The advent of the internet has enabled individuals to copy and distribute protected marks and materials with ease, while its accessibility across territories has complicated the issue of determining jurisdiction for legal action. The issue of jurisdiction has been raised before courts time and again, and the volume of adjudication upon it is extensive. This article summarises takeaways from said adjudication, and sets out the principles currently guiding the choice of forum in a suit involving online infringement of trademarks or copyrights.<\/p>\n
I. Legislative Backdrop<\/strong><\/p>\n The general provision governing territorial jurisdiction in respect of intellectual property disputes is contained under Section 20 of the Civil Procedure Code, 1908 (hereinafter \u201cCPC\u201d), which provides that a suit may be instituted at the court within whose jurisdiction:<\/p>\n According to the accompanying explanation, a defendant corporation is deemed to carry on business at its sole\/principal office, or at a subordinate office if the cause of action arose at the place where such subordinate office is located.<\/p>\n More specifically, the issue of territorial jurisdiction is governed by Section 62 of the Copyright Act, 1957 (hereinafter \u201cthe CR Act\u201d) and by \u00a0Section 134 of the Trade Marks Act, 1999 (hereinafter \u201cthe TM Act\u201d), \u00a0both of which are pari materia. According to the same, suits are to be instituted at a \u201cdistrict court having jurisdiction\u201d, which includes courts within whose territorial limits the plaintiff resides, carries on business, or personally works for gain. These provisions may be availed only in cases of infringement, and not in cases of passing off i.e. only a registered right-holder may sue at the place of its residence or business.<\/p>\n It is to be noted that any explanation for the aspect of \u201ccarrying on business\u201d similar to the one for a defendant corporation under Section 20 CPC is absent from the text under both the CR Act and the TM Act (hereinafter collectively \u201cthe IP Acts\u201d). Despite that, the explanation has been read into the IP Acts by virtue of the decisions in Indian Performing Rights Society Ltd. <\/em>v. Sanjay Dalia<\/em>[1]<\/strong><\/em><\/a> (hereinafter \u201cSanjay Dalia<\/em>\u201d) and Ultra Home Construction (P) Ltd. <\/em>v. Purushottam Kumar Chaubey<\/em>[2]<\/a> (hereinafter \u201cUltra Home<\/em>\u201d). This acts as a restriction on forum shopping by plaintiffs and is discussed later in the article.<\/p>\n Ordinarily, the doctrines of lex specialis and lex posterior would apply, and the provision under CPC would be restricted. However, in light of the language used in the IP Acts, the Supreme Court has held that the jurisdiction under CPC is not ousted[3]<\/a>; rather the IP Acts merely provide an additional forum where suits may be filed. The purpose behind this additional route is to expose an infringer with inconvenience rather than compelling the sufferer to chase after the former.<\/p>\n Since content, products and services on a website or mobile application are available throughout territories wherever the reach of the internet extends, there are two pertinent questions that need answering:<\/p>\n Answers to these can assist us in addressing the conundrum of jurisdiction around internet-based intellectual property disputes, and pinpoint the appropriate forum for institution of a suit.<\/p>\n II. \u201cCarrying on Business\u201d<\/strong><\/p>\n In Dhodha House <\/em>v. S.K. Maingi<\/em>[4]<\/a> (hereinafter \u201cDhodha House<\/em>\u201d), it was observed that the presence of any man was not necessary for the purpose of \u201ccarrying on business\u201d, and the Supreme Court set out three fundamental conditions that had to be satisfied for establishing that an entity carries on business within a court\u2019s jurisdiction:<\/p>\n However, in World Wrestling Entertainment Inc. <\/em>v. Reshma Collection<\/em>[5]<\/a> (hereinafter \u201cWWE<\/em>\u201d), the Division Bench clarified that in case of web-based business models, the first two conditions set out in Dhodha House<\/em>[6]<\/a> will not apply, since they specifically relate to agents. What warrants consideration is whether in transactions over the internet\u00a0 the third condition stipulating performance of the essential part of the business is satisfied, and if yes, where?<\/p>\n It was noted that display of goods on a website amounts to an invitation to offer against which an offer is made by a customer at the place where he or she is located. If accepted, the money is paid from the customer\u2019s location, and the goods are delivered to the same location. Owing to the nature of the internet, the offer and acceptance are instantaneous. Keeping these factors in mind, it was held that the availability of transactions through a website at a particular place is virtually the same as a seller having a shop at that place in the physical world, and therefore, such seller would be regarded as carrying on business at that place.<\/p>\n The principle expounded in WWE<\/em>[7]<\/a> has been upheld and applied in subsequent cases. In Millennium & Copthorne International Ltd. <\/em>v. Aryans Plaza Services (P) Ltd.<\/em>[8]<\/a> (hereinafter \u201cMillennium & Copthorne<\/em>\u201d), it was clarified that service providers would also attract jurisdiction at places where customers can make a mere reservation (even through third-party websites), whether the reservation concludes into a transaction or not. For example, if there is a hotel located at A<\/em>, and through a tourism website, customers at B<\/em> and C<\/em> can book a room at the hotel, the hotel would be carrying on business at B<\/em> and C<\/em>, and would attract jurisdiction on this ground at both of those places in addition to A<\/em>.<\/p>\n III. Cause of Action<\/strong><\/p>\n The determination of the cause of action, and thereby, jurisdiction under Section20 CPC in an online context has been examined extensively in Banyan Tree Holding (P) Ltd. v. A. Murali Krishna Reddy<\/em>[9]<\/a> (hereinafter \u201cBanyan Tree<\/em>\u201d); a case where interestingly, neither the plaintiff nor the defendant was located within the territorial limits of the court. Here, the Division Bench of the Delhi High Court decided that mere accessibility or interactivity of a website in a particular place would not confer jurisdiction to courts in that place. Rather, the plaintiff must establish that the defendant \u201cpurposefully availed\u201d itself of the jurisdiction at the place of suing. After noting common law developments in UK and USA, the following elements were held necessary to show that the cause of action partly arose in a particular place through the use of internet:<\/p>\n Thus, a rigorous standard to determine cause of action and jurisdiction in cases of online transactions was set up. Over the years, however, adjudication has diluted this standard. In Sholay Media and Entertainment (P) Ltd. \u00a0<\/em>v. Yogesh Patel<\/em>[10]<\/strong><\/em><\/a>, the Court considering that mere display of a trade mark at an exhibition confers jurisdiction[11]<\/a> observed that an act of advertising counterfeit products or soliciting customers therefor in a place would constitute a part of the cause of action, and courts in such place would accordingly have jurisdiction.<\/p>\n Similar views have been held in Burger King Corpn. <\/em>v. Techchand Shewakramani<\/em>[12]<\/strong><\/em><\/a> and in Exxon Mobil Corpn. <\/em>v. Exoncorp (P) Ltd.<\/em>[13]<\/a> (hereinafter \u201cExxon Mobil<\/em>\u201d). \u00a0According to these decisions, the cause of action arises in each and every place where infringement\/passing off occurs. Since, in addition to actual sales, advertisements and promotions too constitute infringement according to the IP Acts, the cause of action partly arises in all places where such advertisements and promotions are made. The courts exercising jurisdiction in all those places would thus be appropriate fora for institution of proceedings.<\/p>\n IV. Restriction on Forum Shopping<\/strong><\/p>\n Guided by the motive of aiding convenience, the IP Acts provide for an additional forum where a registered right-holder could sue for infringement. However, the motive was never to enable a plaintiff to indulge in forum shopping, and the legislature did not attend to require either party to travel to distant places. Therefore in Sanjay Dalia<\/em>[14]<\/a>, the Supreme Court interpreted Section 62 of the CR Act and Section 134 of the TM Act in a manner that allowed the availment of the additional route to plaintiffs while restricting harassment of defendants through filing of suits at far-flung places.<\/p>\n It was noted that generally, a plaintiff under the IP Acts ought to file a suit at the place of ordinary residence or where the principal office is situated. However, if a right-holder is residing or carrying on business at a place where the cause of action has also arisen, the suit must be filed at that place itself \u2013 the IP Acts thus do not allow the right-holder to travel to a far-off place where it carries on business for the purposes of instituting proceedings. For example, if a company has its registered office at A<\/em> and branch offices at B<\/em> and C<\/em>, with the cause of action arising at B<\/em>, the appropriate forum for filing a suit under the IP Acts would be the court exercising jurisdiction over B<\/em>.<\/p>\n This position has been adopted and further clarified in Ultra Home<\/em>[15]<\/a>, where specific scenarios contemplating the plaintiff as a corporation were set out as follows:<\/p>\n\n
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