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Samsung Loses Challenge To Constitutionality Of India's Customs Regulations Governing Import Of IP Goods

Samsung India Electronics Pvt. Ltd, Indian arm of Samsung Electronics Co. Ltd had challenged the constitutionality of India's customs regulations governing the import of IP goods in Delhi High Court by filing a writ petition. Samsung India was aggrieved by action of the Indian customs department that was not clearing its imports of dual-SIM-card mobile phones in view of application for registration of patent rights filed by the patentee in respect of similar technology with custom office. More precisely Samsung India has challenged the custom notification no. 47/2007 Customs (N.T.) dated 08.05.2007 called Intellectual Property Right (Imported Goods) Enforcement Rules, 2007 read with Circular No. 41/2007 Custom Circular dated 29.10.2007 called Instructions for implementation of Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 issued by Central Board of Excise and Customs. Under said provisions any right holder (patentee or licensee) can register his/their patent for a period of 5 years with intellectual property rights cell of Office of Commissioner of customs on filing of an application along with grounds of suspicion, brief disclosure of technology and executing an indemnity bond. 

The brief history of the matter is as follows:

March 4, 2002               Patent Application filed in the Chennai Patent Office with 4 claims and 12 drawings being Patent Application no. 161/MAS/2002 titled as “Mobile Phone with multiple number of SIM Cards to receive and/or to send multiple number of signals at a time”

March 03, 2003             PCT application filed in WIPO PCT/IN03/00044

September 12, 2003       International Publication no. WO 03/75543 A2 with 11 claims and 11 drawings, titled as “Mobile phone with multiple number of SIMCards to transreceive multiple number of mobile companies towers at a time”

January 4, 2004            Amended claims filed on WIPO, 11 claims replaced by 19 claims, first time plurality of headphone/earphone jacks or plugs are disclosed.

January 8, 2004            International Search Report was published on WIPO

March 4, 2004               Amended claimed published on WIPO

January 5, 2006            Revised ISR published on WIPO

January 23, 2006          Amended Claims filed before WIPO, claims increased to 17 from 11

April 6, 2006                  Amended claims with statement published on WIPO    

November 17, 2006        Patent Application was amended, no. of claims was increased to 20, drawings to 13 and title was changed to “Mobile telephone having a plurality of SIMcards allocated to different communication networks”. First time plurality of headphone/ earphone jacks, plurality of headphone/ earphone plugs and plurality of Bluetooth devices were disclosed and claimed.

June 1, 2007                 Patent Application published in Indian Patent Journal with 20 claims, titled as “Mobile telephone having a plurality of SIMcards allocated to different communication”

February 11, 2008         Patent Granted being Patent No.  214388

December 08, 2008        Defendant no. 1 filed an e-application no. UTRN0.TINMAA4PR0009 with Officer of Commissioner of customs, intellectual property rights cell at Chennai under under custom notification no. 47/2007 Customs (N.T.) dated 08.05.2007 called Intellectual Property Right (Imported Goods) Enforcement Rules, 2007 read with Circular No. 41/2007 Custom Circular dated 29.10.2007 called Instructions for implementation of Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 issued by Central Board of Excise and Customs

January 27, 2009          Office of Commissioner of customs, intellectual property rights cell at Chennai communicated vide letter no. F No.SIIB/IPR/1/08-ACC to Defendant no. 1 that his application has been registered and has been allotted UPRNo. A01671NMAA4PR.
 

The claims that are allowed to Mr. Ram Kumar by Chennai Patent Office are related to mobile instruments having provision for plurality of current or modified sim sockets for accommodating plurality of current or modified sim cards and essentially having plurality of  headphone/earphone jacks for accepting plurality of headphone/earphone plugs and/or plurality of Bluetooth devices in order to operate simultaneously so as a plurality of incoming/ outgoing calls can be communicated simultaneously with respective simcards. The above invention is totally different from dual-sim technology as dual sim technology envisage mobile devices with incorporation of plurality of sim cards, and the present patent is step further then that as mobile device disclosed here has a  provision for plurality of sim sockets for accommodating plurality of sim cards and having plurality of  headphone/earphone jacks for accepting plurality of headphone/earphone plugs and/or plurality of Bluetooth devices to operate simultaneously so that a plurality of incoming/ outgoing calls can be communicated simultaneously with respective simcards.

This is not for the first time that provisions of Indian Laws are challenged by MNC companies, Novartis has in the past tried same. But in the instant matter there is nothing wrong in the Indian Custom regulations, if any fault can be attributed it has to be on Chennai Patent office that has granted a Patent with title that is confusing the custom authority, which being non technical are not clearing the shipments. Though the brief disclosure of technology by Mr. Ram Kumar made to Custom office makes it clear that his invention is different from dual sim or multi sim technology.

As per Rule 7 of the custom notification no. 47/2007 Customs (N.T.) dated 08.05.2007 called Intellectual Property Right (Imported Goods) Enforcement Rules, 2007 if Deputy Commissioner of Customs or Assistant Commissioner of Customs (suo motto or on a notice by patentee) has reasons to believe that imported goods are suspected to be goods infringing IP rights, he has to suspend the clearance of goods.  In case of suo motto action Deputy Commissioner of Customs or Assistant Commissioner of Customs must have some prima facie evidence or reasonable grounds. The reasons of suspension have to be immediately issued to importer, right holder (patentee or licensee) or their respective authorised representative by speed post or fax/email. There is provision that if the right holder or his authorised representative does not join the proceedings within 10 working days from date of suspension of clearance (or within further extended period of 10 days in appropriate cases), the case may be decided ex parte on merit and goods could be cleared.

Further in case of suo motto action the right holder has to file an application/ notice and execute indemnity bond etc. within 5 working days from suspension of clearance otherwise the custom office has to release the goods subject to other requirements under custom act.

Therefore Indian Customs regulations provide reasonable opportunity to importers whose goods are not cleared. The stipulated time frame for representation is also just and if any loss or damages are caused to importer because of any such non-action, they could seek damages as custom authorities are indemnified by the right holder. Further, the issue of technology has to be settled by one importer once in respect of a particular patented product and henceforth the decision could be relied by importer as well as custom authorities.    

It has been a settled principal of law where alternative remedy is available resort to writ petitions (extra ordinary jurisdiction) should not be taken. Apart from administrative relief from the custom authorities the importers could also take relief under Section 105 of the Indian Patent Act by filing a suit in the court for declaration that there product is not infringing a particular patent.

Further mobile instruments under no circumstances can be said to be perishable goods that will get perish if not cleared within a time frame by custom authorities warranting exercise of extraordinary jurisdiction.

As per the recent information; the Samsung has withdrawn the writ petition and Ramkumar has got a stay again Samsung and many others dual SIM importer mobile companies apart from Micromax which has filed a declaration suit under Section 105 of the Indian Patent Act that their instrument does not violate Ramkumar's Patent and has got a stay order from the Gurgaon District Court. This order was appealed in Punjab and Haryana High Court and the

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