Can an Indian Court act against a Foreign Party in a Patent Infringement Suit?

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In a recent suit for infringement of an Indian patent before the High Court of Delhi, the captioned issue featured prominently. The situation broadly is as follows:

1. The plaintiff has an Indian patent

2. The defendant is a foreign entity, with no registered place of business in India

3. Representatives of the defendant make concrete offers for sale of goods which infringe the plaintiff’s patent

4. Such representations are made within the territorial jurisdiction of the Delhi high Court

Question: Does the High Court of Delhi have the jurisdiction to entertain the plaintiff’s suit for infringement of his patent, when the defendant has no registered place of business in India?

For most general practitioners, the answer would be obvious. The High Court does have jurisdiction over the matter, notwithstanding the fact that the defendant has no registered place of business in India. This is because Section 104 of the Patents Act, 1970 directs us back to Section 20 of the CPC to ascertain the appropriate Court which would have jurisdiction over the suit.

Let’s take a look at Section 104, which reads thus:

104. Jurisdiction

No suit for a declaration under section 105 or for any relief under section 106 or for infringement of a patent shall be instituted in any court inferior to a district court having jurisdiction to try to suit:

Provided that where a counter-claim for revocation of the patent is made by the defendant, the suit, along with the counter-claim, shall be transferred to the High Court for decision.

To determine the district Court having the jurisdiction to try the suit, one has to look into the provisions of the Code of Civil Procedure, specifically Section 20 of the Code. Section 20 of the Code reads as follows:

20. Other suits to be instituted where defendants reside or cause of action arises.

Subject to the limitations aforesaid, every suit shall be instituted in Court within the local limits of whose jurisdiction-

(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or

(b) any of the defendants, where there are more than one, at the time of the commencement of the suit actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or

(c) the cause of action, wholly or in part, arises.

Why does the title of Section 20 read “Other suits to be instituted where defendants reside or cause of action arises”? This is because Sections 16-19 of the Code govern the jurisdiction of specific suits such as suit for immovable property and for compensation for wrongs to person or movables. “Other suits” in Section 20 refers to suits which do not fall within the ambit of Section 16-19.

Consequently, suits for causes of action which arise under any law in force, and which do not fall within the teeth of Section 16-19, are governed by Section 20 of the Code. This includes a suit for infringement of a patent (How?... why can’t a patent be treated as movable property? After all, section 50(5) of the Patents Act, 1970 states that the rules of law applicable to ownership and devolution of movable property generally shall apply in relation patents..)

Anyways, for the purpose of this post, I shall assume that a suit for infringement of a patent is covered as “other suits” under Section 20 of the Code.

A reading of Section 20 underscores the fact that the institution of a suit does not turn on nationality of the defendant. All that one needs to ask oneself is:

A. Does the defendant reside within the jurisdiction of the Court where the suit is sought to be instituted?

B. If not, does he have a place of business (by default, the place of business must be the sole or principal place of business. Refer to explanation provided in the Code to Section 20)

C. If he neither resides nor has a principal place of business within the jurisdiction of the Court, has the cause of action arisen within the jurisdiction of the Court?

Nowhere in any of these requirements under Section 20 does one find a hurdle to institution of a suit merely because the defendant does not have a registered place of business in India. Clause (c) of Section 20 clearly states that so long as the cause of action has arisen in whole or in part within the jurisdiction of a particular Court, the Court is the “competent court” as required by Section 15 of the Code (“Every suit shall be instituted in the Court of the lowest grade competent to try it”)

With regard to the specific factual matrix of the case being discussed here, the cause of action has arisen because “an offer for sale” of the patented product was made without the consent of the patentee.  (Section 48 of the Patents Act vests the patentee with the exclusive right to prevent third parties from offering for sale his patented product)

If the offer for sale was indeed made within the territorial jurisdiction of the High Court of Delhi, the infringement of the patent has occurred within the Court's jurisdiction. Therefore, the absence of a registered place of business of the defendant ought not to prevent the Court from entertaining the suit, because it is perfectly within its seisin.

P.S: For those who didn’t know, so long as the value of the suit is pegged at INR 200,000, the High Court of Delhi has original jurisdiction over the suit, which is the case with most suits for infringement of patent. Unless of course the patentee decides to value the suit below INR 200,000, in which case he would have to wait for the defendant to file a counterclaim of revocation of the patent, for the suit to be transferred along with the counterclaim from the district Court to the High Court (Courtesy proviso to Section 104 of the Patents Act)