Introduction

The recent judgment from the Delhi High Court in the case of Communication Components Antenna Inc. v. Mobi Antenna Technologies (Shenzhen) Co. Ltd & Ors. [1] has set a significant precedent in the realm of patent litigation. This landmark decision, delivered on May 16, 2024, not only emphasizes the stringent standards of patent enforcement in India but also highlights the court’s commitment to upholding the rights of patent holders against infringement. This case revolves around the infringement of Indian Patent No. 240893 (IN’893), which pertains to the invention titled ‘Asymmetrical Beams for Spectrum Efficiency.’

Facts of the Case

The suit was initiated by Communication Components Antenna Inc. (the Plaintiff), a Canadian company involved in the manufacturing and sale of cellular base station products, against Mobi Antenna Technologies (Shenzhen) Co. Ltd. (the Defendant), a Chinese entity. The Plaintiff sought a decree of permanent injunction to restrain the Defendant from manufacturing, using, distributing, selling, offering for sale, or importing any product that infringes on IN’893. Additionally, the Plaintiff demanded damages and other reliefs such as delivery up and rendition of accounts.

The patent in question was originally filed as a PCT application on March 19, 2007, and subsequently entered the domestic phase in India on August 5, 2008. The patent was granted on June 9, 0, and is set to expire on March 18, 2027. The present suit was filed in September 2010 by the erstwhile plaintiffs, TenXc Wireless Inc. and TenXc Wireless India Private Limited, who later transferred their assets, including IN’893, to the current Plaintiff.

The crux of the Plaintiff’s complaint was that the Defendant’s products, specifically the MB1800-PSA4-18DE10, MB1800-PSA4-18DT4, and MB3F-PSA4-19DE models, infringed on their patented technology by replicating the beam patterns described in IN’893. The Plaintiff substantiated this claim by comparing the Defendant’s product brochures, which showcased beam patterns identical to those protected under IN’893.

The Court’s Decision

The Delhi High Court, presided by Justice Jyoti Singh, delivered a comprehensive judgment favoring the Plaintiff. The court found the Defendant guilty of infringing IN’893 and awarded a decree of permanent injunction against them. Furthermore, the court ordered the Defendant to pay damages amounting to USD 2,60,45,250 (INR 216 crores) as compensation for the lost profits suffered by the Plaintiff due to the infringing activities.

The court’s decision also included directions for the Defendants to maintain accounts of their sales arising from the impugned products and to file these accounts in court monthly. This measure was to ensure that the Plaintiff could be adequately compensated in case of further losses resulting from the Defendant’s actions.

Rationale

The rationale behind this decision was multifaceted and detailed. First, it considered the novelty and inventive step involved in the Plaintiff’s patent. The invention of IN’893 was centered around the concept of asymmetrical beams for spectrum efficiency, which represented a significant improvement over the prior art. The court noted that the Plaintiff had adequately demonstrated the inventive step and industrial applicability of their patent, emphasizing that the patented technology provided a novel solution to the problem of increasing subscriber capacity without compromising on call quality.

Secondly, the court conducted an in-depth analysis of the evidence presented by both parties. The Plaintiff had submitted detailed comparisons of the beam patterns from the Defendant’s product brochures with those described in IN’893. These comparisons were supported by expert testimonies, which convincingly established the case for infringement. The court was particularly persuaded by the technical expertise and credibility of the Plaintiff’s witnesses, who were able to clearly articulate how the Defendant’s products replicated the patented beam patterns.

Moreover, the court considered the Defendant’s failure to lead rebuttal evidence on the damages claimed by the Plaintiff. This absence of counter-evidence on the crucial aspect of damages further reinforced the Plaintiff’s position. The court found that the Plaintiff’s method of calculating damages, based on lost profits and market analysis, was reasonable and well-supported by documentary evidence and expert testimony.

The court also addressed the Defendant’s arguments challenging the validity of IN’893 on grounds of lack of novelty and inventive step. After thorough consideration, the court dismissed these arguments, finding that the prior art references cited by the Defendant did not anticipate or render obvious the claims of IN’893. The court held that the Plaintiff’s patent was valid and enforceable, thereby rejecting the Defendant’s counterclaims of invalidity.

The Rule

In cases of patent infringement, the calculation of damages is guided by specific legal principles and precedents. Section 108 of the Indian Patents Act, 1970, provides the framework for the reliefs available in cases of patent infringement, which include injunctions and damages. The Act recognizes the remedy of claiming damages by way of rendition of accounts and compensatory damages for lost profits.

The court in this case relied on the principles established in previous judgments, including the landmark case of F. Hoffmann-La Roche Ltd. & Anr. v. Cipla Ltd. [2] which laid down a two-step process for analyzing infringement: first, determining the meaning and scope of the patent claims asserted to be infringed, and second, comparing the properly construed claim with the accused infringing device.

In awarding damages, the court referred to the principle that the patentee’s loss does not need to be proportionate to the infringer’s gain. This principle was articulated in the Indian Performing Right Society Ltd. v. Debashis Patnaik and Others [3], where it was held that the measure of damages should reflect the profits the patentee would have made but for the infringement. This can be proven through evidence of business decline or the assertion of such loss by the patentee.

Plaintiff’s Method of Calculating Damages

The Plaintiff’s method of calculating damages in this case was based on a thorough market analysis and the assessment of lost profits. The Plaintiff submitted a Total Addressable Market (TAM) Analysis, which was critical in estimating the potential sales of the patented technology.

The TAM Analysis considered various factors, including:

• Each individual operator in India
• The number of sites each operator had
• Subscriber growth and count
• Spectrum allocation
• Types of Bi-Sector Array Antennas that could address capacity needs

Based on this analysis, the plaintiff estimated that by the end of 2015, the Plaintiff had the potential to sell at least 94,710 units of Bi-sector Antennas in the Indian market. This figure was derived from the sales data prior to the grant of the patent in India and the completion of trials with cellular operators.

To quantify the profit per antenna, the plaintiff calculated an average sale price of USD 1,200 per antenna, derived from the total value of purchase orders received between 2007 and 2011 and the number of antennas sold. An additional profit margin of USD 150 per antenna was added, bringing the total profit per unit to USD 1,350. Using this profit margin and the estimated market size lost from 2011 to 2014 (94,710 units), the Plaintiff calculated the total lost profits to be USD 96,874,870.

This detailed and methodical approach to calculating damages, supported by documentary evidence and expert testimony, convinced the court of the reasonableness and accuracy of the Plaintiff’s claims.

Our Analysis

This judgment is a milestone in patent enforcement in India for several reasons. The Delhi High Court’s decision demonstrates a robust stance against patent infringement, providing a strong deterrent against future infringers. The USD 2,60,45,250 (INR 216 crores) in lost profits damages awarded to the Plaintiff is a significant sum, reflecting the serious financial impact of the Defendant’s infringing activities. This award not only compensates the Plaintiff for their losses but also serves as a powerful message to potential infringers about the severe financial consequences of patent infringement. It emphasizes that the courts will not hesitate to impose substantial penalties to protect the rights of patent holders.

The court’s meticulous examination of evidence and expert testimonies highlights the importance of detailed and technical evidence in patent litigation. The Plaintiff’s ability to present clear, technical comparisons between their patented technology and the Defendant’s products was crucial to their success. This approach ensures that patent claims are substantiated with concrete and credible evidence, thereby strengthening the enforcement of intellectual property rights.

In addition to compensating the Plaintiff for their lost profits, the court’s decision to include measures for ongoing accountability, such as the maintenance of sales accounts by the Defendants, ensures that the Plaintiff will be adequately protected against any further losses. This proactive approach by the court exemplifies its commitment to providing comprehensive relief to patent holders.

Conclusion

The Delhi High Court’s judgment in the case of Communication Components Antenna Inc. v. Mobi Antenna Technologies (Shenzhen) Co. Ltd. & Ors. is a landmark decision that reaffirms the principles of patent protection and enforcement in India.

By awarding substantial damages and granting a permanent injunction, the court has sent a clear message about the consequences of patent infringement. This judgment not only protects the rights of patent holders but also fosters an environment conducive to innovation and technological advancement. It serves as a critical reference for future patent litigation, ensuring that intellectual property rights are upheld with the utmost seriousness.

References

[1] CS(COMM) 977/2016, CC(COMM) 38/2017 and I.A. 7815/2023

[2] 2015 SCC OnLine Del 13619

[3] 2007 SCC OnLine Del 2037

Author – Sharad Vadehra, Aakriti Vadehra