Himachal Pradesh High Court Refuses Interim Relief In SML Patent Infringement Suit Over Territorial Jurisdiction

The Himachal Pradesh High Court has recently refused interim relief to agricultural inputs company SML Limited in its patent infringement suit against Happy Agro Chemicals and others over the agricultural micronutrient product "SELZIC". The court held that the company failed to establish a prima facie case on territorial jurisdiction.

Justice Sandeep Sharma held that the issue of territorial jurisdiction had to be decided before examining the allegations of patent infringement.

SML holds an Indian patent granted in 2017 for an agricultural composition marketed as "TECHNO Z". According to the company, the formulation contains sulphur, zinc oxide, and an agrochemically acceptable excipient, which improves plant physiology and crop yield. It alleged that "SELZIC", an agricultural micronutrient formulation marketed by the contesting parties, infringed its patent.

Besides seeking a permanent injunction, SML sought recovery of ₹1.02 crore, destruction of the allegedly infringing stock and an interim injunction restraining the manufacture and sale of the product.

The interim application came up for fresh consideration after a division bench set aside an ex parte injunction granted in January 2024 and permitted the contesting parties to file their response.

To invoke the High Court's territorial jurisdiction, SML relied on three invoices showing purchases of "SELZIC" from a retailer in Rohru. It also pointed to the defendants' website and Indiamart listings to argue that the product was available for sale in Himachal Pradesh.

The contesting parties argued that they had never authorised the retailer to sell "SELZIC" and that the purchases were arranged solely to create territorial jurisdiction.

Accepting that contention at the interim stage, the court observed: "Since defendant No.1 has neither specifically denied the factum of his having made the sale of the infringing product in the State of Himachal Pradesh nor made any claim that he has been falsely implicated in the present suit only with a view to invoke territorial jurisdiction of this Court, this Court is persuaded to conclude at this stage that invoices available at page Nos. 188 to 190 of the plaintiff's document have been adduced on record solely with a view to invoke jurisdiction of this Court..."

Relying on Indovax Private Limited v. Merck Animal Health and Banyan Tree Holding Private Limited v. A. Murali Krishna Reddy, the court held that the three alleged trap purchases relied upon by SML were insufficient to establish prima facie territorial jurisdiction.

It further held that the mere availability of a product through an interactive website or online listing, without evidence of an actual commercial transaction within the State, was insufficient to confer territorial jurisdiction.

Having found that SML failed to establish a prima facie case on territorial jurisdiction, the court declined to examine the patent infringement allegations at the interim stage.

"On the parameter of territorial jurisdiction the plaintiff has failed to make a prima-facie case for grant of interim injunction. Consequently, there appears to be no occasion to go into the other aspects of the matter with regard to alleged infringement of suit patent," the court ruled.

The court clarified that its observations were confined to deciding the interim application and would not affect the merits of the main suit.