy Commissioner of Customs (respondent no.2 and 3 herein) under Rule 4 of the IPR Rules. At this stage, we would like to reproduce Rule 2(b),(c), (d), and Rule 6 which provides certain definition as well as mechanism for the said registration by the intellectual property right holder for registration under these Rules:-
“2.Definitions-
(a)…….
(b) “intellectual property” means a copyright as defined in the Copyright Act, 1957, trade mark as defined in the Trade Marks Act, 1999, patent as defined in the Patents Act, 1970, design as defined in the Designs Act, 2000 and geographical indications as defined in the Geographical Indications of Goods (Registration and Protection)Act, 1999;
(c)”Intellectual property law” means the Copyright Act, 1957, the Trade Marks Act, 1999, the Patents Act, 1970, the Designs Act, 2000 or the Geographical Indications of Goods (Registration and Protection)Act, 1999.
(d) “right holder” means a natural person or a legal entity, which according to the laws in force is to be regarded as the owner of protected intellectual property right, its successors in title, or its duly authorized exclusive licensee as well as an individual, a corporation or an association authorized by any of the aforesaid persons to protect its rights.
“6. Prohibition for import of goods infringing intellectual property rights:-
After the grant of the registration of the notice by the Commissioner on due examination, the import of allegedly infringing goods into India shall be deemed as prohibited within the meaning of Section 11 of the Customs Act, 1962.”
4. It was in accordance with the aforesaid Rule that the appellant registered its five patents and requested the respondents no. 2 and 3 to suspend the clearance of goods that infringe the patents right of the patentee i.e. the appellant herein. In these notices, the appellant had also specifically mentioned 18 models of G’Five phones that are infringing the patent r
