Delhi High Court Directs South Korean Company To Deposit ₹365 Crore In Patent Infringement Case
Delhi High Court Directs South Korean Company To Deposit ₹365 Crore In Patent Infringement Case
Introduction
The Delhi High Court has directed Ace Technologies Corp, a South Korean company, to deposit ₹290 crore as security in a patent infringement suit filed by Communication Components Antenna Inc (CCA), a Canadian telecom equipment manufacturer. This brings the total security amount to ₹365 crore ($45 million), the highest ever ordered in an intellectual property case in India.
Factual Background
CCA alleged that Ace Technologies infringed its patent related to advanced antenna technology used in cellular base stations, specifically multi-beam or beamforming antenna systems. According to the plaintiff, the defendant manufactured and supplied infringing antenna models to Reliance Jio that incorporated features protected under the suit patent.
Procedural Background
The Court had prima facie found that Ace Technologies was infringing the suit patent in a 2019 interim order, and this finding has remained undisturbed by both the Division Bench and the Supreme Court. CCA approached the Court seeking a direction to secure its damages claim of ₹1,160 crore ($140 million), citing concerns that any decree passed in its favor would be rendered unenforceable.
Issues Involved
1. Patent Infringement: Whether Ace Technologies infringed CCA's patent related to advanced antenna technology.
2. Security Deposit: Whether Ace Technologies should be directed to deposit a security amount to protect CCA's interests.
Contentions of the Parties
CCA's Contentions: CCA argued that Ace Technologies' infringement had caused significant harm and that a security deposit was necessary to protect its interests.
Ace Technologies' Contentions: Ace Technologies opposed the plaintiff’s plea, arguing that infringement had not been conclusively established and that the earlier deposits were sufficient.
Reasoning & Analysis
The Delhi High Court's judgment in favor of Communication Components Antenna Inc (CCA) against Ace Technologies Corp highlights the significance of protecting intellectual property rights, particularly in the realm of advanced antenna technology. The court's decision to direct Ace Technologies to deposit ₹290 crore as security, bringing the total security amount to ₹365 crore, underscores the importance of ensuring the enforceability of potential judgments in patent infringement cases.
The court's analysis reveals that CCA has made out a prima facie case, and the balance of convenience lies in its favor. The bench of Justice Saurabh Banerjee invoked its inherent powers under Section 151 of the Code of Civil Procedure (CPC) to direct interim relief, considering the absence of a reciprocal enforcement treaty between India and South Korea, combined with a significant decline in Ace Technologies' valuation and lack of active business in India. This necessitated protecting CCA's interests through a substantial deposit to prevent potential irreparable harm.
The court's decision also emphasizes the need to balance the rights of patent holders with the interests of defendants in patent infringement cases. Moreover, by directing Ace Technologies to furnish a security deposit, the court aimed to safeguard CCA's interests while allowing the defendant to continue its business operations.
Final Outcome
The Court directed the defendant to furnish a security deposit of ₹290 crore, bringing the total security amount to ₹365 crore. The defendant was directed to deposit the amount within four weeks, either as a bank guarantee or a fixed deposit in the name of the Registrar General of the High Court.
Implications
This decision signifies the importance of protecting intellectual property rights and ensuring the enforceability of potential judgments. The Court's decision emphasizes the need for courts to balance the rights of patent holders with the interests of defendants in patent infringement cases.
In this case the plaintiff was represented by Mr. J. Sai Deepak, Sr. Adv. with Mr. Mohit Goel, Mr. Sidhant Goel, Mr. Deepankar Mishra, Mr. Aditya Goel and Mr. Avinash K. Sharma, Advocates. Meanwhile the defendant was represented by Mr. Suraj Kumar. Singh, Mr. Bharat Sing and Mr. Abhay Singh, Advocates.
