In a recent decision, a Single Judge of the Delhi High Court refused to entertain Allied Blenders’ action for infringement of its TM OFFICER’S CHOICE since the plaint disclosed that the Defendant’s infringing use was restricted only to Andhra Pradesh. Furthermore, the Court also observed that it will not assume jurisdiction merely because the plaintiff has stated at the fag-end of the plaint an apprehension that the Defendant is likely to engage in the infringing activity in Delhi as well.
Back in 2015, the Supreme Court decided in IPRS v Sanjay Dalia that a trademark plaintiff cannot bring an infringement action under Section 134(2) of the Trademarks Act in a Court under whose territorial jurisdiction there is neither any part of the cause of action nor the presence of the defendant; even if the plaintiff has a subordinate office in such a place. This decision has been previously covered here on SpicyIP.
However, even a landmark judgment can leave a few open areas. Ever since it was decided, IPRS has been interpreted at numerous occasions; most notably by the High Court of Bombay in Manugraph v Simarq and Delhi in Ultrahome Constructions v Purushottam Kumar. I have analysed these conflicting decisions here and here. The present judgment is in line with both these decisions.
Factual Matrix
In the present case, the plaintiff has a branch office in Delhi. The defendant nos. 1 and 2 have their registered offices in Maharashtra and Andhra Pradesh respectively. The plaintiff alleged that the defendant infringed its TM ‘OFFICER’S CHOICE’ by using ‘SMART CHOICE’ in Andhra Pradesh. Subsequently, the plaintiff filed an infringement suit before the Delhi HC.
This is where it gets interesting: the plaintiff immediately acceded to the SC’s ratio in IPRS insofar as the Court will not have jurisdiction if no part of the cause of action arose in Delhi. However, the plaintiff pressed its jurisdictional claim on the grounds that Tilaknagar Industries Ltd. (TIL), of which defendant no. 1 is a unit, is located in Delhi and that there existed a strong apprehension that defendant no. 1 will carry on its infringing activities in Delhi through TIL’s distribution network. In essence, the plaintiff sought to base its claim on a quia timet action, i.e. in anticipation of infringement. Madhulika and Aparajita have covered quia timet actions on SpicyIP here and here.
On the other hand, the defendants sought for return of the plaint under Order 7 rule 10 of the CPC, 1908 [07r10 application] since no part of the cause of action actually arose in Delhi.
Decision
At the very outset, the Court clarified that the defendants’ application must be decided on the basis of the disclosures made in the plaint alone, i.e. all allegations in the plaint must be assumed to be correct[1]. If the plaint disclosed a cause of action in Delhi, the Court would be bound to proceed with the case.
The Court concluded that the plaintiff has taken issue only with the defendants’ existing infringing use in Andhra Pradesh and that the primary object of the plaint is to restrain the defendants from continuing with these activities. Therefore, the Court observed that “a mere bald statement at the end of the plaint which has no foundation in the entire plaint cannot be accepted as indicating the cause of action; the averments made in the plaint must, ex-facie, disclose the cause of action”.
The Court stated that the plaint must be read as a whole. It noted that the first 26 paragraphs of the plaint, which capture the catena of averments, are completely silent about the plaintiff’s purported apprehension of infringement in Delhi. Furthermore, the plaintiff has not bothered to even substantiate this ‘apprehension’.
For instance, the Delhi HC previously assumed jurisdiction in Teva v NATCO since the Teva had categorically pleaded to the effect that a news article reported that the NATCO would work upon the infringing activity with Mylan. Teva had also, upon making enquiries, found that Mylan had signed an agreement with NATCO relating to the development and marketing of Teva’s patented drug in the US. Accordingly, the Court returned the plaint in the present dispute.
Analysis
I believe that Justice Vidhu Bhakhru is indeed correct in returning the plaint as the plaintiff was clearly attempting to drag the defendant to Delhi despite the lack of any infringing activity. Accordingly, Justice Bakhru has followed the SC’s decision in IPRS as well as the Delhi HC’s previous judgment in Ultrahome Constructions.
However, I believe that Justice Bakhru uses inconsistent reasoning in arriving at the finding that the plaint does not disclose a quia timet action. This is because, as the Learned Judge also observes, the Court is simply required to look at the averments of the plaint in a 07r10 application; it must not delve into the veracity of the pleadings. In the present claim, Justice Bakhru categorizes the plaintiff’s pleading as a mere bald statement even though the plaint had pleadings to the effect that the Defendant No. 1 may commence infringing activity in Delhi along with TIL.
That said, I still believe that this apparent error does not vitiate the ultimate findings of the Learned Judge. Faced with a set of almost identical facts and the same plaintiff, the Delhi HC has previously ruled in Allied Blenders v R.K. Distilleries that the plaintiff cannot bring an infringement action in Delhi on the basis of even a legitimate apprehension of infringement when the defendant has already commenced infringing activity has already commenced in Andhra Pradesh; for the simple reason that the Delhi HC does not exercise territorial jurisdiction over Andhra Pradesh. I have previously covered it here. Similarly, in the present case, Justice Bakhru should have simply applied the ratio in Allied Blenders to arrive at the same conclusion. Nevertheless, Justice Bakhru’s decision is another indication that the Delhi HC has begun to shed its reputation of being a pro-plaintiff forum.
[1] Exphar SA and Another v. Eupharma Laboratories Ltd. and Another
