The High Court of Himachal Pradesh has dismissed an application for an interim injunction in a patent infringement suit brought by SML Limited, ruling that the Court lacks the necessary territorial jurisdiction to adjudicate the dispute. In a detailed order, Justice Sandeep Sharma concluded that the plaintiff failed to establish a prima facie case against the manufacturers, finding that the reliance on isolated "trap" purchases from a local retailer was insufficient to confer legal authority over the defendants within the state.

The litigation centers on Indian Patent No. 282092, granted to SML Limited in March 2017 for an advanced agricultural composition designed to improve crop yields and plant physiology. The plaintiff, a significant entity in the agrochemical sector, alleged that the defendants were infringing upon their intellectual property by manufacturing, marketing, and selling a product branded as "ZeekaSulf™." While the Court had previously granted an ex-parte ad-interim injunction in July 2023, the recent hearing focused on the maintainability of the suit based on the territorial nexus between the alleged infringement and the state of Himachal Pradesh.

The plaintiff attempted to justify the Court's jurisdiction by presenting four specific purchase invoices from a retailer, identified as Defendant No. 1, located in Tehsil Theog. They argued that these sales demonstrated a commercial presence sufficient to trigger the jurisdiction of the High Court. However, the Court scrutinized the evidentiary value of these transactions, noting a lack of evidence linking the manufacturer, Defendant No. 2, to these specific retail sales. Justice Sandeep Sharma observed: "Mere production thereof would not, by itself, be sufficient to confer territorial jurisdiction upon this Court until it is established that the impugned products were supplied by Defendant No. 2 to Defendant No. 1 for sale in the territory of Himachal Pradesh."

Scrutiny of Regulatory Compliance

Central to the dispute was the regulatory landscape governing the sale of fertilizers. The Court observed that products like those at the heart of this patent dispute are heavily regulated under the Fertilizer (Control) Order, 1985. Under this framework, retailers are required to obtain specific authorizations, including a "Certificate of Source" in Form O, which establishes a verified supply chain between the manufacturer and the dealer.

The defense argued, and the Court found, that no such authorized link existed between the manufacturer and the local shop in Theog. The Court highlighted the absence of material demonstrating that the defendants had supplied the allegedly infringing product to the retailer. Furthermore, the Court reiterated principles regarding online commerce and territorial reach , noting that mere accessibility of a website does not constitute active targeting of consumers within a specific jurisdiction without evidence of actual commercial transactions. As observed in related judicial precedents : "In the present case, even after filing additional documents, the plaintiff has failed to show that an order for any of the products of the defendants has been placed on their website or IndiaMart and that the same has been delivered in [the state]."

Jurisdictional Precedents and Litigation Risks

The Court’s decision was heavily influenced by the concern that allowing jurisdiction based on thin, isolated transactions could expose businesses to significant litigation risks across multiple, unrelated jurisdictions. Justice Sandeep Sharma emphasized the necessity of protecting parties from being dragged into legal proceedings based on "flimsy" or potentially orchestrated evidence. The Court referenced the broader context of litigation, noting: "The possibility of one being dragged into litigation, by adducing flimsy material, cannot be ruled out as it is easy for the present appellant to be dragged into litigation if the only material necessary to give jurisdiction to a court is a few invoices issued by an entity, who is not an authorised representative."

The ruling aligns with the standard established by the Supreme Court of India in the matter of Asma Lateef v. Shabbir , which mandates that courts must form a prima facie satisfaction regarding the maintainability of a suit—including the issue of territorial jurisdiction—before granting interim relief. Because the plaintiff could not demonstrate that the manufacturer had actively operated or sold the product within Himachal Pradesh, the Court found the jurisdictional link tenuous and ultimately invalid for the purposes of an interim injunction.

The Court refrained from commenting on the merits of the patent infringement itself, noting that such findings would be premature given the jurisdictional deficit. The application for an injunction was formally dismissed, leaving the core issues of the patent dispute to be addressed in subsequent stages of the legal process.

The matter is currently listed for further proceedings in January 2027, where the parties are expected to participate in the admission and denial of documents before the Registrar (Judicial). This step will serve as the foundation for the trial, though the threshold issue of where the case will eventually be decided remains a pivotal hurdle for the plaintiff. By rejecting the reliance on isolated, potentially manufactured transactions to establish jurisdiction, the High Court has reinforced the requirement for substantive proof of commercial activities within the geographical limits of the bench hearing a patent case.