[This post is authored by Neha Srikanth. Neha is a fourth-year law student at the School of Law, CHRIST (Deemed to be University) Bangalore. She is interested in IPR & TMT Laws.]
In Conqueror Innovations v. Xiaomi, the Delhi High Court (“DHC”) recently rejected the application for an interim injunction in a patent dispute. In doing so, the Court held that Conqueror Innovations had failed to establish a prima facie case of infringement through their claim mapping. However, interestingly, the Court held that the non-working of the suit patent in India was another factor that had to be considered while adjudicating the dispute.
In the instant case, the DHC, while placing reliance on Franz Xaver Huemer v. New Yash Engineers, held that the fact that the suit patent had hardly been worked in India would be one of the factors for refusing an ad interim injunction in favour of Conqueror Innovations. Kartik has previously explained the facts of the case and the Court’s findings on infringement. Continuing the discussion, in this post, I’ll look at the working requirement under the Patent Act and how courts have relied on non-working of a patent to deny an interim injunction relief to the plaintiff.
Statutory Mandates for “Working” Patents
Section 83 of the Patent Act enumerates the general principles applicable to the working of patented inventions. Broadly, it states that patents are granted to encourage inventions, prevent monopoly over importation of the patented article, and contribute to promoting technological innovation. It can be understood that the statute mandates “use” or “working” of the patents in furtherance of which an exclusive right has been granted to patentees. Exclusive rights in respect to the non-working of patents thereof would irrevocably lead to a monopoly and would act as a barrier to inventions, which is against the public interest.
After setting the general principles under Section 83, Section 84 states non-working as one of the grounds for issuing a compulsory license and Section 85 states it as a ground for revocation. In order to establish that a patent is working in India, Section 146 of the Act requires that a statement pertaining to the commercial working by the patentee at regular intervals. Refusal or failure to furnish the said statement of information under Section 146 is punishable with a fine under Section 122. (Side note: readers would recall that previously, an omission in part of the patentee could attract imprisonment as well, however, the same was amended via Jan Vishwas Amendment Act.) Previously, Rule 131 of the Patent Rules would require patentees to furnish this statement (Form 27) annually. This requirement was changed via the Patent Amendment Rules 2024 where they are now required to file these statements once every three financial years in a mere yes or no tick box manner, instead of giving detailed particulars about the units of the product worked.
This move leaves a lot of room for complacency from the patentees as argued here, and will make it difficult to argue non-working of a patent as a ground for compulsory license or revocation since technically importing 1 unit of a drug once every three years can qualify as “working” and will be sufficient.
The Current Stance on Non-Working Patents
As seen above, on the executive front, the requirement for a robust working requirement has been diluted significantly, it is good to see that the Courts are rejecting requests for interim injunction based on non-working of a patent. In addition to the Xiaomi case, the courts have consistently maintained the aforementioned stance in Enconcore N.V v. Anjani Technoplast (DHC, 2023) FMC v. GSP Crop Science (DHC, 2022), Sandeep Jaidka v. Mukesh Mittal (DHC, 2014), and Franz Xaver Huemer v. New Yash Engineers (DHC, 1996).
However, I say “generally” and not “always” because there have been some cases in which the courts have adopted a different view towards working of a patent. For instance, it has been held that non-working of a patent in India cannot be used as a defence by the Defendant in an infringement suit. (See Bayer Intellectual Property GBH v. Ajanta Pharma Ltd. & Ors. (DHC,2016)). In EISAI Co. Ltd. & Anr. v. Satish Reddy & Anr (DHC, 2019), the DHC rejected the Defendant’s arguments that non-working of the patent was detrimental to public interest. Instead, it upheld that the non-working of a pharma patent does not extinguish the rights of a patentee under Section 48 of the Act and held that the defendants had the remedy to explore a compulsory or voluntary license. This option seems to be virtually closed now, as discussed above, due to the recent 2024 amendments.