Delhi HC Draft Rules for Patent Suits, 2021: Streamlining the Procedure

The Delhi High Court has witnessed a surge in the number of patent infringement actions filed before it across various scientific and technological fields including pharmaceuticals, diagnostics, mechanical engineering, telecommunications, electrical /electronics, wind technology etc, since the past 10-15 years.

In a bid to address the growing complexities concerning patent suits and actions, the Delhi High Court vide its notification dated 10th December published the Rules governing Patent Suits, 2021 in the public domain and has invited inputs and suggestions of the relevant stakeholders, by 17th December 2021.  

The main objective of Drafting a new set of rules is to streamline the procedure for filing patent suits and establish a uniform structure of provisions and governing mandates concerning patent litigation in the city’s adversarial system, following the establishment of IPD.   

Key Highlights of the Draft Rules Governing Patent Suits, 2021

The Draft Rules clarify that the published rules will apply to all patent suits in India which lie before the Intellectual Property Division of the Delhi High Court. As per the issued notification, in case of any inconsistency occurs over the Delhi High Court (Original Side) Rules, 2018 and the Delhi High Court Intellectual Property Division Rules, then in that case the present rules will prevail.

Further, the General Clause of the Rules (Rule 17) states that “Procedures and definitions not specifically provided for in these Rules shall, in general, be governed by The Civil Procedure Code, 1908 as amended by The Commercial Courts Act, 2015 and the Delhi High Court (Original Side) Rules, 2018 as also the Delhi High Court Intellectual Property Rights Division Rules, 2021, to the extent they are not inconsistent with the present Rules.”

As per the Definition Clause Rule 2(b), it is maintained that all suits seeking relief under Section 48, Sections 105, 106 including counterclaims under Section 64, Section 108, 109, 114 in the Patent Act, 1970 are governed by the provisions of the Rule. Additionally, the provision of Priority Patent Application has also been provided for in the Rules. It is defined under Rule 2(j) as, “ A parent application, a Convention application or a Patent Cooperation Treaty application from which the suit patent claims priority.”

Rule 3 elaborates upon the mandated contents of the pleadings and Rule 4 provides the details of the documents to be attached with the respective pleadings discussed under Rule 3. It also highlights the specifications that are crucial to mention in the pleadings.

  1. The Plaint (Rule 3 A) shall discuss a brief background of the technology and relevant technical details, ownership details, corresponding suits/applications emanating from the innovation and the respective requisite details of the suit. An infringement analysis through a claim’s vs product chart, list of experts and details of the royalties received qua the suit/ patent portfolio also has to be mentioned.
  1. Written Statement (Rule 3 B) shall be inclusive of arguments comprehensively challenging the claim of infringement. Technical analysis with specifics of the product/process used by the defendant shall be included in the written statement while claiming non-infringement. Further, if the defendant is willing to obtain a license from the patentee, quantum for the same has to be elaborated upon. Details of the sales of the allegedly infringing product/process also have to be provided.
  1. Counter Claim (Rule 3 C) shall be precise as to the grounds that are raised under Section 64 of the Patent Act. The ground claiming lack of novelty or inventive step shall have to be supported by ‘art documents. If a counter-claim is filed seeking relief on the ground of noninfringement, then the requirements for a Suit under Section 105 of the Act shall be followed.
  1. Replication ( Rule 3 D) shall initially summarize Plaintiff’s case and Defendant’s case. Subsequently, it shall provide a para-wise reply to the written statement.
  1. A suit seeking a declaration of non-infringement under section 105 of the Act, shall specify the scope of the claims, the product/process being implemented by the Defendant claimed to be non-infringing and the technical/legal basis on which declaration is being sought
  1. A suit under section 106 of the Act for an injunction against groundless threats shall contain the nature of the threat, whether oral or documentary; details of any challenge made to the validity of the patent and an invalidity brief pursuant to the challenge and details pertaining to correspondence that may have taken place between the parties.

It is pertinent to note that, strict directions and guidelines for the governance of relief applications under the Patent Act, 1970 saves judicial time and resources and improve the quality of judgements delivered by the court.

Further, the Draft Rules segregate the suit adjudication into three case management hearings, apart from the first listing, namely First Case Management Hearing, Second Case Management Hearing, and Third Case Management Hearing. The Rules enumerates specific directions that may be given by the Court at each stage, and also provide guidelines on when certain specific documents may be filed, officers may be appointed, etc. 

A key concept of Hot-tubbing has been discussed under Rule 9 (iii) that provides that expert testimony can be directed by the Court if it deems fit, on its own motion or application by a party to be recorded by Hot Tubbing technique guided by Rule 6, Chapter XI, Delhi High Court (Original Side) Rules, 2018. Further, the rule also discusses the recording of evidence through video conferencing, by a Local Commissioner or at a venue outside the Court’s premises; all subjected to the discretion of the court.

The current Draft under Rule 12 has provided for “compulsory mediation”. It provides that at any stage of the proceedings if the court is of the opinion that the parties ought to explore mediation, it shall appoint a mediator/ a panel of mediators and technical experts to explore the pathway of amicable dispute resolution.

Under Rule 13 the court has been empowered to prepare a list of scientific advisors that shall assist the Court in the adjudication of patent suits. The list shall be subjected to periodical review. When the assistance of the expert is sought, they would have to submit a declaration of integrity and impartiality. 

Under Rule 16, In addition to the provisions in the Commercial Courts Act, 2015 for Summary judgment, Summary Adjudication of Patent suits can be undertaken in the following conditions;

(a) Where the remaining term of the patent is 5 years or less;

(b) A certificate of validity of the said patent has already been issued or upheld by the erstwhile Intellectual Property Appellate Board, any High Court or the Supreme Court;

(c) If the Defendant is a repeat infringer of the same or related Patent;

(d) If the validity of the Patent is admitted and only infringement is denied.

Conclusion

The Draft Rules present adaptability to the technological revolution that has enveloped the industry sectors across the world by simplifying litigation and increasing flexibility of the procedural aspect of the law. The contents of the pleadings are unambiguously discussed, leaving no room for confusion, as all the requisite information can be obtained by the parties at the first instance. Further, the clearly earmarked list of mandatory documents to be filed by the litigants saves judicial time wasted in adjournments owing to the lack of availability of documents.

Incorporation of methods of video conferences, hot-tubbing etc. for the purpose of collecting evidence while providing for the filing of technical primer, makes the case more comprehensible and streamlines judgment quality across the patent suit. The Draft has also successfully addressed the issue of a lengthy litigation process by providing for Summary adjudication of Patent suits.

Since the Rules are currently open to the opinion and suggestions of the stakeholders, it is yet to be seen how the final rules would shape up.

Image Credits:  Photo by Markus Winkler from Pexels

The Draft Rules present adaptability to the technological revolution that has enveloped the industry sectors across the world by simplifying litigation and increasing flexibility of the procedural aspect of the law. The contents of the pleadings are unambiguously discussed, leaving no room for confusion, as all the requisite information can be obtained by the parties at the first instance.

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Draft Delhi High Court IPR Division Rules, 2021: Observations and Concerns

On 10th October, 2021 the Delhi High Court had issued a Public Notice proposing the Draft “Delhi High Court Intellectual Property Rights Division Rules, ­ 2021”. The Court vide the said notice had invited comments from the members of the Bar by 24th October, 2021. In a much-anticipated development, following the incorporation of the inputs from the Bar, on 10th December 2021 the Hon’ble High Court released the finalised draft of the proposed Rules and has sought suggestions by the relevant stakeholders by December 17, 2021.

 

In July 2021, the Hon’ble Chief Justice of the Delhi High Court announced the constitution of IPD (Intellectual Property Division) following the abolition of IPAD. The Draft Rules seek to regulate the matters listed before the IPD with respect to practice and procedure for the exercise of its original and appellate jurisdiction, and for other miscellaneous petitions arising out of specific statutes[1].

 

The Structure

The Draft Intellectual Property Rights Division Rules, ­ 2021 has a framework of 41 Rules addressing and dealing with various procedures and definitions to be applied while adjudicating cases before the IPD. The General Clause under Rule 29 clarifies that “procedures not specifically provided for in these Rules shall, in general, be governed by The Civil Procedure Code, 1908 as amended by The Commercial Courts Act, 2015 and the Delhi High Court (Original Side) Rules, 2018.”

It is pertinent to note that, following the inputs by the Bar, the term “Acts” under Rule 2a is also now inclusive of the Information Technology Act, 2000. Consequently, under Rule 2d “Appeal” shall also include “an appeal filed before, or transferred to, the IPD” with the nomenclature [C.A. (Comm. IPD-IT)] Under Section 62 of the Information Technology Act, 2000.

The Draft Rules under rule 2i the “intellectual property subject matter” for the purpose of these rules concern the following:

  1. Matters pertaining to Patents, Copyrights, Trademarks, Geographical Indications, Plant Varieties, Designs, Semiconductor Integrated Circuit Layout-Designs, Traditional Knowledge, and all rights under common law, if any related to these.
  2. Matters relating to passing off, unfair competition, disparagement, comparative advertising, and other similar issues.
  3. Matters concerning the protection of trade secrets, confidential information, and other related subjects.
  4. Matters relating to tortious actions related to privacy and publicity rights involving intellectual property issues.
  5. Matters pertaining to data exclusivity, domain names, and other matters relating to data protection involving intellectual property issues, as well as those arising under the Acts.
  6. Matters involving internet violations relating to any of the subject matters under clauses (i) through (v).

Notably, the rights related to data protection, data inclusivity and other such related matters are also covered under the scope of the said “subject-matter’. The Explanation attached with the provision states that cases pertaining to the Information Technology Act, 2000 which deal with the rights and liabilities of the intermediaries, online market places and e-commerce platforms

And those “issues relating to any of the aforementioned rights, shall be deemed to be within the purview of intellectual property rights.” 

The final Draft Rules present a precise scope of jurisdiction of the Draft Rules under Rule 4, as compared to the earlier version. The Rule now states that “Every IPR subject matter or case or proceeding or dispute filed before or transferred to, the IPD, as defined in Rules 2(i), 2(j) and 2(l), shall be heard and adjudicated by a Single Judge of the IPD except those that are to be decided by a Division Bench as per Section 13 of the Commercial Courts Act, 2015.”

Rule 6 elaborates the procedure for filing an appeal before the IPD. As per Rule 6 (xii)

“Procedures applicable to Civil Appeals filed before the Single Judge: The Delhi High Court Rules and Orders as also the Practice directions issued from time to time, to the extent there is no inconsistency with these Rules, shall be applicable to appeals filed before the IPD.”

Procedures for filing original civil petitions, civil writ petitions and civil miscellaneous petitions are discussed under Rules 7, 8 and 9 respectively. Further, Rules 10 to 14 enumerate additional requisite procedures to be followed while addressing a suit to the IPD.

Subsequent to the comments by the members of the Bar, the final Draft Rules have incorporated additional provisions pertaining to the recording of the evidence, hot-tubbing or other such modes of recording evidence, discovery and disclosure, preservation of evidence by the parties, Confidentiality clubs and redaction of confidential information and, damages and accounts of profits; from Rules 15-20.

Under Rule 15, recording of evidence can be undertaken through video conferencing ( as per the High Court of Delhi Rules for Video Conferencing for Courts 2021). The use of videography and transcription technology or any other form of recording evidence can also be applied. Further, evidence can also be recorded at any venue outside the court or by a Local Commissioner. However, it is imperative to note that, the discussed methods shall only be applicable if the court is of the opinion that the same is expedient in the interest of justice.

Interestingly, Rule 18 puts an onus on the parties to the proceedings to “preserve all documentary, tangible and electronic material relating to the subject matter of the proceedings which is capable of being relied upon as evidence” upon the initiation of or receiving notice about the institution of the proceedings before the IPD. Prior to the initiation of the proceedings, a party may issue a Litigation Hold Notice that shall set in motion the evidence preservation liability of the party.

Rule 19 addresses the establishment of a ‘confidentiality club’ by the court at any stage of the proceedings for the preservation and exchange of confidential information filed before the Court including documents, as per the Delhi High Court (Original Side) Rules, 2018. Further, the rules state that upon a request by application the court may direct the redaction of such information. However, the rules fail to mention the party, legal practitioner, expert etc that shall have the Locus Standi to approach the court with such application.

Rule 20 elaborates upon the factors that the courts shall have to take into consideration while determining the quantum of damage for a party seeking to settle accounts of profits/damages. Notably, the rule provides that the courts may engage expert assistance (provided for in Rule 31) in the computation of such damages.

The final Draft Rules, 2021 also lay down provision for summary adjudication under Rule 27 on principles akin to those enumerated in Order XIIIA, Code of Civil Procedure, 1908 and as applicable to commercial suits under the Commercial Courts Act, 2015. It is interesting to note that, unlike the previous version the current rules do not have any provision for summary adjudication in Patent Cases.

With an objective to curb unnecessary delays in the disposal of suits, it is apparent that the High Court has ensured provisions relating to strict guidelines for a written and water-tight timeline for oral submissions are included under Rule 33 of the 2021 Division Rules.

 

Conclusion

The establishment of an independent Intellectual Property Division is an indication of acknowledgement of the importance of Intellectual Property in the country. The corresponding 2021 Division Rules is a concrete step forward, however, the following aspects demand a more sincere deliberation:

  1. Clarity with respect to the Locus Standi of parties, legal practitioners, agents, experts etc. to the case for extending an application to the ‘Confidentiality Club’ needs to be determined.
  2. Under Rule 31 constitution of a Panel of Experts is provided to extend advisory assistance to the court relating to the subject matter of the dispute, as and when necessary. While the provision is definitely in resonance with maintaining the quality adjudicatory function, it fails to elaborate upon the criteria of appointment of the experts. Additionally, the rule mentions ‘reviewing’ the expert panel from time to time, however, the nature and period of such review has not been discussed.

The establishment of an independent Intellectual Property Division is an indication of acknowledgement of the importance of Intellectual Property in the country. The corresponding 2021 Division Rules is a concrete step forward, however, some aspects demand a more sincere deliberation

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