Urgency in IP Suits: No more Pre-Institution Mediation Hurdles in India?

Summary: The Supreme Court in Novenco v. Xero (2025) held that continuing IP infringement constitutes inherent urgency, effectively rewriting the mandatory pre-litigation requirements under Section 12A of the Commercial Courts Act.

In a jurisdiction beset by large volumes of litigation, litigating parties must naturally be encouraged to explore alternate means of dispute resolution.

For commercial matters, this is even codified in Section 12A of the Commercial Courts Act, 2015 (the ‘Act’), dealing with Pre-Institution Mediation and Settlement. The provision states, among other things, that a suit which does not contemplate any urgent interim relief under the Act shall not be instituted unless the remedy of pre-institution mediation is exhausted. In practice, if a plaintiff fails to show urgency, the court may refer the matter to mediation on the first day of hearing.

This provision was tested by the Supreme Court in Novenco Building and Industry A/S v. Xero Energy Engineering Solutions Private Ltd. & Anr. (2025 SCC OnLine SC 2278), specifically examining it in the context of intellectual property (IP) disputes. The case arose out of an appeal against orders passed by Single Judge and Division Benches of the Himachal Pradesh High Court, which rejected Novenco’s (the Appellant) plea on the ground that it did not contemplate “urgency” under Section 12A.

Case history

The Appellant, Novenco, is a Danish company manufacturing industrial fans under the brand ‘Novenco ZerAx’ and has secured several patents and design registrations globally. It entered into a dealership agreement with Respondent No. 1, Xero Energy, for the marketing and sale of Novenco ZerAx fans. A timeline of events is useful to understand the case better:

• July 2022: Novenco discovers that contrary to its agreement, Xero Energy had incorporated another firm, Aeronaut Fans (Respondent No.2), for the manufacture and sale of identical fans under a deceptively similar name and appearance.
• August and October 2022: Novenco issues multiple communications to Xero Energy; no response.
• October 2022: Novenco terminates dealership with Xero Energy
• December 2022: Novenco sends cease-and-desist notice to Aeronaut Fans
• Through 2023: Replies from Aeronaut Fans; intermediary proceedings before the Madras High Court
• December 2023: Novenco’s technical expert inspects Aeronaut Fans
• February 2024: Novenco’s technical expert submits affidavit confirming infringement
• June 2024: Novenco files infringement suit, along with application for exemption from the Section 12A requirement.

The Single Judge before whom the suit first came up rejected Novenco’s plaint, holding that urgency was not made out, for various reasons:

1. There was a delay of six months between the inspection of Aeronaut Fans and the filing of the suit;
2. The legal notice was issued in December 2022, which gave Novenco adequate time to consider mediation; and
3. Pre-institution under Section 12A is mandatory unless an urgent interim relief is sought bonafide.

Novenco appealed this decision, but the Division Bench similarly dismissed the matter holding that no ‘urgency’ was contemplated.

The Supreme Court decision

The matter was appealed further and reached the Supreme Court, which had a specific question to address: can a suit alleging continuing infringement of patent and design rights, accompanied by a prayer for interim injunction, be said to contemplate urgent relief within the meaning of Section 12A, notwithstanding certain delay in its institution?

The Court relied on previous decisions on the issue, i.e., Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd. ((2022) 10 SCC 1), Yamini Manohar v. T.K.D. Keerthi ((2024) 5 SCC 815), and Dhanbad Fuels (P) Ltd. v. Union of India (2025 SCC OnLine SC 1129), to arrive at a five-part analysis on the applicability of Section 12A in plaints seeking interim relief, as follows:

1. Section 12A mandates pre-institution mediation for commercial suits, and non-compliance would ordinarily render the plaint defective.
2. A plaintiff can be exempted from Section 12A only when a ‘wholesome reading’ of the plaint and attached documents clearly show a real need for urgent interim relief.
3. Besides the plaint and supporting documents, the court may also look for the “immediacy of the peril, irreparable harm, risk of losing rights/assets, statutory timelines, perishable subject-matter, or where delay would render eventual relief ineffective”.
4. A proforma or anticipatory prayer for urgent relief used as a device to skip mediation will be ignored and the court can require the parties to comply with Section 12A.
5. The court is not concerned with the merits of the urgent relief, but if the relief is plausibly urgent from the plaintiff’s standpoint, the Section 12A requirement may be dispensed with.

The Court noted that in IP disputes, in particular, ‘urgency’ must be assessed in the context of (a) the ongoing injury, and (b) public interest in preventing deception. The Court also noted that mere delay in the institution of a suit, by itself, does not negate urgency when the infringement is continuing.

In the present case, the Court held that, from the Appellant’s standpoint, each day of continuing infringement aggravated injury to its market standing. Additionally, as this was an IP dispute, it became a matter no longer “confined to the private realm:, and “public interest … becomes the moral axis upon which the urgency turns”.

Implications

A key take-away from Novenco is the distinguishing treatment given to IP disputes, where the Court appears to recognise the special features of such disputes (public vs private interest), and how  ‘urgency’ must be treated differently, as a result. Clearly, the Court is aware that the prevention of confusion in the market, and the protection of consumers, grant greater immediacy to reliefs sought. The Court’s observation that a time lag in instituting a suit does not automatically negate ‘urgency’ is also relevant, particularly in cases where continuous infringement is alleged or demonstrated.

With this precedent, it may be expected that, subject to proper documentation, parties to IP disputes may be able to justify seeking a waiver of the mandatory pre-litigation mediation requirement under Section 12A of the Act.

Nevertheless, even as the Supreme Court has given a green signal for parties to IP disputes to sidestep pre-litigation mediation altogether, this opportunity should be employed strategically. It is in the parties’ own interests to thoroughly evaluate the cost, timelines and overall viability of alternate methods for resolving disputes, given how burdened Indian courts are, and how long formal court-based routes are likely to take.