The question of which courts can hear trademark infringement cases has reached a larger legal crossroads, with the Supreme Court referring the issue to a larger Bench for a definitive ruling.
A Bench comprising Justices JB Pardiwala and K Vinod Chandran found an apparent conflict between earlier judgments concerning the interplay between special statutes and the Commercial Courts Act.
At the heart of the dispute is whether a trademark infringement suit can be filed before a commercial court presided over by a civil judge (Senior Division), even though the Trade Marks Act specifically provides that such proceedings cannot be instituted before a court below the level of a district court.
The Bench observed that the legislative mandate contained in the Trade Marks Act could not simply be diluted through notifications issued by High Courts.
The Court has accordingly directed that the matter be placed before the Chief Justice of India for constitution of an appropriate larger Bench. The move is intended to settle the issue uniformly rather than leave the position dependent on differing arrangements adopted by individual States.
Dispute over jurisdiction
The issue arose from a case between ISDS Private Limited and Khemka Food Products Private Limited.
Section 134 of the Trade Marks Act stipulates that suits concerning trademark infringement and certain related reliefs must be instituted before a court not inferior to a district court.
The difficulty arises because the Commercial Courts Act permits High Courts to designate certain civil courts as commercial courts. In Jharkhand, for instance, civil judges (Senior Division) have been notified to deal with commercial disputes involving specified monetary values, including disputes between ₹3 lakh and ₹1 crore.
The challenge before the Supreme Court was whether such a notification can effectively confer jurisdiction over trademark suits on a court which, under the Trade Marks Act, would otherwise be considered inferior to a district court.
The appellants argued that permitting civil judges to hear these matters would run contrary to the express language of the Trade Marks Act.
Another concern raised was the appellate structure. If a trademark dispute were decided by such a commercial court, an appeal would go to the district court rather than directly to the High Court. This, according to the appellants, would significantly alter the appellate remedy contemplated under the statutory framework.
Commercial Courts Act takes a different route
The opposing side relied on the Commercial Courts Act’s treatment of intellectual property disputes as commercial disputes.
The argument was that the Commercial Courts Act was enacted later and contains an overriding provision aimed at ensuring specialised and speedy adjudication of commercial disputes. On that basis, it was contended that its provisions should prevail where they conflict with an earlier statute.
The Supreme Court examined two earlier decisions while considering the issue.
In Kandla Export Corporation v OCI Corporation, the Court had regarded the Arbitration Act as a special and self-contained legislation and held that its provisions would prevail over the more general framework of the Commercial Courts Act in the context under consideration.
The position appeared different in Jaycee Housing Private Limited v Registrar (General), Orissa High Court, where the Court held that certain jurisdictional provisions under the Arbitration Act had to give way to the subsequently enacted Commercial Courts Act, which carried an overriding clause.
Need for uniformity across States
The Bench noted that intellectual property disputes, including trademark disputes, fall within the wider category of commercial disputes under the Commercial Courts Act.
At the same time, the Trade Marks Act contains a specific jurisdictional prescription of its own, expressly placing the relevant suits before District Courts and barring their institution before inferior courts.
This creates a legal tension when a High Court, through a notification, designates civil judges as commercial courts with jurisdiction over commercial disputes.
The Supreme Court considered that the conflicting statutory provisions and earlier decisions warranted examination by a larger Bench.
The eventual ruling is expected to clarify whether the Commercial Courts Act can permit lower-ranking commercial courts to entertain trademark suits despite the specific jurisdictional restriction contained in the Trade Marks Act.
Until the larger Bench settles the question, the jurisdictional position may continue to depend on how the relevant statutory provisions and High Court notifications operate in individual States.
