SC: Delay in Filing Suit Does Not Negate Urgency in Continuing IP Infringement

The appellant in this case is a Danish company manufacturing high-efficiency industrial fans under the brand “Novenco ZerAx,” which had appointed Xero Energy Engineering Solutions Pvt. Ltd. as its Indian distributor. After termination of the dealership, the appellant discovered that Xero Energy and another company, Aeronaut Fans Industry Pvt. Ltd., were manufacturing and selling deceptively similar fans, infringing Novenco’s patented and registered designs. Novenco filed a commercial suit seeking injunctions against infringement before the High Court.

HC’s Decision: The High Court’s Single Judge rejected the plaintiff’s claim for non-compliance with Section 12A of the Commercial Courts Act, holding that pre-institution mediation was mandatory as the appellant had delayed six months in filing the suit after discovering the infringement. The Division Bench upheld this view, ruling that mere inclusion of an interim injunction prayer could not justify bypassing mediation.

Novenco argued that the infringement was continuous, causing ongoing loss of goodwill and market reputation, and that delay did not erase urgency. It relied on Midas Hygiene Industries Pvt. Ltd. v. Sudhir Bhatia and Yamini Manohar v. T.K.D. Keerthi, urging that continuing violation itself created inherent urgency. The respondents contended that the appellant issued a cease-and-desist notice in December 2022 but filed suit only in June 2024, showing no bona fide urgency.

Main Issue: Whether a commercial suit alleging continuing infringement of intellectual property “contemplates any urgent interim relief” under Section 12A of the Commercial Courts Act despite delay in filing.

SC’s Judgment: The Hon’ble Apex Court held that urgency under Section 12A must be assessed from the plaintiff’s standpoint, based on the facts and pleadings, not by the lapse of time. It clarified that continuing infringement constitutes a recurring cause of action, and delay alone cannot nullify urgency when the wrongful acts persist.

The Court reiterated that pre-institution mediation aims to promote early resolution but should not deprive genuine litigants of urgent protection, especially in cases involving ongoing intellectual property violations affecting public interest and consumer protection. The High Court erred in treating the time gap between discovery and suit filing as conclusive proof against urgency.

The Court emphasized that urgency is inherent in continuing infringement cases and delay in filing does not preclude exemption from pre-institution mediation. It was also explained that Section 12A cannot be applied rigidly to defeat substantive justice. Therefore, judgments of the Single Judge and Division Bench were set aside. The plaint in Commercial Suit was restored for hearing on merits.

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