Executive Summary: The Indian Patent Office has introduced a structured framework for the responsible use of artificial intelligence in patent examination. AI may support classification, prior-art searches, translation, technical analysis and drafting, but every output must be treated as preliminary and independently checked. Confidential or unpublished information must not be entered into public AI tools, and AI cannot replace the judgment of an Examiner or Controller. For businesses and patent applicants, the key message is that AI may make examination more efficient, while human oversight, confidentiality and accountability remain essential.

The Office of the Controller General of Patents, Designs and Trade Marks (CGPDTM) has issued Guidelines for the responsible use of artificial intelligence in patent examination. The framework seeks to improve efficiency and quality while preserving confidentiality, accountability, consistency and the independent application of mind required from the Examiner or Controller.

Why the Guidelines Matter?

Patent examination involves large volumes of technical and legal material and is often time-sensitive. AI can help examiners organise information, develop search strategies, identify relevant documents and prepare draft communications. The Guidelines are intended to capture these efficiency gains without compromising confidentiality, accuracy, consistency or accountability.

In practical terms, the Guidelines allow AI to support the process, while keeping substantive decisions firmly with the Examiner or Controller.

Where AI May Be Used?

Within this framework, AI may assist with the following patent examination activities:

1. Screening of documents;
2. Patent classification;
3. Prior-art searching;
4. Translation support;
5. Drafting support;
6. Technical comparison; and
7. Knowledge retrieval.

The Guidelines distinguish between public AI tools, which are generally available through consumer-facing platforms, and private AI tools, which operate in controlled environments with stronger safeguards for proprietary or sensitive information.

Key Risks to Manage

Because AI outputs can be influenced by previous interactions, prompt design and model-specific behaviour, different tools may produce materially different results for the same patent application or prior-art material. The Guidelines therefore identify the following key risks:

1. Hallucinations or fabrication of information;
2. Omission of critical claim details;
3. False pattern matching between claims and prior art;
4. Loss of technical context during summarisation or translation;
5. Search and classification drift;
6. Overly broad or narrow interpretations;
7. Lack of transparency in AI reasoning;
8. Confidentiality risks;
9. Misguidance through persuasive but incorrect reasoning;
10. Use of incomplete or outdated information;
11. Bias arising from training data; and
12. Difficulty in understanding specialised patent language and legal nuances.

The Guidelines caution that AI tools may generate non-existent citations, misrepresent judicial precedents, incorrectly map claim features to prior-art disclosures, or provide persuasive conclusions that are technically or legally unsound.

Human Oversight Remains Essential

AI may support the Examiner or Controller, but it cannot replace their judgment. All AI-generated output must be independently reviewed before use, and the human decision-maker remains fully responsible for every official action.

The Guidelines require that all AI-generated outputs be critically assessed for correctness, relevance and appropriateness before adoption in any official process.

Permitted Uses of AI

The Guidelines identify several areas where AI may be used as an assistive tool, subject to appropriate safeguards.

AI may assist in identifying candidate IPC or CPC classifications, generating search terms and concept clusters, extracting claim features for preliminary analysis, supporting translation of foreign-language documents, improving the language and structure of draft communications, identifying legal and technical references, conducting preliminary novelty or inventive-step assessments, identifying potential clarity issues and assisting with sufficiency reviews.

These uses are subject to safeguards. Classification, searches, translations and citations must be independently checked, and any conclusions on novelty or inventive step must be based on the Examiner’s own analysis.

The Guidelines further observe that even sophisticated AI systems can produce inconsistent results. The annexures provide examples where different AI models generated different classification codes, different search vocabularies and even contradictory novelty analyses for the same patent claim, thereby illustrating the continuing necessity of human evaluation.

Prohibited Uses

The Guidelines expressly prohibit the following uses of AI:

1. Entering unpublished patent applications, confidential office material or internal records into public AI tools;
2. Using AI as a substitute for the Examiner’s or Controller’s judgment on substantive matters such as novelty, inventive step, sufficiency, clarity, industrial applicability or unity of invention;
3. Issuing FERs, hearing notices, decisions or official communications solely on the basis of AI-generated outputs;
4. Relying upon AI-generated citations without independent verification from authentic sources;
5. Using AI-generated content in official communications without review and validation; and
6. Allowing AI to make decisions affecting the rights of applicants, patentees or third parties.

The Guidelines stress that confidentiality concerns are particularly significant in relation to unpublished patent applications and that care must be taken to avoid disclosure of such material through public AI systems.

Governance and Internal Controls

To promote responsible use of AI, the Guidelines contemplate the establishment of governance mechanisms that may include record-keeping of AI usage, oversight committees, approval of AI tools, periodic policy review, quality monitoring, training programmes and audit mechanisms. Training initiatives may specifically focus on understanding AI limitations, confidentiality risks, prompt discipline, hallucination detection and verification of AI-assisted outputs.

What This Means for Businesses?

The Guidelines should support a more efficient and technology-enabled patent examination process, particularly for searching, classification, translation and document review. Businesses should nevertheless expect patentability assessments and official decisions to remain human-led. Applicants should continue to submit clear, accurate and well-supported patent specifications, protect confidential information carefully, and avoid assuming that AI-generated analysis will be accepted without independent verification.

The content and images are drawn from the guidelines issued by the CGPDTM (ZN0Nk7Z9dXPr0C5vu3zjj1c8cPsRfX1SlxORk0Ke.pdf)

The Calcutta High Court, in a dispute concerning the use of the mark “PRO” in relation to footwear falling under Class 25, considered whether the use of “PRO BALANCE” by Aditya Birla Lifestyle Brands Limited and its associates amounted to infringement and passing off of Khadim India Limited’s registered “PRO” trademark. The Court, while considering the Plaintiff’s application for interim relief, examined the significance of the registered word mark, the essential-feature doctrine, the competing claims of prior use and the Defendant’s challenge to the validity of the registration.

Plaintiff’s Case

1. Khadim India Limited manufactures and sells shoes of various types and materials under the registered word mark “PRO”. The mark was registered in June 2005, pursuant to an application filed in June 1997, in which the Plaintiff had claimed proposed use.
2. According to the Plaintiff, it had continuously used the “PRO” mark since 1997 and, over the years, had developed substantial market identity, goodwill and reputation in relation to footwear sold under the mark.
3. The Plaintiff alleged that Defendant was selling identical or similar footwear bearing the word “PRO”, including products marketed under the expression “PRO BALANCE”. It was contended that the Defendant’s adoption and use of “PRO”, whether independently or in conjunction with another word, appropriated the essential feature of the Plaintiff’s registered trademark.
4. The Plaintiff accordingly asserted that the Defendant’s use constituted infringement of its registered trademark as well as passing off and sought an ad interim injunction restraining the Defendant from manufacturing, marketing or selling footwear bearing “PRO”.

Defendant’s Contentions

1. The Defendant contended that it had been using “PRO BALANCE” since 2023 and had acquired substantial international reputation and public recognition in relation to the mark. It argued that, despite being aware of the Defendant’s use, the Plaintiff had waited for more than three years before approaching the Court in July 2026.
2. Relying upon newspaper advertisements and other materials evidencing its market presence since 2023, the Defendant argued that there was no urgency warranting the grant of an interim injunction and sought an opportunity to file its affidavit before any interim order was passed.
3. A substantial part of the Defendant’s defence concerned the validity of the Plaintiff’s “PRO” registration. It was contended that “PRO” was a generic and non-distinctive expression and that its registration as a word mark was therefore invalid.
4. The Defendant further argued that the use of “PRO” in conjunction with the word “BALANCE” did not amount to infringement, particularly since the overall get-up, customer base, pricing and product range of the parties’ products were different. It also asserted that there was no likelihood of confusion and that no case of passing off could arise merely because the Defendant used the common word “PRO” with additional matter.
5. The Defendant also relied upon alleged honest use and the existence of several third parties using “PRO” in relation to similar products.
6. On the issue of validity, the Defendant submitted that the Court ought to frame an issue regarding the validity of the Plaintiff’s registration, direct the Defendant to institute appropriate rectification proceedings within a prescribed period and keep the interlocutory proceedings in abeyance pending such proceedings.

Plaintiff’s Reply

1. In response, the Plaintiff contended that the addition of the word “BALANCE” could not save the Defendant from a finding of infringement. According to the Plaintiff, adding a prefix or suffix to the registered mark “PRO” did not authorise the Defendant to appropriate the essential feature of the registered mark.
2. The Plaintiff further argued that the question of invalidity of a registered trademark could not simply be conclusively determined in an interlocutory proceeding. Where validity was challenged at the interim stage, a heavy burden lay upon the Defendant to rebut the statutory presumption arising from the subsisting registration.
3. The Plaintiff therefore maintained that its registration, coupled with its longstanding use and substantial reputation, established a strong prima facie case in its favour.

Court’s Analysis

1. The Court found that “PRO” constituted the essential feature of the Plaintiff’s registered trademark. The fact that the Defendant used the expression as part of “PRO BALANCE” did not, at the prima facie stage, take the Defendant outside the scope of the Plaintiff’s trademark rights.
2. The Court attached significance to the Plaintiff’s longstanding use of “PRO” since 1997, its registration since 2005 and the substantial sales and market presence relied upon by the Plaintiff. These factors, according to the Court, demonstrated that “PRO” had acquired a distinctive identity in the relevant footwear market.
3. The Defendant had entered the market subsequently and had failed, at the interim stage, to demonstrate that its use of “PRO” would not result in confusion or association. Given that the competing products were footwear falling within the same product category, the Court found a sufficient basis to conclude that the Defendant’s use was likely to cause confusion.
4. The Court consequently found that the Plaintiff had established a strong prima facie case of trademark infringement as well as passing off.

Challenge to Validity

1. The Defendant’s contention that “PRO” was generic or non-distinctive was also considered in the context of the Plaintiff’s subsisting registration.
2. The Court did not accept that such a challenge, by itself, was sufficient to defeat the Plaintiff’s claim for interim protection. The Defendant’s challenge to the validity of the registration did not, at that stage, displace the rights flowing from the existing registration, particularly in view of the Plaintiff’s longstanding use and the evidence of substantial commercial exploitation of the mark.
3. Thus, the Defendant’s proposed reliance upon rectification proceedings did not provide a sufficient basis for permitting continued use of “PRO” during the pendency of the interlocutory proceedings.

Balance of Convenience and Interim Relief

1. The Court found that the balance of convenience overwhelmingly favoured the Plaintiff. Permitting the Defendant to continue using “PRO”, whether independently or with a prefix or suffix, was likely to prejudice the Plaintiff’s statutory and common-law rights and could result in further confusion and multiplicity of proceedings.
2. Accordingly, the Court restrained the Defendant from manufacturing or selling Class 25 products bearing the word “PRO”, whether used alone or in conjunction with a prefix or suffix.
3. At the same time, the Court permitted the Defendant to dispose of its existing unsold stock bearing “PRO” for a period of six months, subject to the Defendant providing the Plaintiff with detailed particulars of such stock within three weeks.
4. The Defendant was also directed to take steps to remove the relevant products bearing “PRO” from online platforms within three months.

Conclusion

The decision reinforces the principle that, in assessing infringement of a registered word mark, the Court will examine whether the allegedly infringing use appropriates the essential and distinctive feature of the registered mark. The mere addition of another word, such as “BALANCE” does not necessarily immunise the subsequent mark from an infringement claim.

The decision is also significant for its treatment of a validity challenge at the interlocutory stage. A defendant seeking to overcome the rights flowing from a subsisting registration cannot merely assert that the registered mark is generic or non-distinctive; the challenge must be substantiated sufficiently to displace the prima facie rights arising from registration.

On the facts before it, the Calcutta High Court considered the Plaintiff’s longstanding use, registration, market presence and reputation in “PRO”, coupled with the Defendant’s subsequent adoption of “PRO BALANCE” for similar footwear, sufficient to warrant interim protection.

The ruling therefore underscores the continuing importance of prior use, registration, the essential-feature test, likelihood of confusion and the statutory protection afforded to registered trademarks in determining interim relief in trademark infringement proceedings.

RNA has proudly participated as the Knowledge Partner at the India IP Advantage Summit 2026, organized by the Trade Promotion Council of India (TPCI) in New Delhi.

As part of our collaboration with TPCI, RNA authored the report, “From India to the World: IP Strategy, Market Access and Risk Management for Exporters,” which was launched in the presence of Prof. Dr. Unnat P Pandit, Controller General of Patents, Designs and Trade Marks, Registrar of Copyrights and Geographical Indications, Government of India.

Our Founding Partner, Mr. Ranjan Narula, also moderated an engaging session “The Authorship Crisis & the Creative Economy”, examining the evolving impact of AI on ownership, copyright and authorship. A key theme was navigating legal, ethical, and economic challenges that businesses face with growing use of AI-assisted creations.

Daleep Kumar, Meenal Khurana, Riya Raman and Chandan Kumar from RNA team had engaging discussion with delegates and policymakers, and dignitaries at the summit on the intersection of IP, AI, innovation and global market access. Thanks to everyone who contributed to the insightful discussions.

Background of the Case

The appeal arose from the refusal of Indian Patent Application No. 468/DELNP/2008 titled “Method and Arrangement for Optimising the Operational Times and Cell Change Performance of Mobile Terminals.”

During the proceedings, the Court noted that despite the existence of Section 3(m), there were no clear guidelines on how Patent Office examiners should determine whether a claim relates to a mental act. To promote consistency in examination practice, the Court sought assistance from an Amicus Curiae and formulated detailed guidelines for assessing Section 3(m) objections.

Understanding Section 3(m)

Section 3(m) excludes from patentability:

“a mere scheme or rule or method of performing mental act or method of playing game.”

According to the Court, the provision covers four categories:

1. A mere scheme for a mental act;
2. A mere rule for a mental act;
3. A mere method of performing a mental act; and
4. A method of playing a game.

The Court explained that mental acts generally include activities such as calculation, reasoning, evaluation, cognition, judgment, logic and discriminative thinking.

Section 3(m) Is Independent of Novelty and Inventive Step

The Court clarified that an invention may be novel and inventive yet still be excluded under Section 3(m). Accordingly, objections under Section 3(m) must be assessed independently of novelty and inventive step requirements.

Claims Must Be Examined as a Whole

The Court emphasised that claims must be assessed as a whole rather than by isolating individual features or steps. The focus should be on the overall invention and the monopoly being claimed, rather than on a particular analytical or computational step in isolation.

This principle is particularly relevant to inventions involving software, artificial intelligence, communication systems, signal processing and control systems, where technical features often coexist with analytical processes.

The Seven-Step Test for Examining Section 3(m) Objections

To bring clarity and consistency to examination practice, the Court laid down the following framework:

Step 1: Construe the Claim

Interpret the claim from the perspective of a person skilled in the art, in light of the specification but without importing limitations from the specification into the claim.

Step 2: Product Claims Are Generally Outside Section 3(m)

Genuine apparatus or device claims defined by physical features are generally not “schemes, rules or methods” and therefore typically fall outside Section 3(m).

Step 3: Identify What the Claim Monopolises

For process claims, determine the exclusive right being claimed by reading the claim as a whole.

Step 4: Apply the Mental Act Test

The key question is:

Could a person infringe the claim by doing nothing more than thinking, reasoning, calculating, judging or deciding?

If the answer is yes, the claim is likely to be excluded under Section 3(m).

However, Section 3(m) would generally not apply where the claim:

1. recites physical means integral to performing the method;
2. requires interaction between physical components, including hardware and software; or
3. produces a tangible output or technical result.

Step 5: Token Physical Additions Are Insufficient

Merely adding post-solution activities such as displaying, presenting or printing information will not overcome a Section 3(m) objection if the substance of the invention remains a mental act.

Step 6: Keep Section 3(m) Separate from Novelty and Inventive Step

Section 3(m) must be assessed independently and should not be influenced by considerations of novelty, inventive step or obviousness.

Step 7: Distinguish Section 3(m) from Section 3(k)

Computer-implemented inventions should not be rejected under Section 3(m) merely because they involve a computer. Where applicable, such claims must be separately assessed under Section 3(k).

Illustrative Examples Provided by the Court

To aid consistent application of Section 3(m), the Court provided several examples:

1. A claim directed solely to logically deriving a Sudoku solution would fall within Section 3(m), even if the final solution is printed on paper.
2. A method for selecting the optimum arrangement of fuel bundles in a nuclear reactor may also be excluded where it involves only evaluation and selection without physical implementation.
3. In contrast, inventions involving sensors, fuel-heating devices, engine control units, modulators, circuits, buses, record carriers, hardware-software interaction or tangible outputs generally fall outside Section 3(m).
4. Computer-implemented methods requiring simulations should be examined under Section 3(k) rather than Section 3(m).

Conclusion

The Delhi High Court’s decision provides the first structured framework for examining Section 3(m) objections. The focus is now firmly on whether the claimed invention, viewed as a whole, amounts to no more than a mental act.

To overcome a Section 3(m) objection, applicants should demonstrate that the claimed invention:

1. incorporates physical means or components integral to its operation;
2. involves meaningful technical implementation, including hardware-software interaction where applicable;
3. produces a tangible output or technical effect; and
4. cannot be performed solely through human thought, reasoning, calculation or decision-making.

The judgment also confirms that claims should not be dissected into individual steps when assessing Section 3(m). The analysis must instead focus on the invention as a whole and on the actual monopoly claimed. Applicants should therefore ensure that their specifications and claims clearly emphasise the invention’s technical implementation, the physical interaction of its components and the practical technical outcome achieved.

The Court’s reasoning also aligns with European patent practice. Under Article 52(2)(c) EPC, methods for performing mental acts are excluded from patentability ‘as such’. The EPO has consistently held that processes capable of being carried out entirely within the human mind fall within the exclusion, while claims directed to a technical implementation or producing a technical effect are assessed on their technical merits. The Delhi High Court’s focus on distinguishing a mere mental process from a patent-eligible technical invention therefore reflects a principle long recognised in European patent jurisprudence.

This comparison is particularly strong because both the EPO and the Delhi High Court are attempting to distinguish abstract cognitive activity from technical innovation, rather than imposing a blanket exclusion on inventions that involve human decision-making.

The Bombay High Court recently considered two applications alleging wilful breach and disobedience of an injunction granted on 24 November 2010 in a trademark and copyright dispute concerning the mark “NOVA” and its associated artistic work. Since both applications arose from substantially the same alleged violations, the Court considered them together and disposed of them by a common order.

The proceedings are significant because they illustrate the consequences of disregarding an existing injunction and clarify the limited scope of proceedings under Order XXXIX Rule 2A of the Code of Civil Procedure, 1908 (“CPC”). The Court emphasised that once an injunction has been granted, the party restrained by the order must comply with it in letter and spirit. The subsequent registration or independent justification for the impugned mark cannot, in contempt proceedings, be used to justify conduct that falls within the injunction.

Background of the Dispute

The Applicant/Plaintiff was the registered proprietor of the trademark “NOVA” and the corresponding artistic work, both used in connection with brilliantine hair cream. In 2007, the Plaintiff discovered that Respondent No. 1, the sole proprietor of M/s Ravi Industries, was selling counterfeit brilliantine hair cream bearing a label deceptively similar to the Plaintiff’s NOVA label. The Plaintiff consequently instituted proceedings alleging trademark infringement, copyright infringement and passing off.

On 24 November 2010, the Court granted an injunction restraining the Respondents from using the “NOVA” mark, any deceptively similar mark, and the Plaintiff’s original NOVA artistic carton and label.

The dispute, however, did not end with the injunction. In December 2013, the Plaintiff discovered that Respondent No. 1 was using the mark “NONI” on brilliantine hair cream, with a label which was alleged to be virtually identical to the Plaintiff’s registered artistic work. The Plaintiff accordingly initiated proceedings alleging breach of the injunction.

The matter resurfaced again in February 2025 when, during execution of an order in another suit, the Court Receiver found “NOVA MINI” goods and “NONI” labels at Respondent No. 1’s premises. Respondent No. 1’s son identified himself as the proprietor of M/s Ravi Industries. The Plaintiff thereafter sought his impleadment as Respondent No. 3 and alleged a further breach of the injunction.

Contentions of the Plaintiff

The Plaintiff contended that the issue before the Court was not whether a fresh injunction should be granted against “NONI”, but whether the existing injunction had been wilfully breached.

According to the Plaintiff, the injunction expressly prohibited the use not only of “NOVA” but also of deceptively similar marks and, importantly, the Plaintiff’s registered artistic work. The Plaintiff argued that the “NONI” label substantially reproduced the protected artistic work and therefore fell within the scope of the injunction, irrespective of the separate registration of the “NONI” trademark.

The Plaintiff also relied upon Respondent No. 1’s own Written Statement, which allegedly acknowledged that the same artistic work was used on both the NOVA and NONI labels. This, according to the Plaintiff, demonstrated that the Respondent was aware that the injunction extended to the artistic work appearing on the NONI label.

The Plaintiff further argued that the Respondent’s subsequent attempt to obtain clarification that “NONI” was outside the injunction was itself significant. The Plaintiff characterised this application as a counterblast to the contempt proceedings and as evidence that the Respondent understood the scope of the injunction.

As regards “NOVA MINI”, the explanation that its use resulted from an employee’s mistake was contended to be implausible, particularly in light of the alleged history of infringement. The Plaintiff also alleged suppression of material facts, false statements on oath and failure to provide complete sales information despite directions of the Court. It invoked the Safe Distance Rule, contending that the Respondents were required to maintain a clear distinction from the Plaintiff’s protected mark and artistic work.

Defence of the Respondents

The Respondents disputed the allegation of contempt. Their principal contention was that the injunction did not extend to the “NONI” label. According to them, the restraint was confined to the NOVA label and specific NOVA products, cartons and labels. “NONI”, being a separately registered mark and label, was outside the scope of the original injunction.

The Respondents relied upon the history of the NONI registration, claiming registration dating back to 1966 and use since 1958, supported by advertisements, invoices and licences. They also relied upon an earlier IPAB decision, which had recognised prolonged and concurrent use of the NONI label and permitted the Respondent’s registration to continue as a special circumstance under Section 12 of the Trademarks Act.

It was argued that the Safe Distance Rule could not enlarge an injunction so as to cover a separately registered mark which had been known to the Plaintiff but had never been adjudicated upon. The Respondents further relied on the Plaintiff’s first contempt application, which had specifically sought restraint against the use of “NONI”. According to them, this demonstrated that the original injunction did not cover NONI.

The Respondents also emphasised that contempt proceedings are quasi-criminal in nature and that breach had to be established beyond reasonable doubt. A silent injunction, they argued, could not subsequently be judicially expanded to prohibit conduct that the original order had not expressly restrained. Respondent No. 3’s impleadment was also challenged for want of evidence connecting him with the alleged contempt.

Without prejudice, Respondent No. 1 offered to discontinue the NONI label, adopt a distinct label and pay ₹2 lakhs to Tata Memorial Hospital as part of a proposed settlement.

The Court’s Analysis and Findings

The Bombay High Court ultimately rejected the Respondents’ defence and found that they had wilfully and deliberately breached the injunction, acting in a brazen and dishonest manner to defeat the Court’s orders. Respondent No. 1 was described as a habitual counterfeiter, while Respondent No. 3 was held complicit in the breach.

A central aspect of the Court’s reasoning was the limited scope of proceedings under Order XXXIX Rule 2A CPC. The Court held that the question in such proceedings is whether the injunction was breached. The Court cannot use those proceedings to reopen the merits of the original suit, reconsider the correctness of the injunction or adjudicate the ultimate rights of the parties.

The Court found that the original injunction extended to the Plaintiff’s registered artistic work. Therefore, Respondent No. 1’s use of virtually identical or deceptively similar artwork on the NONI label constituted a breach. The use of “NOVA MINI” was also found to fall within the restraint.
Importantly, the Court rejected the argument that registration of the NONI mark provided a defence to disobedience. The existence of a registration did not authorise Respondent No. 1 to disregard a subsisting injunction. The injunction remained binding and was required to be obeyed “in letter and spirit.”

The Court also rejected the Respondents’ reliance on the IPAB proceedings and their contention that NONI was outside the scope of the injunction. The Respondent’s own attempt to obtain clarification that the injunction did not cover NONI had been refused by the Division Bench. According to the Court, this demonstrated the Respondent’s awareness that the injunction applied to the label. The explanations that NONI was outside the suit and that NOVA MINI labels had been printed by mistake were therefore not accepted as legitimate justifications for non-compliance.

The Court further noted deliberate non-disclosure of sales despite admitted sales of approximately ₹83.46 lakh. This was viewed as an attempt to conceal the extent of the infringing sales and the commercial exploitation of the Plaintiff’s goodwill.

Reliefs and Directions

The Interim Application was allowed. Although Respondent No. 1 was found guilty of wilful breach and disobedience of the injunction dated 24 November 2010, the Court, taking into consideration his age, did not impose imprisonment at that stage.

The Court directed Respondent No. 1 to pay ₹32,42,868 towards legal costs and ₹50 lakh as exemplary costs, within four weeks. He was also directed to disclose on oath complete sales figures relating to the counterfeit label, NONI label and NOVA MINI mark/label. The amount to be deposited would thereafter be determined by the Court. Failure to comply with these directions would result in the Respondent’s defence being struck off.

Comment

The decision reiterates that an injunction must be strictly obeyed until it is modified or set aside. A separate trademark registration does not excuse breach of an existing injunction, and proceedings under Order XXXIX Rule 2A CPC focus on compliance rather than the merits of the underlying dispute. The imposition of substantial exemplary costs highlights the serious consequences of deliberate disobedience and concealment of sales.

The Division Bench of the Delhi High Court in the More Than Water Private Limited v. Nesco passing off dispute involving “WATERBOX”, “MORE THAN WATERBOX” and “MY WATER BOX”, stressed that parties seeking interim equitable relief must approach the Court with clean hands, full disclosure and credible evidence.

The Court declined interim relief to the plaintiff, finding that it had failed to establish prima facie goodwill and reputation and had relied on prima facie unreliable invoices. At the same time, the defendant was also criticised for relying on prima facie fabricated photographs and invoices before the Trademarks Registry to support its claimed prior use.

The Division Bench further held that “WATERBOX” was prima facie descriptive and non-distinctive. Although the rival marks appeared prima facie similar, the questions of deceptive similarity and likelihood of confusion were left open for trial.

Background of the Dispute

More Than Water Private Limited manufactures and sells packaged drinking water in paper-based tetra packs under the mark “MORE THAN WATERBOX, .” Its predecessor, M/s Meera Enterprises, allegedly coined and adopted “WATERBOX” and “WATERBOX IS THE RIGHT CHOICE” in 2018, with the associated IP rights later assigned to the plaintiff upon its incorporation in 2022.

In January 2026, the plaintiff discovered that Nesco had obtained registration for the device mark “MY WATER BOX” in Class 32, claiming use since October 2020. The plaintiff alleged that Nesco’s coloured mark was deceptively similar to its marks, particularly due to the shared expression “WATER BOX,” a similar wave device, and comparable presentation on tetra packs.

Alleging that the defendant’s adoption and use were likely to cause confusion and misrepresentation of an association with the plaintiff’s business, the plaintiff instituted a passing off action and sought an interim injunction restraining use of the impugned mark.

Single Judge Refuses Absolute Interim Injunction

The Single Judge held that the plaintiff had failed to establish a prima facie case of goodwill and reputation, finding its evidence of prior use and sales unreliable and insufficient to show continuous commercial use or substantial market presence. The Court also noted inconsistencies between the plaintiff’s trademark filings and its claimed use and found that the alleged use of the mark on tetra-packaged drinking water during 2018–2020 appeared prima facie inconsistent with applicable BIS regulations.

As goodwill was not established, the Court did not examine misrepresentation and damage in detail. However, instead of granting an absolute injunction, it imposed a limited territorial restraint, permitting the plaintiff to sell only in Gujarat and the defendant only in Maharashtra. Both parties challenged aspects of this order before the Division Bench.

Plaintiff’s Submissions Before the Division Bench

The plaintiff argued that the Single Judge erred in refusing a nationwide injunction and restricting its sales to Gujarat, contending that it was entitled to sell across India, including through e-commerce platforms, and had applied for a Central FSSAI licence. It also submitted that the territorial restraint was imposed suo motu, despite the defendant not seeking such relief.

On goodwill, the plaintiff argued that the Court had applied an unduly high threshold, as prior adoption and use could suffice in a passing off action without proof of extensive reputation. It alleged that Nesco had falsely claimed use since October 2020 and relied on fabricated photographs and unreliable invoices, asserting that genuine commercial use began only in 2025, supported by a 2025 invoice, Instagram launch post and website activity.

The plaintiff further contended that “WATERBOX” was the dominant element of both marks and that “MORE THAN WATERBOX” and “MY WATER BOX” were deceptively similar. It also alleged copying of its trade dress, tetra pack presentation and wave device. Given that packaged drinking water is a mass-market, low-involvement product, these similarities, it argued, created a substantial likelihood of consumer confusion.

Defendant’s Defence

Nesco submitted that its defence was based on its actual commercial use commencing in 2025, rather than its trademark registration or any alleged use before that period. It supported the finding that the plaintiff had failed to establish goodwill, alleging that the plaintiff’s use was sporadic and its purported 2020 invoices were fabricated.

The defendant also questioned the legality of the plaintiff’s pre-2020 use of tetra-packaged water in light of applicable FSSAI, GST and other regulatory requirements. It contended that the plaintiff’s State FSSAI licence did not permit pan-India sales and that its application for a Central licence had been rejected, which the plaintiff allegedly failed to disclose to the Court.

Nesco, in contrast, claimed to have obtained a Central FSSAI licence in July 2025 and commenced commercial sales in October 2025. It therefore argued that, in the absence of established prior goodwill, the plaintiff could not sustain a passing off claim.

Division Bench Finds Plaintiff Had Approached the Court with Unclean Hands

The Division Bench upheld the denial of interim injunction, holding that the plaintiff had failed to establish credible prior use of “WATERBOX.” The invoices relied upon since 2020 contained an incorrect HSN code that was not applicable to water, and the plaintiff could neither satisfactorily explain the discrepancy nor produce supporting GST records. In the absence of contemporaneous corroboration, the invoices appeared prima facie manipulated and could not establish prior use.

The Court also noted the plaintiff’s failure to disclose that its Central FSSAI licence application had been rejected, despite relying on the pending application to claim an ability to expand sales beyond Gujarat.

The Division Bench held that reliance on prima facie manipulated invoices, coupled with suppression of the FSSAI rejection, showed that the plaintiff had approached the Court with unclean hands. Since interim injunction is an equitable and discretionary remedy, the plaintiff’s conduct disentitled it to such relief.

Defendant Also Comes Under Strong Judicial Criticism

The Division Bench held that Nesco’s conduct required scrutiny independently of the plaintiff’s failure to establish its case. The Court found that Nesco had relied on prima facie fabricated photographs and unreliable invoices before the Trademarks Registry to claim use of “MY WATER BOX” since 2020. The invoices were suspect as they recorded product quantities without prices, contrary to ordinary commercial practice. Although Nesco later stated that it would not rely on its registration or alleged prior use, the Court criticised the manner in which the registration appeared to have been obtained, observing that it was unfortunate that registration had been secured on the basis of documents that appeared prima facie fabricated.

Court Condemns Both Parties for Fabricated Documents

The Division Bench strongly condemned both parties’ reliance on prima facie fabricated invoices and false documents, warning that such conduct undermines the administration of justice and reflects a serious lack of corporate ethics. The Court stressed that invoices are important fiscal records underlying GST and income-tax compliance, making their manipulation particularly serious. It directed that the disputed invoices be subjected to strict proof at trial and cautioned that perjury proceedings could follow if they are found to be fabricated.

“WATERBOX” Found Prima Facie Descriptive

The Division Bench held that the Plaintiff failed to establish proprietary rights in “WATERBOX”, which was prima facie considered descriptive and non-distinctive, conveying the idea of “water in a box.” Although the competing marks “MORE THAN WATERBOX” and “MY WATER BOX” appeared prima facie similar due to the common expression “WATERBOX” and wave device, similarity alone was insufficient for an interim injunction. The Plaintiff’s lack of goodwill, reliance on unreliable evidence, and failure to make complete disclosure further weakened its case. The issues of deceptive similarity and likelihood of confusion were left open for trial.

Territorial Injunction Vacated

The Division Bench vacated the territorial injunction, permitting both parties to sell their respective products beyond the earlier territorial restrictions, subject to regulatory compliance. The Plaintiff was specifically directed to comply with its FSSAI licence, while the Defendant’s statement regarding sales outside Maharashtra was made binding for determining territorial jurisdiction at trial.

The Court also restrained the Defendant from asserting its trademark registration against third parties during the suit, given prima facie concerns regarding the documents used to obtain the registration. If the documents are proved genuine, the registration may be relied upon; if fabricated, appropriate consequences, including perjury proceedings, may follow. The Court further clarified that the Defendant’s continued use of the mark during the proceedings would not create any equitable rights in its favour.

Conclusion

The decision reiterates that interim injunctions are discretionary and equitable remedies requiring credible evidence and full disclosure. Despite prima facie similarity between the marks, the Plaintiff failed to establish goodwill and relied on questionable documents. The Court also criticised the Defendant’s unreliable records, highlighting that commercial credibility, evidentiary integrity and the conduct of both parties are crucial in trademark litigation.

Key Takeaways

1. Clean hands are essential: Suppression of material facts or regulatory developments can defeat a claim for interim equitable relief.
2. Prior use requires credible evidence: Trademark use must be supported by genuine, contemporaneous and verifiable commercial records.
3. Defendants are equally accountable: Questionable evidence placed before the Trademarks Registry remains subject to judicial scrutiny.
4. Descriptive elements have limited protection: Prima facie descriptive and non-distinctive common elements may not support proprietary rights.
5. Similarity alone is insufficient: Prima facie similarity does not automatically warrant an injunction; goodwill, conduct and evidentiary credibility also matter.
6. Fabricated records carry serious consequences: False invoices and documents may lead to perjury proceedings and consequences for responsible officers.

The internet has blurred traditional ideas of territoriality. Businesses now rely on cloud infrastructure, data is stored and processed across borders, artificial intelligence models are trained on servers in different countries, and digital intermediaries operate through globally distributed networks. Against this backdrop, defendants in intellectual property disputes increasingly argue that Indian courts lack jurisdiction simply because their servers are located outside India or they are based outside India. Indian courts have consistently rejected such a broad proposition. Server location is relevant context, but it is not decisive. The real enquiry is whether Indian law provides a basis for jurisdiction, whether the defendant has purposefully engaged with India, whether the alleged infringement or injury has occurred in India, and whether the court can grant effective relief.

The Delhi High Court’s recent decision in ANI Media Pvt. Ltd. v. OpenAI has brought these questions back into focus. Its reasoning builds on a developing line of Indian decisions which recognises that, in the digital environment, jurisdiction depends on where the cause of action arises and, on the defendant’s, purposeful connection with India.

This article traces the development of that approach through India’s leading internet-jurisdiction cases and considers how it now applies to generative AI. It focuses on four questions: the statutory basis for jurisdiction; the defendant’s purposeful or commercial engagement with India; the location of the alleged infringement or injury; and the court’s ability to grant meaningful relief despite foreign-hosted infrastructure.

Governing framework

Territorial jurisdiction in India is governed primarily by the Code of Civil Procedure, 1908. In intellectual property disputes, special provisions, notably Section 62 of the Copyright Act, 1957 and Section 134 of the Trade Marks Act, 1999, provide an additional basis for approaching a court.

Within that framework, server location is only one factual consideration. Courts instead look at the defendant’s commercial presence or targeting of India, the place where the alleged harm is felt, and whether exercising jurisdiction is necessary to provide an effective remedy.

Evolution of Indian digital-jurisdiction jurisprudence

Indian case law reflects a clear progression. The early decisions distinguished purposeful targeting from mere online accessibility. Later cases recognised that digital transactions could create a genuine commercial nexus with the forum. More recently, courts have emphasised that foreign-hosted systems should not make domestic remedies ineffective.

Banyan Tree: Moving beyond mere accessibility

The modern framework began with the Delhi High Court’s decision in Banyan Tree Holding (P) Ltd. v. A. Murali Krishna Reddy (2010).

The Court rejected the idea that a website’s mere accessibility in India is enough to confer jurisdiction. Instead, it adopted a “purposeful availment” test: a foreign defendant must have intentionally targeted Indian consumers or directed commercial activity towards India.

Banyan Tree therefore shifted the focus away from the location of digital infrastructure and towards the defendant’s deliberate relationship with the forum. Accessibility alone was not enough; purposeful commercial targeting could be.

WWE v. Reshma Collection: Carrying on business through e-commerce

The next important development came in World Wrestling Entertainment Inc. v. Reshma Collection & Ors., where the Delhi High Court considered whether a foreign rights-holder could be said to carry on business in Delhi through online commercial activity.

Although the plaintiff had no physical office in Delhi, its programmes were broadcast there, its merchandise was available there, and Delhi consumers could purchase its goods and services through its website. The Division Bench held that “carrying on business” could not be confined to a brick-and-mortar presence when essential commercial transactions were concluded online.

WWE connected the statutory test with the idea of purposeful targeting. Where online transactions are directed at and completed with consumers in the forum, a business may be treated as operating there even without a local office or agent. Deliberate e-commerce activity can therefore provide both the commercial nexus and the purposeful connection needed for territorial jurisdiction.

India TV: Recognising commercial nexus

In India TV Independent News Service Pvt. Ltd. v. India Broadcast Live LLC, the Delhi High Court reaffirmed that internet disputes require a practical and commercial approach. The Court recognised jurisdiction because the defendant’s online activities had a sufficient connection with India and were capable of causing confusion and injury within the country.

India TV added another dimension- the place where the harm is felt. The Court considered whether the defendant’s conduct had a sufficient connection with India and was capable of causing confusion or injury. The enquiry therefore extended beyond conduct directed at India to the territorial effect of that conduct.

Swami Ramdev: Effective remedies in a borderless internet

The problem became still more apparent in Swami Ramdev v. Facebook Inc., which concerned allegedly defamatory material available across the world.

The Delhi High Court granted a global injunction directing the intermediaries to disable access to the offending material. It recognised that relief confined to India could be ineffective when digital content moves effortlessly across borders.

Swami Ramdev thus developed the remedial limb of the jurisdictional enquiry. Once a sufficient territorial nexus exists, the remedy must reflect the borderless way in which digital content is disseminated. The location of servers should not make judicial protection illusory.

Tata Sons v. Hakunamatata: Targeting India through foreign digital platforms

The principle was carried forward in Tata Sons Private Limited v. Hakunamatata Tata Founders & Ors. The defendants were foreign entities accused of using the TATA mark for cryptocurrency offerings promoted through websites accessible in India.

The Division Bench stressed that the central question was not where the defendants were located, but whether their online conduct showed purposeful targeting of Indian consumers. Website accessibility remained insufficient by itself. However, interactive commercial activity, Indian traffic, references to Indian users or programmes, and the use of a mark enjoying an exceptional reputation in India could, taken together, establish a sufficient nexus for interim protection.

Tata Sons reaffirmed the targeting test in the context of newer digital business models, including cryptocurrency and tokenised offerings. Foreign incorporation or infrastructure does not insulate an online actor whose interactive conduct is aimed at India and allegedly harms Indian intellectual property rights.
Neetu Singh v. Telegram: Server location cannot become a jurisdictional shield

These decisions identify the factors that can establish territorial jurisdiction: a statutory basis, purposeful targeting, commercial activity and injury within the forum. Neetu Singh v. Telegram FZ LLC addressed the question directly and examined if connections to India and purposeful targeting can be displaced merely because the relevant data is stored abroad?

Telegram resisted disclosure orders on the ground that user information was stored on servers outside India. The Delhi High Court rejected that argument, observing that treating foreign server location as decisive would leave Indian copyright owners without an effective remedy against online infringement.

Neetu Singh made the principle explicit. Once the alleged infringement, injury and need for relief are sufficiently connected with India, a platform cannot avoid jurisdiction or enforcement obligations simply by storing data on foreign servers. Server geography is a technical fact; it is not a shield.

ANI v. OpenAI: Applying settled principles to generative AI

The Delhi High Court recently applied these principles in ANI Media Pvt. Ltd. v. OpenAI, one of India’s first major copyright disputes involving generative artificial intelligence.

OpenAI argued that the alleged copying occurred outside India because its large language models were trained on servers in the United States. On that basis, it contended that Indian courts lacked territorial jurisdiction.

The Court rejected this submission by applying the same four-part framework. ANI, an Indian copyright owner carrying on business in Delhi, could invoke the special jurisdiction under Section 62(2) of the Copyright Act. OpenAI purposefully served the Indian market by making ChatGPT and paid subscription services available to Indian users. The allegedly infringing outputs could be generated and consumed in India, linking the asserted injury and part of the cause of action to the forum. Finally, treating overseas server location as decisive would undermine the court’s ability to grant effective relief.

The Court also observed that storing copyrighted material on foreign servers is only one step in a wider chain of events connected with India. Accepting OpenAI’s position would allow digital platforms to avoid Indian law simply by placing their servers abroad.

Drawing on Neetu Singh, the Court held, on a prima facie basis, that foreign server location does not oust the jurisdiction of Indian courts when a substantial part of the cause of action arises in India.

Conclusion

Global cloud infrastructure has unquestionably made questions of jurisdiction more complex, but Indian courts have responded pragmatically. Banyan Tree and Tata Sons explain what purposeful targeting looks like. WWE shows when online transactions amount to carrying on business. India TV links jurisdiction to injury within the forum, while Swami Ramdev highlights the importance of effective relief. Neetu Singh states the consequence plainly: a foreign server is a technical circumstance, not a jurisdictional determinant.

The decision in ANI v. OpenAI is a natural extension of this jurisprudence. It confirms that multinational technology companies cannot sidestep Indian copyright law merely by pointing to the geographical location of their servers.

In a recent decision, the High Court of Delhi considered whether a plaintiff that had instituted a passing-off action could amend its plaint to add a claim for trade mark infringement after securing registration of the mark during the pendency of the suit. The judgment affirms that procedural law should facilitate the effective adjudication of disputes and permit subsequent developments that materially affect the parties’ rights to be brought on record.

Brief Facts

L’Oréal instituted a passing-off suit concerning its mark GARNIER BRIGHT COMPLETE, challenging the Defendants’ use of the marks GARUDA BRIGHT COMPLETE 30x and 6 DROPS BRIGHT COMPLETE 3x VITAMIN C. During the pendency of the suit before the Trial Court, L’Oréal obtained registration for the device mark of the product subject matter of the suit. It thereafter applied under Order VI Rule 17 of the Code of Civil Procedure, 1908 (CPC), to amend the plaint, place the registration on record, and add a claim for trade mark infringement.

The Trial Court dismissed the application, holding that the original plaint did not disclose the pendency of the trade mark application and that the proposed amendment would introduce a new cause of action and alter the nature of the suit. It also noted that evidence had already concluded and considered that permitting the amendment at that stage would effectively reopen the proceedings.

Aggrieved by the dismissal, L’Oréal invoked the Delhi High Court’s supervisory jurisdiction under Article 227 of the Constitution of India and challenged the Trial Court’s order.

Contentions raised before the High Court:

L’Oréal submitted that:

1. The amendment was necessary to determine the real controversy between the parties.
2. Its infringement claim arose only after registration was granted during the suit. A separate action was unnecessary because the parties, marks, products, and underlying facts were the same.
3. Refusing the amendment would result in duplicative proceedings concerning the same marks and products.
4. The Respondents, having been proceeded against ex parte before the Trial Court, could not oppose the petition.

Respondents’ contentions:

The Respondents defended the Trial Court’s order, arguing that the amendment introduced a fresh cause of action, altered the nature of the suit, and relied on a trade mark application not disclosed in the original plaint.

Court’s Decision:

The Delhi High Court set aside the Trial Court’s order and allowed the amendment on the following grounds:

1. An amendment necessary to resolve the real controversy may be allowed at any stage; commencement of trial is not, by itself, a ground for refusal.
2. Subsequent facts and reliefs may be brought on record provided they do not fundamentally alter the nature of the suit.
3. A post-registration infringement claim may be added where it arises from the same facts, marks, and products as the passing-off claim.
4. Courts should adopt a liberal, rather than hyper-technical, approach to bona fide and necessary amendments.
5. As both claims concerned the same marks, products, and facts, refusing the amendment would cause duplicative proceedings. The Respondents were also ex parte, leaving no reason to prolong parallel litigation.

Conclusion

The decision affirms that a plaintiff may amend a passing-off suit to add an infringement claim when registration is obtained during the proceedings and both claims arise from the same facts. It reinforces that procedural rules should facilitate effective adjudication and avoid duplicative litigation.

In a significant ruling concerning the arbitrability of trademark disputes arising from contractual arrangements, the Division Bench of the Delhi High Court allowed an appeal against an order of the District Judge (Commercial), South District, Delhi, and referred the dispute between the parties to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996.

The appeal arose from the dismissal of the defendant’s application seeking reference of disputes to arbitration in terms of the arbitration clause contained in the Partner Agreement executed between the parties. The Division Bench held that the trademark dispute had a direct nexus with the contractual obligations between the parties and was therefore required to be referred to arbitration.

Background of the Dispute

The plaintiff, Newgen Software Technologies Ltd., is the proprietor of several registered trademarks incorporating the mark “NEWGEN” as the dominant element across various classes. The plaintiff asserted that the NEWGEN marks had acquired substantial goodwill and reputation through extensive commercial use, supported by its turnover figures, advertising expenditure, and promotional activities.

The defendant, originally incorporated as VCARE INFOTECH SOLUTIONS & SERVICES PRIVATE LIMITED, was engaged in providing services similar to those of the plaintiff. In July 2023, the parties entered into a Partner Agreement, under which the defendant acknowledged the plaintiff’s exclusive rights in the NEWGEN marks and agreed to use such marks only in accordance with the terms of the Agreement.

Intellectual Property Provisions under the Partner Agreement

Article 14 of the Partner Agreement recognized NEWGEN as the exclusive property of the plaintiff and granted the defendant only a limited right to use approved NEWGEN trademarks during the term of the Agreement for the sale and distribution of Newgen products. The defendant expressly acknowledged the plaintiff’s trademark rights, acquired no proprietary interest through such use, and undertook to assist the plaintiff in protecting its trademark rights against infringement.

Article 15 provided that all intellectual property rights in Newgen’s software, products, designs, engineering details, and related materials remained exclusively vested with the plaintiff. The defendant and end customers were granted only a limited, non-exclusive, and non-transferable licence to use the software, without acquiring any ownership rights.

Article 18 contained the arbitration clause, providing that all disputes or differences arising between the parties would be resolved through arbitration in accordance with the Arbitration and Conciliation Act, 1996. The arbitration was to be conducted in New Delhi under Indian law.

Alleged Trademark Infringement and Institution of Suit

In July 2024, the defendant changed its corporate name to NEWGEN IT TECHNOLOGIES LIMITED and also applied for registration of NEWGEN formative marks. The plaintiff alleged that the defendant’s actions amounted to unauthorized appropriation of its trademarks.

Consequently, by letter dated September 15, 2024, the plaintiff terminated the Partner Agreement and called upon the defendant to immediately cease using the NEWGEN marks.

The defendant refused to comply with the cease-and-desist demand, following which the plaintiff instituted proceedings alleging trademark infringement and passing off, claiming that the defendant was attempting to misrepresent its goods and services as those of the plaintiff.

Defendant’s Application under Section 8 of the Arbitration Act

Upon being served with the suit, the defendant filed an application under Section 8 of the Arbitration and Conciliation Act, 1996, seeking reference of the dispute to arbitration under Article 18 of the Partner Agreement.

The defendant contended that the dispute arose directly from the Agreement, particularly Article 14 governing trademark usage rights. It was argued that trademark infringement disputes are not inherently non-arbitrable and that the arbitral tribunal was competent to determine its own jurisdiction under Section 16 of the Act.

District Court’s Decision

The District Judge dismissed the Section 8 application, holding that the arbitration clause ceased to operate after termination of the Partner Agreement and the defendant’s change of corporate name. The Court also observed that the Agreement did not expressly bind successors or altered entities.

Aggrieved by the decision, the defendant approached the Division Bench of the Delhi High Court.

Submissions Before the Division Bench

Defendant’s Submissions

The defendant argued that, at the stage of considering an application under Section 8, the Court was required only to ascertain the prima facie existence of an arbitration agreement.
As the dispute arose from an alleged breach of Article 14 of the Partner Agreement and Article 18 expressly covered disputes arising under the Agreement, the matter was required to be referred to arbitration.

Plaintiff’s Submissions

The plaintiff contended that the dispute was a trademark infringement action concerning intellectual property rights, which constituted rights in rem and were therefore non-arbitrable.

The Partner Agreement merely regulated channel-partner activities and did not govern enforcement of intellectual property rights.

The arbitration clause could not survive termination of the Agreement and that the defendant had waived its right to seek arbitration by submitting to the court proceedings.

Delhi High Court’s Analysis and Findings

Change of Corporate Name Does Not Extinguish Contractual Obligations

The Division Bench rejected the Commercial Court’s finding that the arbitration agreement became inapplicable merely because the defendant changed its corporate name.

The Court observed that a change in the name of a company does not extinguish its contractual rights and obligations. Accepting such a proposition would permit parties to avoid contractual liabilities merely by changing their corporate identity.

Accordingly, the Commercial Court’s reasoning was held to be legally unsustainable.

Reliance on the Supreme Court’s Interplay Judgment

The Division Bench placed reliance on the seven-Judge Constitution Bench decision of the Supreme Court in In Re: Interplay Between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899, which reaffirmed important principles relating to arbitration law, including:

1. the doctrine of separability;
2. the principle of kompetenz-kompetenz under Section 16; and
3. limited judicial scrutiny at the referral stage under Sections 8 and 11.

The Supreme Court held that an arbitration agreement is legally independent from the underlying contract and continues to survive despite the invalidity, termination, repudiation, or frustration of the main contract, unless the arbitration agreement itself is specifically challenged.

The Division Bench observed that the arbitration clause therefore continued to operate even after termination of the Partner Agreement and remained available for resolution of disputes arising from such termination.

Arbitrability of Trademark Disputes

The Court reiterated that arbitrability involves a jurisdictional question and that, under Section 16 of the Arbitration and Conciliation Act, the arbitral tribunal is competent to determine its own jurisdiction.

While distinguishing between:

1. rights in rem, which are enforceable against the world at large and generally considered non-arbitrable; and
   rights in personam, which operate between specific parties and are generally arbitrable,
2. the Court clarified that disputes involving subordinate contractual rights in personam arising from rights in rem may still be referred to arbitration.

Applying these principles, the Court held that the present dispute was not a standalone trademark infringement claim but arose from the contractual relationship between the parties.

The defendant’s alleged infringement was founded on the breach of the Partner Agreement, which expressly regulated the defendant’s use of the NEWGEN trademarks. Therefore, the dispute had a direct and substantial nexus with the Agreement and fell within the scope of the arbitration clause.

Decision

The Division Bench allowed the appeal, set aside the order of the District Court, and allowed the defendant’s application under Section 8 of the Arbitration and Conciliation Act, 1996.

The parties were consequently referred to arbitration in accordance with Article 18 of the Partner Agreement.

Key Takeaways

1. An arbitration clause survives termination of the underlying contract by virtue of the doctrine of separability.
2. A change in corporate identity does not absolve a party from contractual obligations.
3. Questions of arbitrability should ordinarily be determined by the arbitral tribunal under Section 16.
4. Trademark disputes arising from contractual obligations may be arbitrable, particularly where the alleged infringement is founded upon breach of an agreement containing an arbitration clause.
5. Courts exercising jurisdiction under Section 8 must limit their inquiry to the existence of an arbitration agreement and whether any statutory bar prevents reference to arbitration.

CS(COMM) 1028/2024, I.A. 45301/2024 & I.A.26192/2025

Date of decision 24th July 2026

This judgment is among the first significant Indian decisions to examine how traditional copyright principles apply to generative artificial intelligence and large language models. In refusing interim relief to ANI Media Pvt. Ltd., the Delhi High Court considered whether OpenAI’s use of publicly available news content for training ChatGPT, and the generation of responses through ChatGPT, amounted to copyright infringement or was protected as fair dealing under Section 52 of the Copyright Act, 1957. The ruling is notable for its treatment of AI training, retrieval-augmented generation, commercial use, market substitution and public interest in the development of AI technologies.

Background

Against this backdrop, ANI Media Pvt. Ltd. filed a copyright infringement suit against OpenAI OpCo LLC before the Delhi High Court, alleging unauthorised use of ANI’s copyrighted news content in connection with ChatGPT. ANI advanced two principal claims: (a) that OpenAI copied and stored ANI’s works to train its large language models; and (b) that ChatGPT generated outputs that reproduced, or were substantially similar to, ANI’s copyrighted works.

The Court noted that the case raised novel questions at the intersection of copyright law and artificial intelligence. Since the Copyright Act, 1957 was enacted long before the emergence of generative AI and large language models, the Court approached the dispute by examining how existing copyright principles should apply to technologies that rely on large-scale data collection, storage, tokenisation, model training and retrieval-augmented generation.

Issues

1. Whether OpenAI’s storage of ANI’s copyrighted data for training ChatGPT amounted to infringement of ANI’s copyright.
2. Whether ChatGPT’s generation of responses using ANI’s copyrighted data amounted to infringement of ANI’s copyright.
3. Whether OpenAI’s use of ANI’s copyrighted data qualified as fair dealing under Section 52 of the Copyright Act, 1957.
4. Whether Indian courts had jurisdiction to entertain the suit, given that OpenAI’s servers and training infrastructure were located outside India.

Contentions of the Parties

ANI’s Contentions

ANI’s case was that OpenAI had used its copyrighted news content without permission. ANI alleged that OpenAI copied, stored and processed ANI’s news articles and other literary works while training ChatGPT. According to ANI, the fact that its works were available on the internet did not make them free for unrestricted use, nor did it dilute ANI’s copyright in the original expression of its reports.

ANI also characterised the technical steps involved in AI training, scraping, storage, tokenisation and vectorisation as acts of reproduction or adaptation in electronic form. ANI argued that the conversion of text into machine-readable formats did not take the use outside copyright law; it merely changed the form in which the copyrighted work was copied or processed.

Separately, ANI objected to ChatGPT’s outputs. It argued that certain responses reproduced, paraphrased or substantially copied ANI’s interviews and news reports, thereby amounting to unauthorised communication of its works to the public. ANI said this was not merely a case of using underlying facts, but of appropriating the form and substance of its protected expression.

On fair dealing, ANI’s principal objection was that OpenAI’s use was commercial and could not properly be described as private or personal use, or as research, within the meaning of Section 52(1)(a). ANI also urged the Court not to import the broader US fair use doctrine into Indian law, particularly where large-scale copying of copyrighted works was being justified as AI training.

ANI further submitted that OpenAI’s conduct had commercial consequences for ANI’s business. By making summaries or extracts of ANI’s content available through ChatGPT, ANI argued that OpenAI diverted traffic away from ANI’s own platforms, reduced licensing opportunities and undermined the market for ANI’s news content.

OpenAI’s Contentions

OpenAI first objected to the Court’s jurisdiction over the training claim. It argued that the relevant acts of training and storage took place outside India, on servers located in the United States, and that Indian copyright law should not be applied extraterritorially merely because ChatGPT was accessible in India.

On the merits, OpenAI’s central answer was that ChatGPT does not store or reproduce training data once training is complete. Any copying during training, it said, was only an intermediate and non-expressive step in teaching the model statistical relationships, linguistic patterns and contextual associations. OpenAI maintained that copyright protects original expression, not facts, ideas, news events, grammar, syntax or language patterns.

OpenAI also challenged ANI’s examples of alleged infringement. It pointed out that the articles relied on by ANI were published after the relevant training cut-off dates for OpenAI’s models. On that basis, OpenAI argued that those examples could not prove memorisation or regurgitation from training data. At most, the responses reflected facts, short summaries or material generated through search or RAG-type functionality, rather than reproduction of ANI’s protected expression.

For the fair dealing defence, OpenAI submitted that its use fell within “private or personal use, including research” under Section 52(1)(a) of the Copyright Act. It emphasised that the training process was internal and closed, and that the training material was not made available to the public. OpenAI also argued that commercial use is not automatically excluded from fair dealing, particularly where the statute does not expressly impose a non-commercial limitation.

Finally, OpenAI relied on the broader utility of ChatGPT. It submitted that the technology serves public-facing functions such as research, education, translation, accessibility, summarisation and innovation, and that restricting model training through interim relief would have consequences beyond the parties to the suit.

Contentions of the Intervenors

Intervenors Supporting ANI

1. The Digital News Publishers Association, Indian Music Industry and Federation of Indian Publishers broadly supported ANI.
2. They argued that AI training involves unauthorised copying and storage of copyrighted works and that such use cannot be treated as fair dealing merely because it is technologically complex or machine-readable.
3. They submitted that Section 14(a)(i) gives copyright owners an exclusive right over reproduction, including storage in electronic form, and that temporary or intermediate copying can still amount to infringement.
4. They contended that OpenAI’s use was commercial, large-scale and substitutive, and should not be protected under Section 52(1)(a).
5. They further argued that Indian law does not contain a broad US-style fair use defence and that transformative use should not be imported into Indian copyright law without statutory basis.

Intervenors Supporting OpenAI

1. IGAP Project LLP, Broadband India Forum and Flux AI Labs broadly supported OpenAI.
2. They submitted that LLMs do not ordinarily reproduce training material but learn statistical patterns, relationships and linguistic structures from large datasets.
3. They argued that AI training is a form of research or private use and that requiring licences from every copyright owner would make AI development economically unviable, particularly for Indian AI developers.
4. They contended that ChatGPT’s outputs are materially different from ANI’s articles and do not substitute ANI’s news syndication business.
5. They also emphasised the public interest in access to AI tools, technological innovation and the development of domestic AI systems.

Court Ruling

Jurisdiction

The Court held, prima facie, that it had territorial jurisdiction. ANI’s principal office was in Delhi, OpenAI made its services available to users in India, and the alleged infringing outputs were generated within the jurisdiction of the Court. The Court rejected the argument that the location of servers outside India, by itself, defeated jurisdiction.

Output/Reproduction Claim

The Court held that ANI had not established, at the interim stage, that ChatGPT’s outputs were substantial reproductions of ANI’s copyrighted works. The Court noted that copyright does not protect facts or news events, but only the original form, manner and arrangement of expression. It found that the examples relied on by ANI were not substantially similar when compared with ANI’s works as a whole.

The Court also found that the illustrative ANI articles were published after the relevant training cut-off dates for OpenAI’s models. Therefore, the examples could not support ANI’s allegation that ChatGPT memorised those articles from training data. The Court considered that such outputs were more likely connected to live retrieval or RAG-type functionality, an aspect not specifically pleaded as the foundation of ANI’s claim.

Training/Storage Claim and Fair Dealing

The Court held that storage of a literary work in electronic form is covered by the reproduction right under Section 14(a)(i) of the Copyright Act. However, Section 14 is subject to Section 52, which sets out acts that do not constitute infringement. The Court therefore considered the storage and fair dealing issues together.

Applying a broad and liberal interpretation of Section 52(1)(a), the Court held, prima facie, that OpenAI’s storage of ANI’s works for training LLMs fell within “private or personal use, including research”. It reasoned that AI training is a closed, internal process and can qualify as research when understood in light of technological developments. The Court held that “private” does not mean only use by an individual. It can include use by a company or closed group, provided the use is internal and not made available to the public. The Court adopted a broad reading of “research,” observing that research may be undertaken in commercial settings.

The Court further held that commercial use is not automatically excluded from Section 52(1)(a), since the provision does not expressly restrict the defence to non-commercial use. It also held that the “non-infringing copy” limitation in the Explanation to Section 52(1)(a) applies only to incidental storage of computer programmes, and not to every electronically stored work.

Fairness and Public Interest

For the fairness analysis, the Court considered whether OpenAI’s use was limited to training, whether it caused economic competition or market substitution, and whether ChatGPT served broader public interest. It held, prima facie, that OpenAI’s use was limited to training, that ChatGPT’s functions were fundamentally different from ANI’s news syndication business, and that ANI had not shown loss of market share or subscription revenue.

The Court also found that LLMs and ChatGPT serve important public interests, including education, research, translation, accessibility, software development and access to information. On this basis, the Court held that the purpose and fairness tests under Section 52(1)(a) were satisfied at the interim stage.

Interim Injunction

The Court refused to grant an interim injunction. It held that ANI had not made out a prima facie case of infringement either on the training/storage claim or on the output claim. It also found that the balance of convenience favoured OpenAI, since an injunction could affect the functioning of ChatGPT and have wider implications for AI development.

The Court noted that ANI’s claim was quantifiable in monetary terms, especially since ANI had itself offered a licence to OpenAI. It also considered that ANI and its subscribers had technical options to block crawling or scraping.

Key Takeaways

1. AI training is not treated the same as public reproduction: The Court drew a practical distinction between internal use of works for model training and outward-facing reproduction of those works in outputs. At the interim stage, storage for training could fall within Section 52(1)(a) if it remained internal and did not substitute the copyright owner’s market.
2. Indian fair dealing remains purpose-based: The Court did not import the US four-factor fair use test as binding law. Instead, it assessed the statutory purpose under Section 52(1)(a) and then examined fairness through factors such as market substitution, functional difference and public interest.
3. Commercial use is relevant, but not decisive: OpenAI’s commercial character did not, by itself, defeat the fair dealing defence. The Court focused instead on what the use was for, whether the training material was exposed to the public, and whether the use caused market harm.
4. Evidence of market harm will matter: The Court gave weight to the absence of material showing loss of subscribers, reduced licensing revenue, traffic diversion or market substitution. Future plaintiffs may need stronger evidence of commercial impact, not merely assertions of unauthorised use.
5. News copyright protects expression, not facts: The judgment reinforces that news publishers must show copying of original expression, arrangement or presentation not merely use of underlying facts or events. This makes substantial similarity a demanding test in AI-output disputes involving news content.
6. Technical controls may influence injunctions: The Court noted that ANI and its subscribers had options to block crawling or scraping. That observation may become relevant in future cases when courts assess urgency, balance of convenience and equitable relief.