We are happy to present to you a guest post by Mr. Arun C. Mohan, Partner at Mohan Associates, analysing the recent decision of the Hon’ble Supreme Court in IPRS v. Sanjay Dalia. The decision clarifies certain salient aspects of the jurisdiction to file infringement suits under Ss. 62 and 134 of the Copyright and the Trademarks Act respectively. We had reported on the decision in a two part series here and here.
Shedding Light on IPRS v. Sanjay Dalia
– Arun C. Mohan
The SC has clarified legislative intent under Sec 62 of the Copyright Act and Sec 134 of the Trademark Act as being apparent to provide an additional forum to the plaintiff to institute a suit wherein it either has its head/principal/registered office or branch/subordinate/ancillary office. This is apart from its right under sec 20 of the Code of Civil Procedure to institute a suit wherever the defendant has its head/principal/registered office or branch/subordinate/ancillary office or where the cause of action wholly or in part arises.
This further/additional right has been stated to include the places wherein:
- The company has a principal office or branch office and where the cause of action has arisen wholly or in part.
- The company has a principal office or branch office irrespective of the cause of action not having arisen therein.
After accepting the vast scope of point 2 hereinabove for the maintainability of jurisdiction, the judgment places a restriction on the same that if the cause of action, in part or whole, arises within any principal or subordinate office of the plaintiff, such place cannot be ignored by the plaintiff and it would have to institute the suit within such place/places. It cannot consequently, institute suits in such scenario at such other places wherein it has a branch office and cause of action does not arise. It is of immense relevance that in such scenario wherein the cause of action arises at multiple places where the plaintiff has offices, the precedent does not discuss the doctrine of election as to which place should be preferred, and hence by such omission such matters continue to be left to the discretion of the plaintiff.
The restriction may thus be summed up as stating that though Sec 62 of the Copyright Act and Sec 134 of the Trademark Act remove any embargo or occurrence of the accrual of cause of action within the principal office or branch office, if the cause of action does in fact arise within such principal office or branch office, the company cannot choose a branch office wherein no cause of action arises for instituting a suit and would necessarily have to file the same based on the former.
The judgment in my interpretation therefore has the following outcomes:
- A suit can be filed under Sec 62 of the Copyright Act and Sec 134 of the Trademark Act at the place of the principal/registered office/branch office of the Company if the cause of action does not arise within any of these places.
- If the cause of action arises only within the principal/registered office of the Company, the jurisdiction of all branch/subordinate offices before which cause of action does not lie would be ousted. This was the exact scenario considered in the present judgment.
- If the cause of action arises within the principal place of business and a branch office/s, the plaintiff has the discretion to choose either of these forums. In such circumstances, the jurisdiction of all other branch offices before which cause of action does not lie would be ousted.
- If the cause of action only before a branch office/offices, the jurisdiction of other branch offices before which cause of action does not lie would be ousted. However, in interpreting what are the relevant branch offices to be considered, reliance can be placed on the judgment of the Hon’ble Supreme Court in Dhoda House which states that there must be some correlation between the branch office and the ‘essential part of the business’ i.e. the branch office within which the cause of action arises must have some correlation to the cause of action, and not every branch office is to be deemed relevant for the purposes of considering the same.
This judgment is also to be read in the light of the accepted rule that any challenge to the jurisdiction of the Court under Order 7 Rule 11 would have to be based exclusively on the contents of the plaint. Therefore, if the plaint states that the cause of action in part or full has arisen before the branch office stated therein, the same would be deemed to be true for these limited purposes and the issue of jurisdiction can be considered only at the time of trial. Also in considering what is the cause of action, it would have to be remembered that the same is a bundle of rights and is not restricted to the physical manufacture or sale of the defendants’ products but also without limitation the usage in any communications, advertisements or websites. Given the affirmation of various past precedents in this judgment, the defendant cannot launch a fact-finding mission to consider jurisdiction and would only have to try to apply such precedent to the pleadings in the plaint itself.
The Hon’ble Supreme Court though has not regarded forum conveniens explicitly, the purpose of the judgment is to avoid prejudice to the defendant by instituting suits in far-off places which have no correlation to the cause of action and has been chosen only to harass the defendant. In observing the consequence of the same, the Hon’ble Supreme Court has been quite blunt in stating that the practice of having most such litigation being instituted in Delhi merely due to presence of counsel cannot be sustained and the same is irrelevant for the purposes of maintainability of jurisdiction.
In conclusion, I believe the impact of this case is rather limited particularly in the context of courts having original side jurisdiction and their own rules (Madras, Bombay, Calcutta). However, the purpose of the judgment to prevent harassment to the defendant is laudable, and would definitely lead to the distribution of intellectual property litigation across the country and not merely focused in Delhi, as has been the case till date.