Sunday, November 16, 2008

Temporary Injunctions: Cyanamid or Series 5?

On Spicy IP, I recently posted two posts (linked here and here) discussing the recent judgment of Justice Ravindra Bhat of the Delhi High Court in Chancellor Masters of Oxford v. Narendra Publishing. The posts dealt with the standard of originality required under Indian law, and also with the requirement of a “prima facie’ case for the purpose of granting a temporary injunction. The following is what I said on prima facie cases:

(For the discussion on the meaning of “prima facie” case, I am particularly indebted to a paper by Shantanu Naravane and V. Niranjan, 4th year students at the National Law School of India University, Bangalore, which is presently under review by a leading journal. Unfortunately, the paper is not available online.)

Under English law, the leading case on the requirements for granting a temporary injunction was the American Cyanamid case (House of Lords). According to Lord Diplock’s speech, a “prima facie” case would be made out if the plaintiff raised a “serious question to be tried”. All that was required was that this “serious question” test be satisfied – it was not necessary for the plaintiff to demonstrate a reasonable possibility of success at trial. A “serious question” was considered to be any question which was not “frivolous or vexatious”. This was a low burden – as long as the plaintiff’s case was not frivolous or vexatious, the requirement of a prima facie case would be made out. The merits of a parties case are not to be considered at this stage under the Cyanamid test. Now, it is arguable that the English position has changed and a greater burden is posed on the plaintiff according to the Series 5 Software (1996 C.L.C. 631). According to Series 5, in order to establish a prima facie case, the relative strengths of the claims of the parties can also be looked at. Nonetheless, Series 5 is a Court of Appeal decision, while Cyanamid is a case decided by the House of Lords. English Courts have therefore shown reluctance to go along with Series 5, and the recent approach seems to indicate that Cyanamid is in general still the law in England.

I now turn to the Indian position. The Supreme Court has pronounced on the relevance of the Cyanamid test several times; unfortunately, the Supreme Court decisions have not been exceptionally clear. For instance, in Wander Ltd. v. Antox (1990) SCC (Supp) 727, the Court appeared to approve the Cyanamid “serious question test; however, it did not express a clear opinion on the issue. In Power Control Appliances v. Sumeet Machines, the Supreme Court relied upon Cyanamid (which does not require the plaintiff to demonstrate a reasonable probability of success) and also on a 1957 Madras High Court decision (K. Aboobacker v. Nanikram Maherchand, 1957 (2) Madras LJ 573) which said that reasonable probability of success was a major factor in deciding whether a prima facie case was made out. The Court did not clarify how it could rely on these two directly contradictory lines of reasoning. This confused state of affairs caused several High Courts to cite Cyanamid but resort to a comparison of the relative strengths of the claims of the parties. In Colgate Palmolive v. Hindustan Lever, the Supreme Court approved of the decision in Series 5, but it clarified that Series 5 must not be read changing the Cyanamid position. The Court also said that the no opinion should be expressed on the merits; yet, the relative strength of the parties’ claims should not be ignored. It appears that the only way to reconcile all these observations is to consider the relative merits of the parties’ cases as one of the factors in determining the balance of convenience, and not in assessing whether a prima facie case is made out.

However, this was not the final word. In a recent pronouncement in M. Gurudas v. Rasaranjan, the Court again went back to the “serious question” test. In Cyanamid, a serious question was considered to be a question which was not merely frivolous or vexation. In Gurudas, however, the Court considered a serious question to be a something more than a “mere triable issue”. One of the most recent decisions discussing this whole area of law is the Cipla decision of the Delhi High Court. On this blog (Spicy IP), the Cipla decision has been extensively covered. It is important because of its introduction of “public interest” as a factor in granting interim injunctions in patent cases. However, even from the point of view of the general law on “prima facie case” in injunctions, the decision is important. In the words of the Court, “… the courts should follow the approach indicated in American Cyanamid…The first aspect to be considered is whether the plaintiff had an arguable case…

So where does that leave Indian law? I would argue that given the reasoning of Gurudas, the Indian law on “prima facie case” is that there must be a serious question raised by the plaintiff; in the sense that the plaintiff’s claim must not be vexatious, and that there should be some possibility of success. I would read Gurudas as moving away from the Series 5 approach and closer to Cyanamid. If the plaintiff can show that he has some possibility of success and that his claim is not vexatious, then he must be held to have satisfied the requirement of “prima facie” case. There should not be a comparative examination of the respective merits of the parties’ claims/arguments – that examination is a matter best left for the trial stage. What is relevant is the possibility of success, not the probability. The relative strengths of the parties’ cases should be used as a “tipping factor” in case it is difficult to establish in whose favour the balance of convenience lies. This – in my opinion, based on the existing case law and the rationale behind grant of temporary injunctions – is the correct position of law in India.

The full posts are available on Spicy IP at the above links. What I have argued is not the only possible way of reconciling all the cases on the point. There is a strong case that Colgate should not be read together with Gurudas. One can also argue that despite Gurudas, Colgate would still govern interim injunctions in IP matters. Nonetheless, I believe that an approach closer to Cyanamid is favourable.

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