Introduction

In recent years, the Indian judiciary has been involved in numerous cases regarding intellectual property (IP) rights, particularly related to patent and design infringement. A crucial decision by the Supreme Court sheds light on the nuances of pre-institution mediation under the Commercial Courts Act, 2015 and the concept of urgency in IP cases. This blog will unpack the implications of the judgment in the case of Novenco Building and Industry A/S v. Xero Energy Engineering Solutions Pvt. Ltd. & Anr. (2025 INSC 1256), exploring the legal principles established, the context of the decision, and the broader implications for commercial litigation in India. The dispute arose between Novenco Building and Industry A/S, a Danish manufacturer specializing in industrial fans under the brand name Novenco ZerAx, and Xero Energy Engineering Solutions Pvt. Ltd. along with Aeronaut Fans Industry Pvt. Ltd. Novenco alleged that Xero began marketing competing, allegedly identical fans, infringing upon their intellectual property rights. The original dealership agreement signed in September 2017 was terminated in October 2022 after Novenco discovered the infringement activities, prompting Novenco to take further action as they sought to protect their proprietary rights.

Legal Journey: From High Court to Supreme Court

Initially, Novenco filed a commercial suit in June 2024, accompanied by an application for an ad-interim injunction. The suit aimed to halt the ongoing infringement, but crucially, it sought an exemption from the mandatory pre-institution mediation stipulated under Section 12A of the Commercial Courts Act, 2015. The High Court's single judge dismissed the plaint on the grounds of non-compliance with Section 12A, arguing there was no indication of urgency. This decision was upheld by a Division Bench, which interpreted that the plaintiff had to first engage in mediation before proceeding with the suit. The case then moved to the Supreme Court, where the pivotal question arose: Can a suit alleging ongoing IP infringement, particularly one with a request for interim injunction, bypass pre-institution mediation under Section 12A due to urgency?

The Supreme Court’s Decision

On October 27, 2025, the Supreme Court ruled in favour of Novenco and overturned the High Court's decisions. The Court emphasized that urgency must be assessed from the plaintiff's perspective, particularly focusing on ongoing injury and the public interest involved in addressing intellectual property invasions. The core of the decision established that the mere delay in filing a suit does not negate the presence of urgency if the infringement is continuing.

Key Reasoning Behind the Decision

The Supreme Court articulated several critical points in its decision:

·     Urgency is Inherent in Continuing Infringement: The court recognized that in ongoing infringement cases, the urgency of the plaintiff is not merely a procedural requirement; it is substantive. Each instance of manufacturing or selling an infringing product constitutes a new wrong that necessitates immediate remedy.

·       Assessment of Urgency: The Court clarified that the assessment of urgency should not be conflated with the merits of the case concerning the injunction. It is not enough to merely have a proforma prayer for exemption from mediation; plaintiffs must substantively show the need for urgent relief.

·       Impact on Reputation and Goods: The judgment acknowledged that ongoing infringing activities result in irreparable harm to the reputation and goodwill of the affected party. This harm often reinforces the need for swift judicial intervention to prevent further damage.

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Implications for Intellectual Property Law and Litigation

The Supreme Court's decision has profound implications for both plaintiffs and defendants involved in IP litigation:

·       For Plaintiffs: The decision empowers plaintiffs in IP cases to seek immediate judicial relief without first undergoing pre-institution mediation when they can convincingly demonstrate the urgency of their situation. Companies alleging ongoing infringement must articulate their claims carefully and substantiate the immediate threat they face, focusing on consumer deception and the ongoing nature of the infringement.

·       For Defendants: The decision presents a challenge for defendants who wish to contest claims of urgency. Defendants may need to thoroughly demonstrate the absence of immediate peril to successfully challenge a plaintiff's request for an exemption from mediation. They must focus on demonstrating that the plaintiff's claims are either exaggerated or unfounded, potentially suggesting that the urgency is a mere guise.

·       Practice Guidance for Trial Courts: The Supreme Court provided valuable guidance for lower courts concerning how to approach the inquiry into urgency. Courts are expected to evaluate the plaintiff's claims holistically, considering factors such as the immediacy of harm, risk of asset or right loss, and whether any delays could render judicial relief ineffective. By doing so, trial courts will help ensure that justice is served without unnecessary delays.

Moving Forward: What’s Next for the Legal Landscape

With the Supreme Court reinstating Novenco's suit for merits adjudication, it emphasizes the need for vigilance in protecting intellectual property rights. The restoration of the case to the High Court for further deliberation signifies that courts must now grapple with the fast-evolving landscape of commercial disputes in the intellectual property realm. The decision is a clarion call for businesses to prioritize their IP management strategies. Organizations must be alert to potential infringements and have protocols in place to respond swiftly when they suspect violations. A proactive approach can help in mitigating risks and ensuring a robust defence against possible infringing activities.

Conclusion

The Supreme Court's decision underscores an essential shift in how urgency is perceived and handled in intellectual property infringement cases. By clarifying that ongoing infringement inherently creates urgency and allowing for exceptions to pre-institution mediation, the decision strengthens the ability of IP right holders to secure prompt justice. As businesses navigate this landscape, a robust understanding of these legal principles is vital. Holding competitors accountable for infringement not only protects individual enterprises but also contributes to the overall integrity and innovation within the market, fostering a fair competitive environment that benefits consumers and businesses alike.