Territorial Jurisdiction In Intellectual Property Cases: A Judicial Overview

First and foremost, it is important to know the relevant provisions (that pertain to jurisdiction) under various Intellectual Property Acts are as under:

The Patents Act and the Designs Act state the appropriate court to institute a suit for infringement as the District Court. However, both the Acts are silent as to which district court shall be the appropriate forum and therefore Section 20 of the Code of Civil Procedure, 1908, will govern the place of filing the suit. Thus, the appropriate court will be a District court at the place where the defendant (or in case of various defendants where any one of them) voluntarily resides and carries on business or personally works for gain AND/OR the District court within whose limits the cause of action for filing the suit arose.

Now coming to the Trademarks Act, 1999, and Copyright Act, 1957, both the Acts contain a provision that provides for an "additional forum" of instituting suits for infringement and other reliefs, which is essentially absent in the Patents Act and Designs Act.

Section 134 of The Trademarks Act, 1999, permits the registered proprietor/plaintiff to institute a suit in a District Court within whose limits the person instituting the suit or proceeding (or any one of them if there are various plaintiffs) voluntarily resides or carries on business or personally works for gain. Section 62 of The Copyrights Act, 1957, is pari materia to Section 134 and essentially states the same thing. Thus, under the Trademarks Act and Copyright Act, an additional forum is provided to the right holders/aggrieved parties to institute a suit in a District Court within whose jurisdiction they reside.

What makes trademark and copyright cases more peculiar is that often times these cases also involve buying and selling of goods or services from an online marketplace. Thus, in such situations, it is imperative for right-holders to initiate suits in an appropriate court having territorial jurisdiction to try the suit. Over the years the Hon'ble Supreme Court and various Hon'ble High Courts have, through their judgments, deciphered this complex issue of territorial jurisdiction.

Section 134 and Section 62 were widely discussed and interpreted by the Supreme Court in its landmark decision of Indian Performing Rights Society Ltd. v. Sanjay Dalia & Anr.^[1] The Supreme Court in Sanjay Dalia (Supra) extensively discussed the parliamentary intent behind enacting Section 134. The main objective of inserting the said section was to create an additional forum for the right-holders so that they do not have to travel to far flung places to initiate suits of infringement. This landmark judgment clarified the position that the plaintiff or the right holder essentially has an option to choose between two forums as per Section 20 of the CPC or Section 134 of The Trademarks Act, 1999.

The decision of the Supreme Court was thereafter referred and further discussed by the High Court of Delhi in Ultra Homes Pvt. Ltd. v. Purushottam Kumar Chaubey & Ors.^[2], wherein the High Court laid down various scenarios as to where can an aggrieved party file the suit. The Hon'ble Court discussed four probable scenarios and also listed the appropriate forum for filing the suit. The table represented in Para 13 of the judgment is as under:

The four scenarios aptly cover the probable scenarios that usually occur in IP cases. Interestingly enough, the court pointed out a symbiotic relation between Section 20 and Sections 134 and 62. The court stated that by virtue of the Supreme Court's decision in Sanjay Dalia (Supra) case, the meaning of the term "carries on business for gain" which finds its mention in Sections 134 and 62 will be accorded the same meaning as mentioned in Section 20 in relation to the plaintiff.

Based on these decisions the High Court of Delhi in Burger King Corporation v. Techchand Shewakramani & Ors.^[3] came to the conclusion that the provisions of Section 134 of the Trademarks Act and Section 62 of the Copyright Act are in addition to and not in exclusion of Section 20 of the CPC.

However, not all courts are in consonance with the decision of Ultra Homes (supra). The High Court of Bombay in Manugraph India Ltd. v. Sigmarq Technologies Pvt. Ltd. & Ors.^[4] deferred from the finding that Section 20 and Sections 134 and Section 62 accord the same meaning. The court recognized the sections as a three-tier structure separate of one another and clarified that there is nothing in Sanjay Dalia judgment to suggest that provisions of Section 134 and Section 62 are in a way curtailed by provisions of Section 20.

While there might be conflicting views from the Hon'ble High Courts, all the judicial precedents with regards to territorial jurisdiction in case of "physical presence" or "physically carrying out business" at a place do not oust the functioning of any of the three provisions.

Jurisdiction in case of infringement through online marketplaces

A more complex question arises when infringement takes place online. It is undisputed that section 134 and section 62 will govern such cases, but can the aggrieved party take refuge of Section 20(c). It is often difficult to determine where and how the cause of action arises in case of online transactions. Nonetheless there are various judicial precedents to help resolve the complexity.

In World Wrestling Entertainment Inc. v. M/s Reshma Collection & Ors.^[5] The plaintiff company was situated in USA and the defendants were based in Mumbai. The plaintiff filed a suit for infringement and passing off in Delhi High Court. The single judge returned the plaint stating the court had no jurisdicition. However, the Division bench over turned the order of the single judge and held that the cause of action can be deemed to have arisen in Delhi as the website can be easily accessed from Delhi, commercial transactions might take place over the internet from Delhi and payments will be made from Delhi. Hence, it was considered that a part of cause of action had arisen in Delhi.

However, it is to be noted that mere access to a defendant's website will not accrue a cause of action at a particular place. The factors to consider are: (a) the website has to be an interactive website and a one where transactions actually take place; (b) the website targets customers within the jurisdiction of the court which, in turn; (c) causes injury to the plaintiff. This was reiterated by the Delhi High Court in Banyan Tree Holding (P) Ltd. v. A. Murali Krishna Reddy & Anr.^[6] Impresario Entertainment & Hospitality Pvt. Ltd. V S&D Hospitality^[7].

In today's day and age where internet governs most of the transactions, it has become important for right holders to choose an appropriate forum when they are seeking to protect or enforce their rights. In WWE (supra) the High Court referred to the 1966 judgment of the Supreme Court in Bhagwan Goverdhandas Kedia v. Girdharilal Parshottamdas & Co.^[8]wherein the court upheld the finding that a part of cause of action had arisen in Ahmedabad as the contract was accepted over telephone in Ahmedabad. The Supreme Court thus upheld that the Ahmedabad City Civil Court had jurisdiction to try the suit as the cause of action arose in Ahmedabad over the phone. Today, the world has come a long way from transacting over telephones and telegrams and with that the trend towards deciding jurisdiction in Intellectual Property cases has also evolved. While the issue of jurisdiction is still at large, the judicial precedents have always provided some respite from the complexities that arise in Intellectual property cases. In conclusion, parties should always do their due diligence on the aspect of territorial jurisdiction before filing a suit in order to avoid unwanted consequences that might hinder their right to enforce their intellectual property rights.

Mr. Anay Amin is an Associate Advocate & Attorney in the Litigation Department at Y.J. Trivedi & Co. He holds a Master's Degree in Law (LLM) from Northwestern University Pritzker School of Law and a Bachelor's Degree in Law with a focus on Intellectual Property Laws from Institute of Law, Nirma University. As an associate advocate, Amin has had the opportunity to litigate various cases of trademark infringement and passing-off which often involve well known and reputed Indian brands. He has also appeared before the Registrar of Trademarks and the Intellectual Property Appellate Board (IPAB) for arguing trademark opposition and rectification proceedings. Brand and Trademark Protection has always been his key area of interest as he understands that these cases often result in a greater injury both, to the trademark owners and the public at large.