Introduction

The Delhi High Court recently addressed a pressing issue in Communication Components Antenna Inc. v. Ace Technologies Corp. and Ors¹: how can Indian patent holders enforce their rights when foreign infringers have no assets in India?

The case involved a cross-border patent dispute where the defendants, based in South Korea and Hong Kong, were accused of infringement but had no enforceable presence in India. This raised critical questions about judicial remedies and the scope of the court’s inherent powers under Section 151 of the CPC.

Background

The plaintiff, Communication Components Antenna Inc., filed a suit for patent infringement of Indian Patent Number IN240893 against Ace Technologies Corp. and others, alleging unauthorised use of its patented technology.

On 12.07.2019, a Single Judge of the Delhi HC passed an interim order directing the foreign defendants (from South Korea and Hong Kong) to furnish a ₹40 crores bank guarantee and deposit ₹14.5 crores in court to safeguard the plaintiff’s interests.

The defendants appealed to the Division Bench² and sought a stay³ but on 08.08.2019, the Bench refused to interfere, emphasizing the need to protect the plaintiff due to the defendants’ lack of Indian assets. The defendants then approached the Supreme Court⁴ who also declined to interfere, noting the well-reasoned nature of the earlier orders and the foreign status of the defendant.

On 10.04.2023, the Division Bench disposed of the main appeal and allowed the defendants one final opportunity to produce the allegedly infringing antenna for expert examination. It also permitted a 10% sale proceeds-based bank guarantee, referencing a prior royalty agreement.

The plaintiff has now filed a fresh application under Section 151 of the CPC, citing a 64.90% drop in Defendant No.1’s share value and expressing concern about the enforceability of any future decree. The plaintiff sought a fresh ₹290 crore bank guarantee (25% of their ₹1160 crore damages claim).

Issues

• Can an Indian court ask a foreign company with no Indian assets to give a bank guarantee?
• Can Section 151 CPC be invoked to protect plaintiffs in such cross-border IP disputes?
• Does lack of a reciprocal enforcement treaty affect recovery of damages from foreign defendants?

Plaintiff’s Contentions

The plaintiff contended that Defendant No.1, based in South Korea, cannot be compelled to honour an Indian court judgement, as there is no enforcement treaty between the two countries. This is supported by Article 217 of the Korean Civil Procedure Act.  

They contended that despite claiming ₹1160 crores in damages, the defendants admitted to having only ₹28 crores in Indian assets. They cited Communication Components Antenna Inc. vs. Mobi Antenna Technologies (2022)⁵ – where ₹217 crores in damages could not be recovered  from a Chinese firm due to lack of enforceability.

The plaintiff argued that the Court had already found infringement in orders dated 12.07.2019 and 10.04.2023, and that Order 38 Rule 5 CPC didn’t apply, as the defendants lacked attachable property in India. Hence, Section 151 CPC was the only available remedy. Accordingly, they sought a ₹290 crore bank guarantee to secure partial compensation in the event of a favourable decree.

Defendant’s Contentions

The defendants argued that while South Korea is not listed as a “reciprocating territory” under Section 44A CPC, Article 217 of the Korean Civil Procedure Act allows for enforcement of foreign judgments. Hence, coercive relief was unnecessary.

They distinguished this case from Nokia Technologies,⁶ claiming no technical proof of infringement had been shown. They noted they had already deposited ₹70 crores as directed earlier.

They asserted that Defendant No.1 had ceased sales in in India due to Reliance Jio halting orders, not due to wrongdoing, and that they remain financially sound per their CEO’s affidavit.

They also claimed that the plaintiff failed to show any urgent risk of asset flight or bad faith and stressed their compliance with court directions so far.

Court Observation

The Court reviewed the affidavit dated 12.11.2024, which confirmed that Defendant No.1 had negligible assets and had exited Indian business. In this context, Section 151 CPC became the only viable route for relief. Order 38 Rule 5 CPC was ruled out, since the defendants had no attachable Indian property or active business operations here. The Court recognised that Indian judgments may not be enforceable in South Korea due to lack of a treaty, despite Article 217. This heightened the risk of non-recovery even in case of a plaintiff victory.

The defendant’s 65% share value drop and weak financials further justified preventive action. Asking for ₹290 crores (25% of claim) was held to be fair and necessary.

The Court reiterated that the plaintiff holds a valid patent, previously found to be infringed by earlier orders, upheld by the Division Bench and left undisturbed by the Supreme Court.

The earlier 10% of revenue-based deposit (~₹70 crores) had been made, but recent statements of no sales raised further concerns about enforceability.

Judgment

The Court invoked its inherent powers under Section 151 CPC and directed Defendant No.1 to deposit ₹290 crores (in addition to the earlier ₹70 crores), either as a bank guarantee or fixed deposit within four weeks. The Court found that a strong prima facie case had been made out.

Our Analysis

This case shows how Indian courts can step in to protect the rights of patent holders, even when the infringing company is based outside India and has no assets in India. Normally, enforcing a court order is difficult if the company is not under the court’s direct control or if there is no treaty between countries. Here, Delhi High Court used its inherent powers under Section 151 of the CPC to ensure that justice is not denied just because of such practical hurdles.

The court rightly recognised that if the plaintiff won the case later, they might still not get any compensation due to the defendant’s weak financial position and lack of property in India. That’s why the court took a preventive step and asked the defendant to deposit part of the claim amount in advance. This shows that Indian courts are willing to go beyond procedural limitations to protect intellectual property, especially in cross-border disputes.

Conclusion

Sometimes, courts need to take special steps to serve justice, especially when the ordinary legal options are not enough. Section 151 of the Civil Procedure Code empowers the court to pass such orders in rare situations, mainly to stop unfairness and protect a party from serious harm.

In this case, the court recognized that the defendant had almost no assets in India, had stopped doing business here, and there was a real chance that even if the plaintiff won the case, they might not get the money. By exercising inherent powers under section 151 of CPC, the Delhi High Court ensured in this case that the plaintiff’s rights were effectively protected in spite of the cross-border complications.

This decision also highlights the need to protect intellectual property in the global marketplace while at the same time sets a precedence of how Indian courts can actively deal with the evolving commercial situation of companies.

1.  CS(COMM) 1222/2018 ↩︎
2. FAO(OS)(COMM) 186/2019 ↩︎
3. CM APPL. 35213/2019 ↩︎
4. SLP(C) 21938/2019 ↩︎
5. CS(COMM) 977/2016, CC(COMM) 38/2017 & I.As. 10524/2018, 16746/2021 ↩︎
6.  CS (COMM) 303/2021, I.A. 7700/2021 ↩︎