Continuing IP Infringement Creates Inherent Urgency Under Section 12A: Delay Alone Does Not Negate Exemption from Pre‑Institution Mediation

Case: Novenco Building and Industry A/S v. Xero Energy Engineering Solutions Pvt. Ltd. & Anr.

Citation: 2025 INSC 1256

Court: Supreme Court of India (Civil Appellate Jurisdiction)

Date: 27 October 2025

Bench: Sanjay Kumar, J. and Alok Aradhe, J. (Judgment by Alok Aradhe, J.)

Introduction

This judgment addresses a recurrent and commercially sensitive question under Section 12A of the Commercial Courts Act, 2015: when does a suit “contemplate any urgent interim relief” so as to be exempt from the mandatory requirement of pre‑institution mediation (PIM)? The Supreme Court considers this question in the context of an action alleging continuing infringement of intellectual property (IP) rights—patents and designs—involving a former distributor of the plaintiff.

The appellant, Novenco Building and Industry A/S, a Danish manufacturer of industrial fans marketed as “Novenco ZerAx”, claimed that its former Indian distributor, Xero Energy Engineering Solutions Pvt. Ltd. (Respondent No. 1), had facilitated the incorporation and activities of Aeronaut Fans Industry Pvt. Ltd. (Respondent No. 2) to manufacture and sell identically configured fans under a deceptively similar name and appearance, thereby infringing Novenco’s patents and designs in India. After pre‑litigation communications and a technical inspection of allegedly infringing installations, Novenco filed a commercial suit for infringement and interim injunction in June 2024, together with an application seeking exemption from PIM under Section 12A on the ground of urgency.

The High Court of Himachal Pradesh (Single Judge and Division Bench) rejected the plaint under Order VII Rule 11 CPC for non‑compliance with Section 12A, reasoning that the delays between detection, inspection and filing negated urgency and that the statutory mediation requirement could not be bypassed merely by including an interim relief prayer. The Supreme Court’s decision reverses that approach and articulates a controlling standard for assessing urgency under Section 12A, especially in cases of continuing IP infringement.

Summary of the Judgment

The Supreme Court holds that in suits alleging continuing infringement of IP rights, urgency must be assessed in the context of ongoing injury and the public interest in preventing deception and consumer confusion. The persistence of harm, not the age of the first act, is determinative of urgency.
Mere delay in instituting the suit, by itself, does not negate urgency when the infringement is continuing. A time lag between discovery/inspection and filing cannot, without more, defeat the exemption under Section 12A.
The correct test is whether the plaint and documents, viewed holistically and from the plaintiff’s standpoint, plausibly disclose a need for urgent interim intervention—not whether the interim relief would ultimately be granted on merits.
Applying these principles, the Court sets aside the High Court’s orders, restores the plaint, and directs that the suit proceed on merits.

Detailed Analysis

Statutory Framework and Purpose

Section 12A mandates pre‑institution mediation for commercial suits “which do not contemplate any urgent interim relief.” It seeks to promote early, consensual resolution so that only “the most trying cases” reach the courts. The legislative design also recognizes, however, that certain disputes genuinely require immediate judicial protection; such suits are exempt from PIM to prevent irreparable harm wrought by delay.

Precedents Cited and Their Influence

Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd. (2022) 10 SCC 1
The Court reaffirmed that Section 12A is mandatory and non‑compliance ordinarily renders the plaint institutionally defective, inviting rejection under Order VII Rule 11 CPC. This forms the starting point for any Section 12A inquiry—the default rule is PIM unless the suit contemplates urgent interim relief.
Yamini Manohar v. T.K.D. Keerthi (2024) 5 SCC 815
The Court laid down the criteria for determining whether urgency is contemplated: examine the subject matter, cause of action, and the interim relief sought; read the plaint and documents holistically; assess from the plaintiff’s standpoint; and guard against a cosmetic or pro forma urgency pleaded to dodge mediation. The present judgment relies on and extends this plaintiff‑centric approach.
Dhanbad Fuels (P) Ltd. v. Union of India (2025) SCC OnLine SC 1129
The Court clarified that the Section 12A test is not about whether interim relief will be granted but whether, from the plaintiff’s standpoint and in light of the suit’s nature and cause of action, a plausible need for urgent interim relief is contemplated. This insight is central to the Court’s reasoning in Novenco: merits are not to be pre‑tried at the threshold.
Midas Hygiene Industries Pvt. Ltd. v. Sudhir Bhatia (2004) 3 SCC 90
Addressing IP infringement, the Court held that mere delay does not legalize infringement or bar injunctive relief against dishonest adoption. This principle directly informs Novenco’s holding that delay alone cannot negate urgency in a continuing IP infringement scenario.

The Court’s Legal Reasoning

The Supreme Court synthesizes the above precedents into a five‑part test for Section 12A determinations:

Pre‑institution mediation is mandatory and suits filed in breach are ordinarily institutionally defective.
Exemption arises only when the plaint and annexures clearly show a real need for urgent interim intervention; a wholesome reading should disclose the urgency.
Civil courts must assess urgency on the filings themselves, considering indicators like immediacy of peril, irreparable harm, risk of losing rights/assets, perishable or time‑sensitive subject matter, and whether delay would render eventual relief ineffective.
Courts must ignore pro forma/anticipatory prayers used as a tactic to evade mediation.
Courts are not to adjudicate the merits at this threshold; the inquiry is limited to whether the relief sought appears plausibly urgent from the plaintiff’s standpoint.

Applying these principles to IP disputes, the Court emphasizes that each act of manufacture, sale, or offer for sale of an infringing product is a fresh wrong—a recurring cause of action. In such cases, urgency is “inherent in the nature of the wrong” and lies “in the persistence of the peril,” not in the age of the first infringing act. Public interest—avoiding consumer confusion, market deception, and dilution of trust in trade—adds a further dimension of immediacy in IP cases.

The Court also cautions against a mechanical insistence on PIM where ongoing infringement creates continuing harm. Requiring mediation in such circumstances may render a plaintiff remediless by allowing the infringer to continue profiting during the mediation window, contrary to the statutory balance Section 12A seeks to strike.

Application to the Facts

The appellant’s plaint alleged ongoing infringement by a former distributor and its associated entity, supported by inspection reports and subsequent certifications. The reliefs included interim injunction to restrain manufacture/sale of the impugned fans. Although there were intervals—between cease‑and‑desist notices (December 2022), inspection (December 2023), expert affidavit (February 2024), and suit filing (June 2024)—the Court holds that these gaps do not defeat urgency in a continuing infringement context.

The High Court had evaluated urgency principally through the prism of delay and, in effect, on merits of entitlement—contrary to the limited, plaintiff‑standpoint, plausibility‑based test required by Yamini Manohar and Dhanbad Fuels. This misdirection warranted interference. The Supreme Court therefore set aside the rejection under Order VII Rule 11 CPC and restored the suit for adjudication on merits.

Impact and Forward-Looking Significance

This decision constitutes an important clarification of Section 12A in the IP space and, more broadly, for all “continuing wrong” commercial disputes:

IP Litigation: Plaintiffs alleging ongoing infringement of patents, designs, trademarks, or copyrights can legitimately invoke the Section 12A exemption where the plaint and documents demonstrate continuity of harm and risk of irreparable injury or consumer deception.
Public Interest as a Catalyst: By expressly recognizing consumer protection and market integrity as dimensions of urgency, the Court anchors IP injunctions within a broader public‑facing rationale, strengthening the case for swift judicial intervention.
No Mechanical Rejection for Delay: Trial courts must avoid treating time gaps as a proxy for absence of urgency. Delay is a factor, not a veto; the focus must remain on present and continuing harm.
Scoped Threshold Inquiry: Courts must confine themselves to the plausibility of urgency from the plaintiff’s standpoint; they must not prejudge the interim relief on merits at the Section 12A stage.
Mediation Ecosystem: The ruling prevents PIM from becoming a refuge for alleged infringers to run out the clock. It keeps mediation’s centrality intact in appropriate cases while preserving swift access to court where immediate protection is plausibly required.
Pleading Discipline: Plaintiffs must particularize facts evidencing ongoing harm, consumer confusion, loss of goodwill/market share, and the risk that delay will render subsequent relief ineffective. Boilerplate “urgent” prayers will not suffice.

Complex Concepts Simplified

Section 12A (Commercial Courts Act, 2015): Before filing a commercial suit, parties must attempt pre‑institution mediation unless the suit contemplates urgent interim relief. If mediation is undertaken, its time is excluded for limitation purposes.
Pre‑Institution Mediation (PIM): A statutorily encouraged process for resolving disputes without litigation, generally to be completed within three months (extendable by two months with consent).
Urgent Interim Relief: Temporary protection sought from the court to prevent immediate and irreparable harm before the final decision—e.g., injunctions restraining continued infringement.
Continuing Wrong: A legal wrong that recurs over time (e.g., each sale of an infringing product), giving rise to a fresh cause of action with each occurrence.
Order VII Rule 11 CPC (Rejection of plaint): A plaint may be rejected at the threshold for various defects (including statutory bars). Rejection is distinct from return of plaint (Order VII Rule 10), which addresses territorial or other jurisdictional defects for filing elsewhere.
“From the plaintiff’s standpoint” test: At the Section 12A gatekeeping stage, courts assess whether urgency is plausibly contemplated based on the plaintiff’s narrative and documents; the court does not adjudicate entitlement to relief on merits.
Public Interest in IP cases: IP law protects not just private proprietary interests but also consumers and market integrity by preventing deception and promoting trust in the origin and quality of goods.

Practical Takeaways for Litigants and Courts

Plead and document ongoing acts of infringement (dates, customers, installations, sales materials), and explain how each act compounds harm.
Articulate concrete risks: loss of exclusivity, erosion of goodwill and market share, customer confusion, and how delay would render final relief illusory.
Attach corroborative materials (expert inspections, cease‑and‑desist correspondence, product comparisons, certifications) to demonstrate plausibility.
Avoid pro forma urgency prayers. The court will scrutinize substance over form.
Court’s inquiry at the Section 12A threshold is narrow: determine if urgent interim relief is plausibly contemplated; do not adjudicate merits.
Delay alone should not defeat urgency in a continuing infringement setting; however, plaintiffs should still explain any time gaps to forestall adverse inferences.

Conclusion

Novenco v. Xero Energy is a consequential clarification of Section 12A’s “urgent interim relief” carve‑out. The Supreme Court firmly positions continuing IP infringement as a paradigm case where urgency can be inherent, especially given the public interest in preventing deception and maintaining market integrity. The Court corrects an overly formalistic High Court approach that elevated delay over the persistence of harm, and it reaffirms a plaintiff‑centric, plausibility‑based inquiry at the threshold.

The key takeaways are:

In continuing IP infringement suits, urgency arises from ongoing injury and public interest; delay in filing does not, by itself, negate urgency.
For Section 12A, the decisive question is whether the plaint and annexures plausibly disclose a need for urgent interim protection, assessed from the plaintiff’s standpoint.
Courts must guard against abuse by ignoring pro forma urgent prayers, yet avoid pre‑judging merits at this stage.

By restoring the suit and permitting adjudication on merits, the judgment recalibrates the balance between the salutary objectives of mediation and the necessity of timely judicial intervention where immediate protection of rights is plausibly warranted. It will serve as a guiding beacon for commercial courts nationwide in harmonizing Section 12A with the realities of fast‑moving IP markets.

Disposition

The Supreme Court set aside the High Court’s orders rejecting the plaint and restored Commercial Suit No. 13 of 2024 to the High Court’s file for adjudication on merits. The appeal was allowed.