While
deciding Enercon India Ltd. v. Aloys Wobben, responding
affirmatively to the a question whether a licensee of a patent who had used the
patented technology under the license issued by the Patentee for more than a
decade may be allowed to challenge its validity, the Intellectual Property
Appellate Board (IPAB) held that owing to the costs of the
litigation and the very special nuances of the technology, it may very well be
that the licensee alone is capable of challenging the patent. The invention in question in Enercon
India Ltd. v. Aloys Wobben was “An inverter for producing an
alternating or three phase current from a DC voltage”. The object of the invention is to eliminate
harmonics so that only current with very low and if possible, no harmonics at
all is fed in the public supply net work. The applicant, Enercon India had been
using patent in question under a licence issued by the respondent for twelve
years till December, 2008.
S. 140 of the Indian Patent Act tells us that it is not
lawful to insert in a licence to manufacture or use a patented article or to
work any process protected by a patent, any condition of prevention to
challenges to the validity of a patent. This condition will govern all licences
which relate to or are in relation to a patented article or a process protected
by a patent.
In Lear Incorporated v. John S.Adkins
[395 U.S.653, 89, S.Ct.1902], it was held that the contractual rights give way
to public interest in a challenge to a patent and therefore, even a licensee
can attack an unworthy patent. The U.S. Supreme Court said that the
present federal policy favoured free competition in ideas which do not merit
patent protection, and that the licensee estoppels had an uncertain
status and it is a product of judicial efforts to accommodate the competing
demands of the common law of contract in the federal law of patents. It
observed that instead of a creative compromise, there has been a chaos of
conflicting case law. It also observed as under:
“Surely the equities of the
licensor do not weigh very heavily when they are balanced against the important
public interest in permitting full and free competition in the use of ideas
which are in reality a part of the public domain. Licensees may often be
the only individuals with enough economic incentive to challenge the
patentability of an inventor’s discovery. If they are muzzled, the public
may continually be required to pay tribute to would-be monopolists without need
or justification. We think it plain that the technical requirements of
contract doctrine must give way before the demands of the public interest in
the typical situation *671 involving the negotiation of a license after a
patent has issued.”
The U.S. Supreme Court also
held that the overriding federal policies would be significantly frustrated if
licensees are required to continue to pay royalty during the time they are
challenging the patent’s validity. The Court observed that enforcing this
contractual provision would undermine the strong federal policy favouring full
and free use of ideas in the public domain. Considering his opinion of
the U.S. Supreme Court explaining why a licensee is entitled to invalidate the
patent and the restriction imposed under S. 140 of the Patent Act, the Board
held that, while the law shall protect the rights of the property owner, it
will not restrict the rights of the interested person to challenge the grant,
so that unworthy patents are restored to the public domain. Because of the
costs of the litigation and the very special nuances of the technology, it may
very well be that the licensee alone is capable of challenging the patent. He
has the funds and the knowledge to launch the attack on the subject matter of
the invention. This is why the U.S. Supreme Court held that it would be
inequitable to restrict him from attacking the patent by any condition in the
contract. Observing that the Parliament has specifically introduced this
provision in our Patents Act which is a special enactment as far as patents are
concerned and hence it will prevail over the general rules relating to contract
the Board held that no licensee can be estopped from challenging the patent.
Question on delayed application of amendments of claims
Denying to allow any amendments
to the claims under considerations, the Board observed that, the
materials had all along been
both before this Board till the date of the amendment, and before the US PTO
and the EP office and hence cannot be
allowed to amend it now. The Board relied upon the observation made in Matbro
Ltd. v. Machingan (GB) Ltd. [(1973) RPC 823] in relation to belated
amendments wherein it was held
that,
“ a clear distinction between instances where a
patentee knows of prior art which he genuinely, and quite properly in the
circumstances, thinks is irrelevant, and other instances where, though he
learns of or has been warned of objections which are available against his
patent as a result of prior art, yet he takes no steps to put his specification
right by way of amendment, or still worse, knowingly persists in retaining it
in the unamended and suspect form. In the latter cases delay is culpable
because potential defendants and the general public are entitled to plan their
activities on the assumption that the patentee, though warned, has decided not
to amend. If the patentee, by his conduct, lulls the public into a false sense
of security he cannot thereafter be allowed to change his mind and ask for
amendment, or at any rate without adequate protection being granted to the
public.”
Question
of Inherent Disclosure
The Board held that a patent is invalid for anticipation if a single prior art
reference discloses each and every limitation of the claimed invention. Regarding the question of inherency, it was
held that, the prior art reference may anticipate without disclosing a
feature of the claimed invention if that missing characteristic is necessarily
present, or inherent, in the single anticipating prior art. Citing the decision in Schering Corporation, v. Geneva
Pharmaceuticals, Inc and Others [339 F.3d 1373] it was held that it
is not necessary that inherent anticipation requires that a person of ordinary
skill in the art at the time would have recognized the inherent disclosure. But
it is necessary that the result is a necessary consequence of what was
deliberately intended in the invention.
