ST. REGIS PACKAGING (PVT) LTD v. CEYLON PAPER SACKS LTD

005-SLLR-SLLR-2001-V-1-ST.-REGIS-PACKAGING-PVT-LTD-v.-CEYLON-PAPER-SACKS-LTD.pdf


ST. REGIS PACKAGING (PVT) LTD
v.
CEYLON PAPER SACKS LTD
SUPREME COURTS.N. SILVA. CJ.
PERERA, J. ANDBANDARANAYAKE. J.
SC (CHC) APPEAL NO. 1 /2000SC (LA) (HC) 3/2000HC/CIVlL/26/99(3)
19th MAY. 2000
Intellectual property – Infringement ofa patent – Action for injunction undersection 179 of the Code of Intellectual Property Act. No. 52 of 1979 – Rightof assignee of a registered patent.
The plaintiff filed action against the defendant for alleged infringementof his rights as the registered owner of patent No. 10694. This patent wasfor a product called “SAFE T PACK” a container used for packing tea asa cost effective alternative to plywood chest. The inventor of the patent,one Caderamenpulle had a dispute with the defendant and upon anaction filed by him (the inventor) the High Court (Commercial) Colombodirected the Registrar of Patents to enter his (the inventor's) name as theregistered owner of the patent. Caderamenpulle assigned his rights to theplaintiff on 13. 05. 1999 which assignment was recorded in the Registerof Patents.
The plaintiffs action was instituted on 13. 12. 1999 in terms of section179 of the Code of Intellectual Property Act, No. 52 of 1979 (“the Code")alleging that the defendant was infringing the plaintiffs rights bymanufacturing and selling products, exploiting the patent registered inthe name of the plaintiff and seeking an injunction from the High Court(Commercial) Colombo against the defendant restraining him fromcontinuing to infringe the rights of the plaintiff.
The plaintiff had, before the assignment of the patent was registered withthe Registrar in his favour, instituted an action against E. 1 & M (Pvt) interms of section 57 of the Code that the industrial design No. 5469 is nulland void. That action was instituted by the plaintiff under section 57of the Code as a person “showing a legitimate interest to have thedeclaration declared null and void."
sc
SL Regis Packaging (Pvt) Ltd. v. Ceylon Paper Sacks Ltd.
(Bandaranayake. J.)
37
Held :
After the assignment of the patent was recorded in the register, theplaintiff had all the rights of the proprietor of a patent and was entitledto file an action for an injunction under section 179 of the Code.
When the action against E. I & M (Pvt) Ltd. was filed by the plaintiff-in terms of section 57 of the Code for a declaration that the registrationof the industrial design was null and void, the plaintiff" was not theregistered owner of the industrial design. As such the plaintiff's failureto seek an injunction at the stage did not bar his right to seek aninjunction under section 179 in the present action.
An infringement of an intellectual property is a continuous act givinga recurring cause of action; hence the plaintiffs right to seek aninjunction under section 179 was not precluded by delay.
Cases referred to :
Holiday Inns Inc. v. Annamalai Mutthappa and Others (1986)
1 CALR 336
Bengal Waterproof Ltd. v. Bombay Waterproof ManufacturingCompany and Another (1996) Supreme Court of India. AhujasIntellectual Property Cases Vol. 2 No. 3 March 1997, 165 at 170
APPEAL from the judgement of the High Court (Commercial) Colombo.
K. Kang-Iswaran. P.C. with Harsha Cabraal and Ms. Aryali Fernando forappellant.
Wyeyadasa Rajapaksa for respondent.
Cur. adv. vult.
November 10, 2000.
SHIRANI A. BANDARANAYAKE, J.The plaintiff-petitioner (hereinafter referred to as theplaintiff) instituted action against the defendant-respondent(hereinafter referred to as the defendant) seeking to enforce hisrights as the registered owner of patent No. 10694. This patentwas for a product called ‘SAFE T PACK', a container used forpacking tea as a cost effective alternative to plywood chest, as‘containers’ for the export of tea. The plaintiffs position
38
Sri Lanka Law Reports
12001} I Sri UR.
was that these rights were assigned to him by oneMr. Caderamanapulle as the inventor of the patent inquestion. The plaintiff claims that the assignment wasrecorded with the Registrar of Pa tents on 13.05. 1999 in termsof section 84 of the Code of Intellectual Property Act, No. 52 of1979. It is common ground that before the plaintiffbecame theregistered owner of the patent upon an assignment in May1999, there had been a dispute between the defendant and theoriginal inventor of the patent. The original inventor had filedaction in the High Court (Commercial) of Colombo moving foran order declaring him to be the registered owner of the saidpatent. The High Court (Commercial) of Colombo, by orderdated 15. 08. 1997, had directed the Registrar of Patents andTrade Marks to enter the name of the inventor as the registeredowner of the patent.
According to the plaintiff, the defendant was infringing therights of the plaintiff by manufacturing and selling products,exploiting the patent registered in the name of the plaintiff.This action was instituted on 13. 12. 1999 in the High Court(Commercial) of Colombo, seeking to injunct the defendantfrom continuing to infringe the rights of the plaintiff.
Learned High Court Judge dismissed the plaintiffsapplication for an interim injunction on three preliminarygrounds raised by the defendant.
When this matter was taken up for hearing, learnedCounsel for the plaintiff and the respondent agreed that theappeal could be decided on the basis of three(3) preliminarymatters on which the learned High Court Judge refused theapplication for an interim injunction. These 3 matters are asfollows:
whether the plaintiff as an assignee can seek reliefin terms of section. 179 of the Code of IntellectualProperty Act?
sc
St. Regis Packaging (Pvt) Ltd. v. Ceylon Paper Sacks Ltd.
(Bandaranayake. J.)
39
whether the plaintiff can maintain the present actionfor an interim injunction in view of the proceedingsalready instituted by it against the Company fordeclaration of nullity of an industrial design?
C whether the plaintiff is precluded from obtainingan interim injunction in view of the delay ininvoking the jurisdiction of the High Court?
I would now proceed to examine the above mentionedthree(3) grounds.
Whether the plaintiff as an assignee can seek reliefin terms of section 179 of the Code of IntellectualProperty Act?
Learned President’s Counsel for the plaintiff submitted. that, by operation of law, an assignee could instituteproceedings as the registered owner of a patent.
Learned counsel for the defendant, however contendedthat the rights of an owner of a patent and an assigneee of apatent are separately dealt with, in the Code of IntellectualProperty Act of 1979. In support of his contention learnedcounsel for the defendant, relied on section 147 of the Code,where it states that,
“Any person who wilfully infringes the rights of anyregistered owner, assignee or licensee of a ■ patentshall be . .
Learned counsel for the defendant submitted that sincesection 147 of the Code makes specific reference to an owner,assignee and a licensee separately, section 179 could notapply to an assignee in the absence of a specific reference to anassignee in that provision. His position is that, section 179 ofthe Act is limited only to a registered owner of a patent, and asthe plaintiff is only an assignee, he cannot have any recourseto it.
40
Sri Lanka Law Reports
I2001J1 Sri LR.
Section 179 of the Code of Intellectual Property Act dealswith infringement proceedings of industrial design, patent ormark and refers to the ‘registered owner’ as the person whocould claim that there is such an infringement. The questiontherefore is whether the words, ‘registered owner', in section179 of the Code, include an assignee of a patent.
Section 84(1) of the Code provides for a patentapplication or patent to be assigned or transmitted to anotherperson. Referring to the meaning of assignment, learnedPresident’s Counsel relied on P. Narayanan, (Patent Law,3rd edition, Pg. 219), who has stated that,
“. . . In Patent Law the term means an act of patentee bywhich the patent rights are wholly or partly transferred tothe assignee who acquires the right to prevent others frommaking, using, exercising or vending the invention.
A legal assignee is entitled to have his name entered in theregister of patents as the proprietor of the patent and canthereafter exercise all the rights of the proprietor of a patent(emphasis added)
Discussing the sale of intellectual property rights and thedistinct features between an assignment and licensing, HilaryPearson and Clifford Miller have clearly explained the basicfeatures of an assignment:
“. . . assignment is the transfer of the ownership, so thatafter the transfer the original owner is now himselfexcluded from using the property unless the new ownergives him a license” (Commercial Exploitation ofIntellectual Property, 1990, pg. 343).
According to W.R. Cornish, ‘an assignment is in essencea transfer of ownership’ (Intellectual Property : Patents,Copyright, Trade Marks and Allied Rights, 4,J> edition, 1999,pg. 465).
sc
St. Regts Packaging (Pvt) Ltd. v. Ceylon Paper Sacks Ltd.
(Bandaranayake, J.)
41
An assignment in terms section 84(1) of the Code wouldthus pave the way for an assignee to get into the position of the“registered owner” of a patent, industrial design or mark.
Section 84(2) of the Code has made it necessary for aperson, who had become entitled by assignment to a patent,to apply to the Registrar in the prescribed manner in order tohave such assignment recorded in the Register. Section 84(4)of the Code states that,
“No such assignment or transmission shall have effectagainst third parties unless so recorded in the register”.
The cumulative effect of these provisions is that when theassignment is so recorded in the Register, the assignee wouldbe entitled to enter his name in the Register as a proprietor ofthe patent. In terms of section 179 of the Act, the registeredowner has the right to seek an injunction to restrain anyperson from committing or continuing an infringement of thepatent. Hence an assignee who has become entitled to therights of a registered owner would be in a position to seek reliefin terms of section 179 of the Code of Intellectual Property Act.
Whether the plaintiff can maintain the present actionfor an interim injunction in view of. the proceedingsalready instituted by it against the Company fordeclaration of nullity of an industrial design?
The respondent contended that as the plaintiff had notsought an injunction against E. I & M (Pvt.) Ltd., the plaintiffis not entitled to an interim injunction in these proceedings. Itis common ground that the plaintiff had filed action against E.I & M (Pvt.) Ltd., seeking a declaration that the industrialdesign Registration No. 5469 is null and void. E. I & M (Pvt.)Ltd., has been identified as an agent of the respondent. Theposition taken up by the respondent is that as the plaintiff hadnot sought any relief by way of an injunction against E. I & M(Pvt.) Ltd., who had been described by the plaintiff as an agent
42
Sri Lanka Law Reports
120011 l Sri L.R.
of the defendant, the plaintiff is not entitled for an interiminjunction in these proceedings.
As correctly contended by learned President’s Counsel forthe plaintiff, the institution of proceedings for an injunction isgoverned by section 179 of the Code of Intellectual Property Actof 1979. In terms of section 179, it is only a ‘registered owner’who would be eligible to make an application for an injunction.With regard to the industrial design in question it is commonground that the plaintiff was at the time of the aforesaid actionnot the registered owner of the Industrial Design. Therefore itwas not possible for the plaintiff to institute proceedings for aninterim injunction in terms of section 179 of the Code; until hebecame the registered owner of the said industrial design.
Learned counsel for the defendant contended that thisaction is regulated by the provisions of the Civil ProcedureCode. His submission was that the plaintiff could have hadrecourse to the provisions of the Civil Procedure Code whichdeals with injunctions. He contended that section 181 (4) of theCode further strengthens his position, as it provides that,
“The provisions of the Judicature Act and the Civil
Procedure Code shall apply to every application for an
injunction made to the Court under this Code."
Learned counsel for the defendant accordingly submittedthat the contention of learned President’s Counsel for plaintiffthat the plaintiff could not ‘as a matter of law’ obtain any‘interim relief whatsoever’ cannot be sustained.
Section 181(4) of the Code of Intellectual Property Act, nodoubt provides for the Judicature Act and the Civil ProcedureCode, to be applicable to every application for an injunction.However, it must be noted that an application for an injunctionhas to be made under the Code of Intellectual Property Act, asspecifically stated in section 181(4). Therefore the substantiveright to institute proceedings would be as provided for in the
sc
St Regis Packaging (Pvt/ Ltd. u. Ceylon Paper Sacks Ltd.
(Bandaranayake, J.)
43
. Code of Intellectual Property Act of 1979. The jurisdiction ofthe Court empowered to grant such relief and the proceduretherefor would be governed by the Judicature Act and the CivilProcedure Code.
As mentioned earlier, the plaintiff was not the registeredowner of the industrial design in question and therefore he wasnot in a position to apply for an injunction. The plaintiff untilthe assignment in his favour was recorded in the Register hadinstituted action No. HC/Civil/21/99(3) against E. I & M (Pvt.)Ltd., in terms of section 57 of the Code. Section 57 of the Codeprovides that,
“The Court may on the application of any person showinga legitimate interest, . . . declare the registration of theindustrial design null and void …”
Learned President’s Counsel for the plaintiff submittedthat the plaintiff had instituted the above mentioned actionNo. HC/Civil/21/99(3) against E. I & M (Pvt) Ltd., as a person“showing a legitimate interest to have the registration declarednull and void.”
In these circumstances, I am of the view that the failure toobtain an interim injunction in the action against E. I&M (Pvt.)Ltd., does not disentitle the plaintiff to an injunction againstthe defendant in the present action.
Whether the plaintiff is precluded from obtaining aninterim injunction in view of the delay in invoking thejurisdiction of the High Court?
Learned counsel for the defendant submitted that acautionary notice with regard to the patent in question waspublished on 10th November 1998 and even at that time theplaintiff was well aware of the fact that the defendant wasmanufacturing and marketing the product known as 'SAFE TPACK’. His submission is that the plaintiff had waited for
44
Sri Lanka Laiv Reports
120011 1 Sri UR.
almost thirteen (13) months after the cautionary notice, toseek an interim injunction. The position taken up by learnedPresident’s Counsel for the plaintiff is that he became theregistered owner of the patent, upon assignment, only on13. 05. 1999 and had instituted this action on 03. 12. 1999.He further contended that an infringement of an intellectualproperty right is a continuing act and every act ofinfringement, constituted a fresh cause of action. In his viewwhat is necessaiy is, to establish a prima facie case ofinfringement of an intellectual property right and that wouldenable a person to obtain an interim injunction under section179 of the Code of Intellectual Property Act. In support of hisargument, learned President’s Counsel for the plaintiff reliedon Holiday Inns Inc. v. Annamalai Mutthapa and others1'1 whereit was held that,
“Furthermore, since the acts of the defendants werecontinuing acts, the question of delay did not arise”(emphasis added).
It is settled law that an infringement of an intellectualproperty right is a continuing act with every act of infringementgiving rise to a fresh cause of action. Injunctions are the onlyremedy available to prevent such continuing action ofviolation. In Bengal Waterproof Ltd., v. Bombay WaterproofManufacturing Company and another121, it was held that.
“. . . It is obvious that such infringement of a registeredtrade mark carried on from time to time would give arecurring cause of action to the holder of the trade markto make a grievance about the same and similarly suchimpugned passing off actions also would give a recurringcause of action to the plaintiff to make a grievance aboutthe same and to seek appropriate relief from the Court. . . Therefore, whether the earlier infringement hascontinued or a new infringement has taken place, cause ofaction for filing a fresh suit would obviously arise in
sc
St. Regis Packaging (Pot) Ltd. v. Ceylon Paper Sacks Ltd.
(Bandaranayake. J.)
45
favour of the plaintiff who is aggrieved by such freshinfringements …”
In the circumstances, I do not see any merit in the groundof objection based on undue delay.
For the aforementioned reasons, the Order of the HighCourt (Commercial) of Colombo is set aside and this matter issent back for inquiry into the plaintiffs application for aninterim injunction. In all the circumstances there will be nocosts.
S.N. SILVA, CJ. – I agree.
PERERA, J. – I agree.
Appeal allowed.