Sometimes a patentee may have a good case on merits for infringement of his patent, but it’s important for him to know the procedural nitty-gritties of instituting the suit in order for him to secure the relief he seeks.
Among the first things a patentee may need to know to sue an infringer, is the constitution of the infringer i.e. whether the infringer is an individual or a partnership firm or proprietorship firm or company or a Hindu Undivided Family (HUF).
But then, it is possible that the patentee knows nothing about the infringer, except the name in which the infringer carries on his business. Can the patentee proceed to institute the suit by merely identifying the infringer by the name or the style in which the infringer represents himself to the world?
Fortunately, the answer is a yes.
Patent suits, like other civil suits, are governed by the Code of Civil Procedure, 1908 (CPC, as lawyers call it). The CPC makes sufficient room for institution of suits against infringers by merely identifying them by their ostensible business names/styles.
Order 30, Rule 10 of the CPC specifically provides for such identification. It says:
10. Suit against person carrying on business in name other than his own: Any person carrying on business in a name or style other than his own name, or a Hindu undivided family carrying on business under any name, may be sued in such name or style as if it were a firm name, and is no far as the nature of case permits, all rules under this Order shall apply accordingly.
Let’s probe this provision a bit more. This Rule forms part of Order 30 of the CPC, whose title is “Suits By or Against Firms and Persons Carrying on Business in Names Other Than Their Own”.
Considering the wording of Rule 10 and the title of Order 30, would it be a fairly logical proposition to state that this Rule is not applicable when the defendant is a company?
It has been argued in a few cases that Rule 10 cannot be used when the defendant is a company. This is because Order 29 of the CPC, which obviously precedes Order 30, specifically deals with “Suits By or Against Corporations”.
What this means is that Rule 10 applies to partnership firms or individuals or HUFs, but not to companies since there is no Rule in Order 29 which is identical or similar to Rule 10 of Order 30. Therefore, it could be argued that when the infringing entity is a company, it must be identified by its registered name, and no other.
To support this argument, sometimes Section 147 of the Companies Act has been marshalled. Section 147 of the Companies Act requires a company to conduct its business under its registered name, non-compliance of which has penal consequences for the company.
However, Courts have held otherwise. The Rajasthan High Court in M.K.M. Moosa Bhai Amin, Kota vs Rajasthan Textile Mills (AIR 1974 Raj 194) observed as follows:
“Rule 10 enables a person to sue another in the assumed name. The underlying principle appears to be to facilitate suits against those who carry on business in the name other than their own. It is common experience that the business is carried on from one part of the world to another through post and goods are supplied on orders on credit.
The person residing at distant places and supplying goods on credit cannot be expected to know the names of the persons or the proprietors carrying on the business in the firm name which ordered the goods. It is to facilitate commercial transactions that Order 30, Rule 10 was enacted.”
A Full Bench decision of the Allahabad High Court in Rajendra prasad Oil Mills, Kanpur v. Smt. Chunni Devi, AIR 1969 All 1 (FB) was faced with the following issue:
"Whether a limited company falls within, the meaning of the expression 'person' as used in Rule 10 of Order 30 of the Code of Civil Procedure?"
The Full Bench after a review of a large number of decisions, answered the question as follows:
"A Limited Company falls within the meaning of the expression 'person' as used in Rule 10, Order 30 of the Code of Civil Procedure. This would be so even though the Limited Company may have been carrying on business in a name or style other than its own without any attempt to conceal its own corporate name and this fact was known to the party suing."
The Supreme Court has discussed the issue in Rashpal Malhotra vs Mrs. Satya Rajput And Another 1987 AIR 2235, however, this decision does not appear to put pause to the debate on the issue.
High Courts have even gone to the extent of saying that Rule 10 may also be used when the Plaintiff is aware of the Defendant’s constitution as a company. I am not sure the argument can be stretched to cover this situation because the premise underlying Rule 10 appears to be want of knowledge of the defendant’s details on the part of the Plaintiff.
Suffice it to say that where a defendant company conducts business under an assumed name, other than its registered name, Rule 10 of Order 30 may come to the aid of the Plaintiff. This is so because it is possible that certain companies may be conducting their business in violation of Section 147 of the Companies Act, and the Plaintiff may not be aware of this.
Further, there is no qualification or restriction in Rule 10, which says “Subject to other laws or the provisions of this Code”. If a qualification of this kind had been included, it would have seemed plausible to argue that the reference to other laws or the Code is a reference to the Companies Act or Order 29 of the CPC, thereby precluding the applicability of Rule 10 to a company or a juristic person.
Not just that, the beneficial intent of the provision must not be lost sight of, which is to allow plaintiffs to institute suits against parties whose constitution/antecedents he may not be aware of.
Corrections/opinions or case-laws on this issue are welcome!