LINTECH ELECTRONICS PRIVATE LIMITED Vs. MARVEL ENGG CO

JUDGEMENT

(1.) On 26th May, 1995 while issuing summons to the defendants, the plaintiffs' application for an order of injunction was considered. Defendants were restrained by an ex parte order from interfering, selling or offering for sale to any party in India, Steam Leak Detection Equipment, which might be similar in technical specifications to the plaintiff's Acoustic Steam Leak Detection System registered under Indian Patent No.162647. Defendant has now applied for vacation of the order of injunction. I heard learned counsel for the parties at length, after notice of application under Order 39 Rule 4 of the Code of Civil Procedure had been given to the plaintiffs.

(2.) . Plaintiffs' case is that plaintiff No.1 company is engaged in the manufacture, marketing and installation of highly sophisticated automatic steam leak detection equipment and is also the exclusive licensee of Indian Patent No.162647 dated 12th February, 1985, which is equivalent to European Patent No.0108556, owned by plaintiff No.2. Indian Patent is stated to be owned by plaintiff No.2 company of which plaintiff No.1 are the exclusive licensee in India and it is plaintiff No.1 who has applied for registration of exclusive licence agreement under Section 68 and 69 of the Patents Act, 1970, hereinafter referred to as "the Act". It is alleged that plaintiff's Acoustic Steam Leak Detection equipment detects the leakage at a pin hole level and also identifies the areas of leaks which helps in taking the decision fast for shut down which reduces the outage time and repair cost. Plaintiff has a good record of installation of the system in various parts of the country. Salient features of its equipment, which is stated to be protected under the Indian Patent No.162647, have been enumerated in para 3 of the plaint. It is alleged that defendants 1 and 2 are also engaged in the same business as the plaintiff. In December, 1994, a tender for supply and installation of steam leak detection system for Tuticorin Thermal Power Station was floated by the Chief Engineer (Thermal Design) of Tamil Nadu Electricity Board. The tender notice also detailed the specifications for automatic steam leak detection equipment for which tender enquiry was made. Plaintiffs learnt that defendant No.2 through defendant No.1 had responded to the tender enquiry. The plaint further says that on comparasion of the technical specifications in the tender enquiry read with the salient features of plaintiff's Indian Patent Act, the defendant's response to Chief Engineer's enquiry amounts to infringement of plaintiff's Indian Patent, which in turn violates the exclusive rights conferred on plaintiff No.2. In this back ground, it is alleged that the Acoustic system offered by the defendants to the Chief Engineer (Thermal Designs) of Tamil Nadu Electricity Boad is in violation of plaintiffs' Patent in all respect, since all the salient features of the plaintiff's apparatus have in pith and substance been copied by the defendants. It is also alleged that the technology of the plaintiff is highly developed one and is known only to plaintiff's engineers and scientists. The plaintiff's automatic steam leak detection equipment, which works on an Acoustic principle is the subject matter of patent protection in all countries of the world including India except South Africa. Decree for permanent injunction has been claimed by the plaintiff against the infringement of the patent. Decree for rendition of accounts etc. has also been claimed. Along with the suit, an application for interim relief was also moved, on which the aforementioned order was passed.

(3.) . Defendants' main ground in seeking vacation of the ex parte order of injunction is the alleged suppression of material and relevant facts by the plaintiff. It is alleged that defendant No.2 is carrying on its business of manufacture and sale of Steam Leak Detection Equipment based on acoustic principle in various parts of the world but primarily in South Africa and Germany for the last many years, in which countries more than 70 systems had been sold by defendant No.2 to the knowledge of plaintiff No.2. Plaintiff No.2 and defendant No.2 are business competitors. Plaintiff No.2 never thought of challenging the action of defendant No.2 overseas, which it now seeks to do in India although the said plaintiff claims to hold patents in many countries except South Africa. It is alleged that suppression of material fact is of a judgment of the Supreme Court of South Africa dated 5th December, 1991 in a case filed by plaintiff No.2 against defendant No.2 which fact alone is sufficient not only to vacate the order of injunction but also to dismiss the plaintiff's suit. Not only there is deliberate concealment of material fact but there is a postive false statement made that plaintiff's system has got Patent protection in many countries of the world except South Africa. Plaintiff No.2 in the litigation, which resulted in a judgment in defendant's favour, claimed relief against defendant No.2 on the alleged infringement by defendant No.2 of plaintiff's copyright in the drawings and designs relating to the system in question and the alleged misappropriation of the plaitniff's confidential information relating to the system. It is also alleged that in a detailed discussion Mr.Justice Zulman of the Supreme Court of South Africa held that there were in fact many essential dissimilarities between the two systems. A statement of fact was also recorded in the judgment wherein plaintiff No.2 conceded that defendants' system was totally different in at least two vital respects, namely, processing of signals captured by the microphone and display of such information and since a finding was recorded that system of plaintiff No.2 and defendant No.2 were dissimilar in their essential facts and material respects, there was no question of infringement of plaintiffs' copyright in the technical drawings on which the system in question is based.