- What are Pro Tem Deposits?
- Order XXXIX Rules 1& 2 of the Code of Civil Procedure, 1908
- Rule 5(v) of the
High Court of Delhi Rules Governing Patent Suits , 2022
Ordinarily, in Indian Patent Litigation, a Patentee is either entitled to seek interim injunction or at the very least interim deposits to be made in its favour in lieu of an interim injunction, under the following specific provisions:
However, the Court would issue an injunction or an order of interim deposits against the Defendant only if the following three requirements stood established in favour of the Plaintiff in the facts of the case1 - (i) prima facie case (ii) balance of convenience and (iii) irreparable harm.
However, in the context of Standard Essential Patent (SEP) Litigation, the SEP claimers started asserting that there was a need to secure them even prior to a determination of all the above factors, since such a determination in the SEP context is bound to take considerable time, as more often than not in an SEP suit, unlike an ordinary patent suit the SEP claimer assert 4-6 patents, which they believe are representative of their entire portfolio. SEP claimers argued that since they have essentially given up their right to seek any interim injunction (which an ordinary patentee is entitled to) on account of accepting the legal obligation of offering their patents on Fair, Reasonable and Non-Discriminatory (FRAND) rates, it was only fair that the court secure their interests through the means of a "pro tem" deposit. Since otherwise even after succeeding on merits, they may be just left with a paper order without any force, since the alleged infringer either could exit the market or siphon off its funds to deliberately frustrate the realisation of such a decision.
"Pro tem deposit" therefore, refers to an interim security or deposit, made by a party before a proper determination of merits of the claims made. This is essentially a stop gap arrangement put in place by the court, to ensure that a delay in determination of the merits of a matter, even at the interim stage, does not prejudice the Patentee. The pro tem deposit is ordinarily required to be in place only till the determination of the Order XXXIX Rule 1 & 2 application, however, if the parties consent to it, the said deposit can be extended till the final determination of the matter.
The earliest example of a pro tem order within the SEP space, was in the case of the
- Pro Tem deposits- When is it justified?
Now while the issue of pro tem deposits consistently kept being brought up by SEP claimers, accused implementers also put across their very valid concerns of deposits being allowed just for the asking of SEP claimers, especially when there is no guarantee that their patents are indeed SEPs or valid for that matter and when the central issue of FRAND rates were yet to be assessed by the Court. It was also pointed out that even internationally the SEP claimer is not entitled to any reliefs prior to evidencing the merits of their claims.
The courts were therefore, understandably faced with the complicated dilemma of whether or not to treat SEP litigations different to other patent matters and allow for such deposits even prior to an adjudication of the SEP claimer's case, or to hold that SEP suit cannot be so sui generis so as to have a different set of SOPs apply to it. While this issue repeatedly came up in multiple SEP suits, the Division Bench of the
However, a definitive answer on the issue of Pro Tem deposits was rendered by the Division bench of the
- Are Pro Tem deposits here to stay?
The ratio in the Nokia v. Oppo case and the Intex v.
It may be relevant to point out that this is the first order in an SEP matter post 2019 where a pro tem deposit has been ordered even prior to reply of the Defendant being filed, reinforcing the point that a pro tem deposit is likely in an SEP case even on the first effective day of hearing.
It is therefore clear that pro tem deposits as an issue is only going to get more and more popular by the day, and thus Courts must be wary of the remedy ultimately becoming a curse. Concerns persist about the potential disruption of the SEP litigation landscape, emphasizing the need for cautious and equitable application of pro tem deposits in the Indian SEP Jurisprudence. Though intended as a stop-gap measure to safeguard the interests of SEP holders, a premature application of the pro tem measure could tilt the balance of power in favor of the claimant, and potentially prejudice the Defendant's opportunity to put forward a case on merits. With careful scrutiny and stringent adherence to the prerequisites for its application, the potential risks associated with pro tem deposits could be effectively mitigated, preserving the integrity of the legal process and fostering a climate of equitable innovation and competition.
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Footnotes
1. Judgement dated
2 Order dated
3. Judgement dated
4 Ibid.
5 Decision dated
6Ibid.
7. Order dated
8 Ibid.
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