Intellectual Property Rights : Continuing infringement - Courts not to insist on mediation in situations of ongoing infringement.

Supreme Court Overrules High Court, Restores Novenco's Intellectual Property Suit, Continuous Infringement of Intellectual Property Rights Warrants Urgent Interim Relief, Says Apex Court

In a significant ruling, the Supreme Court of India has set aside judgments by the Himachal Pradesh High Court, restoring a commercial suit filed by Novenco Building and Industry A/S. The Danish company had accused Xero Energy Engineering Solutions Pvt. Ltd. and Aeronaut Fans Industry Pvt. Ltd. of infringing its patented industrial fan designs. The Supreme Court's decision underscores the importance of assessing urgency in intellectual property disputes based on the ongoing nature of the alleged infringement.

The case revolved around the interpretation of Section 12A of the Commercial Courts Act, 2015, which mandates pre-institution mediation for commercial suits unless urgent interim relief is genuinely contemplated. Novenco, which has invested millions in developing its Novenco ZerAx industrial fans, discovered that its distributor, Xero Energy, and Aeronaut Fans were allegedly manufacturing and selling deceptively similar products. The company's request for an interim injunction was initially rejected by the Himachal Pradesh High Court due to a perceived lack of urgency, given the delay between discovering the infringement and filing the suit.

However, the Supreme Court, led by Justices Sanjay Kumar and Alok Aradhe, emphasized that each act of infringement represents a fresh wrong, thus constituting a recurring cause of action. The court highlighted that intellectual property disputes are not merely private concerns but have broader public interest implications, as they can deceive consumers and taint the marketplace. The judgment clarifies that the urgency in such cases stems not from the age of the cause but from the ongoing nature of the infringement and its impact.

The Supreme Court's decision allows Novenco to proceed with its suit without undergoing mandatory pre-institution mediation, marking a pivotal moment for intellectual property rights enforcement in India. The case has been remanded to the Himachal Pradesh High Court for further proceedings on its merits.

Bottom Line:

Section 12A of the Commercial Courts Act, 2015 mandates pre-institution mediation for commercial suits unless urgent interim reliefs are genuinely contemplated. In cases of continuing intellectual property infringement, urgency must be assessed in the context of ongoing injury and public interest in preventing deception. Mere delay in institution of suit does not negate urgency when infringement is continuous.

Statutory provision(s): Commercial Courts Act, 2015 Section 12A, Order VII Rule 11 of CPC, Order XXXIX Rules 1 and 2 of CPC, Section 151 of CPC.

Novenco Building and Industry A/S v. Xero Energy Engineering Solutions Private Ltd., (SC) : Law Finder Doc Id # 2799230