INTRODUCTION

The 2025 Supreme Court decision in Novenco Building & Industry A/S v. Xero Energy Engineering Solutions Pvt. Ltd. & Anr. has become a landmark ruling in the field of intellectual property (IP) litigation. The case dealt with a question that has long troubled IP owners and commercial courts alike whether suits involving patent, design, or trademark infringement must go through mandatory pre-institution mediation under Section 12-A of the Commercial Courts Act, 2015, or whether such cases can directly approach the court for urgent injunctions.

BACKGROUND OF THE DISPUTE

The plaintiff, Novenco Building & Industry A/S, is a Danish company renowned for manufacturing advanced ventilation and energy efficient industrial fans. It held multiple forms of IP protection in India including patents covering the technology behind its energy-saving fans, registered industrial designs protecting the external shape and configuration of the fans, and trademarks over the name “NOVENCO” and its logo.

The defendants, Xero Energy Engineering Solutions Pvt. Ltd. (also operating under the brand name Aeronaut Fans), were alleged to have manufactured, marketed, and sold fans that were deceptively similar in both design and technology to those of Novenco. They were also accused of using a mark and packaging closely resembling Novenco’s trademark, potentially misleading customers into believing the products originated from the same source.

Novenco first discovered the alleged infringement in July 2022 and sent cease-and-desist notices to Xero Energy in December 2022. However, the infringement allegedly continued. After observing the market for almost two years and noting continued sales of the infringing fans, Novenco decided to file a commercial IP suit in 04th June 2024 before the Himachal Pradesh High Court. The company sought permanent and interim injunctions to restrain further infringement of its patents, designs, and trademarks, along with damages. Importantly, it chose not to initiate pre-institution mediation under Section 12-A, arguing that the case involved urgent interim relief and hence fell within the statutory exception.

WHAT SECTION 12-A REQUIRES

Section 12-A of the Commercial Courts Act was introduced to encourage early dispute resolution through mediation. Section 12-A states that “A suit which does not contemplate any urgent interim relief shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation.” It mandates that before filing a commercial suit, a plaintiff must first attempt pre-institution mediation, unless the suit “contemplates any urgent interim relief.” The intent is to reduce the burden on courts and promote amicable settlements. Failure to comply with this procedure can lead to outright rejection of the plaint.

The controversy in this case arose from whether IP disputes particularly those involving ongoing infringement automatically satisfy the “urgent relief” exception, or whether rights-holders must still undergo mediation before approaching the court.

BEFORE THE HIGH COURT

The Himachal Pradesh High Court dismissed Novenco’s plaint, holding that the company could not bypass Section 12-A. The Court reasoned that Novenco had known about the alleged infringement since 2022 but filed the suit only in mid-2024, indicating a lack of genuine urgency. It observed that the “urgent relief” exception should be narrowly interpreted and that the plaintiff had sufficient time to attempt mediation. As a result, the High Court rejected the plaint for non-compliance with Section 12-A, holding that the delay in filing defeated the claim of urgency.

THE APPEAL TO THE SUPREME COURT

Aggrieved by the rejection, Novenco appealed to the Supreme Court of India. The company argued that the High Court had taken an overly rigid view of Section 12-A. Novenco submitted that each act of infringement by the defendant whether in manufacturing, marketing, or selling the impugned fans amounted to a fresh cause of action and therefore made the harm continuous. Because the infringing activities were ongoing, the need for urgent interim relief was inherent in the situation. Novenco also contended that IP disputes involve not only private commercial rights but also public interest, since ongoing infringement can deceive consumers and damage market integrity.

In response, Xero Energy maintained that the delay in filing the suit showed that there was no immediate urgency. It argued that Section 12-A was mandatory, and allowing exceptions too easily would undermine the purpose of the provision. The defendant insisted that mediation could have provided an efficient, out-of-court resolution.

THE SUPREME COURT’S JUDGMENT (OCTOBER 27, 2025)

The Supreme Court allowed Novenco’s appeal and set aside the High Court’s order. In a detailed judgment, the Court held that continuing IP infringement itself constitutes a fresh cause of action every day it occurs, and that the need to restrain such activity is inherently urgent. Consequently, when a plaintiff seeks urgent interim relief to stop ongoing infringement, the mediation requirement under Section 12-A does not apply.

The Court further clarified that a delay in filing the suit does not automatically eliminate urgency. What matters is whether the infringement and harm are continuing at the time of filing. The Supreme Court also emphasized that IP rights are not purely private rights they carry a public interest dimension, as continued sale of infringing products can mislead consumers and distort market competition.

The Court concluded that Section 12-A is procedural in nature and should not be used to block access to justice when a plaintiff faces ongoing, irreparable harm. Thus, the Supreme Court restored Novenco’s suit and directed the High Court to hear it on merits.

COVERAGE ACROSS ALL IP RIGHTS

Importantly, the Supreme Court’s reasoning was not limited to patent infringement. It extended across all forms of intellectual property. For patents, every act of unauthorized manufacture or sale constitutes a new infringement. For designs, each production or marketing of a copied product is a continuing wrong. For trademarks, every instance of passing-off or deceptive use misleads the public. Hence, ongoing infringement of any of these rights inherently creates urgency, allowing the plaintiff to bypass mediation under Section 12-A.

THE GUIDING TEST LAID DOWN

The judgment effectively established a three-part test for determining when an IP rights-holder may skip pre-institution mediation:

1. There must be a continuing or imminent act of infringement amounting to a fresh cause of action.
2. The plaintiff must genuinely seek urgent interim relief, such as an injunction, to prevent further harm.
3. The plaint and accompanying materials must clearly demonstrate ongoing harm and urgency, showing that mediation would defeat the purpose of seeking immediate relief.

If these elements are satisfied, Section 12-A does not bar the institution of the suit.

IMPACT AND SIGNIFICANCE

The Novenco v. Xero decision has far-reaching consequences for IP enforcement in India. For rights-holders, it ensures quicker access to judicial protection when infringement is ongoing, reaffirming that IP harm is continuous in nature. It also prevents procedural hurdles from delaying effective remedies. For defendants, the ruling means they can no longer rely on Section 12-A as a technical shield to postpone injunction proceedings. For the legal system as a whole, the judgment strikes a careful balance preserving the value of mediation for ordinary commercial disputes while ensuring that urgent IP violations are not left unaddressed.

CONCLUSION

The Supreme Court’s ruling in Novenco Building & Industry A/S v. Xero Energy Engineering Solutions Pvt. Ltd. provides crucial clarity on how Section 12-A should operate in the realm of intellectual property. The Court made it clear that IP cases do not enjoy an automatic “free pass” to skip mediation, but where infringement is ongoing, continuing, or causes irreparable harm, the courts will recognize inherent urgency and allow the plaintiff to directly seek relief.

By recognizing that IP rights protect not only owners but also the public from confusion and deception, the judgment reinforces the importance of timely and effective IP enforcement. Novenco v. Xero now stands as a leading authority confirming that when the harm is live and immediate, justice cannot wait for mediation.