A Division Bench of the Delhi High Court today made some key observations on jurisdictional issues in matters where the cause of action lies in that nebulous space called the World Wide Web. The judgement comes on a referral made by a Single Judge of the court last year in the Banyan Tree Case, which Kruttika had covered and analysed in a superb piece that you can read here.The matter has now been placed again before the Single Judge to decide if in view of the law laid down in this judgement, and on the facts of the suit at hand, the plaintiff has been able to show prima facie that this court has the jurisdiction to entertain the suit. For a brief discussion of teh facts of the case, I invite you to read Kruttika’s original post on this issue.
This post is more in the nature of an update, and will be followed by a lengthier analysis shortly.
However, for those of you who are curious to know more, I quote some key observations made by the Court in CS (OS) No.894/2008, which you can access in full from the Delhi High Court website here (choose Nov 23 2009 under the date-wise section) —
1. Mere accessibility of the Defendants’ website in Delhi would not enable a court to exercise jurisdiction. A passive website, with no intention to specifically target audiences outside the State where the host of the website is located, cannot vest the forum court with jurisdiction. To such extent, the court has overruled the proposition in Casio India Co. Limited v. Ashita Tele Systems Pvt. Limited 2003 (27) PTC 265 (Del).
2. …[M]ere hosting of a website which can be accessible from anyone from within the jurisdiction of the court is not sufficient… Also a mere posting of an advertisement by the Defendant depicting its mark on a passive website which does not enable the Defendant to enter into any commercial transaction with the viewer in the forum state cannot satisfy the requirement of giving rise to a cause of action in the forum state.
3. The Plaintiff would have to show that the Defendant “purposefully availed” itself of the jurisdiction of the forum court. For this it would have to be prima facie shown that the nature of the activity indulged in by the Defendant by the use of the website was with an intention to conclude a commercial transaction with the website user and that the specific targeting of the forum state by the Defendant resulted in an injury or harm to the Plaintiff within the forum state.
This is what caught my eye at first read. Be assured you have not heard the end of the Banyan Tree!
Hail to the Delhi High Court!The Indian Judiciary has, as Kruttika hoped they would, demonstrated “dynamism and an open mind to incorporate certain changes that may be necessary considering the trend of cases globally.”
According to me, the single most outstanding feature of this judgment that gives it the extra-edge over all other similar cases is the fact that, unlike all the other cases, in this case, the plaintiff itself was not located in the forum state. Keeping this in mind, the following line in para 42, I believe is the most important – “For the purposes of a passing off or an infringement action (where the plaintiff is not located within the jurisdiction of the court), the injurious effect on the Plaintiff’s business, goodwill or reputation within the forum state as a result of the Defendant’s website being accessed in the forum state would have to be shown. Naturally therefore, this would require the presence of the Plaintiff in the forum state and not merely the possibility of such presence in the future.”
I applaud the conceptual clarity of Justice Bhat who referred the matter in the first place and Justice Muralidhar who passed the present judgment!
The judgment in question in para no. 45 states that “Also a mere posting of an advertisement by the Defendant depicting its mark on a passive website which does not enable the Defendant to enter into any commercial transaction with the viewer in the forum state cannot satisfy the requirement of giving rise to a cause of action in the forum state.”.
I, with referance to the above quoted lines from the judgment, here want to put forth a proposition and invite answers from everybody.
In Jawahaar Engineering Co. vs. Jawahar Engineers P Ltd. [1983 PTC 207] it was held that mere application by defendant to register a trade mark in Delhi would be sufficient jurisdiction upon the Court. In the said case it was also held that “when an injuncton is sought, it is not necessary that the threat should have become a reality before the injunction and it can even be sought for a threat that is still to materialise”. In Pfizer Products Inc. vs. Rajesh Chopra and Ors.[2006(32)PTC 301 (Delhi)] it was held that threat of selling offending goods in Delhi would confer jurisdiction in delhi.
Now, if such a threat of selling goods in delhi in the form of an advertisement is posted on a website accessable from delhi then according to judgment, as quoted above, the delhi courts will not have any jurisdiction untill any comercial transaction has taken place. Would this the judgment, as quoted above,then, not go contrary to the Jawahar case and Pfizer case and against section 29 (8)?????????????
It seems that my comment is tooo long so I am posting it in 2 part
Part 1
Dear IpCrazy, You have a very valid question; however, I believe there is no conflict as such for the following reasons:
1. In the Pfizer case (Del HC), the learned judge discussed in detail the ratio of Jawahar case (Del HC) and held that – the ratio in Jawahar Engineering (supra) is that mere advertisement in the Trade Mark Journal would not give a court jurisdiction. However, a threat that the offending goods could be sold at a particular place would definitely give jurisdiction to the court in such a place (para 8)…the filing of an application for registration of a trademark in Delhi would give rise to a threat perception in the minds of the people that the offending goods would be sold in Delhi and that would be sufficient to give the courts in Delhi jurisdiction to entertain a suit for passing off.
2. In the Pfizer case itself, other than the filing of application, the threat-factor was also given importance.
3. In Pfizer case, the Judge also cited ONGC v. Utpal Kumar Basu (SC) (1994 SCALE (3)90) wherein it was held that an advertisement by itself in a journal or a paper would not confer jurisdiction upon a court.
4. Further, Pfizer also discusses the SC judgment in Dhodha House & Patel Field Marshal Industries v S.K. Maingi & P.M. Diesel Ltd : 2006 (32) PTC 1. The Del HC held that “the ratio of the Supreme Court decision in Dhodha House is not that the filing of an application at the Registrar of Trade Marks at a particular place would not clothe courts at that place with territorial jurisdiction to entertain the matter. The ratio is that an advertisement by itself in a Trade Mark Journal would not confer jurisdiction upon a court within whose territorial limits the advertisement is published or is seen.”
Now, from the ratio of Dhodha House Case (SC) as discerned in Pfizer, there are two aspects that have to be taken into consideration – Advertisement and Filing of TM application.
All 4 judgments mentioned above clearly in consonance on the two points – 1. Mere advertisement in journal would not give rise to cause to action and therefore confer jurisdiction on forum state. 2. Filing of an application for registration of a trademark in forum state would give rise to a threat perception in the minds of the people that the offending goods would be sold in forum state and that would be sufficient to give the courts in forum state jurisdiction to entertain a suit for passing off.
Now, let’s analyze the Banyan Tree case.
Part 2
On the first point, I believe its in consonance to the above 4 decisions as per the statements in Para 45 – a mere posting of an advertisement by the Defendant depicting its mark on a passive website which does not enable the Defendant to enter into any commercial transaction with the viewer in the forum state cannot satisfy the requirement of giving rise to a cause of action in the forum state. Above 4 also state that mere advertisement in journal would not give rise to cause of action and therefore no jurisdiction to forum state.
On. the second point, it is pertinent to note the judgment of the SC in K. Narayanan and Anr v. S.Murali CA No. 4480-4481 of 2002 decided in 2008 which I believe qualifies the 2nd point – filing of application giving rise to threat and therefore conferring jurisdiction on forum state – in as much as it says that mere filing of application would not directly indicate a threat/intention to sell goods in the place where the application if filed.
The facts were that the Appellant and Respondent both had their place of business in Coimbatore, TN and were selling goods there only. The TM application was filed by Respondent in Chennai Registry Office as TN came under the jurisdiction of that office. Based on the fact of filing application and relying on Jawahar and Pfizer, jurisdiction was sought to be conferred by the Appellants on the Madras High Court. The Supreme Court held – filing of an application for registration of a trade mark does not constitute a part of cause of action in a suit for passing off. The SC further held that mere filing of a trade mark application cannot be regarded as a cause of action for filing a suit for passing off since filing of an application for registration of trade mark does not indicate any deception on the part of the respondent to injure business or goodwill of the appellants. The SC also cited and approve the judgment of the Division Bench of the High Court of Madras in Premier Distilleries Pvt. Ltd. Vs. Sushi Distilleries [2001(3) CTC 652], wherein it was observed “The cause of action in a suit for passing off has nothing at all to do with the location of the Registrar’s office or the factum of applying or not applying for registration.”
Therefore, I believe that the previous ruling that mere filing of application gives rise to threat/intention of sale is no more good law. I also believe that this ruling is correct considering that TM Registry Offices have not been set up in each State but have jurisdiction over a number of States. Therefore, mere filing of application would not directly indicate intention to sell goods in the State/place where TM Registry Office is located (As in the Narayanan v. Murali case where all the operations of both the parties were restricted to Coimbatore, TN and application was filed in Chennai, KN only because the TM Office was located there.)
However, that part of Jawahar and Pfizer Case which categorically state that if there is a threat of sale or intention to sell, then court will have jurisdiction to grant injunction, is still good law. And this point has also been reiterated in the Banyan Tree case wherein the tests laid down for allowing application for injunction is that “the Plaintiff would have to show that the Defendant “purposefully availed” itself of the jurisdiction of the forum court. For this it would have to be prima facie shown that the nature of the activity indulged in by the Defendant by the use of the website was with an intention to conclude a commercial transaction with the website user and that the specific targeting of the forum state by the Defendant resulted in an injury or harm to the Plaintiff within the forum state.”
Thanks a lot for providing so explicit answer for my query (thanks for diong research upon my queries)
Good to see that the picture clicked by me is used here.