IPRS v. Sanjay Dalia
Read the decision here.
In what will perhaps go down as a prominent decision in IP jurisprudence, the Supreme Court on Wednesday clarified the law on where Copyright and TM infringement suits could be filed. It held that these suits could be instituted only in the District Court that exercised jurisdiction over the place where the cause of action (in whole or in part) arose, if the plaintiffs instituting the suit had an office in that jurisdiction. The decision rendered was rendered by a two judge bench of Justices Khehar and Mishra with the latter writing the decision
The implications of this decision are somewhat momentous in the context considering the parties involved. IPRS is somewhat notorious for filing suits in Delhi for causes of action that could as well have been settled in other jurisdictions. That trend would definitely be stopped with this judgement.
This two post set analyses the decision itself and points out the implications of the judgement. Part I below deals with the analysis of the judgement which will be continued over to Part II, which will then conclude with a discussion on the implications.
Brief Factual Background and Claims
The decision dealt with two different matters clubbed on appeal owing to similar factual circumstances. The first was a case where the plaintiffs/appellants (IPRS) sued in Delhi for infringement of their copyright by the defendants/respondents who owned theatres in Maharashtra. This was despite the fact that the head office of the plaintiffs was situated in Mumbai, and that the cause of action had ostensibly arisen in Maharashtra. The respondents had raised this contention before the High Court of Delhi, where both the Single Judge and the Division Bench considered Mumbai to be the better jurisdiction for this suit.
The other suit was filed for TM infringement where the registered office of the plaintiffs was in Mumbai. They sued in Delhi for infringement however did not clarify in their pleadings that the allegedly infringing magazine was being distributed in Delhi and therefore that a cause of action arose in Delhi. In denying their application to amend the pleadings, the Single Judge noted that an amended pleading does not confer jurisdiction. This order was however reversed by the DB and subsequently went up in appeal to the Supreme Court.
The question presented in both cases is essentially the same – when the cause of action arises in a place where the plaintiff has an office (head or subordinate), can they sue in another jurisdiction?
The plaintiffs set up the argument that both S.62 of the Copyright Act of 1957 and S.134 of the Trademarks Act, 1999 granted an additional remedy over and above the provisions of S.20 of the Code of Civil Procedure and that therefore the restrictions imposed by the Explanation in S.20 are not attracted in this case. They also argue that since the court is dealing with the matter in an interpretative capacity, and that there has been a line of settled cases allowing plaintiffs to sue (Exphar and Dhodha House), the court cannot venture into an exercise where the Heydon’s rule is examined.
The defendants on the other hand argue that S.20 which explains the phrase “carrying on business” cannot be inapplicable in this case, leading to a subjective definition for the phrase and that the Heydon’s rule must be applied to cure the harassment caused by the apparently prevailing interpretation of this rule.
The analysis of the court should therefore depend on three questions:
- Whether the Heydon’s rule should be applied in this case, and if so in what manner?
- Whether S.20 of the Code of Civil Procedure is applicable?
- If so, how does this provision interact with the provisions of S.134 and S.62?
Heydon’s rule and its applicability
The court observes that if the construction adopted by the plaintiffs is to be approved, then it would cause a great deal of hardship to potential defendants as they would have to travel the lengths and breadths of the country to defend actions. Certainly, this would be an absurd construction of these set of provisions, one that may not be attributed to the Legislature. This in itself is sufficient grounds to put into application the principles of Heydon’s rule.
The rule requires the court while interpreting the provision in question to consider four factors – the law prevailing before the provision was enacted, the mischief that existed in such a situation, the remedy that the Legislature provided for such mischief and the reasoning behind such remedy. The court in its analysis points to a number of sources including the Parliamentary Debates to ascertain that the mischief sort to be cured by Ss. 62 and 134 was that plaintiffs would have to often travel across the country to protect their works or their marks, to the site of the cause of action or of the Defendant’s jurisdiction (as per S.20 of the Code). Therefore in order to remedy this, jurisdiction was additionally vested with the courts under whose jurisdiction they ordinarily resided or carried out business. Notice how the intention here seems to be to connect the presence of the plaintiff with the cause of action and not to merely grant them an additional forum to sue. This was an apt way to remedy the mischief that potential plaintiffs faced in protecting their Intellectual Property in case they resided in places where the cause of action did not arise.
The application of Heydon’s rule would therefore suggest that plaintiffs simply have a choice to sue in their jurisdiction if the cause of action arose there, or elsewhere, but cannot interpret these provisions to confer jurisdiction on another court if the cause of action arose in their jurisdiction. That is simply not contemplated by the Legislature. (Ctd…)