Division Bench of Delhi High Court settles the law on interpretation of IPR (Imported Goods) Enforcement Rules, 2007

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In an interesting co-incidence, the Delhi High Court delivered two judgments on an identical point of law on the same day – 13th July, 2012. The first judgment by Justice Manmohan Singh was covered by us over here and here. (The first ex-parte order is available over here) That judgment which in my opinion was highly erroneous, had interpreted the IPR (Imported Goods) Enforcement Rules, 2007 in a manner which concluded that the Customs Department could apply the rules to only goods suspected of trademark and copyright infringement and not patent infringement. The flimsy ground for such an interpretation was a circular issued by the CBEC cautioning, but not prohibiting, its officers from deciding whether an import consignment infringes a particular patent since patents were a complex area of law. 

The initial order by Justice Singh, dated 30th November, 2011 was used as a precedent by Justice Vipin Sanghi in a similar case filed by Kingtech Electronics Pvt. Ltd. to challenge an order of the Customs Commissioner under the Rules which suspended an import consignment on the basis of a complaint made by Ericsson. That order can be accessed over here. Justice Sanghi’s order was appealed to a Division Bench of the Delhi High Court which delivered its judgment on the 13th of July, 2012; the same day as Justice Manmohan Singh in the L.G. case. The judgment can be accessed over here. 

This second judgment by Justice Arjun Sikri & Justice Endlaw is short, simple and it very rightly over-rules the orders of both Justice Manmohan Singh (implied over-ruling) and Justice Vipin Sanghi. The judgment categorically states that patent infringement cases cannot be excluded from the ambit of the rules. In pertinent part, the court states “Per se, the patent cases cannot be excluded from the ambit of IPR Rules or particularly Rule 7.” (para 24). The court further states “The said Notification cannot be read in the manner which totally annihilates or supplant a particular provision of the Rules” (para 26)…… “We thus do not agree with the view of the learned Single Judge that in the absence of judicial order, the Dy. Commissioner of Customs had no jurisdiction to deal with the matter”. (para 26) 

The judgment however also gives the Customs Department the right to not adjudicate any complex patent case and instead refer the matter to a civil court if the facts do not lead themselves to a prima facie analysis. 

With this judgment, the Director of CBEC, against whom Justice Manmohan Singh passed strictures, stands vindicated. He rightly analysed Justice Singh’s order as being erroneous in law and was right in asking the department to appeal the order. We had covered this analysis over here. 

This case is a classic example of why judges must be restrained in the kind of language they use in their judgments. Hopefully, with this latest judgment, we can stop running in circles over patently absurd arguments.