Virtual patent marking and deemed notice

One of the defences available to a defendant in a patent infringement suit for avoiding damages, is that he/she was unaware of the existence of the patent(s) alleged to be infringed. This is not available for avoiding injunction. This is enshrined in Section 111(1)[see end note 1] of the Patents Act, 1970 (the Act). This defence is a matter of trial and proving the negative is not easy. The Explanation [see end note 2] to Section 111(1), on the other hand, provides an opportunity for the defendant to shift the burden[see end note 3] on to the Plaintiff, if the Defendant can show that the Plaintiff’s article/product was not ‘marked’ with the patent number(s) in question (This is of course if the Defendant was not aware or notified of the plaintiff’s patent by other means). If this is the case, the Defendant can argue that he/she was not aware of the existence of the patent alleged to be infringed. Thus, marking of patents is an important aspect of post-grant working of patented inventions.

The reality of current times is that many products are covered by more than one patent with non-concurrent terms. Further, additional patents could be added to the list after grant of pending applications. Thus, it would be impractical or cumbersome in such cases to ‘mark’ the products with all patent numbers, especially if the numbers are large and change often.

Therefore, the question is whether this language in Section 111(1) and Explanation could allow room for ‘virtual marking’ of patented products i.e. whether, instead of putting the actual patent numbers on the product/packaging, a weblink or URL of page showing the list of active patents can be provided. This question also needs to be answered in the context of Section 120 of the Act which prescribes punishment for false representation or marking of patents[see end note 4].

Section 111(1) of the Act and the Explanation thereto (hereinafter said Explanation) essentially state that for a marking on a patented article to be deemed notice to the public, mere words such as “patent” or “patented” would not be sufficient but the patent number(s) must accompany such words. On the other hand, Section 120 of the Act provides that an article/product which is neither patented in India nor for which any application for grant of patent is pending in India, cannot be sold in India with a label bearing words such as “Patented” and/or “Patent Pending”. Further, Section 120 also provides that in case any person falsely represents that any article sold by him is patented in India or that it is the subject of an application for a patent in India, he shall be punishable with fine which may extend to one lakh Rupees (Rs 100,000).

Therefore, the requirements for ‘proper’ marking of a patented product/article are as follows:

1. The product/article (or packaging) must contain words implying that a patent for the article has been obtained; AND
2. The official patent number(s) must ‘accompany’ above words.
3. The said patents must be ‘active’.

In case of a pending patent application, the words implying that an application for a patent for the article has been made would be sufficient. Any departure from the above requirements or incorrect information including non-existence of said patent or patent application at the time of manufacturing the said article/product could lead to a penalty under Section 120.

Let us assume a hypothetical scenario where a patentee has multiple patents over a product and maintains a website that lists out active patent numbers. The website is periodically updated to include new patent numbers and remove the lapsed or otherwise unenforceable patents. A link to that website is provided on the product/package with a notice that the said product is protected by patent(s). This practice has now been accepted by law in some jurisdictions like the United States and the United Kingdom[see end note 5].

In such an instance of virtual marking, it must be seen whether it meets the requirements of Indian law under the said Explanation. The word used in the said Explanation is ‘accompany’. The ordinary meaning of ‘accompany’ is ‘to go with’. Things ‘accompanying’, or ‘to accompany’ each other, should, as nearly as possible, be simultaneous.[see end note 6] This means the patent number must appear along with the words ‘patent’, patented etc. Thus, a mere notice stating that patents have been granted along with a weblink may not meet the standard of the said Explanation. The deeming fiction created for notice to public regarding patent rights of a person comes into operation only when the ‘patent number’ accompanies the words implying grant of a patent i.e. the immediate appearance of the patent number on the patented article is condition precedent for the deeming fiction. If a mere notice along with weblink as mentioned above, is considered to meet the standard of the said Explanation, it would create another deeming fiction that is the ‘weblink is deemed to denote the patent number’. A deeming fiction cannot be extended by importing another fiction[see end note 7] as this is not allowed as per principles of statutory interpretation. If it requires the public or potential infringer to go to internet, type out the web address, it wouldn’t qualify as the deemed notice of the patent(s) in question as per the said Explanation.

Does this mean, therefore, that if there were ten (or more) patents covering a product, all of them must be mentioned on the product to create the deemed notice? If it can be done, it would meet the standard in the said Explanation. However, depending on a given article, it could be impractical to mark entire set of Indian patent numbers and it may not be consistent with the branding strategy. The requirement for marking is not absolute and that it has to be governed by the meaning of Section 111(1) which has two ingredients. Firstly, the Defendant must show that he was not aware of the existence of the patents and secondly, that he had no reason to believe that such patent existed. The onus is on the Defendant to prove that he is innocent at the date of infringement. As to whether he “had no reasonable grounds for supposing”, must be judged in the light of all circumstances at the time of infringement.[see end note 8] One option for the patentee could be that at least one of the active patent numbers can accompany the words “patented” on the article/product along with description such as “and other patents available at www.xyz.com”. This would not only meet the marking requirement in the said Explanation but would make it extremely difficult for a defendant to prove that he had no reason to believe such patent(s) existed. Of course, if any of the mentioned patents were found to have expired / lapsed or unenforceable at the time of mentioning on the article, it could invite a penalty under Section 120 for false representation of patent rights.

If we were to further assume in this case that the patent(s) alleged to be infringed is not the one mentioned on the product but listed at the weblink, while in such a case the plaintiff would not be able to show (because of the said Explanation) that the Defendant was aware of the infringed patent(s) in question, it would be extremely difficult for the Defendant to ‘prove’ that he had no reasonable grounds to believe that patents existed because of the one patent mentioned on the packaging, albeit not alleged to be infringed.

The above approach can also be accompanied by additional measures such as regular publication of notices in newspapers, trade channels, brochures etc. regarding patent protection over the product along with suitable ‘active’ patent numbers, wherein the packaging complications/restrictions would not come in the way, to create the deemed notice of patent rights. Such measures would go a long way in creating safeguards against potential infringers taking defence under Section 111(1). Needless to say, the above measures are in addition to a direct notice or warning letter issued to a potential infringer about a patentee’s rights. This is also because the said Explanation uses the expression “A person shall not be deemed to have been aware…. that a patent exists by reason only of the application to an article of the word "patent", "patented"…” The use of the word “only” shows that the Explanation does not exclude other ways by which the defendant could have acquired the knowledge about the patent’s existence apart from mere mentioning of words “patented” on the article. The Explanation states that the only way the words “patented” on an article could successfully defeat a defence under Section 111(1) is by adding the patent number along with the words.

Conclusion

It emerges that a defendant cannot avoid damages under Section 111(1) for innocent infringement merely by stating that the patentee’s product was not marked. Such an argument would amount to limiting the scope of Section 111(1) by the said Explanation which is not permissible. The onus on the defendant is onerous but still a combination of strategic virtual marking and other measures by a patentee to publicise its rights is advisable to thwart such defences. Care must be taken to regularly update the patent markings, if any. There is an immediate need for the legislature to clarify the position on virtual marking by suitable amendment. Till that happens, most of the above points remain arguments, untested in courts. Thus, litigation on the same cannot be ruled out.[The author is a Joint Partner, IPR Practice, Lakshmikumaran & Sridharan, Delhi]