Grant Of Security Deposit As Interim Arrangement Justified To Uphold Rights Of Registered Patent Holder: Delhi High Court Directs Deposit Of Rs. 290 Crores In Patent Infringement Case
The Delhi High Court directed Ace Technologies Corp. to furnish and deposit an amount equivalent to 25% of the damages of Rs. 1160 Crores.
The Delhi High Court has directed a deposit of Rs. 290 Crores in a patent infringement case while holding that the grant of a security deposit as an interim arrangement is justified to uphold/ protect the rights of a registered patent holder.
The Court directed Ace Technologies Corp. (Defendant) to furnish and deposit an amount equivalent to 25% of the damages of Rs. 1160 Crores (approximately USD 140 Million) as claimed by the Plaintiff i.e. Rs. 290 Crores. The Court emphasised that Section 151 of the CPC grants "sufficient and wide discretionary powers to the Court to exercise," especially "to meet the ends of justice and where it is pricking the conscience of the Court."
A Single Bench of Justice Saurabh Banerjee held, “Also, the factual circumstances involved justify grant of security deposit as an interim arrangement; and that too without entering into an elaborate discourse on merits at this stage. This is, especially, with a view to uphold/ protect the rights of a registered patent holder like the plaintiff; as also to promote a progressive patent regime that incentivizes innovation/ creativity and intellectual advancement. While maintaining a conducive framework for dissemination of knowledge, and keeping in view the object of adjudicatory process to ensure that when/ if the ultimate decree or relief is granted, the same should not become incapable of being enforced and should be in the form of an effective relief, the plaintiff has been able to make out a case in its favour.”
Senior Advocate J. Sai Deepak appeared for the Plaintiff, while Advocate Suraj Kumar Singh represented the Defendants.
Brief Facts
Communication Components Antenna Inc. (Plaintiff), a private company incorporated under the laws of Canada, instituted the present suit seeking permanent injunction restraining the defendants from infringing upon its Indian Patent. The Defendant is a South Korean company manufacturing and selling antennas for the telecommunication industry.
Previously, an Application for ad interim injunction was disposed of, directing the Defendants to deposit certain amounts due to infringement of the plaintiff's patent, given that the Defendant claimed to "not have any assets in India."
Court’s Reasoning
The High Court pointed out, “In view thereof, as also bearing in mind the substantial decline of 65% (approximately) in the valuation of defendant no.1, ends of justice would be adequately met by directing primarily the defendant no.1 to deposit 25% of the amount claimed by the plaintiff as damages, more so, since the same is derived on the basis of Rs.1160 Crores (approximately USD 140 Million). Also, in view of the depreciating financial position of defendant no.1 which is, admittedly, a foreign (Korean) entity, as also in view of Article 217 of the Korean Civil Procedure Act and the apprehensions of the plaintiff qua inability of the defendants to pay the damages, the aforesaid measure is not only fair and reasonable, but rather practical as well. Taking all these as, unless adequate safeguards are put in place, at this stage, the very purpose/ interest of justice shall be rendered otiose.”
“Collectively taking all the aforesaid, the plaintiff has been able to convince/ persuade this Court to exercise its inherent powers under Section 151 of the CPC. As such, this Court is of the view that a prima facie case has been made out in favour of the plaintiff and against the defendants with the balance of convenience in its favour for grant of an appropriate relief, at this stage, as the defendants currently do not have any ongoing business operations in India and the absence thereof, indeed undermines and puts at risk the rights/ interests of the plaintiff. Moreover, if the plaintiff’s apprehension regarding the defendant’s inability to satisfy the decree materializes, great irreparable harm, loss and injury is likely to occur against the plaintiff, and the entire objective of the captioned lis shall be rendered otiose,” the Bench held.
Consequently, the Court ordered, “Accordingly, in the interest of justice and particularly to secure the interests of the plaintiff during the pendency of the present proceedings, the defendant no.1 is hereby directed to furnish and deposit an amount equivalent to 25% of the damages of Rs.1160 Crores (approximately USD 140 Million) as claimed by the plaintiff i.e. Rs.290 Crores, in addition to all the monies already deposited by the defendant no.1 in pursuance to previous order(s) of the Court(s) from time to time, either by way of a Bank Guarantee issued by a scheduled commercial bank or in the form of a Fixed Deposit Receipt in the name of the Registrar General of this Court within a period of four weeks from today.”
Accordingly, the High Court allowed the Application.
Cause Title: Communication Components Antenna Inc. v. Ace Technologies Corp. & Ors. (CS(Comm) 1222/2018)
Appearance:
Plaintiff: Senior Advocate J. Sai Deepak; Advocates Mohit Goel, Sidhant Goel, Deepankar Mishra, Aditya Goel and Avinash K. Sharma
Defendants: Advocates Suraj Kumar. Singh, Bharat Sing and Abhay Singh
