Transfer of IPR cases stayed by the Delhi High Court

[Aparajita Lath]

Two writ petitions (filed by Vifor (International) Limited and Asian Patent Association (Indian Group) have been filed against the Registrar General of the Delhi High Court’s order dated 24.11.2015 with effect from 26.10.2015.

On December 3, 2015 a division bench of the Delhi High Court held that the proviso to section 7 of the Commercial Courts, Commercial Divisions and Commercial Appellate Division of High Courts Ordinance, 2015 (“Commercial Courts Ordinance/Ordinance”) requires consideration but until the next date of hearing (January 19, 2015) cases arising out of the 5 IPR legislations (discussed below) should not be transferred and amendment applications should be considered in accordance with law.

Shamnad was interviewed by the Financial Express where he stated “there is a direct conflict between the amendment to Delhi HC Act and the ordinance. The only way to harmoniously interpret both is to give effect to the Section 7 proviso in the ordinance.” Questioning the rationale behind the ordinance, he said, “Needless to state, a final resolution will only happen once the court hears the matter again. Perhaps by then the commercial courts ordinance is translated into proper legislative enactment after due deliberation by Parliament. What was the urgent need to steamroll this commercial courts Bill as an ordinance just 2.5 weeks before Parliament actually began its session?”

The 24.11.2015 order of the Registrar General of the Delhi High Court, directed as follows:

1. Suits and other proceedings of value of upto Rs. 1 crore pending before the Delhi High Court (Original Side) to be transferred to jurisdictional district courts, except those cases where final judgement has been reserved; and
2. Suits and other proceedings of a value between Rs. 1 crore upto Rs. 2 crore, other than “commercial disputes” of “specified value” as defined under the Commercial Courts Ordinance, pending before the Delhi High Court (Original Side) to be transferred to jurisdictional district courts, except those cases where final judgement has been reserved.

In essence, this order directed the transfer of IPR cases of value not more than Rs. 1 crore to jurisdictional district courts.

As against this order, the Commercial Courts Ordinance came into effect on 23.10.25. This Ordinance under section 2(c)(xvii) defines a “commercial dispute” to include a dispute arising out of intellectual property rights. The Ordinance also creates special commercial courts and commercial divisions in high courts to try suits and applications arising out of a “commercial dispute” of “specified value”. The term “specified value” is defined under section 2(i) to mean the value of subject matters as calculated under section 12 which is not less than Rs. 1 crore. Therefore, disputes in relation to intellectual property rights exceeding Rs. 1 crore are “commercial disputes” of “specified value” and these disputes are to be heard by the Commercial Division of the High Courts as per section 7.

However, a conflict arises between the 24.11.2015 order and the Ordinance. The order suggests that if there are suits and proceedings of value less than Rs. 1 crore then such suits and proceedings are to be transferred to the jurisdictional district courts. The writ petition seeks to challenge this direction as it is argued that disputes in relation to intellectual property rights, even those which are less than the specified value i.e. Rs. 1 crore, are to be heard and disposed off by the Commercial Division of the High Courts that exercise original jurisdiction. Therefore, such cases, regardless of value, cannot be transferred to district courts.

This was argued in light of the proviso to section 7 of the Ordinance. This proviso provides that all suits and applications relating to a commercial dispute (IPR disputes, in this case) stipulated by an Act to lie in a court not inferior to a District Court and where such suits or applications have been filed before a High Court with Original Jurisdiction are to be heard and disposed by the Commercial Division of the High Court. Reading this proviso along with the jurisdiction section of 5 IPR legislations: The Patents Act, 1970 (section 104), the Copyright Act, 1957 (section 62), the Trade Mark Act, 1999 (section 134), the Design Act, 2000 (proviso to section 22(2) and the Geographical Indications Act, 1999 (section 64) suggests that suits pending in relation to these legislations before a High Court exercising original jurisdiction, even if their value is less than Rs. 1 crore, are to be tried by the Commercial Divisions of the High Court.

It was also pointed out to the court that amendment applications to plaints were not being accepted by the Registry. It was argued that an amendment application can be entertained even if the jurisdictional value of the court increases or decreases.

Since the Ordinance is going to be considered in the winter session of the parliament it was prayed that the matter be taken up in the middle of January.

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