The High Court of Himachal Pradesh has dismissed an application for an interim injunction filed by SML Limited, ruling that the company failed to establish the court’s territorial jurisdiction in its patent infringement lawsuit against an agrochemical manufacturer. Justice Sandeep Sharma, presiding over the case, clarified that the production of isolated invoices from alleged "trap purchases" does not inherently grant a court the authority to intervene in a patent dispute without evidence of authorized, commercial-scale distribution within the state.

The litigation centers on Indian Patent No. 282092, granted to SML Limited in March 2017 for an agricultural composition designed for crop protection and nutrition. The plaintiff, a research-driven organization with a significant annual turnover, argued that its product, "TECHNO Z," had been unfairly replicated by a rival manufacturer’s product marketed as "ZeekaSulfTM." SML Limited alleged that the defendant’s manufacturing, marketing, and sale of the product within the territorial limits of the High Court necessitated immediate judicial intervention to prevent further financial loss and irreparable harm to its patented technological innovations.

Examining the Jurisdictional Foundation

The jurisdictional challenge was primarily raised by the second defendant, the manufacturing firm, which contended that it maintains no operations, offices, or authorized distribution networks within Himachal Pradesh. The defendant argued that the plaintiff’s attempt to establish jurisdiction rested solely on four isolated purchase transactions from a local retailer, Mohan & Company, situated in Tehsil Theog. These transactions, characterized by the defendant as "trap purchases," were deemed insufficient to prove that the manufacturer was intentionally conducting business or targeting customers within the state.

Justice Sandeep Sharma noted the necessity of establishing a prima facie case regarding the court's authority before granting any form of interim relief. The court emphasized that while a plaintiff may make assertions in its plaint , the introduction of a defendant’s reply and written statement requires the court to scrutinize those claims. As the court observed, "Mere production of invoices, as detailed hereinabove, would not be sufficient to conclude territorial jurisdiction of this Court to entertain the instant application."

The court further highlighted that the plaintiff could not demonstrate that the manufacturer had supplied the specific "ZeekaSulfTM" product to the retailer in question. The retailer, identified as Defendant No. 1, had previously tendered an unconditional apology, effectively distancing itself from the alleged infringement. However, this action did not provide the necessary evidentiary link to support the claim that the manufacturing defendant had utilized this retailer to distribute its product within the jurisdiction.

Regulatory Compliance and Market Access

A significant portion of the court's deliberation focused on the regulatory framework governing the sale of fertilizers. Under the Fertiliser (Control) Order, 1985, individuals or entities intending to sell or offer fertilizers for sale must strictly adhere to procedural requirements, including submitting a Memorandum of Intimation and obtaining a Certificate of Source. The court found that the plaintiff failed to produce any documentation suggesting that the manufacturer had issued such a certificate to the local retailer or had established a lawful chain of supply for its product in the region.

Furthermore, the plaintiff attempted to rely on a "No Objection Certificate" issued by the Directorate of Agriculture in Gandhinagar as evidence of the defendant's intention to market its goods in Himachal Pradesh. The court, however, remained unconvinced, stating that such administrative authorizations do not serve as proof that actual commercial transactions took place within the state. The mere existence of a listing on a website, without evidence of specific transactions or deliveries to consumers within the state's borders, was deemed inadequate to fulfill the standard of "purposeful availment" required to satisfy territorial jurisdiction.

The court extensively referenced the principle that a defendant’s objection to jurisdiction—if raised as a point of maintainability—must be addressed before the merits of an interim injunction are considered. By applying the standard established by the Supreme Court, Justice Sandeep Sharma held that the plaintiff’s case for jurisdiction was fundamentally shaky, rendering the application for temporary relief unsustainable at this juncture.

"Since this Court for the reason and law taken into consideration hereinabove, is convinced that this Court has no territorial jurisdiction , 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 stated in its order.

By refusing to grant the injunction, the court avoided a definitive pronouncement on the patent infringement allegations, ensuring that the trial remains focused on the core legal issues. The decision emphasizes the importance of substantive commercial activity over performative legal maneuvers when establishing jurisdiction in complex patent litigation.

Following the dismissal of the interim application, the court has directed that the matter remain on the docket for further proceedings. The case is now scheduled for February 2027 to address the admission and denial of documents before the Registrar (Judicial). This step marks the transition toward the formal trial phase, where the parties will have the opportunity to present more robust evidence concerning the manufacturing and distribution channels of the products in question.