Forum shopping is shaping Indian IP litigation practice

Patent litigation in India has been rising with an increasing number of patent disputes between innovator companies and India’s generic drug industry. The approach of Indian courts in understanding and analysing complex patent infringement and validity issues has also gradually changed.

A plethora of Indian case laws have emerged in recent times, subject to debates and controversies. The problem concerning the jurisdiction of courts in entertaining a particular suit is often encountered in India.

Jurisdiction of courts

Indian patent law takes due cognisance of the jurisdiction of the courts. Section 104 of India’s Patents Act (1970) requires a suit for infringement to be filed in a court of first instance having jurisdiction to try the suit.

For filing a suit for infringement, the court of first instance in India is the district court. In India, there are 600 district courts. Apart from the above, four high courts – located at Delhi, Mumbai, Chennai and Kolkata – also can act as a court of first instance.

Appropriate forum

In case the defendant pleads invalidity of the patent and makes a counter-claim for revocation of the patent, the suit of infringement along with the counter-claim is necessarily transferred to the high court having the jurisdiction, there being a total of 24 high courts, including the courts at Delhi, Mumbai, Chennai and Kolkata. Like any other civil suit, the jurisdiction is determined in accordance with the rules of the Code of Civil Procedure. The appropriate forum would be:

1. Principal place where the plaintiff carries out its business; or
2. Principal place where the defendant carries out its business; or
3. Place where the infringing articles are manufactured/sold, or where the infringing process is being applied, or where the articles manufactured by the infringing process are being sold.

Patent infringement

A patent infringement suit can be initiated in any of the 600 district courts, or the four high courts mentioned above. Interestingly, Delhi High Court has emerged as the most active court over the years when it comes to intellectual property (IP) matters, receiving close to 70% of IP litigation cases.

This has resulted in a marked evolution in terms of the expertise of the judges in the realm of patent law, and at the same time has given rise to the popular exercise of “forum shopping”, which is a practice adopted by litigants to have their case heard in the court thought most likely to provide a favourable judgment.

Forum shopping case

The issue of forum shopping was blown up in the recent Teva and Others v Natco case in front of Delhi High Court, wherein Teva filed a suit against Natco for alleged infringement of its Indian Patent No. 190759, relating to a process for preparing Glatimer, and in response to Natco had pleaded for return of the plaint for want of jurisdiction.

Although there was no clear evidence of either the infringing product – product prepared by the infringing method – being available at a place within the territorial jurisdiction of Delhi High Court, or the act of manufacturing being performed within the territorial jurisdiction of Delhi High Court, for the purposes of invoking the jurisdiction Teva stressed that the suit was a quia timet (i.e. preventive) action.

Natco, on the other hand, relied upon the manufacturing plant being located at Hyderabad, the product being manufactured for export outside India and there being no substantial merit in the quia timet action.

The single judge ruling in favour of Natco indicated that Teva had not been able to make a case for the court to entertain the quia timet action.

Successful appeal

Subsequently, the plaintiffs appealed to the division bench of Delhi High Court and found success, with a ruling in favour of the plaintiffs, stating: “We are of the opinion that once the appelants/plaintiffs have pleaded apprehension of sale/marketing in Delhi, the courts in Delhi would have jurisdiction to entertain the suit, and such jurisdiction cannot be outset by the defendant by making a statement not to do any such act in Delhi, though the defendant would be entitled to prove that there is no basis for such apprehension.” As a result, the suit was restored to the board of the single judge and the case was taken up on merits on 2 July 2014.

The above judgment throws light on a peculiar aspect of jurisdiction, with the plaintiffs opting for Delhi High Court to adjourn the suit.

With the large concentration of expertise in Delhi High Court, the other high courts have often been overlooked by IP litigators in India. There is a positive aspect to look at it in the light of the fact that Delhi High Court has grown to become the most IP-savvy court in the country.

Impact on other courts

However, the plentitude of IP lawsuits and aggregation of skill and expertise in this court has eventuated an aperture between Delhi High Court and the other high courts. The practice of forum shopping has been on the rise, with Delhi High Court receiving accolades for some landmark judgments.

This may have a serious impact on the other high courts of the country, which may end up with insufficient expertise to entertain IP lawsuits since they have not had much exposure to sophisticated IP disputes.

Landscape of litigation

It is thus a serious issue that is deeply affecting the IP litigation practice in the country. There have been a number of proposals in this regard suggesting the training of judges to handle IP cases and setting up of special IP courts. Thus, it can be expected that the landscape of IP litigation in India will evolve and witness a more consistent judiciary system in the coming years.

Kanika Arora is an associate with the patents-science team at LexOrbis