Declaratory Judgment Provisions In India And US: A Relief From Potential Patent Infringement?

The provisions for declaratory judgment in patent matters are also present in the United States. While the exercise of declaratory judgements provisions in India is very less, at the same time a study published in the New York Law Journey indicates that 113 declaratory judgment actions were instituted in the US in 2019.^[4]

A comparative study of such provisions in India and in the United States highlights the differences in scope between the two laws. This study also explains the scope and challenges present in the provisions of both jurisdictions.

Understanding Declaratory Judgments Provision for Patents in India

Section 105 of the Patents Act, 1970 details the provisions for declaratory judgments, allowing individuals and businesses to approach the court for a declaration that their use of a specific process, or the manufacture, use, or sale of a specific product, does not infringe on the specific existing patent(s).^[5] Furthermore, Section 106 addresses the issue of unjustified threats of patent infringement lawsuits.^[6] These provisions serve as safeguards for those who are wrongfully accused of infringing on a patent and also aim to prevent the misuse of rights by an applicant or a patentee.

Thus, it can be said that the Patents Act of 1970 strikes a thoughtful balance:

· It empowers innovator patentees by providing them exclusive rights over their claimed inventions^[7] while simultaneously offering protection to innocent individuals and businesses who may find themselves facing unfounded accusations^[8]. This dual approach fosters a fair environment for innovation, ensuring that both the rights of patent holders and the interests of those wrongfully accused are respected. Furthermore, the provisions of Section 105 are proactive measures that a product owner may seek to ensure clear freedom to operate.

Let's break down the key provisions in Section 105:

Key Provisions of Section 105^[9]:

• Before initiating court proceedings, there are some essential prerequisite conditions that must be met:

First, the person seeking declaratory judgment must send a written request to the patent holder or the exclusive licensee seeking non-infringement confirmation for their product or process. In this request, they should clearly outline the process or product and ask the patent holder to confirm that their product or process does not infringe on the patent.

o If the response to the notice is not received or if the patent holder disputes the claims, the individual and business can then approach to the court.

In Bajaj Auto Ltd. v. TVS Motor Company Ltd, the Madras high court emphasized the need for the above conditions to be met for initiating proceedings under Section 105.^[10]

• Generally, the expense in such litigations is borne by the person initiating the suit. However, the court has the discretion to alter this arrangement if there are compelling reasons to do so.^[11]

· It is important to note that provisions of Section 105, does not allow to contest the validity of the patent itself. The court will focus exclusively on whether the actions infringe upon that patent.^[12] In S. Ram Kumar vs Micromax Informatics Limited, the Punjab and Haryana High court held that no comment can be made on the merit of the patent under the proceedings of Section 105 and Section 106 ^[13]

· The suit can be filed any time after the patent is granted, thus ensuring legal clarity is obtained in a timely manner.

Key Aspects to Consider While Exercising Section 105 Provisions:

Since the proceedings are proactively initiated by a potential infringer, it helps businesses to clarify their legal standing. Furthermore, a favourable outcome reduces the risk of infringement giving businesses the confidence to operate freely in the market. This can also provide a strategic benefit by discouraging baseless and aggressive infringement claims of a patent holder.

Comparison with the U.S. Provisions on Declaratory Judgments in Patent Cases

In the United States, the framework for declaratory judgment suits, also known as "DJ actions," finds basis in the Declaratory Judgment Act, specifically under 28 U.S.C. § 2201.^[14] Furthermore, the scope of DJ actions in the United States more resembles to that of a counterclaim in India, as it allows a potential infringer to challenge the validity and enforceability of the patent in question.^[15]

Although both the U.S. and India aim to clarify legal uncertainties surrounding patent rights, the scope of the U.S. system generally offers more opportunities for a potential infringer under the ambit of a single DJ action. This broader scope has led potential infringers to cleverly use this as a legal tool to bring the patent owner to court rather than being dragged into court by the patent owner.^[16] However, in recent years, this approach has lost its effectiveness following the Leahy-Smith America Invents Act, particularly under 35 U.S.C. § 315(a), which bars a potential infringer seeking remedies under DJ actions to invalidate a patent at the Patent Trial and Appeal Board (PTAB), a forum that is generally more cost-effective and less time-consuming.^[17]

U.S. Provisions Scope and Key Ingredients:

• The U.S. Declaratory Judgment Act covers a wider array of issues and thus have broader scope.^[18]
• "Actual Controversy" is an essential ingredient: In the United States, the very foundation for seeking a declaratory judgment is the existence of an "actual controversy" between the concerned parties. " An Actual controversy" means a genuine and real dispute that presents an immediate and tangible concern.^{[19] [20]} This happens when a patent holder has taken steps to assert it's rights such as by issuing cease-and-desist letters or formally threatening legal action and thus the DJ action is filed as a pre-emptive measure.^[21]

However, as discussed above, in India, the provisions for revocation of patents^[22], declaratory judgements^[23], and remedy in cases of baseless threats of infringement^[24] are codified under different provisions of the same act.

Declaratory judgment serves as a crucial legal instrument for addressing uncertainties related to patents in both India and the United States. It is an option available to business or individual to could enable them to safeguard themselves from costly infringement litigation(s).

Authors' Details:

Udit Malik  is a Patent Agent & Advocate  at Delhi High Court & Siddharth Praveen Acharya  is an AOR at  Supreme Court. Views are personal.