India: Arbitrability of IP issues

Managing IP is part of Legal Benchmarking Limited, 1-2 Paris Gardens, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2026

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

India: Arbitrability of IP issues

In a recent judgment of October 2017, a Division Bench of the Madras High Court in Lifestyle Equities CV v QDSeatoman Designs Pvt. Ltd & Ors has held that IP issues could be subject to arbitration. The fundamental point at dispute was whether and to what extent are IP related rights arbitrable given that they tend to have effect in rem.

The case concerned a commercial agreement between the parties, whereby QDSeatoman Designs Pvt Ltd, and Quintessential Designs India Pvt Ltd (collectively referred to as "QDS") were engaged by Lifestyle Equities for certain creative services, relating to apparel and garments. This obviously covered IP. This agreement contained an arbitration clause. Certain disputes arose between the parties, though the judgment is not entirely clear on the exact details and circumstances.

Lifestyle Equities invoked the arbitration clause in the matter whereas QDS opposed the same on the ground that the disputes involve IP issues and thus, non-arbitrable. Instead, QDS wanted the Court to permit the filing of a civil suit.

In its judgment dated October 13 2017, the Court held that the issue boiled down to whether the issues being raised would result in a judgment / award in rem or in personam; the former is not arbitrable, but the latter is. According to the Court, the distinction between a right in rem and a right in personam is very old and well-defined one – a judgment in personam refers to a judgment against a person, whereas a judgment in rem refers to a judgment against a thing, right or status or condition of property. In the context of IP, the Court held that a patent licence issue may be arbitrable, but validity of the underlying patent may not be arbitrable.

On facts, the Division Bench agreed with the opinion of the Learned Single Judge, which was under appeal, that the fundamental dispute between the parties related to who had the better right of usage vis-a-vis the other and that this was clearly an issue in personam.

Even though the Hon'ble Court concluded that the dispute between the parties was arbitrable, the Arbitral Tribunal so constituted nevertheless had the jurisdiction to decide its own competence and thus, the final decision on the issue would have to be that of the Arbitral Tribunal.

R Parthasarathy

Lakshmi Kumaran & Sridharan

B6/10 Safdarjung Enclave

New Delhi 110029, India

Tel: +91 11 41299800

Fax:91 11 41299899

vlakshmi@lakshmisri.com

www.lslaw.in

more from across site and SHARED ros bottom lb

More from across our site

By accepting a relatively small sample of infringing content to grant worldwide relief, a UK court has adopted a pragmatic approach that could reduce the time and expense involved in huge enforcement actions
This year’s IP STARS Americas rankings reveal that firms are expanding their capabilities, particularly in trade secrets and life sciences
Law firms’ expanding IP capabilities are driving broader industry recognition across a wider range of practice areas
As specialist boutiques challenge traditional firm models, major disputes involving Disney, Ericsson, Siemens and Dolby highlight the firms winning work before the UPC
The firm has added two leading damages specialists as it expands beyond technical analysis and deepens its role in the economics of IP litigation
Josh Seidenfeld, partner at DLA Piper, outlines the emerging legal trends that drive the future of life sciences innovation and how stakeholders can prepare for the future
South Korea's One Law Partners is combining with boutique firm Minwho Law Group to leverage global expansion of K-content and build a broader offering spanning IP, tech and regulatory advisory work
Russell Kennedy's Gina Tresidder on juggling matters, delivering hard truths, and why IP ownership is rarely as simple as people think
Attorney Oran Friar and trainee attorney Harry Cunliffe at Reddie & Grose, share that patent filings for clinical LLMs are surging, but success in the UK and Europe hinges on demonstrating technical innovation
Implementers can use the UK courts to seek FRAND terms for patent pool licences
Gift this article