Supreme Court Seeks Clarity on Jurisdiction in Trademark Infringement Cases
The Supreme Court of India has referred a crucial question to a larger bench regarding whether trademark infringement cases can be adjudicated by commercial courts below the district court level. This move comes in response to conflicting interpretations of the Trade Marks Act, 1999, and the Commercial Courts Act, 2015. [Case: ISDS Vs Khemka]
Justices JB Pardiwala and K Vinod Chandran presided over the matter and observed a potential conflict between previous Supreme Court decisions concerning special statutes like the Trade Marks Act and the Arbitration Act with the provisions of the Commercial Courts Act. “In our humble view, the legislative imprimatur cannot be diluted by notifications issued by High Courts,” they remarked. Consequently, the Court has directed the Chief Justice of India to form a larger bench to ensure uniform legal interpretation across states.
Case Background: ISDS vs Khemka
The issue arose from an appeal by ISDS Private Limited against Khemka Food Products Private Limited. The crux of the matter is Section 134 of the Trade Marks Act, which mandates that suits for trademark infringements cannot be initiated in courts below the district court level. On the other hand, the Commercial Courts Act allows some states to designate civil judges (senior division) as commercial courts, including in Jharkhand, where they handle disputes valued between ₹3 lakh and ₹1 crore.
The appellants argued that permitting trademark suits in such courts undermines the Trade Marks Act’s explicit provisions. They also highlighted the issue of appeals from these commercial courts being directed to district courts instead of High Courts, limiting litigants’ appellate options.
Conversely, the respondents maintained that intellectual property disputes are classified as commercial disputes under the Commercial Courts Act, which was designed to expedite commercial litigation and should override earlier conflicting laws.
Supreme Court’s Examination of Precedents
The Supreme Court analyzed previous rulings, including Kandla Export Corporation v OCI Corporation and Jaycee Housing Private Limited v Registrar (General), Orissa High Court. In Kandla Export, the Court recognized the Arbitration Act as a specialized framework taking precedence over the Commercial Courts Act concerning appeals. However, Jaycee Housing presented a different scenario, where jurisdiction provisions under the Arbitration Act were deemed subordinate to the more recent Commercial Courts Act, which includes an overriding clause.
Justice Pardiwala and Justice Chandran noted that while intellectual property rights like trademarks are a subset of “commercial disputes” as outlined in the Commercial Courts Act, the Trade Marks Act distinctly assigns jurisdiction to district courts and prohibits filing in inferior courts. The conflict arises when High Court notifications designate civil judges as commercial courts, creating inconsistencies.
The Need for a Larger Bench
Recognizing the need for a resolution, the Supreme Court has called for a larger bench to address the discrepancy and ensure consistent jurisdictional application across states, irrespective of individual High Court notifications.
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Representing the petitioners were advocates Singh Nishant Sajay Kumar and Vishal Arun Mishra, while the respondents were represented by advocates Indrajit Sinha, Prerna Jhunjhunwala, Neeharika Mazumdar, Ankit Rajgarhia, Aakash Nandolia, Sachin Dubey, Vinita Sejwal, and Naman Sondhi.
