Kubota wins jurisdictional challenge in patent dispute  

Background

This dispute revolves around a patent infringement case, CS (Comm) 655/2023, filed by Kubota Corporation (Kubota) against Godabari Agro Machinery and Services India Private Limited (GAMS) and two Chinese companies that allegedly manufactured the machine and parts sold in India by GAMS.

Kubota Corporation, a Japanese multinational, alleged that GAMS is manufacturing, assembling, and selling a self-propelled combine harvester named ‘RUILONG PLUS ++’ with parts and machines coming from China that are materially similar or identical to Kubota’s patented product, the HARVES KING. Kubota claimed that GAMS’s product infringes on several of its Indian patents, identified by Indian Patent Nos. 249257, 294814, 312782, 354002, and 371938, related to the combine harvester’s innovative track system, durable transmission, and maintenance features. Kubota alleged that it received complaints from its distributors about the impugned product being substantially cheaper and materially similar to Kubota’s product.

To verify this, Kubota engaged a private investigation agency to purchase the impugned product, which was then disassembled and analysed. The analysis revealed that the impugned product contained all the essential elements of the independent claims of Kubota’s patents. Additionally, the user manual of the impugned product was found to be a substantial imitation of Kubota’s manual.

Territorial jurisdiction challenge 

The Defendants raised a preliminary challenge to the territorial jurisdiction of the Delhi High Court by way of an application, IA 1778/2024, under Order VII, Rule 10 of the Civil Procedure Code. The primary argument is that they do not have a physical presence in Delhi, and that the Kubota investigators’ purchase and communications constituted a trap transaction, insufficient to establish jurisdiction.

Lack of physical presence

The Defendants argued that none of the parties, including Kubota, has their registered office within the jurisdiction of the Delhi High Court. They emphasized that Kubota and defendants Nos. 2 and 3 (both Chinese Companies) do not have a physical presence in India.

Vague averments

The Defendants contended that Kubota made vague claims without supporting documents, asserting that the impugned product was advertised and offered for sale across India, including within the territorial jurisdiction of the Delhi High Court. They argued that Kubota failed to establish any sale or offer for sale of the impugned product within Delhi and did not show the presence of any distributor or agent of GAMS in Delhi.

Trap transaction

The Defendants claimed that Kubota’s investigator’s request for a quotation and delivery of the impugned product was a trap transaction. They argued that Kubota failed to establish the identity and relationship of the person who provided the quotation with any of the Defendants. The Defendants argued that the only alleged purchase of the impugned product by the Kubota investigator was made in Tamil Nadu and delivered in Chennai. They claimed that trap purchases, especially an incomplete one in this case, are insufficient to invoke the jurisdiction of a court, as a solitary transaction is not enough to establish territorial jurisdiction.

Forum shopping

The Defendants accused Kubota of engaging in forum shopping by creating a communication with Agroharvest, a third party, to establish jurisdiction in the Delhi High Court. They argued that this attempt did not result in a successful order placement within Delhi. The Defendants pointed out that the quotation received by Kubota’s investigator was issued by Agroharvest Solutions Private Limited, which is not a party to the present suit and is not based in Delhi. They argued that Kubota failed to show any bona fide sale or offer for sale of the impugned product by the defendants in Delhi.

Insufficient evidence of sale on IndiaMart

The Defendants contended that the plaintiff failed to show any sale or offer for sale made by Defendant No. 3 through IndiaMart (a B2B platform) within the territorial jurisdiction of the Delhi High Court.

Kubota’s contentions

Exclusive rights under Patents Act

Kubota argued that under Section 48(a) of the Patents Act, 1970, a patentee has the exclusive right to prevent third parties from selling or offering for sale a patented product in India. Kubota argued that even if no actual sale materialized within the jurisdiction of the Court, the cause of action could be made out based on an “offer for sale and delivery“ of the impugned product within the jurisdiction of the Delhi High Court.

Sales and offers for sale in Delhi

Kubota’s investigator confirmed that upon posing as a customer from Delhi, the agent/authorized dealer of GAMS (and by extension, the remaining defendants) offered for sale and delivery the impugned product in Delhi. This argument was supported by the affidavit of the investigator, Mr Vincent Jose, who confirmed that the impugned product could be delivered in Delhi and provided a price quotation. Additionally, accessories and spare parts of the impugned product were also sold through the authorized dealers of the defendants within the territorial jurisdiction of the Delhi High Court.

Sales manager’s confirmation

Kubota submitted that its investigator communicated with Mr. Raj Narayan Singh, the Sales Manager of GAMS, who confirmed his relationship and agreed to deliver the impugned product in Delhi. Kubota emphasized that Defendant did not deny that Mr. Raj Narayan Singh was its sales Manager. Kubota contended that Agroharvest Solutions Private Limited, which provided the price quotation, was a distributor of GAMS; therefore, there was no need to implead Agroharvest as a party to the suit since the communication was between Kubota’s investigator and Mr. Raj Narayan Singh.

Court’s decision

The Court found that the offer for sale made by GAMS’s sales manager to the Kubota investigator was genuine and not merely a trap transaction. The investigator posed as a customer from Delhi and received a price quotation for the impugned product, demonstrating the defendants’ willingness to sell the product in Delhi.

The Court noted that the Defendant (No. 3) admitted that they do not control the territory where their products are sold or the customers who purchase them. This lack of control over the distribution chain allowed the Court to consider the offer for sale in Delhi as part of the cause of action.

The Court found that the plaintiff had made specific averments and provided sufficient evidence to support their claims, including an affidavit from the investigator and email communications confirming the willingness of the Defendant’s sales manager to sell the product in Delhi.

The Court ruled in favour of Kubota on the jurisdictional challenge and held that the question of jurisdiction would have to be determined at the trial stage.

Our comment

The Court’s observation regarding Section 48(a) of the Patent Act, which grants a patentee the exclusive right to prevent third parties from selling or offering for sale a patented product without the patentee’s consent, was crucial in this case. The Court emphasized that the threshold for invoking this right is merely an “offer for sale“ and not necessarily an actual sale. The Court noted that even if no actual sale materialized within the jurisdiction of the Court, the cause of action could still be established based on an “offer for sale and delivery“ of the impugned product within the jurisdiction of the Delhi High Court. 

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