Delhi High Court Restrains Chinese Warehouse Automation Company From Making, Selling Machine Which Allegedly Violated Indian Company's Patent

The Delhi High Court granted an ex-parte interim injunction against a Chinese warehouse automation company from manufacturing, selling, importing or exporting pre-sortation machines in India that are patented by an Indian company.

A single bench of Justice Mini Pushkarna was considering the application of Falcon Autotech Private Limited, an Indian company, under Order 39 Rules 1 and 2 read with Section 151 CPC, for an ex-parte ad-interim injunction against Kengic Intelligent Technology Co. Ltd, a Chinese company.

The plaintiff- Falcon company was grated patent for 'Integrated Sortation System' by the Indian Patent Office. These systems are engineered to automate critical operational processes within the supply chain. Falcon stated that the invention, along with its technical knowledge, know-how and expertise is its invaluable asset and exclusive property.

In June 2024, Falcon learned that the defendant-Kengic company had installed a machine at one of Falcon client's sites, which appeared to closely resemble its patented sorter machine. After inspection of the machine, Falcon found it to be functionally identical to their patented sorter machine.

Falcon contended that Kengic, being a much later entrant in sorting system industry, is attempting to springboard its business in India by offering and selling the infringing products to the customers, including its clients. Further, that Kengic has adopted an illegal approach to displace Falcon from its market in India.

Falcon referred to the Ministry of Corporate Affairs' website, which displays the status of Kengic's Indian Company as 'Strike Off'. The affidavits from its Directors indicate that the company has been inactive since its inception and is therefore considered as 'Defunct'. Falcon also brought the Court's attention to the LinkedIn profiles of certain individuals, which show them working as Project Manager and employees for Kengic in India.

Falcon thus submitted that Kengic is clandestinely operating in India, despite having its name struck off from the website of the Ministry of Corporate Affairs.

The High Court stated that the plaintiff-Falcon has proved a prima facie case for grant of ex-parte injunction in its favour. It noted that not granting the injunction would cause irreparable loss to it.

“Considering the submissions made before this Court, the plaintiff has demonstrated a prima facie case for grant of injunction in its favour and that if no ex-parte ad-interim injunction is granted, the plaintiff will suffer an irreparable loss. Further, the balance of convenience also lies in favour of the plaintiff, and against the defendant.”

The Court thus ordered defendant-Kengic to stop manufacturing, selling, importing or exporting the patented machines and further issued notice to Kengic.

Falcon Autotech was led by Mr. Sandeep Sethi, Senior Advocate, briefed by Mr. Subhash Bhutoria of LAW SB.

Case title: Falcon Autotech Private Limited vs. Kengic Intelligent Technology Co. Ltd. (I.A. No. 35231/2024)

Citation: 2024 LiveLaw (Del) 880

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