Interim Safeguards in IP Litigation: Balancing Jurisdiction and Financial Security
Introduction: The case of Communication Components Antenna Inc. versus Ace Technologies Corp. and Others represents a significant judicial pronouncement by the Delhi High Court in the realm of intellectual property law, specifically patent infringement in a cross-border context. This dispute centers on allegations that Ace Technologies, a South Korean company, infringed upon the plaintiff’s Indian Patent No. 240893, which pertains to innovative antenna technology designed to enhance spectral efficiency in cellular networks. The plaintiff, a Canadian entity, sought to protect its patent rights against defendants with limited presence in India, raising complex issues of jurisdiction, enforcement, and interim relief. The case underscores the challenges of safeguarding intellectual property rights when foreign entities with minimal Indian assets are involved and highlights the strategic use of the court’s inherent powers under Section 151 of the Code of Civil Procedure, 1908 (CPC) to ensure justice in such scenarios.
Factual Background: Communication Components Antenna Inc., a Canadian company specializing in cellular base station products, holds Indian Patent No. 240893, titled “Asymmetrical Beams for Spectrum Efficiency.” This patent covers a novel sector-antenna design that employs asymmetrical beam patterns to enhance subscriber capacity in cellular networks, overcoming limitations of traditional symmetrical sectorization. The plaintiff’s products, including antennas and tower-mounted amplifiers, are designed to optimize cellular base station performance. The primary defendant, Ace Technologies Corp., is a South Korean company manufacturing and selling antennas for the telecommunication industry. Additional defendants include a Hong Kong-based entity, Shin Ah Ltd., and two Indian subsidiaries of Ace Technologies. The plaintiff alleged that Ace Technologies’ antenna models, specifically XXDW-18-33i-IVT-DB8P and XXDH-20-33ie-VT-DB, infringed its patent by replicating the asymmetrical beam technology. The plaintiff claimed it became aware of the infringement in 2017 after comparing beam patterns of the defendants’ antennas with its own, prompted by a cellular operator’s analysis in India’s 4G/LTE network. The plaintiff further asserted that it had shared details of its patented technology with the defendants in prior communications, raising concerns about unauthorized use.
Procedural Background: The plaintiff initiated the suit, CS(COMM) 1222/2018, in the Delhi High Court, seeking a permanent injunction to restrain the defendants from infringing its patent, along with damages or rendition of accounts. An interim application, I.A. 1522/2018, was filed under Order XXXIX Rules 1 and 2 of the CPC for an ad interim injunction. On July 12, 2019, a Single Judge found prima facie infringement, directing the defendants to furnish a bank guarantee of Rs. 40 crores for pre-suit sales (approximately $64.4 million, equating to Rs. 437.96 crores) and deposit Rs. 14.5 crores for sales during the suit’s pendency, failing which an injunction would be enforced. The defendants appealed this order via FAO(OS)(COMM) 186/2019, seeking a stay through CM APPL. 35213/2019. On August 8, 2019, the Division Bench upheld the Single Judge’s order, emphasizing the need to protect the plaintiff’s interests given the defendants’ lack of assets in India. The defendants escalated the matter to the Supreme Court through SLP(C) 21938/2019, which, on September 20, 2019, declined to interfere, affirming the lower court’s reasoning. On April 10, 2023, the Division Bench disposed of the appeal, allowing the defendants to produce the allegedly infringing antenna for expert examination and modifying the deposit requirement to a bank guarantee for 10% of sale proceeds. Amid concerns over Ace Technologies’ financial stability, evidenced by a 64.90% drop in its share value, the plaintiff filed I.A. 36658/2024 under Section 151 of the CPC, seeking a further bank guarantee of Rs. 290 crores, representing 25% of the claimed damages of Rs. 1160 crores. The suit was at the evidence-recording stage before the Joint Registrar when the court pronounced its judgment on July 1, 2025. The defendants challenged this order in the Supreme Court via SLP(C) 20326/2025, listed for hearing on August 1, 2025.
Core Dispute: The central issues in this case revolved around the validity of the plaintiff’s patent, whether the defendants’ antennas infringed it, and the appropriateness of interim financial safeguards given the defendants’ foreign status and limited Indian assets.
The plaintiff argued that its patent was valid, emphasizing the novelty of asymmetrical beam patterns that enhance spectrum efficiency, and that the defendants’ products replicated this technology, as evidenced by beam pattern comparisons and third-party analyses. The plaintiff further contended that the defendants’ lack of assets in India, coupled with South Korea’s non-reciprocal status under Section 44A of the CPC, posed a risk of unenforceable decrees, necessitating a substantial bank guarantee.
The defendants countered that the patent was invalid due to prior art and statements made during prosecution of corresponding patents in the USA and EU, which allegedly limited the patent’s scope. They denied infringement, arguing that their antennas’ beam patterns were distinct and that the plaintiff’s evidence, including a comparative chart, was unreliable. They also contested the need for additional financial security, claiming compliance with prior deposits of Rs. 70 crores and asserting financial stability despite ceased Indian operations due to market factors. The court had to determine whether a prima facie case of infringement existed, if the balance of convenience favored interim relief, and whether Section 151 of the CPC could be invoked to protect the plaintiff’s rights in a cross-border context.
Discussion on Judgments: The parties relied on several judgments to bolster their arguments, with citations providing context for their relevance. The plaintiff referenced Communication Components Antenna Inc. v. Mobi Antenna Technologies (Shenzhen) Co. Ltd. & Ors., CS(COMM) 977/2016, CC(COMM) 38/2017 & I.As. 10524/2018, 16746/2021, where the Delhi High Court awarded Rs. 217 crores in damages for infringement of the same patent. The plaintiff used this to highlight the risk of non-recovery against foreign defendants, as the Chinese firm in that case was similarly situated with no enforceable Indian assets, underscoring the need for a substantial bank guarantee. The defendants cited this case to argue it was set aside and thus inapplicable, as noted in Ace Technologies Corp. & Ors. v. Communication Components Antenna Inc., 2023:DHC:2479-DB, where the Division Bench clarified its limited precedential value. The plaintiff also invoked Article 217 of the Korean Civil Procedure Act to argue that South Korea’s lack of a reciprocal enforcement treaty under Section 44A of the CPC justified interim measures, as decrees would be unenforceable abroad. The defendants countered with the same article, asserting it allows enforcement of foreign judgments, negating the need for coercive relief. The defendants relied on Catnic Components Ltd. v. Hill & Smith, [1982] RPC 193, cited in the context of claim interpretation, to argue that the plaintiff’s patent claims should be construed purposively, not literally, and that amendments in the US patent (US 8311582) did not affect the Indian patent’s scope. The plaintiff used Nokia Technologies v. [unspecified defendant], CS(COMM) 303/2021, I.A. 7700/2021, to distinguish their case, arguing that unlike Nokia, they provided technical proof of infringement through expert reports and third-party evidence. The court’s reliance on these precedents, particularly the Mobi Antenna case for financial risk and Catnic for claim interpretation, shaped its approach to balancing patent protection with jurisdictional challenges.
Reasoning and Analysis of the Judge: Justice Saurabh Banerjee’s reasoning was anchored in a pragmatic application of legal principles to address the complexities of cross-border patent enforcement. He first assessed the patent’s validity, finding that the novelty in asymmetrical beam patterns constituted a patentable improvement over prior art, dismissing the defendants’ challenge based on US and EU prosecution statements as insufficient at the interim stage. On infringement, the court accepted the plaintiff’s expert report and third-party evidence as prima facie proof, drawing an adverse inference from the defendants’ withholding of beam pattern data, critical to assessing infringement. The judge emphasized the holistic comparison required under R.G. Anand v. M/s. Delux Films & Ors., (1978) 4 SCC 118, adapted to patent law, to confirm substantial similarity in the defendants’ products.
Addressing the jurisdictional challenge, the court noted the defendants’ negligible Indian assets and Ace Technologies’ 65% share value drop, corroborated by an affidavit dated November 12, 2024, indicating exited Indian operations. This heightened the risk of non-recovery, especially given South Korea’s non-reciprocal status under Section 44A of the CPC, despite Article 217’s provisions. The judge invoked Section 151 of the CPC, finding it a necessary tool to prevent the suit’s objective from being rendered futile, as ordinary remedies like Order 38 Rule 5 were inapplicable due to the lack of attachable Indian property. He balanced the plaintiff’s prima facie case, the defendants’ financial instability, and the potential irreparable harm, concluding that a bank guarantee of Rs. 290 crores (25% of the claimed Rs. 1160 crores) was fair, building on the prior Rs. 70 crores deposit. The decision promoted a progressive patent regime while ensuring effective relief.
Final Decision: The Delhi High Court allowed the plaintiff’s application (I.A. 36658/2024), directing Ace Technologies Corp. to deposit Rs. 290 crores, either as a bank guarantee or fixed deposit, within four weeks, in addition to the existing Rs. 70 crores, to secure the plaintiff’s interests pending the suit’s outcome. The court declined to issue an immediate injunction, allowing the defendants to continue sales subject to compliance, reinforcing the interim nature of the relief.
Law Settled in This Case: This judgment solidifies the judiciary’s authority to invoke Section 151 of the CPC in cross-border IP disputes to impose interim financial safeguards when foreign defendants lack enforceable Indian assets, particularly in jurisdictions without reciprocal enforcement treaties. It reaffirms that a prima facie case of patent infringement, coupled with a defendant’s financial instability and jurisdictional challenges, justifies substantial security deposits to prevent decrees from becoming unenforceable. The case clarifies that patent validity assessments at the interim stage focus on novelty and inventive step, dismissing speculative challenges based on foreign prosecution histories unless substantiated. It also underscores the importance of adverse inferences when defendants withhold critical evidence, such as technical data, in infringement disputes. The decision promotes a robust patent enforcement framework, incentivizing innovation by ensuring effective remedies against foreign infringers.
Case Title: Communication Components Antenna Inc. Vs. Ace Technologies Corp. and Ors.
Date of Order: 1st July, 2025
Case Number: CS(COMM) 1222/2018
Neutral Citation: 2025:DHC:5107
Name of Court: High Court of Delhi at New Delhi
Name of Hon'ble Judge: Saurabh Banerjee J.
Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
