The pecuniary jurisdiction of courts in IPR disputes

Mr. Nosy Parker is an artist who creates interesting posters at his leisure. Recently, through one of the groups on facebook, he saw an attractive poster posted by the IP Press. Upon clicking the link, he was directed to the website of the IP Press. There he read an article on copyright and became aware of his IP rights vested in his work. To enforce his rights against some infringers, Mr. Nosy sent a legal notice of copyright violation against Mr. Flaunter warning him of filing an infringement case against him before the High court of Delhi. Little did Mr. Nosy know that Mr. Flaunter was a learned man and Mr. Flaunter without wasting any time replied to him one-liner, “I will challenge you on the pecuniary jurisdiction”. Now Mr. Nosy got puzzled and wanted a dialogue with the industry experts of the IP Press. 

Dear Readers, 

The IP PRESS brings to you an interesting dialogue with Mr. Srinivas, an Industry expert concerning the pecuniary jurisdiction of the Court with regard to the IP disputes. 

Mr. Nosy: Hello Mr. Srinivas, thank you for giving me your valuable time. 

Mr. Srinivas: Thank you for contacting the IP Press. 

Mr. Nosy: For the benefit of all, let me first ask you a very basic question. What is a pecuniary jurisdiction and how does this apply to IP disputes?

Mr. Srinivas: Pecuniary jurisdiction inter-alia ordains the hierarchy of courts. In other words, courts higher in the hierarchical structure are assigned cases of higher valuation. In this regard, the principle that applies to civil cases equally applies to intellectual property cases. 

Mr. Nosy: Can you help us understand, on what basis is the valuation of a particular case done. 

Mr. Srinivas: The valuation is done based on the value of reliefs sought by the plaintiff in the case viz., based on subject matter of adjudication. For instance, if there is a Memorandum of Understanding based on which you have inherited certain intellectual property rights, and you have filed a suit for injunction against infringement by a third party; the valuation of case would be based on subject matter of adjudication viz., monetary assessment of injunctory and declaratory reliefs sought, and would not be based either on the market value of such intangible rights or the consideration amount that is mentioned in MOU.

Mr. Nosy: We hear about several IP disputes being dealt by with commercial courts these days. What are these commercial courts? How are they different from the regular courts?

Mr. Srinivas: Earlier due to the statutory requirement under Patents Act, Designs Act, Trade Marks Act, Copyright Act, and Geographical Indications Act, cases of infringement had to be filed in a court not inferior to district court. Hence such cases were filed before the district courts in states where High Courts didn’t possess ordinary original civil jurisdiction. In states where high courts did possess original civil jurisdiction (Delhi, Madras, Calcutta, Bombay and Himachal Pradesh), such cases came to be filed before the High Court. 

With the enactment of Commercial Courts, Commercial Division and Commercial Appellate Division of High Court 2015 and its amendment by way of ordinance dated 03.05.2018 separate courts have been established called commercial courts for the speedy resolution of commercial disputes. The term commercial disputes have been defined under Section 2 (1) (c) to mean and include inter-alia all disputes arising out of all intellectual property rights relating to registered and unregistered trademarks copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits. 

Mr. Nosy: What is/are the pecuniary jurisdiction(s) of commercial courts?

Mr. Srinivas: For purposes of pecuniary jurisdiction, the Act stipulates specified value of a commercial dispute to be not less than three lakhs or such higher value as the central government may notify. Pursuant to this Act, Commercial courts at the district level have been set up in all 24 state high courts including those that have original civil jurisdiction.

Mr. Nosy: What about the states where the high courts don’t have original civil jurisdiction?

Mr. Srinivas: In states where high courts don’t have original civil jurisdiction, commercial courts at the level of district judge (minimum commencing from above 3 lakh) and below the level of district judge would be set up (minimum commencing from three lakh and above). Commercial appellate courts would be set up for hearing appeals from commercial courts set up below the level of the district judge. The commercial appellate division would be a bench of the high court consisting of a single judge, hearing appeals from commercial courts set up at district level. Any second appeal from the commercial appellate court would lie before the Commercial Appellate Division of High Court. 

Mr. Nosy: Alright, that makes the picture quite clear. Would you also be able to shed some light on the procedure where high courts have original jurisdiction?

Mr. Srinivas: In states where the high court has original jurisdiction, commercial courts at district level would be set up (minimum commencing from three lakh and above). Commercial Division Bench at the High Court consisting of a single bench would be set up to hear cases of valuation of minimum commencing from such (minimum higher value as stipulated by Central Government) by virtue of original civil jurisdiction. Appeals arising from commercial courts at district court and Commercial Division Bench of High Court would be heard and disposed off by the Commercial Appellate Division of the High Court. Any case, which has already been filed and pending before the High Court having original civil jurisdiction, before commencement of the Act, would continue to be heard and disposed of by the concerned High Court, irrespective of valuation of such case. 

Mr. Nosy: Is there anything other than the pecuniary limit that would determine the allotment of a case?

Mr. Srinivas: Yes, In addition to pecuniary jurisdiction, “place of suing” as stipulated under the Civil Procedure Code, 1908, would also determine the allotment of your case to a particular court.  

Mr. Nosy: Thank you Mr. Srinivas for addressing all my questions with best of your knowledge and interest. I will now prepare a befitting reply against Mr. Flaunter. He will realise that I am now well acquainted with the issue of pecuniary jurisdiction from the pens of IPHolics.

#IP4OL- IPHolics.

About Srinivas.L 1 Article
Srinivas graduated from National University of Juridical Sciences (NUJS) Kolkata in the year 2009. He has worked in dispute resolution teams of well-known Bengaluru based law firms such as M/s Anup Shah Law Firm and M/s Indus Law. He has been practising advocate in district courts and high court of Karnataka since 2012. His practice areas are civil and commercial laws viz., real estate, arbitration, intellectual property rights, defamation, recovery, specific performance, disputes pertaining to co-operative societies, family (divorce, guardianship) etc. During his leisure, he indulges in reading, writing articles and playing sports.

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