W.P.(C) 6878/2011 and C.M. No. 15811/2011
  AND ANR ..... Petitioners
  Through: Mr. Sudhir Chandra, Senior Advocate, with Mr. Dhruv Anand,
  Mr. Achutan Sreekumar and Mr.Pravin Anand, Advocates.
  UNION OF INDIA AND ORS ..... Respondents
  Through: Ms. Kanika Agnihotri, Advocate for the respondent No. 1.
  Mr. Satish Kumar, Advocate for the respondents No. 2 and 3.
  Mr. Anil Dutt, Advocate for the respondent No. 4.
   O R D E R
  C.M. No. 15811/2011
  I have heard learned counsel for the parties on the aspect of grant
  of stay of the impugned communication dated 30.03.2011, whereby the
  Deputy Commissioner of Customs has suspended the clearance of the goods
  of the petitioners covered vide a Bill of Entry No. 2979282 dated
  16.03.2011 by placing reliance on Rule 7 (1) (a) of the Intellectual
  Property Rights (Imported Goods) Enforcement Rules, 2007. The said rules
  provides that ?where the Deputy Commissioner of Customs or Assistant
  Commissioner of Customs, as the case may be, based on the notice given by
  the right holder has a reason to believe that the imported goods are
  suspected to be goods infringing intellectual property rights, he shall
  suspend the clearance of the goods.?
  The Government of India being conscious of the complexity involved
  in the matter and determination of competing claims of, inter alia,
  patent issued a circular dated 29.10.2007, wherein it was, inter alia,
  ?While it is difficult for Customs officers to determine Copyright and
  Trade Marks infringements at the border based on available data/inputs,
  it may not be so in the case of the other three violations, unless the
  offences have already been established by a judicial pronouncement in
  India and the Customs is called upon or required to merely implement such
  order. In other words, extreme caution needs to be exercised at the time
  of determination of infringement of these three intellectual property
  The petitioner imported a consignment of mobile phone instruments
  which is covered by the aforesaid Bill of Entry. Respondent No. 4
  objected to the said import by the petitioner on the ground of
  infringement of its patent by filing an application before the
  Commissioner of Customs. It is informed that this application runs into
  about 12,000 pages. Since respondent No. 4 claims to have obtained
  registration of patent, the Deputy Commissioner of Customs has passed the
  aforesaid order dated 30.03.2011. The relevant part of this order reads
  as follows:
  ?M/s. Telefonaktiebolagat LM Ericsson [PUBL], Sweden has registered their
  five Intellectual Property Rights as given in Annexure I at this
  Commissionerate under Intellectual Property Rights (Imported Goods)
  Enforcement Rules, 2007.
  The right owner has stated that 18 models listed in Annexure-II, of
  G?Five brand of mobile phones infringes their intellectual property
  rights and has requested for the suspension of the consignments of above
  mentioned models of G?Five brand of phones in accordance with IPR
  (Imported Goods) Enforcement Rules, 2007.
  Since the above said consignment contains models as listed in
  Annexure-II, clearance of the goods is suspended in terms of Rules
  7(1)(a) of the Intellectual Property Rights (Imported Goods) Enforcement
  Rules, 2007.?
  A perusal of Rule 7, as extracted above, shows that an order may be
  passed by the Deputy Commissioner or the Assistant Commissioner of
  Customs, as the case may be, only upon having a reason to believe that
  the imported goods are suspected to be goods infringing intellectual
  property rights. The impugned order, prima-facie, does not disclose on
  what basis the Deputy Commissioner of Customs has entertained the ?reason
  to believe? that the goods in question infringed the patent claimed by
  the respondent No. 4.
  Learned senior counsel for the petitioner has also placed reliance
  on the order dated 30.11.2011 passed in I.A. No. 19079/2011 in CS(OS) No.
  2982/2011, which also deals with the aforesaid rule and notifications
  dated 29.10.2007. The Court in this interim order has observed:
  ?21. In case clause 4 of the notification dated 29.10.2007 is read in a
  meaningful manner, it becomes clear that as far as the case of other
  three violations, i.e., Patents, Design and Geographical Indications, are
  concerned, unless the offences have already been established by a
  judicial pronouncement in India, the custom department cannot take action
  contrary to clause 4 of the notification.
  22. Mere reading of clause 4 makes it clear that as far as three
  violations, i.e., Patents, Design and Geographical Indications, are
  concerned, the defendants 2 and 3 are merely implementing agencies to
  enforce the orders, if passed by the Court in favour of the party
  pertaining to above mentioned three subjects and the custom department
  would be entitled to enforce the same.
  23. x x x x x x x x x
  24. No doubt, unless the Court passes the order in favour of the
  patentee, thereby restraining the plaintiff from infringing the impugned
  patents, then under these circumstances, in order to implement the order
  of the court, the defendant No.2 can take action as provided under Clause
  4 of notification dated 29.10.2007.
  25. In the absence of that, even the complaint, if any, filed by the
  patentee is to be treated contrary to the Clause 4 of the notification
  issued by Government of India and any order passed contrary to that would
  be without any jurisdiction.?
  Mr. Sudhir Chandra, learned senior counsel for the petitioner,
  submits that the registration of a patent does not lead to any
  presumption for its validity. He has drawn my attention to various
  provisions of the Customs Act and in particular, to Sections 104 and 105
  thereof. He submits that under Section 115, the Court which is
  confronted with a dispute regarding patents may appoint scientific
  The impugned order does not show any application of mind by the
  Deputy Commissioner of Customs to the claim made by respondent No. 4 with
  regard to the alleged infringement of its patent by the petitioner or the
  validity thereof. Respondent No. 4 has not approached a competent Court
  to assert its claim to patent and, on that basis, to seek an injunction
  against release of the petitioner?s consignment.
  In view of the aforesaid position, I stay the operation of the
  impugned order. The respondents should release the consignment of the
  petitioner. However, the same may not be released for a period of ten
  days to enable the respondent No. 4 to approach the Civil Court to seek
  appropriate remedy.
  No observation made by me in this order shall prejudice the case of
  either party before the Civil Court.
  The application stands disposed of.
  W.P.(C) 6878/2011
  Counter-affidavit be filed by the respondent authorities within
  four weeks. Rejoinder thereto, if any, be filed before the next date.
  List on 06.03.2012.
  Order Dasti under the signature of the Court Master.
  DECEMBER 19, 2011