Trademark Infringement Suit Pre-Supposes Urgency For Dispensation Of S.12A Of Commercial Courts Act: Telangana High Court

The Court emphasized the time-sensitive nature of IPR/trademark infringement cases. It remarked “Unlike other forms of property, where the wrongful appropriation can be quantified, infringement of IPRs is often un-quantifiable as the wrongdoer rides on the reputation and goodwill of the Mark/brand. Therefore, time is always of the essence as even a single “consumption” of the Mark by an unauthorized user can result in immeasurable injury to the owner/proprietor.”

A Division Bench of Justice Moushumi Bhattacharya and Justice M.G.Priyadarsini were considering the petitioner's challenge to the Commercial Court's order, which rejected its revision application.

In its revision application, the petitioner/defendant no.1 claimed that the suit filed by respondent no.1/plaintiff was not maintainable as the plaintiff had circumvented the statutory mandate of Section 12A of the CC Act by not exhausting the pre-institution mediation requirement. However, the Commercial Court found that the plaintiff had made a case for waiving the mandate of Section 12A of the CC Act.

Statutory silence on mode and manner to seek exemption under Section 12A

Analyzing Section 12A of the CC Act, the Court noted that the provision does not specify the mode and manner in which the plaintiff must satisfy the requirement of 'urgent interim relief'.

It noted that the provision does not state whether the plaintiff must file a separate application for dispensing with pre-institution mediation or whether the plaintiff should include the prayer for dispensation in the plaint itself. It also noted that the provision does not contemplate any requirement for obtaining any leave from the court to institute a suit that needs urgent intervention.

The Court was of the view that this 'statutory silence' makes it evident that it is for the plaintiff to make an assessment of whether the suit requires urgent interim relief and for on the Court to determine a finding on the issue.

It stated that as the statutory silence relates to the manner in which the plaintiff may seek exemption, the onus is both on the plaintiff and the court to fill in the gaps relating to the mode and manner of such exemption.

“The silence pertains to the manner in which a plaintiff may seek exemption from the bar. The onus is therefore on the plaintiff as well as the Court to fill in the gaps in the mode and manner of exemption when the plaintiff intends to by-pass the statutory embargo which includes filing of a separate application for dispensing with the statutory mandate.”

Onus on plaintiff to prove suit requires urgent interim relief

The Court observed that while the plaintiff is not required to seek leave from the court or file a separate application for exemption, the burden of proving urgency is on the plaintiff.

It held that the plaintiff must discharge the onus by satisfying the Commercial court that the suit requires urgent interim relief and thus needs to be instituted without a pre-institution mediation. The court would then decide whether the suit require urgent interim relied based on the 'substance of the dispute and the relief claimed.'

“The plaintiff is not required to seek the leave of the Court or file a separate application for dispensing with the statutory mandate under section 12A, i.e., for instituting a Suit circumventing the pre-institution mediation requirement. Therefore, the question of whether the Suit requires urgent interim relief must be answered by the Court based on the substance of the dispute and the relief claimed. The plaintiff must discharge the onus by proving to the Court that the Suit indeed contemplates urgent interim relief and hence needs to be instituted without waiting for pre-institution mediation.”

Sensitive time frame for urgent interim relief

In the present case, the Court took note of the relevant facts. It noted that Veda Seed Sciences Pvt. Ltd. (respondent no.1/plaintiff) filed a suit of permanent injunction against defendants nos. 1 and 2 (petitioner and respondent no.2) before the Commercial Court, alleging copyright and trademark infringement of its registered trademarks. The plaintiff/Veda claimed reputation and goodwill in the market in relation to its trademarks.

In its plaint, Veda alleged trademark infringement and passing off were committed by the defendants with respect to its 3 trademarks for high-quality hybrid cotton and other seeds. It also alleged copyright in the trade dress of the products sold under the 3 marks along with variations. Veda claimed that it had business arrangements with Kohinoor Seed Fields India Pvt. Ltd. (petitioner/defendant no.1), where it was agreed that Veda would be the exclusive owner and user of the three marks.

The Court opined that the allegations of the plaintiffs about the misuse of trademarks by the defendants point towards an urgency for interim relief. It said, “The nature of the Suit, the cause of action and the relief claimed would itself command urgent intervention by the Court. The question is not whether the plaintiff was entitled to protective orders of the Court but whether the Suit instituted contemplated urgent interim relief.”

It observed that the plaintiff could not afford to wait for pre-institution mediation considering the nature of the allegations. It stated that diverting the plaintiff to mediation would have frustrated the suit. It remarked that “The cause of action pleaded in the plaint would show that urgency formed the bedrock of the statements made therein.”

The Court also noted that the plaint alleges the importance of the Kharif (harvesting) season for marketing of the trademarked products. It remarked, “Therefore, stopping a rival from misappropriating the Trademark before the onset of the Kharif season would also entail that the Suit contemplates a sensitive time frame for urgent interim relief.”

Considering the nature of the suit, the Court held that the suit instituted by Veda was 'wholly unsuited' for pre-institution mediation since it contemplated urgent interim relief.

It thus upheld the Commercial Court's order which exempted the plaintiff from the requirement of pre-institution mediation under Section 12A of the CC Act.

Case title: Kohinoor Seed Fields India Pvt. Ltd. vs. Veda Seed Sciences Pvt. Ltd. and Another (Civil Revision Petition No.2297 of 2024)