Intellectual property lawsuits are often about obtaining interim relief in the form of injunctions against parties, sometimes without the court giving them an opportunity to be heard. Usually, the court considers factors of whether a prima facie case has been established, if balance of convenience lies in favour of the complaining party, and whether irreparable loss is likely to be caused if such relief is not granted. In its decision in a copyright infringement suit, in Kinjal Lalitbhai Dave vs. Red Ribbon Entertainment Private Limited (R/Appeal From Order No. 18 Of 2019 With Civil Application No. 1 Of 2019, Order dated 24 January 2019), the Gujarat High Court held that when granting an interim injunction in the absence of the defending party, the court must record reasons as to why delay in granting the injunction would affect the case.
The case originated in a music video uploaded online in September 2016, which was covered by another group also in a music video and uploaded three months later. The rights owner in the original video, after failed discussions with the accused party, filed a suit in the Commercial Court seeking interim relief. The suit was verified and filed in November 2018, and the interim injunction application was filed on 1 January 2019. The Commercial Court granted relief the same day.
The defendants in the original suit appealed the decision before a Division Bench of the High Court, arguing that the requirements of rule 3 of Order XXXIX of the Code of Civil Procedure, 1908, were not followed. According to this provision, if a court intends to grant an injunction without giving notice of the application to the opposite party, the court is required to record the reasons for its opinion that the object of granting the injunction would be defeated by delay.
The appellate court agreed that there was no discussion whatsoever as to how the object of granting the injunction would be defeated by delay. It noted that the Commercial Court had not discussed relevant facts such as when the cause of action had first arisen, the stage at which the suit was instituted, and when it had been moved for hearing. Instead, it granted an interim injunction on the basis of two findings – relating to the existence of a prima facie case and the balance of convenience. It did not, critically, consider the issue of irreparable injury. Neither did it record as to how the object of granting the injunction would be defeated by delay.
The appellate court made reference to the principles laid down in Morgan Stanley Mutual Fund v. Kartick Das, (1994) 4 SCC 225, where it was held that when granting an ex parte interim injunction, the following factors had to be considered:
(i) The court should consider the time at which the plaintiff first had notice of the act complained so that the making of improper order against a party in his absence is prevented;
(ii) The court would expect the party applying for ex parte injunction to show utmost good faith in making the application; and,
(iii) general principles like prima facie case, balance of convenience and irreparable loss should also be considered by the court.
Applying these principles to the present case, the appellate court found that the plaintiff had knowledge of the infringing act several months before the suit was actually filed. Besides the delay in instituting the suit despite having knowledge of the alleged infringement, even after the suit was filed, the application for interim injunction was not moved for over a month. The court concluded that the actions of the plaintiff itself suggested that there was no urgency in the matter that warranted the grant of an ex parte injunction. Additionally, the order of the Commercial Court shows that there were no finding as regards the irreparable loss.
Accordingly, the interim injunction was quashed, set aside, and the matter was returned to the original court to decide the interim injunction application independently on the merits of the case.