India: Listing Of IPR Matters: Before District Judge (Commercial) Or District Judge (Non-Commercial)

In the times of deliberate undervaluation of IP related suits, it becomes inevitable to discuss the maintainability and jurisdiction of such matters in the District Courts, also, to determine the intent of litigants behind following such practices. At the outset, it is clear that the subject-matter of IPR suits is primarily, civil and only after passing of Commercial Courts Act, 2015, these suits have been categorised as 'commercial disputes' as defined under Section 2(c)(xvii) of the Commercial Courts Act, 2015 (hereinafter CCA). Thus, the moment an 'IP related matter' comes up, it is usually understood that the trial of such matters would be carried out by the Commercial Courts. But then the pertinent question arises 'Would ALL the IP related matters be tried by Commercial Courts?' The answer to this issue is not very straightforward.

When discussing about the jurisdiction, as per Section 134 of Trade Marks Act,1999, Section 62 of Copyright Act, 1957, Section 104 of Indian Patents Act, 1970 it is stated that such suits are at the lowest, to be instituted before the District Court, making District Judges/ADJs competent to try such matters. And for Commercial courts to have jurisdiction in IPR matters, the twin conditions of the matter being a "commercial dispute", and such commercial disputes being of "specified value" has to be satisfied. Explanation (i) to section 2(c)(xvii) of Commercial Courts Act, 2015 details about the term 'Specified Value' and the determination followed by fixation of 'Specified Value' is stated under Section 12 of Commercial Courts Act, 2015.

Currently in Delhi, there are three different classes of Courts which are dealing with IPR matters, they are:

i. District Judges/ADJs (Non-Commercial)-Suits valued below Rs. 3 lakhs.

ii. District Judges/ADJs (Commercial)-Between Rs.3 lakhs up till Rs.2 crores.

iii. Commercial Division of the High Court (Original Jurisdiction) -Above Rs. 2 Crores.

The focus of this article is specifically on initiation of IP suits by District Courts, ergo, the jurisdiction of the High Court shall not be discussed. From the clauses read above, it is vital to distinguish the maintainability of such matters in District Courts both commercial and non-commercial. In the matter of Vishal Pipes Limited V. Bhavya Pipe Industry^[1] (2022 SCC Online Del 1730), the Hon'ble bench of Justice Pratibha M. Singh, decided that it is not licit of litigants and lawyers to escape the rigours of the provisions of the CCA by purposely valuing the suits below Rs. 3 lakhs.

The essential questions which were raised in the said matter are as follows:

• Whether or not IPR suits be valued below 3 lakhs and be listed before the Courts which are not notified as Commercial Courts?
• Whether or not Commercial Courts can entertain and adjudicate IPR matters valued less than Rs. 3 Lakhs?
• Whether or not the provisions of Commercial Courts Act, 2015 would be applicable to such disputes?

While examining the issues in detail, the Hon'ble Court analysed the object and purpose of the enactment of Commercial Courts Act, 2015 and whether depriving certain IPR disputes from being adjudicated under the act would be in tune with the envisaged objectives. In lines of the same discussion, it was pointed out that Commercial Courts Act, 2015 does not merely contain procedural provisions, but with the object of expediting the resolution of commercial disputes, it has also provided for various other substantive provisions such as case management hearing, truncated trials, summary judgements etc. Thus, civil suits which are "commercial disputes" as per Section 2(1)(c)(xvii) but not of "specified value" cannot take the benefit of adjudication that can be achieved by way of application of the provisions of Commercial Courts Act, 2015.

The discretion before the passing of this judgement was of the Plaintiff as to choose in which court the Suit has to be instituted. The consequence of this absolute discretion is evident in the form of habitual undervaluation of IP matters, bench hunting and forum shopping. The very practice of forum shopping is considered as disreputable by the Hon'ble Courts and thus, has no sanction and paramountcy in law. Apprehending to the current state of affairs, the Hon'ble High Court further observed the following:

To sum up, it can be concluded that the very purpose of Commercial Courts Act, 2015 was to facilitate speedy and efficient disposal of commercial matters that contribute to the economic growth of the country. When plaintiffs deliberately undervalue the suits in order to escape the strict provisions of CCA, it defeats its fundamental object and leads to odd or arbitrary decisions. Curtailing ill practices of forum shopping and undervaluation of IP suits is the need of the hour and thus, this judgement comes to the rescue of genuine litigants and as a deterrent to the violators. In coming time, the expedient adoption of this judgement in all other jurisdictions can save time, money and other resources of the Hon'ble Courts and help achieve the objective of Commercial Courts Act, 2015 i.e., to enable speedy redressal of commercial disputes in India.

META TITLE: THE TUSSLE OF LISTING OF IPR SUITS

META DESCRIPTION:

Deliberate undervaluation of IPR suits has become an unethical practice among the litigants and lawyers. In order to curtail that, Delhi High Court in a recent judgement has reprimanded such practice and has passed orders which will benefit not only genuine litigants but also courts. It has been iterated that IPR suits under any circumstances will first go to District Judge (Commercial), only after determining the specified value of the suit it will be transferred to District Judge (Non-commercial) if the value comes below Rs. 3 lakhs.

Footnote

1. Vishal Pipes Limited V. Bhavya Pipe Industry, (2022 SCC Online Del 1730)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.