India – Rules On Intellectual Property Matters Notified By High Court Of Delhi.

In a much-awaited development, the Delhi High Court has notified the “High Court of Delhi Rules Governing Patent Suits, 2022” and “Delhi High Court Intellectual Property Rights Division Rules, 2022” on February 24, 2022 (IP Rules). These Rules have been made in exercise of the powers conferred by Sec. 7 of the Delhi High Court Act, 1966; Sec. 129 of the Code of Civil Procedure, 1908 and powers conferred under the various Intellectual Property statutes as amended by the Tribunal Reforms Act, 2021.

This process began with the abolishment of the Intellectual Property Appellate Board (IPAB) on April 4, 2021 by the Government of India when it promulgated the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021. IPAB was an appellate authority empowered to hear appeals arising from the decisions of the controllers and registrars appointed under the Patents Act, Trademarks Act, etc. It also had the power to revoke a patent and cancel a design, a trademark, or a copyright. The ordinance was ratified by the Parliament of India and it was later enacted as the Tribunal Reforms Act, 2021.

Until April 4, 2021, India had the three-tier dispute resolution systems for IPR matters, which included IP Offices at level one, the Intellectual Property Appellate Board (IPAB) at level two and the courts of law at the top level. IPAB had powers to revoke IPRs and keep a check on creation and existence of frivolous IPR. IPAB also served as the sole appellate authority against the decisions of various Intellectual Property (IP) offices, including decisions that refused grant of protection. These powers have now been vested in the High Courts.

After dissolution of IPAB, it was expected that over 3000 cases will be transferred to the High Court of Delhi alone, and to effectively manage such a huge volume of cases, a committee comprising of Hon’ble Ms. Justice Pratibha M Singh and Hon’ble Mr. Justice Sanjeev Narula was constituted by the Hon’ble Chief Justice of the High Court of Delhi to provide recommendations for the management of overall IP matters. Based on the recommendations of this Committee, the Hon’ble Chief Justice issued an Office Order on July 07, 2021, creating an Intellectual Property Division (IP Division) in the High Court of Delhi, a first in the entire country. This IP Division deals with all matters relating to IP Rights including fresh and pending IP infringement suits and matters which were pending before the erstwhile IPAB. These cases include appeals against the decisions of the Patent/Trademark/Copyright Offices, revocation/cancellation actions and applications for rectification of patents/trademark register.

With the creation of a separate IP Division, need was felt to form special rules to govern procedures before this new division because of the complexity and peculiarity of IP matters. Keeping this in mind, draft IP Rules were framed and published by the High Court of Delhi for suggestions from the members of the Bar and stakeholders. Only after considering these suggestions and several rounds of discussions, final IP Rules have now been notified.

Delhi High Court Intellectual Property Rights Division Rules, 2022 (IPD Rules)

IPD Rules will regulate the matters listed before IPD and prescribe the practice and procedure for the exercise of the original and appellate jurisdiction of IP Division and for other miscellaneous petitions arising out of specific IP statutes. Some of the salient features of the proposed Rules are:

1. Registered Patent agents or Trademark agents and also any professional having knowledge of the said subject matter of the dispute shall have a right of audience before the IPD, to assist the Court along with the counsels/legal practitioners representing the parties.
2. For cases other than patent cases, the IPD can pass summary judgment, without the requirement of filing a specific application seeking summary judgment on principles akin to those contained in Order XIIIA, Code of Civil Procedure, 1908 as applicable to commercial suits under the Commercial Courts Act, 2015 22.
3. In case of multiple proceedings relating to the same or related IPR, irrespective of whether the said proceedings are between the same parties or not, the IPD shall have the power and the discretion to direct consolidation of proceedings, hearings, and also to direct consolidated recording of evidence/ common trial and consolidated adjudication.
4. In all matters filed before the IPD, advance copy shall be served at the address for service as also through email at least 48 hours in advance, upon the Respondents including the counsels/agents, who may have represented the Respondents before the IPO, or trial court, or authority as the case may be.
5. Evidence is allowed to be recorded through video conference by Local Commissioner and/or videography and transcription technology or by use of any other technology. In case there are expert witnesses from both the sides with conflicting opinions, “Hot Tubbing” as per Rule 6 of Delhi High Court (Original Side) Rules 2018 is also allowed.
6. Most significantly, IPD Rules introduce “Litigation Hold Notice” (LHN) whereby prior to initiation of proceedings, a party may issue LHN to other parties to preserve for a year, all documentary and electronic material relating to the subject matter of the proceedings, which can be used as an evidence.

The notified IPD Rules can be accessed at
https://egazette.nic.in/WriteReadData/2022/233739.pdf .

High Court of Delhi Rules Governing Patent Suits, 2022 (Patent Rules)

With Delhi High Court witnessing a large increase in the number of patent infringement actions since the turn of this century, specific rules governing complex patent matters were waiting to happen and on 27th October 2020, first draft of Patent Rules was circulated for suggestions of the stakeholders. Finally, Patent Rules have been notified with a set of 17 rules covering all the stages and intricacies involved in a patent suit. Some notable features of Patent Rules are:

1. A dedicated procedure regarding invalidity claim has been laid down and invalidity brief has been explained in detail such as:
   1. Invalidity brief is required to contain the prior art references with details such as date of publication, country of origin/publication, reference number and the specific portion of the prior art(s) which allegedly anticipates or renders the claim obvious.
   2. If the Defendant relies on prior publication/prior use of the patented product/process, the brief shall be specifically referenced along with the date of publication, title of publication, country of origin, and/or the source of the product/process to show use, including reference to any inspection reports.
   3. Invalidity brief shall contain a conclusive analysis on how each of the prior arts and/or combination thereof seeks to render the patent invalid, due to lack of novelty and/or inventive step. If lack of inventive step is pleaded, the brief shall clearly explain how the invention would have been obvious to the person skilled in the art, as of the priority date.
   4. If invalidity is pleaded on any of the grounds contained in Section 3 or Section 4 of the Act, as being non-patentable, an explanation for the same along with the reasoning thereof, shall be provided in the brief. The invalidity brief may also mention the case law relied upon.
   5. If invalidity is pleaded based on grounds contained in Section 64(h) and/or Section 64(i) of the Act, the brief shall clearly point out the claims that have not been sufficiently disclosed in, supported by, or enabled in, the specification with an explanation of the insufficiency for each of the claims.
   6. If invalidity is pleaded based on any of the other grounds provided in the Act, the brief shall specify the provision and the grounds for the same in a simple manner.
   7. If any of the grounds of invalidity have been dealt with by the Indian Patents Office (IPO), the same shall be referenced against the respective ground.
2. The Rules provide for filing of ‘Claim construction brief’ which means a brief which would enumerate all the claims relied upon, break down the construction of each of the terms contained in the claims, the meaning thereof, as also the overall scope and effect of all the claims relied upon, as per the party filing the brief.
3. The Rules provide for detailed structure for the “plaints”, “written statements”, “counterclaim”, “replication” and the documents to be filed with such pleadings.
4. The Plaintiff is also required to provide the details of licenses given out and similarly, steps taken by defendants to obtain licenses from the plaintiff have to become part of the written statement.
5. The Rules also provide for detailed procedures for the First Hearing in suit which includes the following:
   1. At the first hearing, the patentee may seek an interim injunction as also appointment of a Local Commissioner for inspection, etc.. If appointment of a Local Commissioner is being prayed for, the specific premises where the product is being manufactured or the process is being implemented, be ascertained and mentioned in the application.
   2. In addition to any interim orders that the Court may pass at the first hearing, inspection of the manufacturing facilities may also be directed.
   3. In order to assist the Local Commissioner, technical experts from both sides may be permitted to be present at the time of execution of the commission. The Local Commissioner shall address any issues of confidentiality, if raised by either party, at the time of execution of the commission by filing the said confidential information before the Court in a sealed cover for further orders.
   4. If the Defendant is on caveat, upon receiving notice of two working days, the Defendant shall be ready with any documents it wishes to rely upon to oppose the grant of any interim relief, on the first hearing.
   5. Upon infringement being prima facie established, the court may pass directions for monetary payments instead of an injunction, in exceptional situations, and on such terms and conditions as the Court may deem fit.
   6. In case of grant of an interim injunction, the Court may direct the Plaintiff to give a cross undertaking of costs or security, in case it loses at trial or if the patent is held to be invalid, on such terms as it deems fit.
6. The Rules also provide elaborate requirements of case management hearings.

The High Court has considered comments and suggestions of several stakeholders before notifying the aforesaid Rules. We expect that these Rules would assist in developing robust system for efficient and timely disposal of IP matters at the Delhi High Court. The notified Patent Rules can be accessed at https://egazette.nic.in/WriteReadData/2022/233727.pdf