Resolving IP Infringement Lawsuits: Swifter.

Contrary to the popular belief, intellectual property actions can be settled faster among the category of usual civil action, in comparison to suit for specific performance, partition of properties, etc. Though I generally file action on behalf of the Plaintiff, so the present post might prove as counter productive since I’m giving a Defendant’s perspective in light of precedents.

Whenever a Plaintiff is approaching the Court in an IP lawsuit, the sine qua non relief prayed is that the Defendant should immediately cease from the counterfeiting activities. Incidental relief, thereafter, are delivery of infringing goods and paying damages to the Plaintiff.

After the recent increase in the Court Fees in Delhi, usual practice is not to seek damages but rendition of accounts of the Defendant. Though I have my separate reservation on that front. Nonetheless, since the focus is shifting from damages, job of a Plaintiff to seek speedy disposal only becomes easier and swift.

IP matters do not require the whole nine yards of a garden variety civil litigation. With minimal evidence, maximum result is possible. In 2006, His Honour Sanjay Kishan Kaul paved the way of culminating an IP lawsuit faster in cases where Defendant is willfully abstaining from the proceedings. In the Glaxo matter, His Honour held that where the Defendant is not joining the proceedings, no useful purpose can be served by asking the Plaintiff to bring witness before the Court for deposition. His Honour, under Order 19 Rule 2 sub-rule 2 of the Code of Civil procedure, not only exempted the witnesses from appearing personally, but also decreed the lawsuit then and there on the basis of the material before the Court.

His Honour S. N. Dhingra too followed the Glaxo ruling in Eco Labs and dispensed with the appearance of the witness of the Plaintiff in similar circumstances. Meaning thereby, in matters where the Plaintiff’s officials are not in Delhi generally, or even out of the Country, they need not come to the Court and can seek exemption.

However, these were the cases where the Defendant abstained from joining the proceedings. In some IP cases where the Defendant has put in his appearance, the matter can also culminate soon, in fact sooner, if the Defendant chooses not to contest the matter and suffers the decree with prejudice at the very first opportunity.

The landmark precedent is, again, by His Honour Kaul in Nestle vs Satya Prakash Maheshwari. The last order disposing off the lawsuit is here. In the matter, His Honour faced a situation where Nestle had instituted a lawsuit against infringing wrappers similar to its flagship ready-to-cook noodle brand Maggi. When the lawsuit came up for hearing for the first time, the High Court also allowed Plaintiff’s prayer for appointing Court Commissioners to conduct search and seizure action in the premises of the Defendants.

At the inception, the Defendants chose not to contest the proceedings and offered to suffer a decree of permanent injunction provided Nestle gave up relief of damages against the Defendant. Nestle was, obviously, not interested in giving up claim for damages. Counsel for the Defendant relied upon Section 135(3) of the Trade Marks Act to strengthen his submissions. The provision provides that when the Defendant has chosen to cease his activities in question, then the Court cannot pass any relief for damages, other than nominal damages in Court’s discretion.

Relying upon the provision, His Honour Kaul decreed the suit in favour of Nestle without any damages awarded. Nestle, understandably, took the matter in the Appeal Court before the Division Bench. Their Honours, comprising Mudgal and Shali, with one of the best counsel for IP matters, Mr. Saikrishna Rajgopal as Amicus deliberated on the matter at length.

The Appeals Court, in the comprehensive ruling, not only upheld His Honour Kaul’s judgment, but also cleared the way for the Defendants who want to avoid the rigmarole of long drawn out litigation, most probably resulting in injunction and damages.

This speedier resolution is more favourable to the Plaintiff than the Defendant in a more practical way. By and large, Delhi High Court does not award massive damages after a matter reaches culmination. Settling much earlier and for a token damage can save the Plaintiff a lot of cost and paperwork.

Frankly, a speedier disposal helps the counsels more than the parties. Once an ex-parte interim injunction is in favour of the Plaintiff, if an IP suit gets settled after first few hearings, the legal team can focus on other pressing matters.

Maybe because I had my training as a Mediator during my LL. M. that is why I have more resolution oriented approach towards litigation rather than prolonging it.

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Filed under In Accordance With Law, IP reviews, Uncategorized

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