Friday, June 12, 2026

SC-Exphar SA and Another Vs. Eupharma Laboratories Ltd

Exphar SA v. Eupharma Laboratories Ltd.: Jurisdiction Under Section 62(2) of the Copyright Act, 1957 — The Supreme Court Settles the Law

Introduction

In the realm of intellectual property litigation in India, one of the most practically significant questions has always been: which court has the power to hear a copyright infringement case? The answer to this question determines not just legal strategy but also the very ability of a copyright owner to enforce their rights without being compelled to travel to a distant court. The Supreme Court of India, in its landmark decision in Exphar SA and Another v. Eupharma Laboratories Ltd. and Another, rendered on February 20, 2004, addressed this precise issue with far-reaching consequences. The judgment, delivered by a Bench of Justices Ruma Pal and P. Venkatarama Reddi, settled an important point of law concerning the scope and interpretation of Section 62(2) of the Copyright Act, 1957 — the provision that determines jurisdictional competence of courts in copyright suits. The case also touched upon the legal character of a "cease-and-desist" notice in copyright matters and the manner in which a demurrer on jurisdiction must be adjudicated.

Factual and Procedural Background

The story of this case begins with a pharmaceutical product — a malaria treatment medicine sold under the trade mark "Maloxine" — manufactured and marketed by Exphar SA, the first appellant, a foreign company. The medicine was sold in distinctive packaging with a unique get-up, layout, and design, and Exphar SA claimed ownership of the copyright in the trade mark "Maloxine" and the artistic work comprised in the "Maloxine" carton. The second appellant, M/s Shreechem Laboratories, was a company that carried on business within the jurisdiction of the Delhi High Court and had a registered office in New Delhi.

The commercial arrangement was structured as follows: Exphar SA had entered into a manufacturing/agency agreement with the second appellant, Shreechem Laboratories, authorizing it to manufacture tablets under the "Maloxine" trade mark for sale in the world apart from Nigeria. For the Nigerian market, Exphar SA had a separate arrangement with M/s Shreechem Laboratories. Importantly, a prior agreement had existed with Eupharma Laboratories — the second respondent — but that agreement was terminated.

The trouble began when Respondent 2, despite the termination of its manufacturing arrangement with Exphar SA, allegedly continued to manufacture "Maloxine" tablets and was exporting them, among other places, to M/s Moore Associates Ltd. It was also claimed that the respondents were planning to launch "Maloxine" in the Indian market. As early as November 5, 1993 and again on May 19, 1998, the second respondent wrote letters to the second appellant and to Shreechem Laboratories, calling upon them to cease and desist from manufacturing pharmaceutical preparations under the trade mark "Maloxine." In 1996, Exphar SA had independently filed a civil suit before the Federal High Court of Nigeria against M/s Moore Associates Ltd. and the second respondent, alleging passing off of its "Maloxine" trade mark. That suit remained pending.

The appellants then filed a suit before the Delhi High Court seeking, among other reliefs, an injunction to restrain the respondents from passing off the trade mark "Maloxine" or adopting the distinctive get-up of the "Maloxine" carton, and to restrain infringement of the copyright in the artistic work comprising the "Maloxine" carton. The basis for invoking the Delhi High Court's jurisdiction was two-fold: first, the copyright in the "Maloxine" carton was being infringed by the respondents; second, the appellants (particularly the second appellant) carried on business in Delhi and one of them had a registered office in New Delhi. It was also stated that the defendants themselves carried on business for profit in New Delhi.

On October 26, 1998, a learned Single Judge of the Delhi High Court passed an ex parte interim order in favour of the appellants, which was confirmed on September 28, 1999. The interim arrangement allowed the defendants to continue using the name "MALOXINE" but in a colour combination different from that approved by Exphar SA in 1991, required bold mention of Defendant 2's name and address on all packaging, restrained the use of a deceptively similar colour combination, and required the defendants to maintain quarterly accounts and undertake to pay 10% of sale proceeds as estimated damages in the event the plaintiff succeeded.

Both the appellants and the respondents preferred appeals before a Division Bench of the Delhi High Court. The respondents had not questioned the territorial jurisdiction of the Delhi High Court in their memorandum of appeal. Nonetheless, the Division Bench, acting suo motu on the question of territorial jurisdiction, not only allowed the respondents' appeal but also directed that the appellants' plaint be returned for presentation before the appropriate court, concluding that the Delhi High Court had no territorial jurisdiction. As a consequence, the appellants' own appeal was also dismissed. It is this judgment of the Division Bench that was brought before the Supreme Court by way of Civil Appeals Nos. 1189-90 of 2004, arising out of Special Leave Petitions filed by the appellants.

The Dispute

The central dispute before the Supreme Court was narrow but legally vital. The question was whether the Delhi High Court had jurisdiction under Section 62(2) of the Copyright Act, 1957 to entertain the suit filed by the appellants. The Division Bench of the Delhi High Court had answered this question in the negative, directing the return of the plaint. The appellants challenged this conclusion on multiple grounds. They argued that the Division Bench had gone beyond the pleadings of the parties; that the issue of jurisdiction was never raised in the respondents' memorandum of appeal; that the Division Bench had relied upon facts asserted in the respondents' written statement rather than facts pleaded in the plaint, which was procedurally impermissible when deciding a demurrer; and that the Division Bench had misconstrued Section 62(2) of the Copyright Act, 1957.

There was also a subsidiary but legally interesting question: whether the "cease-and-desist" notices sent by the second respondent to the second appellant at its New Delhi office constituted a sufficient basis for the Delhi High Court to entertain the suit — particularly in light of Section 60 of the Copyright Act, 1957, which provides a remedy to the recipient of a groundless threat of copyright infringement proceedings.

Reasoning and Analysis of the Judge

Justice Ruma Pal, who delivered the judgment of the court, began by identifying two procedural infirmities in the approach of the Division Bench.

The first infirmity was that there had been no application filed by the respondents under Order 7 Rules 11 and 10 of the Code of Civil Procedure, 1908 for rejection or return of the plaint. The Division Bench had gone beyond the scope of the appeals before it by directing the return of the plaint on a ground — lack of territorial jurisdiction — that the respondents themselves had not raised in their memorandum of appeal. This was wholly outside the scope of the pending appeals, and the court noted this with evident disapproval.

The second and more substantive infirmity concerned the manner in which the Division Bench had approached the question of jurisdiction. The Supreme Court explained a fundamental principle: when an objection to jurisdiction is raised by way of demurrer — that is, as a preliminary objection at the threshold rather than at trial — the court must proceed on the assumption that all the facts as pleaded by the initiator of the proceedings are correct. The objecting party, in order to succeed, must show that even granting those pleaded facts as true, the court has no jurisdiction as a matter of law. This is because at the demurrer stage, no evidence is led and no finding of fact is returned. The Division Bench had, however, examined the written statement filed by the respondents — which claimed that the goods were not sold within the territorial jurisdiction of the Delhi High Court and that the second respondent did not carry on business there — and had relied on these assertions to conclude that the court lacked jurisdiction. The Division Bench had even observed that "admittedly" the goods were traded outside India and therefore there was no infringement of the trade mark within the territorial limits of any Indian court, let alone Delhi. The Supreme Court found this observation to be an ex facie contradiction within the Division Bench's own judgment and a fundamental error in methodology.

The court then turned to the substantive question: the proper construction of Section 62(2) of the Copyright Act, 1957. Section 62 of the Act deals with jurisdiction of courts in copyright matters. Sub-section (1) provides that every suit or civil proceeding arising under Chapter 12 of the Act — which deals with civil remedies — in respect of infringement of copyright or any other right conferred by the Act, shall be instituted in the District Court having jurisdiction. Sub-section (2) then adds: for the purposes of sub-section (1), a District Court having jurisdiction shall, notwithstanding anything in the Code of Civil Procedure, 1908, or any other law for the time being in force, include a District Court within the local limits of whose jurisdiction, at the time of institution, the person instituting the suit or proceeding, or where there are more than one such persons, any of them, actually and voluntarily resides or carries on business or personally works for gain.

Justice Ruma Pal drew attention to the word "include" in Section 62(2). She held that this word is significant — it demonstrates that the jurisdiction prescribed under Section 62 is wider than, and not merely co-extensive with, the jurisdiction of the court as prescribed under the Code of Civil Procedure, 1908. The normal rule under Section 20 of the Code of Civil Procedure, 1908 permits a suit to be instituted where the defendant resides or where the cause of action arises. Section 62(2) prescribes an additional ground — over and above the "normal" grounds — by enabling the plaintiff to institute a suit in the court within whose jurisdiction the plaintiff himself resides or carries on business. This provision was not meant to restrict owners of copyright from exercising their rights; rather, its purpose was to remove impediments from their doing so.

To support this reasoning, the court referred to the report of the Joint Parliamentary Committee published in the Gazette of India on November 23, 1956, which had preceded and provided the foundation for Section 62(2). The report stated clearly that many authors were being deterred from instituting infringement proceedings because the court in which such proceedings were to be filed was situated at a considerable distance from their place of ordinary residence. The Committee felt this impediment should be removed and the new sub-clause (2) was accordingly introduced to permit infringement proceedings to be instituted in the District Court within the local limits of whose jurisdiction the person instituting the proceedings ordinarily resides or carries on business. This legislative history reinforced the court's interpretation that Section 62(2) is an enabling, not a restricting, provision.

The Division Bench had, however, held that Appellant 2 (Shreechem Laboratories) was not a "person instituting the suit" under Section 62(2) because it had not claimed ownership of the copyright in the trade mark, infringement of which was the subject matter of the suit. The Supreme Court rejected this interpretation emphatically. Justice Ruma Pal held that it was evident not just from the cause title but also from the body of the plaint that Appellant 2 carried on business within the jurisdiction of the Delhi High Court. Appellant 2 was plainly "a person instituting the suit." The fact that Appellant 2 might ultimately not be entitled to the relief claimed in the suit — because it had not claimed ownership of the copyright — was an entirely different matter going to the merits. That did not mean it was not a person who had instituted the suit within the meaning of Section 62(2). To deprive a co-plaintiff of the status of "person instituting the suit" merely because their claim might fail on merits was to go beyond the express words of the statute and undermine the jurisdictional framework in a manner not warranted by the law.

The court then addressed the second legal question regarding the "cease-and-desist" notices. The appellants' plaint stated that the cease-and-desist notice was sent by the second respondent to Appellant 2 at its New Delhi office and alleged that Appellant 2 had infringed the copyright of the second respondent in the "Maloxine" trade mark. The court explained that a cease-and-desist notice in a copyright context is not a mere notice. It is a threat — it alleges infringement and puts the recipient on notice that they are liable to institution of civil and/or criminal proceedings. The plaint asserted that this threat was received within the jurisdiction of the Delhi High Court, which was itself sufficient to invoke that court's jurisdiction. Crucially, the court drew a distinction between the cases cited by the respondents — Oil and Natural Gas Commission v. Utpal Kumar Basu, (1994) 4 SCC 711 and Union of India v. Adani Exports Ltd., (2002) 1 SCC 567 — which held that service of a mere notice may not be sufficient to found jurisdiction unless it formed an integral part of the cause of action. The Supreme Court distinguished these cases by holding that a cease-and-desist notice in a copyright action cannot be termed a "mere" notice, particularly in view of Section 60 of the Copyright Act, 1957. Section 60 specifically provides that a person who has received such a threat has a cause of action to institute a suit to counter that threat and to seek relief on the ground that the alleged infringement was not in fact an infringement of any legal right of the person making the threat. Therefore, the receipt of such a notice within the court's territorial jurisdiction was a legally relevant event that could itself ground jurisdiction, and was not comparable to the ordinary notices considered in the ONGC and Adani Exports cases.

The court also noted with approval the decision in Ciba Geigy Ltd. v. Sun Pharmaceutical Industries, (1997) 17 PTC 364, which had been cited in the matter.

The Supreme Court concluded that the Division Bench had disposed of the appeals purely on the question of jurisdiction and its conclusion was unsustainable. The matter was remanded to the Division Bench for disposal of the appeals on merits. Pending the Division Bench's decision, the earlier order passed by the learned Single Judge — which had allowed the defendants to use the "MALOXINE" mark subject to conditions including a different colour scheme and the requirement to maintain accounts and deposit 10% of sale proceeds — was directed to continue.

Final Decision of the Court

The Supreme Court allowed both Civil Appeals with costs. The impugned judgment and order of the Division Bench of the Delhi High Court was set aside. The matter was remanded to the Division Bench for fresh disposal of the appeals filed by the respondents and the appellants on merits. The interim order passed by the learned Single Judge was restored and directed to continue pending the decision of the Division Bench.

Point of Law Settled

This case settled the following important points of law. First, the word "include" in Section 62(2) of the Copyright Act, 1957 demonstrates that the jurisdiction conferred under that provision is wider than the ordinary jurisdiction prescribed under the Code of Civil Procedure, 1908. Section 62(2) provides an additional ground of jurisdiction — over and above those under Section 20 of the Code — by enabling the plaintiff to sue in the court within whose local limits they reside or carry on business. This provision was designed to facilitate copyright owners in accessing justice, not to restrict them. Second, where a preliminary objection to jurisdiction is taken by way of demurrer and not at trial, the court must proceed on the basis that all facts pleaded by the party initiating the proceedings are correct, without examining the written statement of the opposing party. Third, a co-plaintiff who carries on business within the jurisdiction of a court qualifies as a "person instituting the suit" under Section 62(2) even if that co-plaintiff has not claimed ownership of the infringed copyright and may ultimately not be entitled to relief. Entitlement to relief is a matter of merits, not of standing to institute proceedings. Fourth, a cease-and-desist notice in a copyright case is not a "mere" notice — it is a threat of civil and/or criminal proceedings, and its receipt within a court's territorial limits can constitute a sufficient cause of action to invoke that court's jurisdiction, particularly in view of Section 60 of the Copyright Act, 1957.

Case Details

Title: Exphar SA and Another Vs. Eupharma Laboratories Ltd. and Another

Date of Order: February 20, 2004

Case Number: Civil Appeals Nos. 1189-90 of 2004 (arising out of SLPs (C) Nos. 3551-52 of 2003)

Neutral Citation: (2004) 3 SCC 688

Name of Court: Supreme Court of India

Name of Hon'ble Judges: Justice Ruma Pal and Justice P. Venkatarama Reddi

Disclaimer: Readers are advised not to treat this as a substitute for legal advice as it may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

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Section 62(2) Copyright Act 1957 Explained: Landmark Supreme Court Ruling in Exphar SA Case
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Cease-and-Desist Notice as Cause of Action in Copyright Suits: Exphar SA v. Eupharma Laboratories
Copyright Jurisdiction and the "Person Instituting the Suit": Supreme Court's Ruling in Exphar SA Case
How Section 62(2) of the Copyright Act Protects Copyright Owners' Right to Choose Their Forum

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Headnote

The Supreme Court of India, in Exphar SA and Another v. Eupharma Laboratories Ltd. and Another, (2004) 3 SCC 688, decided on February 20, 2004 by a Bench of Justice Ruma Pal and Justice P. Venkatarama Reddi, settled the law on the scope of Section 62(2) of the Copyright Act, 1957. The court held that the jurisdiction conferred by Section 62(2) is wider than the ordinary jurisdiction under the Code of Civil Procedure, 1908, and provides an additional ground of jurisdiction enabling copyright owners to institute suits in courts within whose jurisdiction they reside or carry on business. A co-plaintiff who carries on business within a court's jurisdiction qualifies as a "person instituting the suit" under Section 62(2) regardless of whether that co-plaintiff has claimed ownership of the infringed copyright. The court also held that when jurisdiction is challenged by way of demurrer, the court must proceed solely on the basis of the facts pleaded in the plaint and cannot rely on averments in the defendant's written statement. Further, a cease-and-desist notice in a copyright case constitutes a legal threat — not a mere notice — and its receipt within a court's territorial jurisdiction can ground that court's jurisdiction, particularly in view of Section 60 of the Copyright Act, 1957. The appeals were allowed, the Division Bench's order was set aside, and the matter was remanded for disposal on merits.

SC-Cadila Health Care Ltd. Vs. Cadila Pharmaceuticals Ltd.

When a Name Can Kill: The Supreme Court's Landmark Ruling on Deceptive Similarity in Pharmaceutical Trademarks

Introduction

Of all the areas where trademark law intersects with public welfare, none is more critical than the pharmaceutical industry. A mistaken purchase of a wrongly labeled soap or beverage may cause financial inconvenience. A mistaken dispensing of the wrong medicine can cause death. It is against this backdrop that the Supreme Court of India, in its landmark judgment of 26th March 2001, laid down a comprehensive set of principles governing the test of deceptive similarity specifically in the context of medicinal products. The case of Cadila Health Care Ltd. versus Cadila Pharmaceuticals Ltd. is not merely a trademark dispute between two pharmaceutical giants — it is a seminal contribution to the jurisprudence of intellectual property law in India, one that overruled a previous Supreme Court decision, synthesised decades of Indian and international case law, and set down a framework that courts continue to apply to this day. The judgment is remarkable for its sensitivity to Indian ground realities, particularly the vast linguistic diversity and widespread illiteracy among the Indian population, and for its insistence that a stricter standard of scrutiny must be applied when the goods in question are medicines rather than ordinary consumer products.

Factual and Procedural Background

The two parties to the dispute, Cadila Health Care Ltd. and Cadila Pharmaceuticals Ltd., were both pharmaceutical companies that had emerged from the restructuring of the erstwhile Cadila Group. Under the scheme of restructuring approved under Sections 391 and 394 of the Companies Act, 1956, both companies had been permitted to use the name "Cadila" as their corporate name. This shared corporate identity formed the backdrop to a deeper rivalry between the two entities.

The appellant, Cadila Health Care Ltd., developed and marketed a drug under the brand name "Falcigo." This drug contained Artesunate and was meant for the treatment of cerebral malaria, specifically the strain known as Falciparum Malaria, a severe and potentially fatal form of the disease. On 20th August 1996, the appellant applied for registration of the trade mark "Falcigo" with the Trade Marks Registry at Ahmedabad in Part A, Class 5 under the Trade and Merchandise Marks Act, 1938. On 7th October 1996, the Drugs Controller General of India granted permission to the appellant to market the drug under this trade mark, and from October 1996 onwards, the appellant claimed to have been manufacturing and selling "Falcigo" across India.

The respondent, Cadila Pharmaceuticals Ltd., obtained permission from the Drugs Controller General of India on 10th April 1997 to manufacture a different drug containing Mefloquine Hydrochloride. This drug was also used for the treatment of Falciparum Malaria, but its composition was entirely different from the appellant's drug. Crucially, the two drugs had different side effects and were in fact contraindicated in certain respects, meaning that what one drug was suited for, the other may be entirely unsuitable or even harmful. The respondent chose to sell this drug under the brand name "Falcitab."

In April 1998, the appellant came to know that the respondent had begun selling "Falcitab" in the market. Alarmed by the similarity between the names "Falcigo" and "Falcitab," particularly given that both drugs treated the same disease, the appellant filed a suit for injunction in the District Court at Vadodara, seeking to restrain the respondent from using the mark "Falcitab" on the ground that it was deceptively similar to "Falcigo" and was likely to cause confusion and deception among buyers.

The Extra Assistant Judge at Vadodara dismissed the application for interim injunction on 30th May 1998, holding that the two drugs differed in appearance, formulation, and price, and that since both were Schedule L drugs sold exclusively to hospitals and institutions and not across the counter, there was no real chance of deception or confusion. The appellant's appeal to the High Court was also unsuccessful. The High Court, after examining the packaging and cartoons of both products and surveying various case law, concluded that there was little chance of the two products being confused by an unwary consumer, and that passing off of one product for the other was not likely. It was against this order that the appellant approached the Supreme Court by way of a Special Leave Petition.

The Dispute Before the Supreme Court

The core question before the Supreme Court was whether the brand names "Falcigo" and "Falcitab" were deceptively similar to each other, and whether the respondent should be restrained from using the mark "Falcitab." But the Court, conscious that the case raised issues of broader significance, chose to go beyond the immediate facts and lay down the governing principles for determining deceptive similarity, especially in relation to pharmaceutical products. In doing so, the Court also had to grapple with whether the fact that these were Schedule L drugs sold only to hospitals and clinics, and not to the general public over the counter, provided a sufficient safeguard against confusion. The Court also found it necessary to overrule certain observations made in the more recent decision of S.M. Dyechem Ltd. v. Cadbury (India) Ltd., reported as MANU/SC/0407/2000, which it found to be inconsistent with settled legal principles.

Reasoning and Analysis of the Court

The Supreme Court, in a judgment delivered by Justice B.N. Kirpal (with Justices Doraiswamy Raju and Brijesh Kumar on the bench), began by tracing the legal framework governing both registered and unregistered trade marks. Under Section 28 of the Trade and Merchandise Marks Act, 1938, registration in Part A or B of the register confers an exclusive right to use the trade mark. For unregistered marks, Section 27(1) bars proceedings for infringement, but Section 27(2) preserves the right to bring a passing-off action. Passing off, the Court explained, is grounded in the principle that no person should represent his goods as those of another. The Court referred to Lord Diplock's formulation in Erwen Warnink BV v. J Townend and Sons, reported as 1979 (2) AER 927, which identified five elements of the modern tort of passing off: a misrepresentation made by a trader in the course of trade, to prospective customers or ultimate consumers, which is calculated to injure the goodwill of another trader, and which causes or is likely to cause actual damage to that trader's business or goodwill.

The Court then conducted a thorough survey of its own earlier decisions, building towards a holistic and coherent framework.

In National Sewing Thread Co. Ltd. v. James Chadwick and Bros Ltd., reported as MANU/SC/0063/1953, the Court had examined Section 8 of the Trade Marks Act, which bars registration of marks likely to deceive or cause confusion. The principle established was that the real question is how an average man of ordinary intelligence would react to a particular trade mark and what association he would form on seeing it.

In Corn Products Refining Co. v. Shangrila Food Products Ltd., reported as MANU/SC/0115/1959, the Court had reinforced that in deciding the question of similarity between two marks, the marks must be considered as a whole, not dissected into component parts. The case involved the marks "Glucovita" and "Gluvita," and the Court agreed with the minority view that the two marks were similar enough to cause confusion among the Indian public, for whom these English words were essentially foreign and phonetically similar.

In Amritdhara Pharmacy v. Satya Deo, reported as MANU/SC/0256/1962, the Court dealt with the marks "Amritdhara" and "Lakshmandhara" used on similar medicinal preparations. This case became the bedrock of the judgment in the Cadila case. The Court quoted extensively from Amritdhara, where it had been observed that medicines would be purchased by villagers and townsfolk alike, literate and illiterate, and that the question must be approached from the point of view of a man of average intelligence and imperfect recollection. Such a person, the Court reasoned, would not dissect the names etymologically. He would go by the overall structural and phonetic similarity. It was also observed, drawing on the reasoning of Lord Parker in Re Pianotist Co.'s Application, reported as (1906) 23 RPC 774, that the court must take the two words, judge them both by look and by sound, consider the goods to which they are applied, the nature and kind of customer likely to buy those goods, and all surrounding circumstances.

In Durga Dutt Sharma v. N.P. Laboratories, reported as MANU/SC/0197/1964, the Court had drawn the important distinction between an action for passing off and an action for infringement. In a passing-off action, the use of the plaintiff's exact trade mark is not necessary — what matters is whether the defendant's conduct is likely to deceive. However, in an infringement action, it is a sine qua non that the defendant has used the plaintiff's registered mark or something so similar as to constitute a colourable imitation. Importantly, the Court also held that where the similarity between two marks is so close — whether visually, phonetically, or otherwise — that the court concludes there is an imitation, no further evidence is needed to establish that the plaintiff's rights have been violated.

In F. Hoffmann-La Roche and Co. Ltd. v. Geoffrey Manner and Co. Pvt. Ltd., reported as MANU/SC/0302/1969, the Court had applied both visual and phonetic tests to compare the drug names "Protovit" and "Dropovit" and concluded that they were dissimilar enough to avoid confusion. The judgment had extensively quoted the celebrated test formulated by Lord Parker in Re Pianotist, which had by then become the gold standard for comparing two word marks.

After building this doctrinal foundation, the Supreme Court turned its critical attention to S.M. Dyechem Ltd. v. Cadbury (India) Ltd., decided in 2000, which had compared the marks "Piknik" and "Picnic" for chocolates. The Dyechem case had introduced a different approach, suggesting that in cases of composite or device marks, differences in essential features should be given more importance than similarities. It had also suggested that the relevant consumer was one who knew the distinguishing characteristics of the plaintiff's goods and had sufficient intelligence to tell them apart. The Supreme Court in the Cadila case firmly rejected both these propositions. It held that the stress in Indian law has always been on common features rather than differences, and that the phonetic similarity test, firmly established in Amritdhara, cannot simply be discarded because the marks are written differently. More critically, the Court found the Dyechem approach to the standard of the relevant consumer to be inconsistent with Indian ground realities. Equating the Indian purchaser with a well-informed and careful English consumer was inappropriate in a country where a large section of the population is illiterate, where multiple languages are spoken, and where English words are essentially foreign sounds. Accordingly, the Court expressly overruled the decision on merits in Dyechem's case.

The Court then addressed the specific and weighty issue of pharmaceutical products. It drew extensively on American jurisprudence, noting that even for prescription drugs, confusion in marks can have catastrophic consequences. From American Cyanamid Corporation v. Connaught Laboratories Inc., reported as 231 USPQ 128 (2nd Cir. 1986), the Court drew the principle that exacting judicial scrutiny is required if there is a possibility of confusion over marks on medicinal products, because the potential harm is far more serious than in ordinary consumer goods. From Blansett Pharmaceuticals Co. v. Carmick Laboratories Inc., reported as 25 USPQ 2nd 1473 (TTAB 1993), it drew the principle that confusion is likely even for prescription drugs, where the marks look alike and sound alike. From Glenwood Laboratories Inc. v. American Home Products Corp., reported as 173 USPQ 19 (1972) 455 F. Reports 2d 1384, it adopted the principle that where one product is contraindicated for the disease for which the other is indicated, confusion in filling a prescription can produce harmful effects. The Court also relied on R.J. Strasenburgh Co. v. Kenwood Laboratories Inc., reported as 106 USPQ 379, and on the celebrated text McCarthy on Trade Marks, for the proposition that physicians and pharmacists, although trained professionals, are not immune from confusion or mistake, particularly where prescriptions are telephoned to pharmacists or where handwriting is illegible.

The Court was emphatic on the point that merely because a drug is classified as a Schedule L drug sold only to hospitals and clinics, it does not follow that confusion is impossible. India's linguistic, urban, semi-urban and rural diversity, combined with the possibility of even accidental negligence by professionals, means that strict measures must be taken to prevent confusion among pharmaceutical marks. The stakes are simply too high. The Court quoted from McCarthy on Trade Marks that a lesser quantum of proof of confusing similarity should be required when the goods are medicinal products, and that if there is any possibility of confusion in the case of medicines, public policy requires that the confusingly similar name be restrained.

The Court also took note of Section 17B of the Drugs and Cosmetics Act, 1940, which treats as a spurious drug any drug bearing a name or mark that imitates or resembles another drug in a manner likely to deceive. Drawing on this provision, the Court directed that before any authority grants permission to manufacture a drug under a brand name, it must satisfy itself that the name will not cause confusion or deception in the market. The Court suggested that drug regulatory authorities should consider requiring applicants to submit an official search report from the Trade Marks Office before approval is granted, so that the drug authority can make a properly informed decision.

Having surveyed all these principles, the Court synthesised them into a comprehensive list of factors to be considered when determining deceptive similarity in a passing-off action based on an unregistered trade mark. These factors are the nature of the marks, whether they are word marks or label marks or composite marks; the degree of resemblance between the marks, including phonetic similarity; the nature of the goods in respect of which the marks are used; the similarity in the nature, character, and performance of the goods of the competing traders; the class of purchasers likely to buy the goods, their education and intelligence, and the degree of care they are likely to exercise; the mode of purchasing the goods or placing orders; and any other surrounding circumstances relevant to the degree of dissimilarity between the competing marks. The Court was careful to note that no fixed weightage can be assigned to any one factor, and that each case must be decided on its own facts.

Final Decision of the Court

Despite the elaborate principles laid down, the Supreme Court did not itself decide the question of deceptive similarity between "Falcigo" and "Falcitab" on the merits. The Court took the view that a detailed examination of evidence might be required and that it would not be advisable to express a final opinion at that stage. Accordingly, the matter was remitted back to the Trial Court at Vadodara with a direction to decide the suit afresh, keeping in mind all the principles and observations laid down in the judgment. No order as to costs was made. The appeal was accordingly disposed of.

Points of Law Settled in the Case

This judgment settled several significant points of law that have shaped intellectual property jurisprudence in India ever since. First, it overruled the decision on merits in S.M. Dyechem Ltd. v. Cadbury (India) Ltd. and reaffirmed that in passing-off actions, the test of similarity focuses on the overall resemblance between marks, with particular emphasis on phonetic similarity, rather than on differences in essential features. Second, it firmly established that the standard of the relevant consumer in India must be calibrated to Indian conditions, accounting for illiteracy, linguistic diversity, and imperfect recollection, and cannot simply be transplanted from English law. Third, it held that a stricter standard of deceptive similarity applies to pharmaceutical products, given the potential for serious, even fatal, consequences from confusion between medicines. Fourth, it held that the fact that a drug is sold only to hospitals and clinics and not over the counter does not by itself provide sufficient protection against confusion, since even trained professionals can make mistakes. Fifth, it laid down a comprehensive seven-factor test for assessing deceptive similarity in passing-off actions, which has since become the standard framework applied by Indian courts in trademark disputes. Sixth, it flagged the need for coordination between drug regulatory authorities and trade mark offices to prevent confusingly similar names from entering the pharmaceutical market.

Case Details

Title: Cadila Health Care Ltd. Vs. Cadila Pharmaceuticals Ltd.

Date of Order: 26th March 2001

Case Number: Civil Appeal arising from Special Leave Petition (the SLP number is not specifically mentioned in the judgment text; the matter was heard on special leave)

Neutral Citation: MANU/SC/0199/2001

Equivalent Citations: AIR 2001 SC 1952; (2001) 5 SCC 73; JT 2001 (4) SC 243; 2001 (3) SCALE 98; [2001] 2 SCR 743

Name of Court: Supreme Court of India

Names of Hon'ble Judges: Justice B.N. Kirpal, Justice Doraiswamy Raju, and Justice Brijesh Kumar

Disclaimer: Readers are advised not to treat this as a substitute for legal advice as it may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

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Seven-Factor Test for Deceptive Similarity in India: A Deep Analysis of the Cadila Pharmaceuticals Judgment
Falcigo vs Falcitab: How the Supreme Court Rewrote the Rules of Passing Off for Medicines in India
Stricter Trademark Protection for Pharma Products: The Cadila Case That Changed Indian IP Law
Overruling Dyechem: How Cadila Health Care Restored Phonetic Similarity as the Touchstone of Indian Trademark Law
Passing Off Action and Medicinal Products in India: Complete Legal Analysis of Cadila Pharmaceuticals Case 2001

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Headnote

Held, that in a passing-off action relating to pharmaceutical products, a stricter standard of deceptive similarity must be applied than in cases involving ordinary consumer goods, because confusion between medicinal products may have fatal or seriously harmful consequences. The test of deceptive similarity requires an overall assessment of competing marks from the perspective of a man of average intelligence and imperfect recollection, and the Indian consumer cannot be equated with an English consumer given India's widespread illiteracy, linguistic diversity, and multilingual population to whom English words are essentially phonetically apprehended foreign sounds. Phonetic similarity remains a primary test and cannot be discarded merely because the marks are written differently or because differences in essential features are present. Seven factors were laid down for determining deceptive similarity in passing-off actions: the nature of the marks; degree of resemblance including phonetic similarity; nature of goods; similarity in nature, character, and performance of competing goods; the class of purchasers and their education and care; mode of purchasing; and other surrounding circumstances. The fact that drugs are Schedule L drugs sold only to hospitals and clinics and not across the counter does not by itself provide sufficient safeguard against confusion, as even trained professionals are not immune from mistakes. The decision on merits in S.M. Dyechem Ltd. v. Cadbury (India) Ltd. (MANU/SC/0407/2000) was expressly overruled to the extent it held that differences in essential features should prevail over phonetic similarity and that the relevant consumer is one who knows the distinguishing characteristics of the plaintiff's goods. Drug regulatory authorities were directed to consider requiring applicants for drug brand name approvals to submit official Trade Mark Office search reports to prevent confusingly similar pharmaceutical names from entering the market. Matter remitted to Trial Court for fresh decision in light of the principles laid down.

SC-Brihan Karan Sugar Syndicate Private Limited Vs. Yashwantrao Mohite Krushna Sahakari Sakhar Karkhana

When a Winner Loses: How Acquiescence and Unproved Goodwill Stayed a Copyright and Passing-Off Decree

Copyright Infringement, Goodwill and Passing Off Action:Brihan Karan Sugar Syndicate Private Limited Vs. Yashwantrao Mohite Krushna Sahakari Sakhar Karkhana Judgement by Supreme Court

Introduction

In the world of intellectual property disputes, winning a full trial is often considered the hardest part. Yet, as this Supreme Court case demonstrates, even a decree passed after a complete trial is not immune from being stayed by a higher court. This case presents a fascinating intersection of copyright law, passing-off actions, and the doctrine of acquiescence, all arising from a dispute over labels on country liquor bottles. Beyond the intellectual property issues, the Supreme Court also took the opportunity to comment on the professional conduct of advocates during trial proceedings, making this judgment instructive on multiple levels. The case serves as an important reminder that winning on the merits at trial does not automatically translate into enforcement of the decree if the appellate court finds a good reason to pause its operation.

Factual and Procedural Background

Brihan Karan Sugar Syndicate Private Limited, the appellant, was in the business of selling country liquor under the label "Tango Punch." The respondent, Yashwantrao Mohite Krushna Sahakari Sakhar Karkhana, also sold country liquor but used the label "Two Punch Premium." The appellant claimed to own a registered copyright in the artistic label displayed on its bottles and contended that the respondent's label was deceptively similar to its own.

The appellant filed a suit before the District Judge-1, Osmanabad, seeking two main reliefs. The first was a permanent injunction restraining the respondent from infringing the copyright in the appellant's artistic label by reproducing it or any substantial part of it. The second was an injunction restraining the respondent from passing off its country liquor as that of the appellant by using a deceptively similar trademark label.

During the pendency of this suit, the appellant applied for a temporary injunction, which was denied by the Trial Court on 12th April 2019. This refusal was confirmed by the High Court on 7th January 2020. This meant that throughout the trial, there was no court order stopping the respondent from using its labels.

Despite this, after a complete trial on merits, the District Judge passed a decree on 24th May 2021 decisively in favour of the appellant. The decree included a permanent injunction against copyright infringement, a permanent injunction against passing off, damages of Rs. 1,00,000 to the appellant, and an order directing the respondent to hand over all infringing labels, wrappers, dies, and printing material for destruction within one month.

The respondent, aggrieved by this decree, filed an appeal before the High Court of Judicature at Bombay, Aurangabad Bench. By an order dated 23rd June 2021, a learned Single Judge of the High Court stayed the execution and operation of the entire decree pending the final disposal of the appeal. It is this stay order that was challenged by the appellant before the Supreme Court in Civil Appeal No. 2768 of 2023.

The Dispute Before the Supreme Court

The core question before the Supreme Court was whether the High Court was justified in staying a decree that had been passed after a complete and full-fledged trial. The appellant argued strongly that once a trial court has examined all evidence and passed a reasoned decree, it should not be suspended by the appellate court merely because an appeal has been filed. The respondent, on the other hand, defended the stay by pointing to specific weaknesses in the appellant's case, particularly regarding the failure to prove goodwill and reputation, and the admitted act of withdrawing objections which, the respondent argued, amounted to acquiescence.

A key factual element was that in March 2016, the respondent had applied to the Commissioner of State Excise for approval to use the "Two Punch Premium" labels. The appellant had raised formal written objections to this application. However, in April 2016, the appellant withdrew those objections by submitting letters of withdrawal. Although one of the appellant's witnesses claimed during cross-examination that the withdrawal was conditional, he was unable to point to anything in the letters themselves that said so. The suit was ultimately filed by the appellant only on 4th October 2017, nearly one and a half years after withdrawing the objections.

Reasoning and Analysis of the Court

The Supreme Court approached the matter with careful nuance. The Court began by acknowledging that it was dealing with an interim order passed during a pending appeal, not a final decision on the merits. It clarified that the High Court was not required to conduct a deep or exhaustive analysis of the merits of the appeal while deciding whether to stay a decree. Only a prima facie examination was needed.

On the Question of Passing-Off

The Court turned to the law on passing-off actions and referred extensively to the Supreme Court's own decision in Satyam Infoway Ltd. v. Sifynet Solutions (P) Ltd., reported as (2004) 6 SCC 145. This judgment had laid down that a passing-off action requires three elements to be established by the plaintiff: first, that the plaintiff had acquired a reputation or goodwill connected with its goods; second, that the defendant made a misrepresentation to the public; and third, that the plaintiff suffered or was likely to suffer loss. Importantly, the Satyam Infoway case had clarified that it is not essential for the plaintiff to prove long use, and that the question of reputation depends on the volume of sales and extent of advertisement.

The Court also referred to Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd. and Others, reported as (2018) 2 SCC 1. This decision approved the view in S. Syed Mohideen v. P. Sulochana Bai, reported as (2016) 2 SCC 683, that a passing-off action premised on the rights of the prior user generating goodwill shall remain unaffected by any registration. The Toyota case had endorsed the triple test laid down by the House of Lords in Reckitt and Colman Products Ltd. v. Borden Inc. and Others, reported as (1990) 1 WLR 491, one element of which was that the plaintiff must prove acquisition of reputation or goodwill in connection with the goods. The Toyota decision further held, in paragraph 40, that if goodwill or reputation in a particular jurisdiction is not established, no other issue needs examination to determine the extent of the plaintiff's right in a passing-off action.

Applying these principles to the facts, the Court found that the appellant had examined only two witnesses. The first was Mr. K.K. Kalani and the second was Mr. Sudhir Pokhale, who was examined only on the issue of label approval. Exhibits 73 and 73.1 to 73.4 were statements of sales and advertisement expenses certified by a Chartered Accountant named Mr. Natesh. However, the Chartered Accountant was never examined as a witness to prove these statements. The witness Kalani had only quoted figures of sales and marketing expenses in his examination-in-chief without the underlying documents being proved in the manner known to law. The Court noted an important distinction between the standard applicable at a temporary injunction stage and at the final hearing. At the stage of a temporary injunction, certified accounts might suffice to make out a prima facie case. But at the final hearing of the suit, figures of sales and advertisement expenses must be proved through proper legal evidence. Since this was not done, the Court found that the appellant had prima facie failed to establish the goodwill and reputation necessary for the passing-off action. This finding, the Court held, justified the High Court's decision to stay that part of the decree relating to passing-off.

On the Question of Copyright Infringement and Acquiescence

The Court then turned to copyright infringement. It acknowledged that acquiescence is a well-recognised defence in copyright infringement actions. It referred to Power Control Appliances and Others v. Sumeet Machines Pvt. Ltd., reported as 1994 (2) SCC 448, which had discussed the concept of acquiescence at length. That case had held that if acquiescence in infringement amounts to consent, it will be a complete defence. Acquiescence is a course of conduct inconsistent with the claim for exclusive rights, and it applies to positive acts, not merely silence or inaction as in cases of latches. Mere negligence is not sufficient for acquiescence.

Applying this to the facts, the Court found a very significant positive act on the part of the appellant. When the respondent had applied for permission to use the impugned labels, the appellant had raised written objections. It then took the affirmative step of withdrawing those objections in writing. The letters of withdrawal did not contain any condition or reservation, even though the witness Kalani claimed orally that the withdrawal was conditional. When confronted with the actual letters, he admitted there was nothing written to suggest the withdrawal was conditional. Moreover, the suit was filed nearly one and a half years after this withdrawal. The Court held that this withdrawal amounted to a prima facie case of acquiescence, supporting the stay of the copyright infringement part of the decree as well.

The Court also noted that the fact that temporary injunction had been refused during the pendency of the suit was a relevant consideration. Since no prohibitory order had operated during the entire period of the trial, the situation of the respondent's business had developed without any court-imposed restriction.

On Lawyers' Conduct During Trial

The Court also took note of a deeply concerning aspect of the trial proceedings. The Trial Judge had recorded observations that the advocate appearing for the appellant had persistently raised objections to almost every question asked during cross-examination. The Trial Court noted that the frequency of objections had become so excessive that it was required to record a substantial part of the cross-examination in question-and-answer form, consuming considerable court time. The Supreme Court, in paragraphs 19 and beyond, noted this with concern in the context of the massive judicial pendency reflected in the National Judicial Data Grid for Maharashtra. It observed that advocates, as officers of the court, are expected to act fairly and reasonably during trials. It stated that fairness is a hallmark of great advocacy, and that persistent objections to every question in cross-examination not only delay individual trials but contribute to the systemic problem of arrears.

Final Decision of the Court

The Supreme Court dismissed the civil appeal filed by the appellant. It upheld the High Court's order staying the execution and operation of the decree passed by the District Judge-1, Osmanabad, pending the final disposal of the respondent's appeal before the High Court. The stay was to continue until the High Court disposed of the substantive appeal on merits.

Points of Law Settled in the Case

This judgment contributes meaningfully to several areas of law. On passing-off, it reaffirms that while long user is not essential to establish reputation, evidence of sales volume and advertisement expenditure must be properly proved through legal evidence at the final hearing stage. Certified accounts alone, without the certifying Chartered Accountant being examined as a witness, are insufficient to prove goodwill and reputation at trial.

On acquiescence in copyright matters, the judgment reaffirms that acquiescence requires a positive act, not mere silence or inaction. However, a written withdrawal of formal objections, especially without any recorded condition or reservation, constitutes such a positive act and can make out a prima facie case of acquiescence, even if the party later claims the withdrawal was conditional.

On the power to stay decrees, the judgment clarifies that an appellate court is not required to conduct a detailed examination of the merits while deciding whether to stay a trial court decree. A prima facie examination suffices. The fact that temporary injunction was refused during the pendency of the trial is a legitimate and relevant consideration when deciding whether to stay the eventual decree.

On professional responsibility, the Court's observations remind the Bar that excessive and unwarranted objections during cross-examination are inconsistent with an advocate's role as an officer of the court and contribute to the delay in the administration of justice.

Case Title: Brihan Karan Sugar Syndicate Private Limited Vs. Yashwantrao Mohite Krushna Sahakari Sakhar Karkhana

Date of Order: September 14, 2023

Case Number: Civil Appeal No. 2768 of 2023

Neutral Citation: 2023 INSC 831

Name of Court: Supreme Court of India, Civil Appellate Jurisdiction

Name of Hon'ble Judge: Justice Abhay S. Oka (with Justice Rajesh Bindal)

Disclaimer: Readers are advised not to treat this as a substitute for legal advice as it may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

Suggested SEO Titles

Copyright Infringement and Passing Off in Liquor Label Dispute: Supreme Court Upholds Stay of Decree in Brihan Karan Sugar Case
Acquiescence as Defence in Copyright Law: How Withdrawal of Objections Cost a Decree Holder in Supreme Court
Proving Goodwill in Passing-Off Actions: Supreme Court's Landmark Guidance on Evidence Standards
When a Trial Court Victory Gets Stayed: Supreme Court on Acquiescence, Goodwill, and Appellate Powers
Tango Punch vs Two Punch: Supreme Court Explains Copyright Acquiescence and Passing-Off Proof Standards

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Headnote

The appellant-plaintiff obtained a decree from the District Judge, Osmanabad, granting permanent injunction, damages, and other reliefs for copyright infringement and passing off. The respondent appealed, and the Bombay High Court (Aurangabad Bench) stayed the execution and operation of the decree pending disposal of the appeal. The plaintiff challenged the stay order before the Supreme Court.The Supreme Court upheld the High Court’s interim stay and dismissed the appeal. The Court held that a prima facie case existed regarding lack of proof of goodwill in the passing-off claim and acquiescence in the copyright claim, justifying continuation of the stay pending disposal of the first appeal. The High Court was directed to decide the appeal on its own merits, uninfluenced by observations in either judgment.

Thursday, June 11, 2026

Kanpur Flowercycling Private Limited Vs Sarathi International Inc.

Kanpur Flowercycling Private Limited Vs Sarathi International Inc. 04.06.2026 : Writ Petition No.30565 of 2025 (IPR) : 2026:KHC:26391 : Karnataka HC : Tara Vitasta Ganju

The court considered a dispute concerning the pecuniary jurisdiction of a Commercial Court in a trademark infringement suit relating to the mark "TULASI". The case arose from allegations that the respondent/plaintiff, after initially asserting that the specified value of the suit exceeded Rs.3,00,000/- (resulting in the matter being transferred to the Commercial Court), later filed an application contending the value was below Rs.3,00,000/- and sought return of the plaint to the Civil Court, relying on an order in a separate suit involving a different defendant. The principal question before the Court was whether the Commercial Court's order returning the plaint, passed without independently determining the "specified value" under Section 12(1)(d) of the Commercial Courts Act, 2015, warranted interference under Article 227 of the Constitution.

After examining the material on record and the submissions of the parties, including the petitioner/defendant, respondent/plaintiff, and the Amicus Curiae, Justice Ganju observed that a writ petition under Article 227 is maintainable against orders of Commercial Courts despite the bar under Section 8 of the CC Act, but such jurisdiction must be exercised sparingly and only in cases of patent jurisdictional error or manifest injustice. The Court held that the Commercial Court had failed to undertake any independent examination of the "specified value" as required under Section 12(1)(d), and had erroneously relied on an order in another suit (involving a different defendant) which itself was based on the wrong provision (Section 12(1)(c) instead of 12(1)(d)), emphasizing that while a plaintiff is dominus litis, a bona fide and reasoned valuation must still be demonstrated, especially where mala fides are alleged.

Accordingly, the Court allowed the petition, set aside the impugned order dated 02.08.2025, and directed the Commercial Court to examine the "specified value" claimed by the respondent/plaintiff afresh and pass orders in accordance with law, keeping the rights and contentions of both parties open.

[Disclaimer: Readers are advised not treat this as a substitute for legal advise as it is based on limited information and is intended solely for general informational purposes.]

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Karnataka High Court Examines Scope of Article 227 Jurisdiction Over Commercial Court Orders: A Case Study on Valuation Disputes in Trademark Litigation

Determination of Specified Value in Commercial IPR Dispute is Essential

Introduction

When a business approaches a court seeking protection of its trademark, one of the first hurdles it must cross is establishing that the court has the authority to hear the case. This authority, known as jurisdiction, often depends on something as seemingly mundane as the monetary value assigned to the dispute. Yet, as this judgment from the Karnataka High Court demonstrates, valuation disputes can become surprisingly complex, especially when a litigant changes its position midway through proceedings.

This case is significant for multiple reasons. First, it addresses a long-debated question about whether the High Court can intervene under its supervisory powers when a Commercial Court passes an interlocutory order, particularly given the restrictions imposed by the Commercial Courts Act, 2015. Second, it deals with the practical problem of how courts should value "intangible rights" such as trademarks for the purpose of deciding whether a case belongs before a Commercial Court or an ordinary Civil Court. Third, and perhaps most importantly for litigants and practitioners, it cautions against parties taking inconsistent positions on valuation to suit their convenience, a practice sometimes described as forum shopping.

For businesses engaged in intellectual property disputes, lawyers handling commercial litigation, and even courts grappling with similar valuation questions, this judgment offers valuable clarity on how such issues ought to be approached.

Factual and Procedural Background

The dispute traces back to a suit filed by the respondent, a partnership firm, against the petitioner company, alleging infringement of its registered trademark "TULASI". The respondent had approached the Civil Court seeking a permanent injunction and managed to obtain an ex parte temporary injunction in its favour shortly after filing the suit.

Once the petitioner appeared before the Civil Court and raised objections regarding maintainability, the Civil Court directed the respondent to disclose the specified value of the suit as required under Section 12 of the Commercial Courts Act, 2015. In response, the respondent filed a memo stating that the specified value of the suit exceeded Rs.3,00,000. Based on this declaration, the Civil Court returned the plaint for presentation before the Commercial Court, since disputes involving registered trademarks valued above this threshold fall within the domain of Commercial Courts under the Act.

The plaint was accordingly re-registered before the Commercial Court. The respondent then went a step further and sought an amendment to its plaint, adding a fresh paragraph specifically asserting that the market value of the "TULASI" trademark, as estimated by the plaintiff, exceeded Rs.3,00,000, thereby justifying the Commercial Court's jurisdiction.

However, the story took an unexpected turn. The respondent subsequently filed an application under Order VII Rule 10 of the Code of Civil Procedure, this time contending that the specified value of the suit was actually below Rs.3,00,000, and therefore the matter should be sent back to the ordinary Civil Court. This reversal was based on an order passed in a separate suit filed by the same respondent against a different defendant, where another Commercial Court had observed that the value of the respondent's rights in the same trademark was below the threshold.

The petitioner opposed this application, arguing that the respondent could not be allowed to take such a contradictory stand after having earlier invoked the Commercial Court's jurisdiction on its own assertion. Despite this objection, the Commercial Court allowed the respondent's application and directed that the plaint be returned to the Civil Court. This order, passed on a date corresponding to August 2025, became the subject matter of challenge before the High Court.

Following the impugned order, the respondent refiled the suit before the Civil Court, where it was registered as a fresh proceeding. The High Court, while examining this petition, also stayed further proceedings in both the Commercial Court suit and the subsequently filed Civil Court suit.

Interestingly, this petition was heard alongside a batch of other petitions raising a common question: whether interim or interlocutory orders passed by Commercial Courts are amenable to challenge under Article 227 of the Constitution, given the restrictions contained in Section 8 of the Commercial Courts Act. An Amicus Curiae was appointed to assist the Court on this larger question, and arguments on both the maintainability issue and the merits of the present case were heard together.

Dispute Before the Court

At its core, this case presented two intertwined questions, one procedural and one substantive.

The procedural question was whether a petition filed under Article 227 of the Constitution challenging an order of a Commercial Court is maintainable at all, given that Section 8 of the Commercial Courts Act bars civil revision applications or petitions against interlocutory orders of such courts. If maintainable, the Court also had to determine the extent to which it should interfere with such orders, particularly keeping in mind the legislative intent behind the Commercial Courts Act to ensure speedy resolution of commercial disputes.

The substantive question revolved around the conduct of the respondent in changing its stance on the valuation of the suit. The petitioner argued that having once asserted, through a formal memo and an amendment application, that the value of its trademark rights exceeded Rs.3,00,000 (and having obtained the benefit of this assertion by getting the matter transferred to the Commercial Court), the respondent could not be permitted to reverse this position simply because it suited a different litigation strategy. According to the petitioner, this amounted to forum shopping and an abuse of the legal process, forcing the petitioner to chase the case across different courts.

The respondent, on the other hand, contended that as the "dominus litis" (master of the suit), it had the right to value its own claim, and that this valuation could be revised based on subsequent developments, particularly the observations made by another Commercial Court in a separate suit involving the same trademark. The respondent also pointed to earlier proceedings involving the same mark where courts had accepted a lower valuation.

The Amicus Curiae, appointed specifically to address the broader question of Article 227's applicability to Commercial Court orders, argued that while this supervisory power is a constitutional safeguard that cannot be taken away by any statute, it must be exercised with extreme caution, particularly in commercial matters where speed of disposal is a legislative priority.

Reasoning and Analysis of the Court

The Court's analysis proceeded in a structured manner, first addressing the question of maintainability and the scope of Article 227, before turning to the specific facts of the valuation dispute.

On the question of maintainability, the Court extensively relied on the foundational principle laid down by the Supreme Court in L. Chandra Kumar v. Union of India, (1997) 3 SCC 261, which held that the power of judicial review and superintendence vested in High Courts under Articles 226 and 227 forms part of the basic structure of the Constitution and cannot be excluded by any legislative enactment. This meant that no matter what restrictions the Commercial Courts Act imposes through Section 8, the constitutional power under Article 227 remains intact.

The Court then turned to Surya Dev Rai v. Ram Chander Rai, (2003) 6 SCC 675, where the Supreme Court clarified that even interlocutory orders, against which statutory revision has been barred, remain open to challenge under the High Court's supervisory jurisdiction. However, this jurisdiction is to be exercised only where the subordinate court has acted without jurisdiction, in excess of jurisdiction, or in a manner causing grave injustice, and not merely to correct errors of fact or law where two views are reasonably possible.

The Court further discussed Shalini Shyam Shetty v. Rajendra Shankar Patil, (2010) 8 SCC 329, which reiterated that the power under Article 227 is meant to keep subordinate courts within the bounds of their authority and is not to be exercised as an appellate remedy. The Supreme Court in that case had cautioned that this power, though unfettered, is subject to a high degree of judicial discipline and should be used sparingly.

On the specific question of how Article 227 interacts with the Commercial Courts Act, the Court examined the Delhi High Court's Division Bench ruling in M/s. C.P. Rama Rao Sole Proprietor v. National Highways Authority of India, 2024 SCC OnLine Del 7342, and the earlier decision in Black Diamond Trackparts Pvt. Ltd. v. Black Diamond Motors Pvt. Ltd., 2021 SCC OnLine Del 3946 (a decision whose correctness was later affirmed by the Supreme Court when a challenge to it was dismissed). These cases held that the word "petition" in Section 8 of the Commercial Courts Act refers only to revision petitions and not to petitions under Article 227, and therefore the statutory bar does not extend to constitutional remedies. Similar reasoning was found in the Gujarat High Court's decision in State of Gujarat v. Union of India, 2018 SCC OnLine Guj 1515, and the Bombay High Court's ruling in Pravinchandra v. Hemant Kumar, 2023:BHC-NAG:16159.

At the same time, the Court drew guidance from how the Supreme Court has approached similar tensions in the context of the Arbitration and Conciliation Act, 1996. In Deep Industries Ltd. v. ONGC, (2020) 15 SCC 706, and Bhaven Construction v. Sardar Sarovar Narmada Nigam Ltd., (2022) 1 SCC 75, the Supreme Court held that while Article 227 remains available even against orders passed under self-contained statutory codes, High Courts should be extremely circumspect in interfering, restricting intervention to situations where a party is left remediless or where bad faith is clearly demonstrated. The Karnataka High Court found this reasoning equally applicable to the Commercial Courts Act, which similarly aims at speedy and efficient disposal of commercial disputes through Sections 8 and 13.

Turning to the substantive valuation issue, the Court examined Section 12 of the Commercial Courts Act in detail. While Section 12(1)(a) to (c) deal with valuation for money claims, movable property, and immovable property respectively, Section 12(1)(d) specifically governs "any other intangible right" and states that the market value as estimated by the plaintiff shall be taken into account. The Court also noted Section 2(1)(c)(xvii), which classifies disputes relating to registered and unregistered trademarks as commercial disputes, and Section 2(1)(i), which defines "specified value" as the value determined under Section 12, which cannot be less than Rs.3,00,000.

The Court examined the petitioner's reliance on Kirloskar AAF Limited v. M/s. American Air Filters, RFA 1/2015, where a Coordinate Bench had observed that the value of a trademark infringement dispute involving a company could "safely" be taken as exceeding Rs.3,00,000, even without specific evidence. However, the Court distinguished this case on facts, noting that the present matter was at a different procedural stage where the respondent had already made specific assertions about valuation, which were later contradicted.

The Court also discussed the Bangalore Blues Entertainment India Pvt. Ltd. v. One Ikigai Edutech Pvt. Ltd, 2023 SCC OnLine Kar 177, and Gangadharappa Munindra Kumar v. M/s Eaglesight Media Pvt. Ltd., 2022 SCC OnLine Kar 1859, observing that these dealt with situations where the specified value had not been mentioned in the plaint at all, a stage already crossed in the present case. The Court noted that the reasoning in Bangalore Blues had relied on a Delhi High Court single-judge decision in Vishal Pipes Limited v. Bhavya Pipe Industry, which had since been substantially overruled by a Division Bench in Pankaj Ravjibhai Patel trading as Rakesh Pharmaceuticals v. SSS Pharmachem Pvt. Ltd., 2023 SCC Online Del 7013.

The discussion of the Pankaj Ravjibhai Patel case proved particularly significant. The Delhi High Court Division Bench had clarified that it would be incorrect to assume that intellectual property disputes are necessarily valued above Rs.3,00,000, just as it would be incorrect to assume that valuations below this threshold are automatically the result of bad faith. Instead, where a dispute arises about whether a valuation has been deliberately understated, the competent court hearing the matter itself can examine this issue and, if satisfied that the valuation was incorrect or actuated by ulterior motives, direct amendment of the plaint and payment of additional court fees. Importantly, this examination need not be transferred to a separate Commercial Court merely for this purpose.

Applying this framework to the facts, the Court observed that the respondent had indeed asserted contradictory valuations for the same intangible right, the trademark "TULASI", at different points in the litigation. However, no material had actually been placed before the Commercial Court to support either valuation, and crucially, the Commercial Court itself had not undertaken any independent examination of the specified value. Instead, it had simply relied on an order passed in a different suit involving a different defendant, where the earlier Commercial Court had itself relied on Section 12(1)(c), the provision dealing with immovable property, rather than the correct provision, Section 12(1)(d), applicable to intangible rights like trademarks.

The Court found this approach problematic. Given that the petitioner had specifically raised an allegation of mala fide conduct and forum shopping against the respondent, the Commercial Court was obligated to examine this allegation and independently determine the specified value in accordance with Section 12(1)(d), rather than mechanically adopting a determination made in an unrelated proceeding based on an incorrect statutory provision.

On the question of whether an alternative remedy of appeal was available, the Court examined Order XLIII Rule 1(a) of the Code of Civil Procedure, which provides for an appeal against orders returning a plaint under Order VII Rule 10, except where the procedure under Order VII Rule 10A has been followed. Since the Commercial Court had followed the Order VII Rule 10A procedure (fixing a date for appearance before the transferee court), and since Order VII Rule 10A(5) expressly bars an appeal where the plaintiff's own application for return of plaint has been allowed, the Court found that no appellate remedy was available to the petitioner. This made the case an appropriate one for invoking Article 227.

Final Decision of the Court

The High Court allowed the writ petition and set aside the order of the Commercial Court that had directed the return of the plaint to the Civil Court. The matter was remanded back to the Commercial Court with a specific direction to conduct a proper examination of the "specified value" as claimed by the respondent, taking into account the allegations of inconsistent positions and mala fides raised by the petitioner, and to pass a fresh order in accordance with law. The rights and contentions of both parties on this aspect were left open for consideration by the Commercial Court.

Given that the matter had already been pending for a considerable period, the Court requested the Commercial Court to conduct this examination at the earliest opportunity. The Court also directed that the matter be placed before the Chief Justice for appropriate administrative directions, particularly regarding the suggestion that a separate roster or procedural mechanism be considered for handling Article 227 petitions arising from commercial disputes, so as to further the speedy disposal objectives of the Commercial Courts Act.

Point of Law Settled

This judgment makes several important contributions to the law surrounding commercial litigation and supervisory jurisdiction.

First, it reaffirms that a petition under Article 227 of the Constitution remains maintainable against orders, including interlocutory orders, passed by Commercial Courts, notwithstanding the bar contained in Section 8 of the Commercial Courts Act, 2015. This is because the word "petition" in that section refers only to revision petitions under the Code of Civil Procedure and not to constitutional remedies, which cannot be curtailed by ordinary legislation.

Second, and equally important, the judgment emphasizes that this constitutional remedy must be exercised with considerable restraint in commercial matters. Drawing parallels with how courts approach the Arbitration and Conciliation Act, the judgment suggests that interference should be limited to situations involving patent jurisdictional errors, manifest injustice, or where a party would otherwise be left without any remedy, so that the legislative goal of speedy disposal of commercial disputes is not defeated by routine recourse to writ jurisdiction.

Third, on the substantive question of valuation, the judgment clarifies that for disputes involving intangible rights such as trademarks, Section 12(1)(d) of the Commercial Courts Act is the governing provision, requiring the court to consider the market value as estimated by the plaintiff. However, this does not mean such estimation is beyond scrutiny. Where a party raises a specific allegation that the valuation has been manipulated for forum shopping or is otherwise actuated by mala fides, particularly where the same litigant has taken inconsistent positions on the value of the same intellectual property right in different proceedings, the court hearing the matter must independently examine this question rather than mechanically relying on determinations made in unrelated proceedings, especially where those determinations were themselves based on an incorrect statutory provision.

Finally, the judgment also serves as a reminder that courts cannot simply transplant findings on valuation from one suit to another involving different parties without independent verification, particularly when the correctness of the underlying reasoning itself is in question.

Case Title: Kanpur Flowercycling Private Limited Vs. Sarathi International Inc.

Date of Judgment/Order: 04.06.2026

Case Number: Writ Petition No.30565 of 2025 (IPR)

Neutral Citation: 2026:KHC:26391

Name of Court: High Court of Karnataka at Bengaluru

Name of Hon'ble Judge: Justice Tara Vitasta Ganju

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

Disclaimer: Images used herein do not reflect actual images used in Judgement and that the same are for illustrative purpose only. Readers are advised not to treat this as substitute for legal advice as it may contain errors in perception, interpretation, and presentation.

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Headnote of the Judgment:

In Kanpur Flowercycling Private Limited Vs Sarathi International Inc. (2026:KHC:26391), the Karnataka High Court, in WP No.30565/2025 (IPR), examined a writ petition under Articles 226 and 227 challenging an order of the Commercial Court returning a trademark infringement plaint to the Civil Court for alleged lack of pecuniary jurisdiction. The Court held that Article 227 petitions remain maintainable against Commercial Court orders despite Section 8 of the Commercial Courts Act, though to be exercised sparingly. Finding that the Commercial Court had not independently examined the "specified value" under Section 12(1)(d) despite allegations of inconsistent valuation by the plaintiff, the Court allowed the petition, set aside the impugned order, and remanded the matter for fresh determination.

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SC-Bishwanath Prasad Radhey Shyam Vs. Hindustan Metal Industries

When Old Methods Don't Make New Patents: The Supreme Court's Landmark Ruling on Inventive Step in Bishwanath Prasad Radhey Shyam Vs. Hindustan Metal Industries

The Test of Inventive Step and Novelty for Invention: Bishwanath Prasad Radhey Shyam Vs. Hindustan Metal Industries Judgement by Supreme Court

Introduction

Patent law exists to reward genuine creativity. It gives an inventor a temporary monopoly over his creation in exchange for sharing that creation with the world. But this bargain only works if the law is strict about what qualifies as an invention. If courts allow patents over things that were already known, already used, or merely obvious to any skilled worker, the system turns from a reward for innovation into a tool for monopolizing common knowledge. This is precisely the concern at the heart of the Supreme Court's landmark 1978 judgment in Bishwanath Prasad Radhey Shyam Vs. Hindustan Metal Industries. Decided on December 13, 1978, this case remains one of the most important Indian judicial pronouncements on what it truly means for something to be "new" and "inventive" under patent law. The judgment not only settled a specific commercial dispute between two utensil manufacturers in Mirzapur but laid down enduring principles about novelty, inventive step, and the standard by which courts should evaluate the validity of a patent.

Factual and Procedural Background

The story begins in the utensil manufacturing industry of Mirzapur, Uttar Pradesh, a town with a long tradition of producing brass and German silver utensils. The old method of manufacturing shallow dishes and plates involved turning and polishing them on a machine called a headstock, without a tailstock. The utensils were either fixed to the headstock using a thermoplastic adhesive like lac or shellac, or held in the jaws of a chuck attached to the headstock. The problem with this method was a serious safety hazard: the utensils would frequently fly off the headstock during the turning process, causing injuries to workers. This risk apparently became serious enough that the work of manufacturing plates and dishes was suspended at Mirzapur for several years before 1951.

In 1951, Purshottam Dass, one of the partners of Hindustan Metal Industries (the plaintiff-respondent), claimed to have invented a new device and method to address this problem. His solution involved mounting metallic utensils on a lathe using an adapter on the headstock and applying independent pressure through a pressure spindle or tailstock to hold the utensil firmly in place during the turning operation. This, he claimed, eliminated the danger of utensils flying off and made the manufacturing process safer, faster, and more efficient. On the strength of this claimed invention, the plaintiff firm filed the necessary specifications and claims at the Patent Office and obtained Patent No. 46368-51 on May 6, 1953, with effect from December 13, 1951, under the Indian Patent and Designs Act, 1911.

In September 1952, the plaintiff discovered that Biswanath Prasad Radhey Shyam (the defendant-appellant), another concern in the utensil manufacturing business in Mirzapur, was using substantially the same device and method. The plaintiff served a notice on September 9, 1952, demanding that the defendant stop using the patented method, but the defendant did not comply. On August 8, 1953, the plaintiff filed a suit for permanent injunction and damages of Rs. 3,000 in the Court of the District Judge, Allahabad.

The defendant contested the suit vigorously. He argued that his firm had been in the metal ware manufacturing business for a long time, and that the method described in the patent, namely using a lathe with a headstock, an adapter, and a tailstock, had been publicly known and in common commercial use all over the country for several decades before the plaintiff's patent. He further argued that the alleged invention was not, at the date of the patent, a manner of new manufacture or improvement, nor did it involve any inventive step. The defendant also filed a counter-claim for revocation of the patent, and on October 13, 1953, he along with three other business concerns filed a formal petition under Section 26 of the Indian Patent and Designs Act, 1911, for revocation of the patent on the same grounds.

The plaintiff's suit and the revocation petition were transferred to the High Court of Allahabad under Section 29 of the Act, consolidated, and tried together . The defendant examined 9 witnesses to establish that the method had been publicly known and in use long before 1951, while the plaintiff examined 4 witnesses to prove that the patented machine was a genuine improvement over the crude machines previously in use.

The learned Single Judge, after careful examination of all the evidence and the machines produced before him (marked Exhibit CC, which was the plaintiff's patented machine, and Exhibit XVI, alleged to be an imitation), ruled against the plaintiff on all the key issues. He found that the patent did not involve any inventive step having regard to what was known or used prior to its date, that the alleged invention was not a manner of new manufacture or improvement, that the defendant had publicly manufactured goods before the patent date substantially according to the same method, and that the patent was liable to be revoked. He accordingly dismissed the plaintiff's infringement suit and allowed the petition for revocation, revoking Patent No. 46368-51.

The plaintiff challenged this decision before a Division Bench of the Allahabad High Court in two Special Appeals. The Division Bench took a different view. It found that formerly, plates and dishes were attached to the headstock using adhesive like lac or shellac and used to fly off causing injuries, leading to the suspension of manufacturing at Mirzapur for about 5 or 6 years. It found that the plaintiff had invented the method of mounting in 1951, after which the work restarted successfully. The Division Bench accepted that lathes with headstock and tailstock were well known, and that known uses of a tailstock included centering the article, holding long work by pivoting with a pointed tailstock, and holding articles in metal spinning by pressure of a pad. However, it went on to find that "the method of holding an article by the pressure of a point of a pointed tailstock was neither used nor known." On this basis, the Division Bench concluded that the method of mounting patented by the plaintiff did involve an inventive step and was a manner of new manufacture and improvement. It allowed the appeals, set aside the trial court judgment, and decreed the plaintiff's suit with costs. Aggrieved, the defendant brought the matter before the Supreme Court of India.

The Dispute

At the Supreme Court, the central controversy narrowed into two essential questions. First, whether the patented method was, at the date of the patent on December 13, 1951, a manner of new manufacture or improvement under Section 26(1)(d) of the Indian Patent and Designs Act, 1911. Second, whether the invention involved any inventive step having regard to what was known or used prior to the date of the patent under Section 26(1)(e) of the same Act. If either answer was no, the patent was liable to be revoked.

The defendant-appellant argued that the method and means claimed in the patent involved no inventive step or novelty whatsoever. He specifically pointed out that the Division Bench had committed a serious error by locating the novelty of the invention in the use of a pointed tailstock, when the complete specification itself expressly stated that the pressure spindle could be "pointed or blunt." The claims in the patent, he argued, made no assertion of novelty for a pointed tailstock. Therefore, the Division Bench had gone beyond the scope of what the patentee himself had claimed and had essentially invented a case for the plaintiff that had never been pleaded. He also highlighted the damaging fact that Purshottam Dass, stated to be the actual inventor, had not appeared in the witness box to explain in what way the invention was novel or what research or experiments had led to it. This failure, the appellant argued, should give rise to an adverse inference.

The plaintiff-respondent countered that the question of whether a process involves a manner of new manufacture or improvement is purely one of fact, and factual findings, especially concurrent ones, should not be disturbed by the Supreme Court. He further argued that a patent is granted by the Controller only after due inquiry and publication, and should therefore be presumed valid unless the contrary is proved. He also urged that since both the trial court and the Division Bench had concurrently found that the invention had utility, the patent should be sustained on that ground alone.

Reasoning and Analysis of the Court

The Supreme Court, in a judgment authored by began by setting out the foundational principles of patent law before applying them to the facts. This approach gave the judgment its lasting significance, as the principles articulated go well beyond the specific dispute between two utensil manufacturers in Mirzapur.

The Court explained that the object of patent law is to encourage scientific research, new technology and industrial progress by granting an exclusive privilege to own, use or sell a patented method or product for a limited period. The price of this monopoly is the disclosure of the invention, which after the expiry of the monopoly period passes into the public domain. The Court then stated the fundamental principle with great clarity: a patent is granted only for an invention that must be new and useful. It must have novelty and utility. It must be the inventor's own discovery, as opposed to mere verification of what was already known before the date of the patent.

The Court noted that under Section 2(8) of the Indian Patent and Designs Act, 1911, "invention" means any manner of new manufacture and includes an improvement and an allied invention. "Manufacture" under Section 2(11) includes any art, process or manner of providing, preparing or making an article, as well as any article prepared or produced. Unlike the Patents Act, 1970, the 1911 Act does not expressly require an invention to be "useful" in its definition, but courts have always required utility, reading it from Section 26(1)(f) which lists lack of utility as a ground for revocation.

On the crucial question of what qualifies as patentable, the Court drew an important distinction. It emphasized that in order to be patentable, an improvement on something already known, or a combination of different matters already known, must be something more than a mere workshop improvement. It must independently satisfy the test of invention, meaning it must involve an inventive step. The improvement or combination must produce a new result, a new article, or a better or cheaper article than before. The Court noted that a mere collocation of more than one known integers or things, without any exercise of inventive faculty, does not qualify for a patent.

To illustrate this principle, the Court quoted Lord Davey from Rickmann v. Thierry (1896) 14 Pat. Ca. 105, to the effect that it is not enough that the purpose is new or that there is novelty in the application; there must be novelty in the mode of application itself, meaning that in adapting an old contrivance to a new purpose, there must be difficulties to be overcome that require what is called invention, or there must be some ingenuity in the mode of making the adaptation. Cotton L.J.'s formulation from Blackey v. Latham (1888) 6 Pat. Ca. 184 was also cited: that to be new in the patent sense, the novelty must show invention.

The Court then set out the tests for determining whether a claimed invention involves novelty and an inventive step. It observed that this is a mixed question of law and fact, depending largely on the circumstances of the case. One important criterion is whether the manner of manufacture patented was publicly known, used and practised in the country before or at the date of the patent. Prior public knowledge, whether by word of mouth or through published books and other media, would negate novelty. The Court quoted from Hindmarch on Patents, as approved in Humpherson v. Syer 4 R.P.C. 407, that once the public becomes possessed of an invention by any means whatsoever, no subsequent patent for it can be granted, because the public cannot be deprived of the right to use what it already possesses.

The Court then discussed the concept of "obviousness," noting that the expression "does not involve any inventive step" in Section 26(1)(a) of the Act and its equivalent word "obvious" have acquired special significance in patent law terminology, and that obviousness must be strictly and objectively judged. The Court quoted the test formulated by Salmond L.J. in Rado v. John Tye & Son Ltd. (1967) R.P.C. 297: whether the alleged discovery lies so much out of the track of what was known before as not naturally to suggest itself to a person thinking on the subject. The discovery must not be the obvious or natural suggestion of what was previously known.

Another test articulated by the Court, drawn from the Encyclopaedia Britannica, asked: if the prior art document had been placed in the hands of a competent craftsman endowed with common general knowledge at the priority date, who was faced with the problem the patentee sought to solve, would he have said "this gives me what I want"? A further formulation from Halsbury's Laws of England, 3rd Edition, Volume 29, referred to by Vimadalal J. of the Bombay High Court in Farbwerke Hoechst & B. Corporation v. Untchan Laboratories AIR 1969 Bom 255, asked: was it practically obvious to a skilled worker in the field, in the state of knowledge existing at the date of the patent as found in the literature then available, that he would or should make the invention the subject of the claim concerned?

The Court also firmly rejected the respondent's argument that there is a presumption in favour of the validity of a patent once granted. It pointed out that the grant and sealing of a patent, or a decision in favour of grant by the Controller in opposition proceedings, does not guarantee the validity of the patent, which can always be challenged before the High Court in revocation or infringement proceedings. This position is now expressly stated in Section 13(4) of the Patents Act, 1970. The argument for a presumption of validity was therefore untenable.

Turning to the facts, the Supreme Court conducted its own examination of the evidence and the machines placed before it. It found that the trial court had established the following on the basis of evidence: the manufacture of utensils is an old industry at Mirzapur and across India; the lathe is a well-known mechanism used for spinning and various other processes; adapters of various sizes and shapes were in use for holding plates and dishes before 1951; the tailstock was probably also used in this industry before 1951; no bracket or angle exactly like the one used in the plaintiff's machine (Ex. CC) appeared to have been used before 1951; and that work on plates and dishes was suspended at Mirzapur for a few years before 1951. The trial court had found that the mere addition of a bracket did not amount to a novelty, and that the suspension of work was a neutral circumstance that could just as well have been caused by labour trouble rather than any defect in the then-existing contrivance.

The Supreme Court agreed completely with the trial court's analysis. It found that the patented machine was merely an application of an old invention, known for decades before 1951, to the traditional purpose of scraping and turning utensils, with only a slight change in the mode of application. This was no more than a "workshop improvement," a normal development of an existing manner of manufacture, not involving anything novel that would be outside the probable capacity of a skilled craftsman. The alleged discovery did not lie outside the track of what was known before.

The Court was particularly scathing about the Division Bench's reasoning. The Division Bench had located the novelty of the invention in "the method of holding an article by the pressure of a point of a pointed tailstock" which it said was neither used nor known. The Supreme Court pointed out that this finding was directly contradicted by the Division Bench's own earlier findings, in which it had acknowledged that lathes with headstock and tailstock were well known, and that uses of the tailstock included holding articles by the pressure of a pad. More importantly, the finding about the pointed tailstock directly contradicted the patent specification itself. The complete specification expressly stated that "the pressure spindle may be pointed or blunt," and Claim No. 4 in the patent similarly stated that the pressing end of the pressure spindle could be "pointed or blunt." There was thus no assertion of novelty for the pointed tailstock in the patent itself. The Division Bench had gone beyond the scope of the specifications and claims made by the patentee and had essentially made out a new case for the plaintiff that had never been alleged in the patent or in the pleadings.

The Court also found that the Division Bench's finding was contradicted by admissions made by Sotam Singh (D.W. 3), the representative of the patentee firm, in cross-examination. Sotam Singh had admitted that he did not know whether Purshottam Dass had made any research or experiments before obtaining the patent, and another witness Lakshmi Dass (D.W. 1) had admitted that machines like Ex. XVI were in use even before 1951-52. The Court quoted the rule from Arnold v. Bradbury (1871) 6 Ch. A. 706 that the proper way to construe a patent specification is to first read the full description of the invention before reading the claims, because the patentee cannot claim more than he desires to patent. The specification and claims must be read together, as stated by Lord Esher M.R. in Parkinson v. Simon (1894) 11 R.P.C. 483.

The Court also referred to the House of Lords decision in Harwood v. Great Northern Railway Co. (1864) 11 H.L.C. 654, a factually analogous case where a person had patented a groove in a fish-plate used to connect railway rails. The House of Lords held the patent invalid because it involved merely applying an old contrivance in the old way to an analogous subject, without any novelty or invention in the mode of application. Blackburn L.J. had stated that in order to bring the subject matter of a patent within patentable territory, there must be invention so applied as to produce a practical result, and a mere application of an old contrivance in the old way to an analogous subject, without novelty or invention in the mode of applying it, is not a valid subject matter of a patent. The Supreme Court found this principle squarely applicable to the facts before it.

On the respondent's final argument that utility alone should sustain the patent, the Court firmly held that utility is not the crucial test. Even if an invention has utility, it must separately satisfy the tests of novelty and inventive step. The crucial test is whether the invention involves novelty and an inventive step, and that test went against the patentee in this case.

Final Decision of the Court

The Supreme Court allowed both appeals. It set aside the judgment of the Division Bench of the Allahabad High Court dated January 18, 1966, and restored the judgment of the learned Single Judge. The patent (No. 46368-51) stood revoked on the grounds mentioned in Clauses (d) and (e) of Section 26(1) of the Indian Patent and Designs Act, 1911, namely that the invention was not, at the date of the patent, a manner of new manufacture or improvement, and that the invention did not involve any inventive step having regard to what was known or used prior to the date of the patent.

Point of Law Settled in the Case

This judgment settled several foundational points of Indian patent law that continue to be cited by courts and practitioners.

The most important principle is the standard for patentability: a patent is valid only if the claimed invention is new and involves a genuine inventive step. Novelty alone is not sufficient if the claimed novelty does not rise above the level of what any skilled craftsman would have done. Utility alone is also not sufficient to sustain a patent, even if concurrently found by multiple courts.

The Court clarified that an improvement on existing technology, or a combination of existing elements, is patentable only if it produces a new result or a better result and goes beyond what could be called a "workshop improvement." The combination of old known integers, without any novelty in their interaction or result, does not qualify for a patent. Mere collocation of existing elements without any inventive faculty is not patentable.

The Court firmly established that there is no presumption of validity in favour of a patent merely because the Controller granted it after due examination. The grant of a patent does not guarantee its validity.

The Court also laid down the correct approach to construing patent specifications and claims: the description of the invention must be read first, followed by the claims, and both must be read together. The patentee cannot claim more than what is described in the specification. Courts cannot go beyond the scope of the specifications and claims to find novelty that the patentee himself never asserted.

The tests for "obviousness" were clearly articulated: whether the discovery lies so much outside the track of existing knowledge that it would not naturally suggest itself to a person thinking on the subject, and whether a competent craftsman endowed with general knowledge at the priority date, faced with the same problem, would have arrived at the same solution from the prior art.

Case Title: Bishwanath Prasad Radhey Shyam Vs. Hindustan Metal Industries

Date of Order: December 13, 1978

Case Number: Civil Appeal Nos. 1630-1631 of 1969

Citation: AIR 1982 SC 1444; (1979) 2 SCC 511; [1979] 2 SCR 757

Name of Court: Supreme Court of India

Hon'ble Judges: A.N. Sen, J.; R.S. Sarkaria, J.; V.D. Tulzapurkar, J.

Disclaimer: Readers are advised not to treat this as a substitute for legal advice as it may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

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When Old Technology Cannot Be Patented: Supreme Court's Ruling in Hindustan Metal Industries Case
Patent Revocation on Grounds of Lack of Inventive Step: Lessons from a Landmark Supreme Court Case
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Section 26 of the Indian Patent and Designs Act 1911: Revocation of Patent Explained Through Landmark Case

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Headnote

Bishwanath Prasad Radhey Shyam Vs. Hindustan Metal Industries , The dispute concerned the validity of a patent relating to a method of mounting metallic utensils on a lathe. The patent holder sued for infringement, while the defendant sought revocation on grounds of lack of novelty and inventive step. The Supreme Court held that the claimed invention was merely a workshop improvement based on existing knowledge and did not constitute a “manner of new manufacture.” Accordingly, the patent was revoked and the appeal was allowed. This Judgement is one of the foundational Judgement in Patent Law in India explaining The Test of Inventive Step and Novelty for Invention.

Friday, June 12, 2026

SC-Exphar SA and Another Vs. Eupharma Laboratories Ltd

Exphar SA v. Eupharma Laboratories Ltd.: Jurisdiction Under Section 62(2) of the Copyright Act, 1957 — The Supreme Court Settles the Law

Introduction

Factual and Procedural Background

The Dispute

Reasoning and Analysis of the Judge

Final Decision of the Court

Point of Law Settled

Case Details

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SC-Cadila Health Care Ltd. Vs. Cadila Pharmaceuticals Ltd.

When a Name Can Kill: The Supreme Court's Landmark Ruling on Deceptive Similarity in Pharmaceutical Trademarks

Introduction

Factual and Procedural Background

The Dispute Before the Supreme Court

Reasoning and Analysis of the Court

Final Decision of the Court

Points of Law Settled in the Case

SC-Brihan Karan Sugar Syndicate Private Limited Vs. Yashwantrao Mohite Krushna Sahakari Sakhar Karkhana

When a Winner Loses: How Acquiescence and Unproved Goodwill Stayed a Copyright and Passing-Off Decree

Introduction

Factual and Procedural Background

The Dispute Before the Supreme Court

Reasoning and Analysis of the Court

Final Decision of the Court

Points of Law Settled in the Case

Thursday, June 11, 2026

Kanpur Flowercycling Private Limited Vs Sarathi International Inc.

Introduction

Factual and Procedural Background

Dispute Before the Court

Reasoning and Analysis of the Court

Final Decision of the Court

Point of Law Settled

SC-Bishwanath Prasad Radhey Shyam Vs. Hindustan Metal Industries

When Old Methods Don't Make New Patents: The Supreme Court's Landmark Ruling on Inventive Step in Bishwanath Prasad Radhey Shyam Vs. Hindustan Metal Industries

Introduction

Factual and Procedural Background

The Dispute

Reasoning and Analysis of the Court

Final Decision of the Court

Point of Law Settled in the Case

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