Trademark

Banyan Tree spreading its roots: Karnataka High Court on Jurisdiction


A recent order passed by a Single Judge Bench of the Karnataka High Court has reinforced and strengthened the Banyan Tree ruling pertaining to jurisdictional issues in matters of trademark infringement. We are lucky to have a guest post on the subject by Nidhishree B.V., who was had worked on the matter and was able to give us some useful insights.

Nidhishree graduated from University Law College, Bangalore University in the year 2005 as a gold medallist and rank student. Working with Aditya Sondhi’s Law Chambers, she is a practicing Advocate in the High Court of Karnataka and was fortunate to assist the lead counsel, Aditya Sondhi, in the present appeal. She also makes regular appearances at the Trial Courts in Bangalore, the Trade Marks Registry, IPAB and the Company Law Board.

This order is exciting for us here at SpicyIP, since as our guest poster has also pointed out, this judgment from the High Court of Karnataka seems like the “first of its kind ruling… under the Trade Marks Act, 1999. The Court has clearly pointed out the.. rather misguided application of Section 134 (2) of the Trade Marks Act, 1999, ignoring the fact that neither of the Plaintiffs had registered marks. The Trial Court’s enthusiasm in invoking jurisdiction under Section 134 (2) of the Act with respect to unregistered marks, while giving a go-by to the traditional yet elementary tenet of jurisdiction under Section 20 of the Civil Procedure Code, is a disturbing yet recurring trend with the lower judiciary which seems to get befuddled with fundamental concepts such as jurisdiction, in the face of novel ‘special’ jurisdiction created under the Trademarks Act, 1999 or the Copyrights Act, 1957. In both the cases, the Trial Court had proceeded to grant an injunction in favour of the Plaintiff which the Defendants appealed against in the subject Appeals.”

With that promising beginning, we bring you an analysis of this judgment. The order clubs two separate appeals against interim injunctions awarded by the City Civil Court of Bangalore, owing to their similar facts. As brief as possible, these are the important facts that Nidhi has highlighted for our readers–

“In the first appeal, the Respondent-Plaintiff had filed a suit seeking an injunction restraining the Appellant-Defendant from infringing the trade mark, ‘Prestige’ by using the allegedly offending mark, ‘Presteege’. The mark “Prestige” had allegedly been used by the Plaintiffs in the construction and building business for over two decades in Bangalore, with pending trademark applications for the same by the Plaintiffs in Class 37 were pending before the Trade Marks Registry.

Interestingly, the cause of action here was claimed by the Plaintiffs on the basis of the Defendants’ advertisement that appeared in an edition of the ‘Malayalam Manorama’ as well as the use of the website ‘www.presteege.com’, by the Defendants.

The Defendants inter alia contended that the suit was not maintainable as they were based in the State of Kerala and had no business in Bangalore. Furthermore they brought to the notice of the court that they were allegedly the prior user of the mark ‘Presteege’ by virtue of a trademark registration by the Defendants’ sister concern in Class 24 since 1982. Additionally, a pending application in Class 37 was also claimed by the Defendants.

In the second appeal, the Respondent-Plaintiff was using the mark ‘Soukya’ in connection with a holistic medical centre in Bangalore and had registered the mark in Class 16 (for printed matter, photograph, stationery etc), while having applied for registration of mark in Class 5 (for pharmaceutical dietic substances etc) and Class 42 (for medical, hygienic and beauty care)

Seeking an injunction to restrain the Defendants from using the mark ‘Sowkhya Ayurvedic Centre’, the Plaintiffs claimed cause of action through an article appearing in ‘Deccan Herald’, a news daily which had covered the Defendants’ establishment based in Kodaikanal.

The Defendants contended that the word ‘Soukya’ was common to the trade and open to the trade to use, while also contending that the Court in Bangalore lacked territorial jurisdiction to entertain the suit as the Defendants were not residing/carrying out business within the jurisdiction of the Bangalore Court.”

In the High Court, three issues were addressed, namely:
(i) Whether the subsequent registration of a trade mark during the pendency of the case would date back and be relatable to the cause of action and conferment of jurisdiction?
(ii) Whether the existing registration in a different Class would inure to the benefits of maintaining such a suit as a registered trademark?
(iii) If the suit is ultimately considered as one for passing off and not infringement, whether part of the cause of action can be held to have arisen within the jurisdiction of the Court of Bangalore in view of the advertisement and accessibility on the website?

In reference to the first issue, the Court held that since the neither plaint mentioned a trademark registration by the Plaintiffs and only indicated a pending application, the Supreme Court decision in Dhodha House and the Premier Distilleries Case would apply i.e. “the cause must precede the action and not follow it…there is no right in the person to assert infringement before registration is granted”.

The second issue addressed by the Court was in respect to whether a suit for infringement could be filed in respect of the business falling under a different class from the existing registration. Interpreting Section 28 of the Trademark Act, the Court opined that if goods & services mentioned in a particular class to the schedule are registered, protection and relief from an infringement would be available to only that class. However, the Court reiterated that while the benefits under Section 134(2) will not be available to a party in such a situation, action for passing-off is still maintainable. As Nidhi points out to our readers, since the question of well known marks did not arise here, the Court has rightly held that protection against infringement would be available only against the class in which it is registered. Any interpretation to the contrary would defeat the purpose of class-wise registration.

This brings us to the all important issue of whether in an action of passing-off, any part of the cause of action has arisen within the jurisdiction of the Court in Bangalore, where the suits have been instituted. The plaintiffs argued even if the suit is construed as one of passing-off, a part of the cause of action can be shown to have arisen in Bangalore as the websites of the defendants is accessible from anywhere, including Bangalore, therefore providing jurisdiction to the Court at Bangalore. The defendants, on the other hand, used the Delhi HC ruling in Pfizer Enterprises & Anr. v. H.R. Manchanda & Anr. to contend that mere existence of a website does not amount to advertisement in a different jurisdiction or give rise to part of the cause of action. The plaintiffs countered this argument by relying on the same case to state that where the websites are interactive in nature, the same would provide cause of action and jurisdiction at that place. In relation to this, the plaintiffs directed the Court’s attention to the homepage of the defendants, referring to an enquiry form and provisions for online booking, indicating the interactive nature of the website which was likely to mislead customers.

In its analysis of the ratio in the Pfizer Enterprises Case, the Court mentioned Pfizer’s reference to the India TV Case, which in turn had relied on the judgment of the US Court of Appeals in Cybersell Inc. v. Cybersell Inc. & Ors. Examining the ratio of both the Pfizer Case and the Cybersell Case, the Court came to the conclusion that web activities of the defendant should be directed to the concerned geographical locale for cause of action to arise in that location. Relying on the Cybersell Case ratio, the Court stated that commercial transactions with “sufficient minimum contacts” should be shown to establish cause of action in a particular location. Therefore, since no evidence to satisfy the said test of a concluding commercial transaction in Bangalore, no cause of action had arisen in Bangalore to provide the Court at Bangalore jurisdiction to hear the matters.

The Court, in providing its judgment, stated how its opinion is fortified by the views expressed in the Banyan Tree Case. From the point of view of the practitioner, Nidhi has very usefully pointed out to us, that within the factual matrix of the present case, the ratio of the Banyan Tree case in terms of “Purposeful availment” did not arise… However, the Court has dealt with this aspect- See page 39 of the judgement. The scope of Banyan tree was restricted to jurisdiction relating to website advertisements, however, the Presteege Judgment deals with several other issues, including effect of registration in another class, effect of subsequent registration on an infringement suit.

Further, while Banyan Tree has been hailed as an all important decision, Nidhi also pointed out to me that “Banyan Tree was helpful in so far as overruling Casio India’s case. We had referred to Pfizer Enterprises v. Dr. Manchanda, (MANU/DE/1999/2008) which held that mere existence of a website does not amount to advertisement and would not give rise to cause of action. Pfizer in turn relied on India TV’s case and Cybersell’s case.”

An interesting guest post with an even more exciting application of the Banyan Tree judgment in Courts besides Delhi- all in all, we hope this is the beginning of the broadening interest of courts in Intellectual Property matters and exciting times up ahead for us here at the blog.

3 comments.

  1. Avatarmnbvcxzaq1

    i am responding out of amusement. coz of coincidence, i am simply amused (in the positive sense) by this post. alomost all the issues/aspects mentioned in this post r also the issues (albeit with a lil twist/complication) in a case which i am currently dealing in the delhi hc (but before a different bench). i cant express my specific views on these issues (n also cannot divulge the name of the case), as it would tantamount to making my legal advice public. but i am eagerly waiting to see how the judges interpret those issues (with complications) this time. however, i would yet like to make some comments (unrelated to our case). the banyan tree judgment has actually not only relied on the zippo’s sliding scale / cybersell test, but it has also combined this with and the calder’s effects targetting test (it even mentions this very clearly in the 1st sentence of para 26 n the last sentence of para 42). so, nowadays, its usually a combined test (per Toys “R” Us case). its a different matter that, in usa, the relevant jurisprudence has now subtly moved a lil beyond this combination. but here in india, v seem to prefer being a lil lethargic; v seem to prefer ‘aping the west’, instead of developing our own standards/tests. anyway, as long as the tests r reasonable, its fine (the current reliance on the combined test is an example of reasonably fair/fine test). but sometimes, late adoption/borrowing/aping (pun intended) of such tests/priciples/standards results in injustices. a fair system should strive to avoid such injustices on account of application of ‘sub-standard’ standards/principles/tests.
    -aditya kant

    Reply
  2. Avatarmnbvcxzaq1

    just a quick update on my last post. in the case that i mentioned therein, the arguments on vacation of interim injunction were wrapped up yesterday n judgment was reserved n IF (coz no one can predict the outcome, thats why ‘if’ is in capital letters) our side wins, u ll get to hear a giant’s trademark biting dust. else, god save …..(u can fill in the blank yrself). lol.
    -aditya kant

    Reply
  3. AvatarAnonymous

    Hi…, I am to understand how jurisdiction can be a place other than the cause of action. Especially where there are language problem s. A mark which has regional meaning and has regional sentiments associated, how the Delhi high court can determine the matters?
    country like india we can there be a common jurisdiction?
    Vijay

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