Module 7 - Part 1 of 8

Forum Selection & Jurisdiction

Master the critical aspects of forum selection in IP litigation, including the Commercial Courts Act, territorial jurisdiction rules, specialized IP benches, and strategic considerations for choosing the right forum.

Duration: 60-75 minutes

7 Key Topics

10 Quiz Questions

Topic 1

Commercial Courts Act, 2015

The Commercial Courts Act, 2015 (as amended in 2018) represents a paradigm shift in IP litigation in India by establishing specialized commercial courts with dedicated procedures for speedy disposal of commercial disputes, including intellectual property matters.

Key Concept: Specified Value Threshold

Under Section 2(1)(i) of the Commercial Courts Act, "Specified Value" means the value of the subject-matter in respect of a suit as determined in accordance with Section 12. The 2018 Amendment reduced this threshold from Rs. 1 crore to Rs. 3 lakhs, significantly expanding access to commercial courts for IP disputes.

Structure of Commercial Courts

Commercial Courts (District Level): For disputes below the pecuniary jurisdiction of High Courts
Commercial Division (High Court): For original side matters in High Courts having ordinary original civil jurisdiction
Commercial Appellate Division: For appeals from Commercial Courts and Commercial Division

Section 12: Determination of Specified Value

For IP disputes, the specified value is determined as follows:

For relief of injunction: Market value of the right sought to be enforced
For recovery of damages: Actual amount claimed
For accounts of profits: Estimated value of profits being claimed
For delivery up/destruction: Value of the goods sought to be delivered/destroyed

The aggregate value of all reliefs claimed determines whether the suit qualifies as a commercial dispute.

Key Features for IP Litigation

Mandatory Pre-Institution Mediation: Section 12A requires parties to exhaust mediation before filing suits (with exceptions for urgent interim relief)
Case Management Hearings: Strict timelines with case management provisions under Order XV-A CPC
Summary Judgment: Order XIII-A allows for summary judgment where there is no real prospect of defense
Written Arguments: Mandatory written arguments replacing lengthy oral arguments
Costs Regime: Realistic costs to be imposed on unsuccessful parties

Practical Implication: Valuation in Trademark Suits

In trademark infringement suits, courts have held that the specified value should include:

The value of the trademark as an intangible asset
The damages/compensation claimed for past infringement
The value of goods bearing the infringing marks sought to be destroyed
The estimated profits made by the defendant

This often results in IP disputes meeting the specified value threshold even when actual damages are difficult to quantify.

Topic 2

Territorial Jurisdiction in IP Cases

Determining territorial jurisdiction in IP cases involves application of general principles under the Code of Civil Procedure, 1908, along with specific provisions in IP statutes. The choice of forum can significantly impact the outcome of litigation.

General Principles (Section 20, CPC)

A suit may be instituted in a court within whose local jurisdiction:

The defendant resides or carries on business or personally works for gain
Any of the defendants (where there are multiple) resides or carries on business
The cause of action, wholly or in part, arises

Section 134 of Trade Marks Act, 1999

This section provides an additional ground for territorial jurisdiction in trademark matters:

"Notwithstanding anything contained in the Code of Civil Procedure, 1908, an additional suit for infringement, or for passing off arising out of the use by the defendant of any trade mark which is identical with or deceptively similar to the plaintiff's trade mark, whether registered or unregistered, shall be instituted in the court not lower than a District Court having jurisdiction to try the suit:

(a) In the place where the person instituting the suit resides or carries on business or personally works for gain; or

(b) Where there are more than one such persons, any of them actually and voluntarily resides or carries on business or personally works for gain."

Similar Provisions in Other IP Statutes

Section 62 of Copyright Act, 1957

Provides that a civil suit for infringement may be instituted where the plaintiff actually and voluntarily resides or carries on business or personally works for gain, in addition to the general jurisdictional grounds.

Section 104 of Patents Act, 1970

Patent infringement suits must be filed in a District Court or High Court. The jurisdiction follows the general CPC principles, but additional jurisdiction lies where the plaintiff carries on business.

Section 22 of Designs Act, 2000

Similar to trademark provisions, allowing suits where the plaintiff resides or carries on business.

Case Law: Ultra Home Construction v. Purushottam Kumar Chaubey (2016)

The Supreme Court clarified that the additional jurisdiction under Section 134 of the Trade Marks Act is available only to the plaintiff who is the registered proprietor or permitted user of the trademark. The provision cannot be used to confer jurisdiction based on the defendant's location if the plaintiff has no presence there.

This judgment emphasized that the plaintiff-friendly jurisdiction provisions in IP statutes have their limits and cannot be used to create jurisdiction artificially.

Cause of Action in IP Cases

In IP matters, cause of action arises where:

The infringing act is committed (manufacturing, selling, advertising)
The infringing goods are found or sold
The infringing website is accessed (for online infringement)
The plaintiff suffers loss or damage

Topic 3

Delhi High Court IPR Division

The Delhi High Court has emerged as the preeminent forum for IP litigation in India, with its Intellectual Property Division (IPD) handling the largest volume of IP cases and developing substantial jurisprudence that influences courts across the country.

Key Concept: Original Side Jurisdiction

The Delhi High Court has ordinary original civil jurisdiction within the territorial limits of Delhi. This means IP suits can be directly filed before the High Court (now the Commercial Division) without having to go through District Courts, provided the specified value threshold is met.

Structure and Functioning

Dedicated IP Benches: Special benches constituted to hear only IP matters
Regular Listing: IP cases are listed on specific days for efficient case management
Specialized Bar: Active IP Bar with experienced practitioners
Landmark Judgments: Numerous precedent-setting decisions in all areas of IP

Procedural Innovations

The Delhi High Court has introduced several procedural innovations for IP litigation:

IPD Rules: Specific rules for IPD matters including mandatory case management
Hot-Tubbing: Concurrent expert testimony where experts testify together
Technology Evidence: Protocols for electronic evidence and software demonstrations
Confidentiality Orders: Well-developed practice for protecting trade secrets during litigation

Delhi High Court (Original Side) Rules, 2018

Key provisions relevant to IP litigation:

Chapter XI: Commercial Division procedures
Rule 7: Case Management Hearings mandatory for IP suits
Rule 10: Written arguments limited to 50 pages
Rule 15: Provisions for preliminary issues
Rule 21: Costs to be determined on actual basis

Why Plaintiffs Prefer Delhi High Court

Several factors make the Delhi High Court attractive for IP plaintiffs:

Speed: Faster disposal compared to other High Courts
Expertise: Judges with significant IP experience
Interim Relief: Well-developed jurisprudence on injunctions
Ex Parte Orders: Willingness to grant ex parte ad interim relief in appropriate cases
Damages: Progressive approach to damages computation
Infrastructure: Modern facilities including e-filing

Topic 4

Other High Courts' IP Benches

While Delhi dominates IP litigation, several other High Courts have developed significant IP jurisprudence and established specialized mechanisms for handling IP disputes.

Bombay High Court

Has original side jurisdiction in Mumbai. Handles substantial pharmaceutical patent litigation and entertainment industry copyright cases. Known for detailed technical analysis in patent cases. The Commercial Division actively hears IP matters with specialized benches.

Madras High Court

Original side jurisdiction in Chennai. Significant IP caseload especially in pharmaceutical patents and Tamil film industry copyright. Has developed substantial jurisprudence on compulsory licensing and patent validity. The IP Division is active with experienced judges.

Calcutta High Court

Original side jurisdiction in Kolkata. Handles IP matters particularly related to tea industry (geographical indications), jute industry, and Tollywood entertainment. Important forum for Eastern India IP disputes.

Karnataka High Court

Original side jurisdiction in Bangalore. Emerging as important IP forum given Bangalore's tech hub status. Handles significant software patent and technology IP disputes. Commercial Court actively hears IP matters.

High Courts Without Original Side Jurisdiction

For High Courts without original civil jurisdiction (Gujarat, Punjab & Haryana, Telangana, etc.), IP suits must be filed in District Courts designated as Commercial Courts. Appeals lie to the Commercial Appellate Division of the respective High Court.

Key Concept: Designated Courts for Patents

Under Section 104 of the Patents Act, patent infringement suits can only be filed in a District Court or a High Court. Where the High Court has no original jurisdiction, the suit must be filed before a District Court notified to exercise such jurisdiction. Many states have designated specific District Courts for patent matters.

Regional Considerations

South India: Madras and Karnataka High Courts handle significant pharmaceutical and IT-related IP disputes
West India: Bombay High Court is preferred for entertainment and pharmaceutical litigation
East India: Calcutta High Court handles regional IP matters and traditional industry disputes
North India: Delhi dominates but Punjab & Haryana handles substantial pharmaceutical litigation given Chandigarh's pharma industry

Topic 5

IPAB: Historical Context and Abolition

The Intellectual Property Appellate Board (IPAB) was a specialized tribunal that heard appeals and rectification matters under various IP statutes. Understanding its history is important as its decisions continue to constitute precedent and its abolition has restructured the IP appellate framework.

History and Establishment

2003: IPAB established under the Trade Marks Act, 1999
2007: Jurisdiction extended to patent matters under the Patents Act
2017: Jurisdiction further extended to copyright and geographical indications matters
2021: IPAB abolished by the Tribunals Reforms Act, 2021

Tribunals Reforms Act, 2021

This Act abolished the IPAB along with several other tribunals. Key changes:

IPAB's jurisdiction transferred to High Courts
All pending matters transferred to respective High Courts
IPAB decisions remain valid as precedent
New appeals and rectification petitions to be filed before High Courts

Current Position Post-IPAB

Patent Matters

Appeals from Controller's decisions go to the High Court having territorial jurisdiction over the Patent Office where the application was filed (Delhi, Mumbai, Chennai, or Kolkata).

Trademark Matters

Appeals and rectification petitions go to the High Court having jurisdiction over the Trade Marks Registry office (Delhi, Mumbai, Chennai, Kolkata, or Ahmedabad).

Appeals from Copyright Board go to the High Court. Commercial courts have jurisdiction for copyright infringement suits.

Impact of IPAB Abolition

The abolition has had mixed effects on IP litigation:

Positive: Access to High Court judges with broader legal expertise; better enforcement of orders
Negative: Loss of specialized technical expertise; potential for varying interpretations across High Courts
Practical: Increased burden on High Courts; need for technical assessors in patent matters

The transition has required practitioners to adapt their strategies and procedural approaches.

Topic 6

Appellate Hierarchy in IP Matters

Understanding the appellate hierarchy is crucial for IP practitioners to advise clients on appeal strategies and to understand the precedential value of decisions at various levels.

Current Appellate Structure

Key Concept: Appeals from Administrative Decisions

Appeals from decisions of the Controller of Patents, Registrar of Trade Marks, Registrar of Copyright, and GI Registry now lie directly to the High Courts. This creates a two-tier appellate system: High Court and Supreme Court.

Appeals from Infringement Suits

District Court/Commercial Court: Appeal to Commercial Appellate Division of High Court
Commercial Division (High Court): Appeal to Division Bench of the same High Court
High Court Division Bench: Appeal to Supreme Court (by special leave)

Appeals from Registry/Controller Decisions

Patent Controller: Appeal to High Court having jurisdiction over the Patent Office
Trade Marks Registrar: Appeal to High Court having jurisdiction over the Trade Marks Registry
High Court: Appeal to Supreme Court (by special leave)

Article 136 of the Constitution - Special Leave Petition

The Supreme Court's jurisdiction to hear IP appeals is primarily through Special Leave Petitions under Article 136. The Supreme Court grants leave where:

Substantial question of law is involved
High Court's interpretation affects IP rights significantly
Conflicting decisions from different High Courts need resolution
Issues of national importance are involved (e.g., access to medicines)

Landmark Supreme Court IP Appeals

Several Supreme Court decisions through SLP route have shaped Indian IP law:

Novartis v. Union of India (2013): Section 3(d) interpretation for pharmaceutical patents
Bayer v. Natco (2014): Compulsory licensing principles affirmed
Satyam Infoway v. Sifynet (2004): Domain name and trademark principles
Yahoo v. Akash Arora (1999): Internet jurisdiction and passing off

Topic 7

Forum Shopping Considerations

While often viewed negatively, strategic forum selection is a legitimate aspect of IP litigation. Understanding the factors that influence forum choice helps practitioners make informed decisions for their clients.

Legitimate Factors in Forum Selection

Judicial Expertise: Preference for courts with experienced IP judges
Speed of Disposal: Courts with faster timelines for interim and final relief
Precedent: Favorable existing jurisprudence in particular forums
Infrastructure: E-filing, video conferencing, evidence handling capabilities
Costs: Court fees, legal costs, and practical expenses
Enforcement: Effectiveness of enforcement mechanisms

Key Concept: Abuse vs. Strategy

Courts distinguish between legitimate forum selection and forum shopping abuse. Factors indicating abuse include:

Filing in a forum with no genuine connection to the dispute
Artificial creation of jurisdiction through sham transactions
Filing multiple suits in different forums for the same cause of action
Filing suit merely to harass or increase litigation costs

Practical Considerations

Plaintiff's Perspective

Consider where evidence is located, witness availability, likelihood of interim relief, cost of litigation, and enforceability of orders. Multi-national plaintiffs should establish business presence strategically to preserve forum options.

Defendant's Perspective

Challenge jurisdiction promptly; consider counterclaim strategy; evaluate whether to seek transfer. Anti-suit injunctions may be available in some circumstances.

Case Law: Jurisdiction Challenges

In Indian Performing Rights Society v. Sanjay Dalia (2015), the Supreme Court addressed the relationship between Section 62 of the Copyright Act and Section 20 of CPC. The Court held:

Section 62 provides an additional ground for jurisdiction, not an exclusive one
The plaintiff can choose between forums where jurisdiction exists
However, the choice must be exercised bona fide and not to harass the defendant

This judgment established principles applicable to similar provisions in other IP statutes.

Transfer of Proceedings

When multiple suits are filed in different forums, parties may seek:

Transfer under Section 24 CPC: Transfer of suits between courts within the same state
Transfer under Section 25 CPC: Transfer between courts in different states (by Supreme Court)
Consolidation: Clubbing of related suits for joint hearing
Stay of Parallel Proceedings: Stay of subsequent suit pending decision in prior suit

Test Your Knowledge

Part 1 Quiz

Answer the following 10 questions to test your understanding of Forum Selection and Jurisdiction in IP litigation.

Question 1 of 10

What is the current specified value threshold under the Commercial Courts Act, 2015 (as amended)?

A) Rs. 1 crore
B) Rs. 10 lakhs
C) Rs. 3 lakhs
D) Rs. 50 lakhs

Explanation:

The 2018 Amendment to the Commercial Courts Act reduced the specified value threshold from Rs. 1 crore to Rs. 3 lakhs. This was done to expand access to commercial courts for a wider range of commercial disputes, including smaller IP matters.

Question 2 of 10

Under Section 134 of the Trade Marks Act, 1999, an additional ground for territorial jurisdiction is:

A) Where the defendant resides
B) Where the plaintiff carries on business
C) Where the trademark was registered
D) Where the Trade Marks Registry is located

Explanation:

Section 134 provides that a trademark infringement suit may be filed where the plaintiff "actually and voluntarily resides or carries on business or personally works for gain." This is in addition to the general jurisdictional grounds under Section 20 CPC.

Question 3 of 10

Which tribunal was abolished by the Tribunals Reforms Act, 2021?

A) National Company Law Tribunal
B) Competition Commission of India
C) Customs, Excise and Service Tax Appellate Tribunal
D) Intellectual Property Appellate Board

Explanation:

The Tribunals Reforms Act, 2021 abolished the IPAB along with several other tribunals. The jurisdiction of IPAB was transferred to the High Courts. NCLT, CCI, and CESTAT continue to function.

Question 4 of 10

Under Section 12A of the Commercial Courts Act, what is mandatory before filing a suit?

A) Pre-institution mediation
B) Arbitration
C) Notice under Section 80 CPC
D) Legal opinion from Senior Advocate

Explanation:

Section 12A requires mandatory pre-institution mediation before filing a commercial suit. However, this requirement does not apply where urgent interim relief is sought. The mediation must be completed within 3 months (extendable by 2 months).

Question 5 of 10

Which of the following High Courts does NOT have original civil jurisdiction?

A) Delhi High Court
B) Bombay High Court
C) Gujarat High Court
D) Calcutta High Court

Explanation:

Gujarat High Court does not have ordinary original civil jurisdiction. Delhi, Bombay, Calcutta, and Madras High Courts have original side jurisdiction within their respective metropolitan areas. In Gujarat, IP suits must be filed before District/Commercial Courts.

Question 6 of 10

Appeals from the Controller of Patents now lie to:

A) IPAB
B) High Court
C) Supreme Court
D) District Court

Explanation:

Following the abolition of IPAB in 2021, appeals from the Controller of Patents lie directly to the High Court having jurisdiction over the Patent Office where the application was filed. IPAB no longer exists, and there is no direct appeal to the Supreme Court.

Question 7 of 10

For determining specified value in an IP suit seeking injunction, the court considers:

A) The registration fees paid
B) The defendant's annual turnover
C) The plaintiff's legal expenses
D) Market value of the right sought to be enforced

Explanation:

Under Section 12 of the Commercial Courts Act, for a suit seeking injunction, the specified value is the market value of the right which the plaintiff seeks to enforce. This includes the value of the IP right being protected.

Question 8 of 10

In Ultra Home Construction v. Purushottam Kumar Chaubey, the Supreme Court held that:

A) Section 134 jurisdiction is available only to registered proprietors or permitted users
B) Any person can invoke Section 134 jurisdiction
C) Section 134 overrides Section 20 CPC completely
D) Defendants can choose the forum under Section 134

Explanation:

The Supreme Court clarified that the additional jurisdiction under Section 134 is available only to plaintiffs who are registered proprietors or permitted users of the trademark. The provision cannot be used to create artificial jurisdiction.

Question 9 of 10

Which provision allows the Supreme Court to transfer IP suits between courts in different states?

A) Section 24 CPC
B) Article 32 of Constitution
C) Section 25 CPC
D) Section 151 CPC

Explanation:

Section 25 CPC empowers the Supreme Court to transfer suits, appeals, or other proceedings from a court in one state to a court in another state. Section 24 CPC deals with transfer within the same state and is exercised by the High Court.

Question 10 of 10

The IPAB was originally established under which Act?

A) Patents Act, 1970
B) Trade Marks Act, 1999
C) Copyright Act, 1957
D) Designs Act, 2000

Explanation:

The IPAB was originally established in 2003 under the Trade Marks Act, 1999. Its jurisdiction was later extended to patent matters in 2007, and further extended to copyright and GI matters in 2017, before being abolished in 2021.