The present appeal challenges the order passed by Patiala House Courts, Delhi in the suit titled Vishal Pipes Limited v. Bhavya Pipe Industry. The said suit seeks to protect the mark “VPL INDIA” against Defendant’s mark “BPI”. The plaintiff asked ex parte order of injunction which was refused by Ld. ADJ. Interestingly, the Court observed that generally the trademark disputes are adjudicated at District Level by Commercial Courts, however the present order was passed by Ld. ADJ who was not designated as Commercial Court. Upon further enquiring, it turned out that the suit is valued below Rs 3 lakhs and therefore it was marked with District Judge, not designated as Commercial Court. The Court observed this peculiar situation and noted question for consideration i.e., whether IPR disputes filed before District Courts, valued before Rs 3 lakhs, ought to be listed before and adjudicated upon by District Judge (Commercial) under the provisions of CCA or by District Judges (Non-Commercial), as normal civil suits. The Court took help from Amicus Curiae to answer the above question. The learned Amicus submitted that “by lifting the veil on valuation, the threat of undervaluation and forum shopping can be mitigated and IPR disputes can be placed before concerned Court accordingly”. Another Amicus who was assisting the Court also submits that the “specified value” under CCA must be taken into account and IPR disputes can be listed before District Judges (Commercial).
The term “specified value” has been defined in Section 2(i)[1] of the CCA and determination of “specified value” has to be done as per Section 12 of the CCA respectively. It is pertinent to note that examination of “specified value” and valuation is important to determine the relevant forum.
At the outset, it cab be noted that all suits concerning IPR related subject matter are first civil suits, and such IPR cases, with the enactment of Commercial Courts Act, 2015, would now be categorised as “commercial disputes”. The term “commercial disputes” has been defined under Section 2(c)[2](xvii) of the CCA.
The decision in the case of Vishal Pipes has provided the clarity over few important points such as Pecuniary Jurisdiction of District Courts is between Rs 3 Lakhs to Rs 2 Crores whereas the pecuniary jurisdiction of Commercial Division of the High Court is Rs 2 Crores and above.
Interestingly, in Delhi, the Commercial Courts only at the level of District Court vide Order No. 60 because the specified value fixed by CCA is same as pecuniary jurisdiction of these Courts.
Now the relevant question which was raised in this case is can the IPR disputes be valued below the specified value of Rs 3 lakhs and can it be listed before District Court (Non-Commercial)? Another question which was raised here was can CCA Provisions be applied in above case.?
This judgement categorically mentions that IPR Disputes are an exception to the rule of institution of cases at the Court of lowest level having jurisdiction. After the enactment of CCA, such disputes vest with Commercial Courts at District Court level. Also, the judgement gave a vivid view that litigants and lawyers cannot escape the rigors of CCA by valuing the suits below Rs 3 lakhs.
The Court also noted that IPR Disputes whose valuation is below Rs 3 lakhs can only be justified in exceptional cases.
Thus, to avoid the malpractices of forum shopping or bench hunting, it was held that IPR disputes with valuation below Rs 3 lakhs would be listed before District Judge (Commercial) in order to determine whether the valuation is arbitrarily whimsical or deliberately undervalued. Recently the practice of Forum Shopping has been condemned by Court in the case of Vijay Kumar & Ors v. State of West Bengal & Ors.[3]
Thus, the directions were issued to examine and ensure that suit valuation should not be arbitrary or unreasonable or undervalued. After examination, the Court may pass appropriate orders directing the plaintiff to amend the plaint and pay the required Court fee or to proceed it as non-commercial suit.
However, to maintain consistency and clarity in adjudication, the suits which are valued below Rs 3 lakhs and continue to be non-commercial suit will also be listed begore District Judge (Commercial) but would not be subjected to the provisions of CCA.
[1] “(i) Specified Value, in relation to a commercial dispute, shall mean the value of the subject-matter in respect of a suit as determined in accordance with section 12 [which shall not be less than three lakh rupees] or such higher value, as may be notified by the Central Government.”
[2] “(c) “commercial dispute” means a dispute arising out of—
xxx xxx xxx
(xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits;”
[3] SLP (Crl.) 10951 of 2019, decided on 22nd March, 2022
DISCLAIMER-
The views are that of author’s own and not necessarily the views of IPTSE Academy. This blog is a platform for academic discussions and hence authors have been given flexibility to convey their thought process.
AUTHOR:
Pallavi Bhatia,
Student of Rajiv Gandhi School of Intellectual Property Law,
IIT Kharagpur
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