Verdict corner: The case for shifting of IPR cases

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Published: December 10, 2015 12:18:11 AM

Legal fraternity including IPR experts are all united in the fight against the transfer of pending IPR cases

The Delhi High Court has stayed the transfer of pending intellectual property rights (IPR) disputes to the 12 district courts irrespective of their pecuniary value. It said it will wait till further clarity in law emerges.

It said the provisions of the Commercial Court, Commercial Division and Commercial Appellate Division Ordinance, 2015, required ‘consideration’ and posted the matter for further hearing on January 19. It took note of the submission made by Delhi’s additional standing counsel Sanjoy Ghose that the government will deliberate over the ordinance and will clarify ambiguities in the Act, which is expected to replace an ordinance dealing with commercial disputes and exclusive commercial divisions in the High Court to dispose of such cases speedily.

The order extends to all cases filed in the High Court under the Patents Act, 1970; Trademark Act, 1999; Copyright Act, 2000; Geographical Indications of Goods (Registration and Protection) Act, 2010; and Designs Act, 2000.
Delhi High Court registry on November 24 had started transferring all cases valued at less than Rs 2 crore to the district courts after the amendment in the Delhi High Court Act and the Commercial Courts Ordinance that had created commercial courts and commercial appellate benches in the high courts. The ordinance later created an exception to this rule and clarified that all commercial disputes, involving IPR ones, shall be decided by specially created commercial divisions in the High Court, provided they were valued at over Rs 1 crore.

The Delhi High Court (Amendment) Act, which came into effect from October 26, was enacted with the objective to reduce the workload of the Court by distributing this burden to lower courts.

The transfer has been challenged by the Asian Patents Attorney’s Association (APAA), an NGO for IP protection in the Asian region, and Swiss pharma company Vifor (International).

They sought quashing of the Court’s administrative order that had allowed a transfer of all pending cases up to the value of Rs 1 crore to subordinate courts. They said cases arising out of the statutes relating to IPR were “protected” under the 2015 ordinance.

The association’s fundamental argument was that IP legislations such as the Patents Act and Trademark Act did not mention the “specific value” of intangible assets such as patents and trademarks. In such a situation, the Court’s registry would not be able to accurately calculate the “specified value,” which is used to decide whether the case would be transferred to district courts or not.

Ghose had argued “the process of transfer has been initiated through the ordinance which has to be replaced by an Act. Heavens would not fall if this transfer is allowed, and if there are any discrepancies in the process, the legislature can correct it. The Act will only partition the court into a commercial side and original side.”
Legal fraternity including IPR experts are all united in its fight against the transfer of pending IPR cases.

Delhi High Court Bar Association secretary Abhijat Bal, who is spearheading the movement against such transfer, says “there is no other way of interpreting Section 7 of the ordnance. The intention is clearly to make IPR matters a category within the general commercial dispute and that these cases have to be heard by the commercial division of the High Court. The ordinance is a progressive legislation.”

Says senior lawyer Pratibha M Singh, “The High Court order is in the spirit of the ordinance, which enables efficient and speedy disposal of IPR cases. In most of the matters, the High Court is already seized with the issue and the transfer to the 12 district courts would result in considerable logistical delay.”

According to another IPR lawyer Amarjit Singh, who is also senior vice-president, APAA, the definition of commercial disputes as mentioned in the ordnance includes IPR cases.

He said the proviso of Section 7 of the ordinance shows that all suits related to commercial disputes stipulated by an Act will lie in a court which is not inferior to a district court. “In case any suit arising out of the five IPR legislations has been filed on the original side of the High Court, the same is to be heard and decided by the commercial division of the High Court as per the proviso.”

Academicians have also come in support. Says Dr Shamnad Basheer, the founder of SpicyIP, “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?”

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