Read Order: VISHAL PIPES LIMITED v. BHAVYA PIPE INDUSTRY 

Tulip Kanth

New Delhi, June 8, 2022: Laying emphasis on the fact that with the enactment of the Commercial Courts Act, the subject-matter jurisdiction over IPR disputes now vests with the Commercial Courts at the District Court Level, the Delhi High Court has extensively dealt with the jurisdiction of Courts with respect to IPR disputes and issued a slew of directions for enabling smooth functioning of such matters.

Clarifying that in all IPR cases, the valuation ought to be Rs 3 lakh and above, the Bench of Justice Pratibha M.Singh said, “All IPR suits to be instituted before District Courts, would therefore, first be instituted before the District Judge (Commercial).” Justice Singh also held that in case of any IPR suits valued below Rs 3 lakhs, the Commercial Court shall examine the specified value and suit valuation to ensure it is not arbitrary or unreasonable and the suit is not undervalued.

This litigation emanated from an order ADJ, titled Vishal Pipes Limited v. Bhavya Pipe Industry, which was a suit seeking permanent injunction against infringement of registered trademark and copyright. The grievance of the Plaintiff was that the  ADJ had refused to grant an ex parte order of injunction and had also failed to appoint a Local Commissioner for seizure of the alleged infringing goods.

When the matter was listed, the Court noticed that while trademark disputes are being adjudicated at the District Level by Commercial Courts, the present order had been passed by the ADJ who was not designated as a Commercial Court. Upon enquiring the reason for the same, the Court was informed that the suit was valued below Rs.3,00,000  and thus, in view of the pecuniary provisions in the Commercial Courts Act, 2015 (CCA), where the ‘specified value’ for ‘commercial disputes’ is 3,00,000 , read with Section 134 the Trade Marks Act, 1999 where a suit relating to trademarks is to be filed and heard only by a District Court, the suit was marked to a District Judge, not designated as a Commercial Court. 

The question that arose for consideration in this matter was whether IPR suits filed before District Courts, valued below Rs 3 lakh, ought to be listed before and adjudicated upon by the District Judges (Commercial) under the provisions of the CCA or by District Judges (non- Commercial), as normal civil suits.

Talking about the pecuniary jurisdiction, the Bench noticed that the pecuniary jurisdiction of the Commercial Division of the High Court is Rs.2 crore and above, the pecuniary jurisdiction of the District Courts (District Judges/ ADJs), is between Rs.3 lakhs to Rs.2 crores and suits which are valued below Rs.3 lakhs are filed before lower Courts i.e., Sub-Judge/Civil Judge. In Delhi, Commercial Courts have been notified only at the level of the District Courts, as the pecuniary jurisdiction of these Courts also matches with the lowest threshold fixed by the CCA for ‘specified value’, i.e., Rs.3 lakhs. As per the IPR Statutes, IPR suits have to be mandatorily filed only in “District Courts” having jurisdiction, added the Bench.

For a better understanding, the Bench also made it clear that  the Commercial Court is not expected to value the specific IP on the basis of any mathematical formulae but to broadly take into consideration whether the said IP would be worth more than Rs. 3 lakhs, which is the threshold for the Commercial Court to exercise jurisdiction. After mentioning that IPR suit valued below threshold of Rs 3 lakh have to be listed before District Judge (Commercial) to determine if same is whimsical or undervalued, the Bench asserted that even such suits which may be valued below Rs.3 lakh and continue as non-commercial suits, shall also continue to be listed before the District Judge (Commercial), but may not be subjected to the provisions of the CCA.

All pending IPR suits before the different District Judges (non- Commercial) in Delhi shall be placed before the concerned District Judges (Commercial) for following the specified procedure and plaintiffs who wish to amend the Plaint would be permitted to do so in accordance with law, held the Bench.

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