The present case is one of the perfect examples of Intellectual property rights as one of an organization’s most valuable assets.

The implications of intellectual property rights are far more complicated than simply filing or registering copyrights, patents, trademarks, or designs. They are a business entity’s assets with far-reaching commercial implications.

The present article is intended to discuss a compelling case that focuses on Royalty payment and its strategic importance.

What is Royalty?

The most common examples of royalties are the remuneration paid to someone who possesses a patent for the usage or the money owed to an owner for an article/product sold.

Royalty is the portion of a product or profit set aside by the owner in exchange for allowing another to use their property.

Overall, an increase has been seen in royalty payments over the last ten years. The Automobile sector leads the way with Rs.3090.49 crores, followed by the I.T. sector with Rs.1924.71 and the Media sector Rs.843.27 crores.

We will discuss a fascinating case where the royalty was so huge that the alleged infringers had to shut down the manufacturing units.

The plaintiff

Vikesh Gupta

The Invention- WO2013057734A1 (click here to read more about the invention)

WIPO (PCT) Laminated polyethylene woven fabric pipes

Priority Data:

3009/DEL/2011 dated October 20, 2011

Inventor; and Applicant:

GUPTA, Vikesh [IN/IN]; c/o V.K. Backwell Pvt. Ltd., 44-B, Co-operative Estate, Dada Nagar UP, Kanpur 208022 (IN).

Agents: WILSON, Neeti et al.; Anand and Anand, B-41 Nizamuddin East, New Delhi 110013 (IN).

Anand and Anand represented Vikesh Gupta.

They filed a patent on October 20 2011. The patent was granted in the year 2019.

Highlights of the invention:

The present invention relates to a multi-layered pipe for distributing fluid comprising five concentric layers structured with an alternate application of linear low-density polyethylene, low-density polyethylene and high-density polyethylene; wherein the first, third and fifth layers are made of a polymer comprising linear low-density polyethylene and low-density polyethylene and the second and fourth layers are made of high-density polyethylene. Further, the first, third and fifth layers are laminated by a lamination machine. The second and fourth layers are fabricated in warp and weft fashion on a circular loom and subsequently pasted by a pasting machine to the first, third and fifth layers.

The claims of the invention:

  • A multi-layered pipe 100 for distributing fluid comprising:

at least three concentric layers comprising an upper layer 102, a middle layer 104 and a lower layer 106;

the upper layer 102 and the lower layer 106 are made of linear low-density polyethylene and low density polyethylene;

the middle layer 104 is made of high density polyethylene;

wherein the middle layer is woven with fabric in warp and weft fashion 108 which is subsequently pasted to the lower and upper layers laminated by a laminating machine.

  • A method of manufacturing a multi-layered pipe 100 for distributing fluid:

arranging at least three concentric layers comprising an upper layer 102, a middle layer 104 and a lower layer 106, wherein;

the upper layer 102 and the lower layer 106 are made of linear low density polyethylene and low density polyethylene;

the middle layer 104 is made of high density polyethylene;

weaving middle layer 104 with fabric in warp and weft fashion 108;

laminating lower 106 and upper layer 102 by a laminating machine;

pasting the laminated lower and upper layer to the middle layer sealing the layers by a sealing machine.

Important strategies that used considered in the present patent application:

  • Interestingly, despite the plaintiff being wealthy (having no financial constraints), they did not go for an expedited examination.
  • Instead, they requested an early publication. Due to this very fact, the patent got granted in 2019 after eight years of filing.
  • As a result, people were using his technology after the publication of his patent. In other words, his patent was being infringed by the infringers.
  • The most important factor that turned the tables for the alleged infringers was that as soon as the patent was granted, the plaintiff (Vikesh Gupta) gave notices and warnings in all papers across all cities to warn the alleged infringers who were using his invention since the day it got published to provide him with royalty backdated eight years (as the period between publication and grant was eight years) or shut down manufacturing units.
  • Plaintiff even cautioned distributors that if they bought the goods manufactured by the alleged infringers, they would be sued too.
  • So to say, he cornered the alleged infringers.
  • The infringers, or in. other words, the people who were using his technology, had no other option than to shut down the manufacturing units.

Why did the infringers not pay the royalty?

The royalty would cost much more than the profit or turnover the alleged infringers were making or had made in the previous years altogether. So this very fact deterred them from running the plant or manufacturing the said invention.

How did the plaintiff manage to claim such a massive amount of royalty?

The plaintiff’s representatives (Anand and Anand) requested the authorities for early publication.

The reason is: Royalty is calculated backdated from the date of publication.

(Early publication implies that the plaintiff is the virtual owner of the invention.)

This gave the power to the plaintiff for demanding royalty.

The present case showcases a precise strategic use of the provisions in the law.

The amount of intellect behind this game-changing case is appreciable.

Disclaimer: The present article intends to provide general guidance on the subject, and you can also consult us in your specific case.

Authors

  • Title

    Abhishek is an intellectual property Attorney. He specializes in the registration and maintenance of patents, designs, trademarks, and copyrights. He regularly assists companies in relation to crucial technology issues. He also helps organizations or individuals to develop patent portfolio management strategies for exciting new inventions and processes. Abhishek has past work experience with reputed firms like SaiKrishna and Associates Advocates, L.S. Davar and Co., Masilamani Law Partners, and Ripple IP Services (NCR).

  • Title

    Madhura is an intellectual property professional. She also assists in article writing, editing, and proofreading for companies, businesses, start-ups and individuals. Madhura has extensive experience in Biotechnology, Genetic Engineering, Molecular Biology, Immunology, Biochemistry, and Biostatistics. She has graduated from the Department of Microbiology, Savitribai Phule Pune University – one of the premier institutes in the country for studying Life Sciences. She has completed various courses related to I.P. Law from different universities worldwide.