The case is between Novenco Building and Industry and Xero Energy Engineering Solutions Pvt. Ltd., embodying a critical question of Law, i.e., whether a suit alleging continuing infringement of patent and design rights can be said to contemplate urgent relief within the meaning of Section 12A of the Act.
The Facts of the case were that Novenco Building and Industry is a Danish company incorporated under the laws of Denmark, and the company is engaged in the manufacture of highly efficient industrial fans, marketed under the Brand ‘Novenco ZerAx’. A dealership agreement was executed between Novenco Building and Industry and Xero Energy Engineering Solutions Pvt. Ltd for marketing and sale of Novenco ZerAx fans across India. However, Xero Energy Engineering Solutions Pvt. Ltd, in violation of the terms of the said Agreement, had incorporated another company named Aeronaut Fans Industry Pvt. Ltd. Hence, a commercial suit was filed against Xero Energy Engineering Solutions Pvt. Ltd and Aeronaut Fans Industry Pvt. Ltd. However, due to continuous breach of an infringement of the Brand ‘Novenco ZerAx’ by them, the Novenco Building and Industry filed an application under Section 151 of the CPC seeking exemption from pre-institution mediation as mandated under Section 12A of the Act.
The Hon’ble High Court held that there is a six‑month delay from the date of discovery of infringement till the filing of a commercial suit. Hence, there is no urgency in filing the commercial suit and, as per Section 12A of the Commercial Courts Act, a pre‑institution mediation is mandatory, and accordingly struck the plaint under Order VII Rule 11 CPC. On appeal, a Division Bench upheld the decision of the Single bench and held that the delay demonstrated a “patent lack of urgency” and that seeking interim relief alone did not excuse mediation. Moreover, the Hon’ble High Court ruled that even a continuous infringement of IP rights “could not override” the mediation requirement.
The Hon’ble Supreme Court, while reversing the orders of the Hon’ble High Court, held that in continuing IP infringement cases, the question of urgency must be assessed in the context of the ongoing injury and public interest (to prevent market confusion and consumer deception). Crucially, the Court ruled that “mere delay” in filing suit does not negate the existence of urgency when the infringement is continuing. The Court therefore found that the High Court erred by focusing on delay rather than on whether the plaint and annexed documents showed a real need for interim relief.
The significance of this case lies in its clarification of the interpretation and application of Section 12A of the Commercial Courts Act, particularly in cases involving continuing infringement of intellectual property rights. The Supreme Court’s decision establishes that in instances of ongoing IP violations, the urgency of seeking relief must be evaluated in light of the continuous nature of the injury and the broader public interest, such as preventing market confusion and consumer deception. By ruling that “mere delay” in filing a suit does not eliminate the urgency when infringement persists, the Court reinforced the principle that procedural requirements like pre-institution mediation cannot obstruct access to timely judicial remedies in cases of ongoing harm. This judgment thus provides critical legal clarity and predictability in IP enforcement, balancing the need for dispute resolution efficiency with the protection of proprietary and consumer interests.