Delhi High Court stays transfer of pending IPR cases to District Courts

The Delhi High Court

A Division Bench of the Delhi High Court stayed the transfer of pending commercial IPR disputes from the High Court to the seven District Courts in the city.

The process of transfer was initiated under the Commercial Ordinance that was passed recently. Under the ordinance, all cases valued at less than two crore were to be transferred to the district courts except commercial cases which were valued between one and two crore

The order was passed in petition filed by the Asian Patents Association represented Senior Advocate Sudhir Chandra. The plea had sought for a quashing of the High Court’s office order that had allowed a transfer of all pending cases up to the value of Rs 1 crore to subordinate courts.

The fundamental argument raised by the association was that IP legislation such as the Patents Act, Trademarks Act etc, did not mention the “specific value” of intangible assets such as patents and trademarks.  In fact, references to a monetary value was limited to that of “relief” sought.

In such a situation, the High Court’s registry would not be able to accurately calculate the “specified value”, a calculation used to decide whether the case would be transferred to the district courts.

Chandra submitted before the Division Bench of GS Sistani & Sangita Dhingra Sehgal JJ that their prayer was limited to those suits that were pending in the High Court when the Court had a pecuniary jurisdiction of 20 lakhs and that these suits ought not to be transferred.

Responding to this, Delhi’s Additional Standing Counsel Sanjoy Ghose appearing for the High Court, stated that the category of cases where judgment had already been reserved were not being transferred pursuant to the Ordinance.

“As of today, only four cases have been transferred to the respective District Courts. The process of transfer has been initiated through the Ordinance which has to be replaced by an Act of the Parliament.

Heavens would not fall if this transfer is allowed and if there are any discrepancies in the process, the Legislature can always correct it. The Act will only partition the Court into a Commercial side and Original Side.” 

Hearing the submissions made by both sides, the Bench held that the provisions of the Ordinance that were in challenge required ‘consideration’.

“Till the next date of hearing, cases valued up to Rs. 1 Crore arising out of the aforementioned five statutes, shall not be transferred. In case applications are filed seeking amendments in the pecuniary value, these shall be considered by the Single Judges in accordance with the law.”

Noting Ghose’s submission that the Government will deliberate over the Ordinance in the ongoing winter session of the Parliament and will clarify ambiguities over the Act in its final form, the Bench posted the matter for further hearing on January 19.