Delhi HC IP Division Rules: An Opportunity to Strengthen Procedural Framework

We’re pleased to bring to you a guest post by Eva Bishwal. Eva is a Senior Associate at Fidus Law Chambers, a boutique IP law firm in Noida.

IP Division Rules: An Opportunity to Strengthen Procedural Framework

Eva Bishwal

The abolition of the IPAB and the creation of the IP Division (‘IPD’) in the Delhi High Court have been extensively discussed here and  here. In this post, I will discuss the foreseeable problems of the new order and the scope of building a robust procedural framework in the form of the IPD Rules.

IPD matters will be heard by nominated judges from the Commercial Division of the Delhi High Court, who have already been hearing IP matters as part of the broader category of commercial matters. Therefore, the structural shift is not expected to be significant. However, the nomenclature, procedural treatment and management of IP matters is expected to change markedly.

While IP matters (particularly writ petitions) are gradually being renumbered and transferred to the IPD, there is insufficient guidance (in the form of notifications or practice directions) on the management of such matters currently. Establishing and managing the IPD will come with several challenges. The two chief challenges anticipated are increase in backlog and handling technical matters:

Increase in backlog

The transferred cases from IPAB when added to the existing backlog of IP cases in the Delhi High Court is bound to increase the caseload significantly. As per the press release announcing the constitution of the IPD, approximately 3000 cases were pending with the IPAB which are now to be transferred to the High Courts. As per the latest statistics of the commercial cases in Delhi High Court, there are about 2500 odd commercial civil suits pending in total. If we add the writ petitions to this, the number of cases before the Commercial Division of the Delhi High Court is expected to double. Further, COVID-19 has resulted in large scale de-prioritization of cases and the IPAB was abolished without any guidance on management of cases, service of papers, filing of pleadings, statutory deadlines etc. The IPD Rules must encapsulate these concerns and provide progressive procedures to address them. It is critical that they set shorter and stricter timelines for filings and oral arguments. Contrary to general civil cases, summary proceedings should be the rule and recording of oral evidence (which significantly adds to the length of a case) should be the exception. The IPD Rules should also provide for penalties for bad faith conduct of parties such as filing frivolous applications and pleadings which unnecessarily draw out the proceedings.

Procedure for technical matters

Handling technical matters (patents, geographical indications and plant varieties) will be a special challenge to deal with as it is critical that judges have a comprehensive understanding of not only the legal framework, but also the technical subject, market forces, and the manner in which inventors and investors rely on IP rights. The popular recommendation in this regard across jurisdictions is that either judges with expertise in the technical subject should hear the matters, or technical experts should be appointed to proffer guidance to the judges. Given the roster system of the Delhi High Court, the former is not viable. Therefore, the IPD Rules should provide for comprehensive mechanism on how to onboard technical experts. There are several options that can be adopted. First, the technical members can hear the matters along with the judges (similar to the IPAB). Second, offshoot hearings can take place and a report can be submitted for the judge’s perusal (similar to the process of mediation, which can be institutionalised or non-institutionalised). Additionally, and/or alternatively, the parties can nominate experts to represent them and bear their fees, where the experts can file their affidavits. In this case, the IPD Rules must build upon the provision of hot-tubbing as provided in the Chapter XI Rule 6 of Delhi High Court Rules, 2018 and prescribe timelines, scope of evidence that can be adduced, rules for cross examination of experts etc. While hot-tubbing is an efficient method of ironing out factual disputes in a technical matter, it can become as lengthy as a trial and judges may not have the bandwidth to conduct the same for every matter. Therefore, it cannot be the only mechanism for dealing with technical matters and should only be adopted for select matters in a time efficient manner. Above all, regular training for judges on the technical subject matters is crucial.

The IPD Rules also provide a chance to codify procedure for IP specific formats such as, dynamic injunction suits, John Doe suits, procedure for impleading intermediaries, alternate confidentiality clubs (as proposed in the Interdigital-Xiaomi dispute), treatment of repeat offenders and Local Commissioner proceedings. This is also an opportunity to concretise the damages jurisprudence in IP matters and provide guidance on their computation and allocation. The IPD Rules make way for notable developments in the procedural framework for IP matters. The committee drafting the rules must keep in mind the same and consult with stakeholders to be able to have a holistic view of the issues and obscurities in India’s IP regime.

The Rajya Sabha in its report on the Review of IPR regime in India has expressed apprehension of increase in pendency of cases before the Commercial Courts and High Courts and has recommended that the IPAB be restructure and reinstated. However, for reasons discussed by several academicians and members of the bar and the bench, building a robust IP division within the existing commercial courts is the more cost and time effective option in the long run. Therefore, it is important that the Delhi High Court consider the potential hurdles for IPD and address them through the IPD Rules, to be able to build a forum which sets an example.