Delhi High Court directs Korean company to deposit ₹290 crore in patent infringement suit

The Delhi High Court recently directed South Korea-based Ace Technologies Corp to deposit ₹290 crore as security in a patent infringement suit filed by Canadian telecom equipment manufacturer Communication Components Antenna Inc (CCA) [CCA v. Ace Technologies]..With this order, the total amount directed to be secured in this case now stands at ₹365 crore (approximately $45 million) - the highest security ever ordered in an intellectual property matter in India..Justice Saurabh Banerjee invoked the Court’s inherent powers under Section 151 of the Code of Civil Procedure (CPC), holding that such interim protection was necessary to preserve the enforceability of any future decree in the suit.“This Court is of the view that a prima facie case has been made out in favour of the plaintiff (CCA)… if the plaintiff’s apprehension regarding the defendant’s inability to satisfy the decree materialises, great irreparable harm, loss and injury is likely to occur.".The Court further observed that the absence of any reciprocal enforcement treaty between India and South Korea under Section 44A CPC, combined with a 65% decline in Ace Technologies’ valuation and lack of active business in India, necessitated protection of the plaintiff’s interests through a substantial deposit..The alleged infringement pertains to a patent granted to CCA which relates to advanced antenna technology used in cellular base stations. According to CCA, Ace Technologies has been manufacturing and supplying infringing antenna models to Reliance Jio that incorporate features protected under the suit patent. Specifically, these features relate to multi-beam or beamforming antenna systems designed to optimise signal strength and reduce interference in mobile networks. CCA claimed that Ace’s antennae mimic the patented beam pattern characteristics and internal configuration, thereby unlawfully exploiting the patented invention without a licence. In a 2019 interim order, the Court had prima facie found that the defendants were infringing the suit patent, and this finding has remained undisturbed by both the Division Bench and the Supreme Court..CCA approached the Court seeking a direction to secure its damages claim of ₹1,160 crore (~$140 million), citing concerns that any decree passed in its favour would be rendered unenforceable.Ace Technologies opposed CCA's plea, arguing that infringement has not yet been conclusively established and that the earlier deposits were sufficient. The defendants contended that their financials remained healthy and that there was no risk of evading any decree..Rejecting these submissions, the Court referred to the inherent powers under Section 151 CPC as a valid basis for directing interim relief in the absence of attachable assets in India and where remedies under Order XXXVIII Rule 5 were not applicable. It held that CCA has been able to convince the Court to exercise its inherent powers under Section 151 CPC.“Unless adequate safeguards are put in place at this stage, the very purpose and interest of justice shall be rendered otiose,” the Court said..The defendant was directed to furnish the ₹290 crore either as a bank guarantee issued by a scheduled commercial bank or as a fixed deposit in the name of the Registrar General of the High Court within four weeks.The suit will now proceed for recording of evidence before the Joint Registrar..CCA was represented by Senior Advocate J Sai Deepak and Advocates Mohit Goel, Sidhant Goel, Deepankar Mishra, Aditya Goel and Avinash K Sharma from Sim & San. .Ace was represented by Advocates Suraj Kumar Singh, Bharat Singh and Abhay Singh..[Read Order]