Can a handful of carefully orchestrated “trap purchases” create territorial jurisdiction in a patent infringement suit? In this post, Maneesha explains that the Himachal Pradesh High Court’s decision in SML Ltd. v. M/s Happy Agro Chemicals rightly rejects attempts to manufacture jurisdiction through isolated purchases, while offering important guidance on forum shopping and online listings. Maneesha Gupta is a bright fifth-year B.A. LL.B. (Hons.) student at NMIMS School of Law, Bengaluru, and a participant in the SpicyIP Summer School 2026.
When Three Invoices Went to Shimla: A Case Analysis of SML Limited vs M/S Happy Agro Chemicals
By Maneesha Gupta
This story is set in Shimla, where a Company is fighting not one, not two, but three alleged infringers- a shop in Shimla itself, a manufacturer from Mumbai, and a wholesaler from Pune. Faced with a map full of jurisdictions, the company chose Himachal Pradesh. What made the company choose so? Three invoices from that mysterious Shop. Can three invoices carefully lay down a jurisdictional trap?
In SML Limited vs M/S Happy Agro Chemicals, the High Court of Himachal Pradesh, Shimla, rejected the Plaintiff’s application seeking grant of an interim injunction in a patent dispute because the Court lacked territorial jurisdiction. The Court ruled that mere isolated ‘trap purchases’ (the test purchases of the infringing product that the plaintiff would arrange by itself to prove infringement) cannot be used only to procure jurisdiction. And the plaintiff must show sales by the defendants at a commercial scale within the territorial jurisdiction of the Court, as held in Indovax Private Limited (2017) by the High Court of Delhi.
My approach towards navigating this multi-party battle of selecting a battlefield is powered by the unusual love for CPC that I bagged during Ms. Kruttika Vijay’s session in the SpicyIP Summer School 2026 on Civil Procedure Argumentation and Client Communication.
So, to start making some sense of the first part of the case analysis, let’s adore ‘dry’ CPC to unpack the judgment that came down heavily and elaborately on trap purchases from an unauthorized dealer, being the basis for creating jurisdiction.
Part 1: The CPC Angle
Section 20(b) of CPC is a relaxed version of Section 20(a). While Section 20(a) of CPC requires each of the defendants to carry on business or reside within that jurisdiction for the plaintiff to institute the suit, Section 20(b) says, “Hey plaintiff, look, I won’t be so hard on you, even if one of those defendants shows presence within the jurisdiction, go ahead and sue them! But but but, just take permission from the respective court, OR just see if the other defendants do not object to the suit being instituted in the forum of your choice.”
In the present matter, Plaintiff SML Limited had not taken leave of the Court before instituting the suit against the defendants, nor did these defendants acquiesce to the institution of the suit in Shimla. The plaintiff had to overcome this gap in procedure to establish that the High Court of Himachal Pradesh could entertain this suit.
SML is an Agrochemical and Agricultural Tech Company having a patent titled “Agricultural Composition,” valid until 2037 and launched in the market as “TECHNOZ.” SML alleged patent infringement by Defendants whose connection to one another became key to determining territorial jurisdiction.
Defendant 1 was an independent single retailer having a shop in Rohru Tehsil in Shimla, Himachal Pradesh. Defendant 2, Mitul Industries (manufacturer in Mumbai), and Defendant 3 ULink (wholesaler in Pune) were in an agreement to market and manufacture the allegedly infringing fertilizer under the brand name of “SELZIC.”
To establish jurisdiction, SML produced three invoices of isolated purchases of SELZIC from the Defendant Shop. Mitul Industries and ULink did not appreciate this establishment, stating:-
- Unmatched Place of Residence: Mitul Industries and ULink were not residing in the State of Himachal Pradesh.
- Authorised sale of SELZIC: SELZIC is a commodity regulated by the Fertilizer (Control) Order, 1985, that allows only its authorised marketing and sale. Mitul Industries had obtained permission to market the product in certain states, which did not include the State of Himachal. ULink was also authorized to sell SELZIC to its distributors and customers in five states, i.e., Gujarat, Maharashtra, Madhya Pradesh, Rajasthan, and Uttar Pradesh.
- No connection with the transactions with Defendant Shop: Mitul Industries and ULink did not sell SELZIC to the Defendant Shop or to any other dealer in the State of Himachal Pradesh.
Relying on Asma Lateef vs Shabbir Ahmad (2024), wherein the Supreme Court of India made it clear that the question of jurisdiction holds importance even at the stage a Court is considering the question of grant of interim relief- the High Court of Himachal Pradesh entertained the question of maintainability of the suit based on territorial jurisdiction, when challenged by Mitul Industries and ULink. And so these defendants got to argue on Section 20(b) before the High Court.
Part 2: Can Isolated Trap Purchases Clear This Test?
Now, for the second part of this case unpacking, let’s look at the discussion on trap purchases produced by SML to show cause of action, and vouching territorial jurisdiction.
SML sought to establish jurisdiction based on what we call ‘trap’ transactions. What are those? Let’s say you hear from a friend that someone is selling scanned copies of your notes from tedious college lectures, online. You want to do something about this, legally. So you ask your friend to engage with the note-seller to make a purchase, and preserve the snapshots of the transaction. This can work well like as evidence that you could produce before the court. You cannot just say- “My rights are lessened, my friend told me!” You need to prove the harm done. Trap Transactions or Purchases work in a similar fashion and are most popular in the trademark litigation world. An investigator hired to pose like an ordinary customer enquiring about the product at the shop may be engaged in selling counterfeit or infringing goods. She would then make a purchase and document the transaction. This would then be used to compare with the original product and determine counterfeiting or infringement. So, this means that trap transactions are important, or else all a plaintiff would have is hearsay.
Coming back to our case, the trap purchases made were not appreciated. But wait! I just said that trap transactions are important. So what went wrong with them in this lis? The Court agreed with SML’s argument that producing one trap order as evidence is sufficient in maintaining a suit; however, the intention behind such a purchase matters, and the plaintiff has to make sure that the defendant’s sales are at a commercial scale within the particular territorial jurisdiction. This was the test held in Indovax Private Limited (2017) by the High Court of Delhi, that a lone invoice indicating purchase of infringing goods will have to clear to win jurisdiction.
Madras High Court in Smithkline French Laboratories Limited v. Indoco Remedies Ltd. answered- What constitutes a commercial sale? To give jurisdiction to the court, a commercial sale would be one where the goods are sold only through a stockist, distributor, or dealer of the respondent. As we saw earlier, Mitul Industries and ULink did not authorize Defendant Shop to sell SELZIEC, and neither sold it to the Defendant Shop or any other dealer in the State of Himachal Pradesh.
Intention Matters!
In Banyan Tree Holding (P) Limited v. A. Murali Krishna Reddy (2010), the High Court of New Delhi held that trap orders or transactions may be used as evidence, but the fairness of such transactions is a relevant factor to consider. Here, the notion of ‘fairness’ is tied closely to the doctrine of Purposeful Availment. The Court explained that for the plaintiff to prove infringement, it would have to show that the defendant has purposefully availed the jurisdiction of the forum court by entering into a commercial transaction with an internet user located within the jurisdiction of the forum court. This is the doctrine of Purposeful Availment. So, mere isolated trap purchases cannot prove commercial transactions that could show that Defendant Shop purposefully availed the territorial jurisdiction of the High Court of Himachal Pradesh, Shimla.
Last month, the High Court of Himachal Pradesh, Shimla itself allowed an appeal by the defendant against an order, whereby an ex parte ad-interim injunction was granted because, as prima facie, it was convinced that there existed no cause of action to invoke the territorial jurisdiction of the Court. It held that the suit lacked evidence of authentic transactions indicative of infringing the suit patent within the territorial jurisdiction of the Court. (Safex Chemicals Private Limited vs Sml Limited And Another (2026))
So, that is how weather can worsen for the “usually legitimate” trap purchases when they are used to establish jurisdiction. Isolated trap purchases from an unauthorized dealer cannot serve as a basis for creating jurisdiction. SML would still have to show that the defendants have been indulging in the commercial sale of the product.
Part 3: Scolding Online Listing of Product
The third and last part of dissecting this judgment is interesting as we discuss how the ‘addresses’ of websites are addressed in a patent infringement suit.
SML: “Defendant Shop, I dare you to list your product on your own website!”
SML sought to establish jurisdiction based on the listing of the infringing product on the website of ULink. The Court held that mere listing of infringing products on ULink’s website may not be sufficient to invoke jurisdiction of this Court. This is so because a listing will not be helpful in deciding jurisdiction if nothing shows that there was any transaction or delivery in Himachal Pradesh by ULink. If only by listing products, jurisdiction could have been sought; it would be an easy way to forum-shop.
While we are looking at this aspect, one case comes to mind. In Kohinoor Seed Fields India Pvt. Ltd. vs. Veda Seed Sciences Pvt. Ltd (2026), the allegedly infringing goods of the respondent are available for ‘sale and purchase’, across e-commerce websites, at Delhi, and so the cause of action arose within the jurisdiction of the High Court of Delhi. However, this did not happen in the case at hand, as there was no trace of any feature on the ULink’s website that allowed sale and purchase in Himachal Pradesh.
SML: “IndiaMart, I dare you to list Defendant’s product on your website!”
Similar to the defendant’s website argument, listing of an infringing product on a platform like IndiaMart would itself not confer jurisdiction upon the Court. SML has to show that some commercial transaction was concluded over such an interactive website within the jurisdiction of the Court of Himachal Pradesh. “The mere accessibility of a website, including IndiaMart, within the territorial jurisdiction of this Court would not amount to specific targeting of customers/consumers in the territorial jurisdiction of that Court in the absence of any commercial transaction executed through the said website,” the High Court of Delhi held in Helsinn Healthcare SA Vs. AET Laboratories Private Limited and Ors.
Since technology is constantly evolving, I would quickly take you back to the Supreme Court’s ruling in Dhodha House v. S.K. Maingi (2006), where the Court held that mere advertisements in newspapers or Trademark Journal are not enough to determine whether the defendant was selling their product in the jurisdiction of Delhi on a commercial scale to maintain the suit on territorial jurisdiction.
And so, mere listing of the infringing product online as evidence does not make sense, as then the plaintiff would get to choose their preferred court of jurisdiction easily- all they have to do is ask someone to browse the internet and look up the listed products on the Defendant’s site. And so evidence of commercial transactions and delivery in the particular area of jurisdiction would be a sounder choice of evidence. Interestingly, in the present case, the website screenshots of the listing on ULink’s website, produced by SML before the court, showed U.P. and Maharashtra as the States selected for delivery, with no trace of Himachal Pradesh.
This was the interesting tale of the High Court of Himachal Pradesh, Shimla, wherein it came down heavily and elaborately on trap purchases from an unauthorized dealer, being the basis for creating jurisdiction. And after writing this post, I can really understand what Kruttika Vijay meant when she said that there is so much to IP Disputes before the question of ‘infringement’ even arrives!
Side Notes: One thing you would have noticed here is that most of the judgments I have cited here, except Dhodha House and Asma Lateef, are given by other High Courts that hold equal footing to the High Court of Himachal Pradesh. And so these judgements are not binding precedents, but hold persuasive value- providing guidance that a judge may adopt.
While researching, I came across a judgement around establishing territorial jurisdiction that had a precedent to rely on. The High Court of Delhi, by relying on precedent A.B.C. Laminart (P) Ltd. v. A.P. Agencies (1989) by the Supreme Court of India, in Kohinoor Seed Fields India Pvt. Ltd. vs. Veda Seed Sciences Pvt. Ltd (2026) ruled that a ‘marketing agreement’ being executed between appellant and respondent at Delhi will be seen as a part of the cause of action, and so the High Court would ipso facto have jurisdiction to adjudicate on the suit.
