Category Archives: Trademark

Online Disputes and Forum Jurisdiction

The Delhi high court on 3rd January, 2018 in Impresario Entertainment & Hospitality Pvt. Ltd. vs S&D Hospitality[1], took a different view with respect to the Internet jurisdiction[2].

In the above case, plaintiff sought permanent injunction against the defendants who was running a restaurant at Hyderabad, under  the impugned trademarks ‘SOCIAL’ and ‘STONE WATER’ and its services were available through Zomato. The court held that the plaintiff would have to produce material prima facie to show that some commercial transaction using the website was entered into by the Defendant through the app- ZOMATO, within the forum state and that the specific targeting of the forum state by the Defendant resulted in an injury or harm to the plaintiff within the forum state.

Defendants contended that this Court has no territorial jurisdiction to entertain the present suit  as the defendant neither has his registered office within the jurisdiction of the said Court nor carries on any business within the jurisdiction of this Court. Mere existence of a website without proof of ‘the effect’ does not clothe this Court with territorial jurisdiction to entertain the present suit. Returning the plaint, the court held that a mere hosting of a website that is  accessible by anyone within the jurisdiction of the court is not sufficient for this purpose[3].

Convinced with the Defendant’s contention, the Court Further relied on Banyan Tree Holding (P) Limited v. A. Murali Reddy and Anr[4] which held that a passive website, with no intention to specifically target audiences outside the State where the host of the website is located, cannot vest the forum court with jurisdiction. The Hon’ble Court also observed that for the purposes of a passing off or an infringement action (where the plaintiff is not located within the jurisdiction of the court), the injury on the plaintiffs business, goodwill or reputation within the forum state as a result of the Defendant’s website being accessed in the forum state would have to be shown.

Earlier, the stance of the court was a bit different  in the case of World Wrestling Entertainment v. M/S Reshma Collection & Ors[5]– The Delhi High court had held that the mere website of the party referring to various goods  is not an offer but an invitation to an offer, just as a menu in a restaurant. The invitation, only if accepted by a customer in Delhi, becomes an offer made by the customer in Delhi for purchasing the goods “advertised” on the website of the appellant/plaintiff. Further, it held that mere accessibility of website in a forum state which ‘solicits’ its business, through which Defendant’s goods and services are sold, is enough to raise cause of action and in determining the personal jurisdiction in Delhi.

Legal Provisions in Regard to Jurisdiction

The Code of Civil Procedure, 1908 contains the provisions under section 20 with respect to institution of the suits where defendant resides or cause of action arises . It reads as : Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction –

  • The defendant, or each of the defendants where there are more than one, at the time of the commencement of the Suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
  • any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or 
  • the cause of action, wholly or in part, arises.”

[Explanation]: A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.

Section 62 [6] provides that every suit or other civil proceeding in respect of the infringement of copyright in any work or the infringement of any other right conferred by this Act shall be instituted in the district court having jurisdiction.

 Learned author Mulla in the Code of Civil Procedure, 18th Edn., has observed that under clauses (a) to (c) of section 20, plaintiff has a choice of forum to institute a suit. The intention behind Explanation to section 20 of the Code of Civil Procedure is that once the corporation has a subordinate office in the place where the cause of action arises wholly or in part, it cannot be heard to say that it cannot be sued there because it did not carry on business at that place. The linking of the place with the cause of 12 action in the Explanation where subordinate office of the corporation is situated is reflective of the intention of the Legislature and such a place has to be the place of the filing of the suit and not the principal place of business. Ordinarily the suit has to be filed at the place where there is principal place of business of the corporation.

The Indian Courts have always followed the parent legislation – Civil Procedure Code, 1908 and have  constantly tried to harmonize the technological advancement with the statute. Therefore, in the following caselaws, the courts have explained Section 20 of the CPC with reference to IPR and internet jurisdiction.

Indian Performing Rights Society Ltd. v. Sanjay Dalia & Anr The Supreme Court of India interpreted section 62 of the Copyright Act, 1957 and section 134(2) of the Trade Marks Act, 1999 with regard to the place where the plaintiff can institute a suit. Wherein it observed that “The very intendment of the insertion of provision in the Copyright Act and Trade Marks Act is the convenience of the plaintiff. The rule of convenience of the parties has been given a statutory expression in section 20 of the CPC as well. The interpretation of provisions has to be such which prevents the mischief of causing inconvenience to parties.”

Banyan Tree Holding (P) Limited vs A. Murali Krishna Reddy & Anr. on 23 November, 2009– The division bench of the Delhi High Court held that “Under clauses (a) to (c) of section 20 CPC, a plaintiff has a choice of forum and cannot be compelled to go to a place of business or residence of the defendant and can file a suit where the cause of action arises.”

In Icon Health And Fitness, Inc vs Sheriff Usman And Anr. – the Delhi High Court assumed jurisdiction under Clauses (a) and (b), stating that the defendants ‘carried on business’ in Delhi. The entirety of the Court’s reasoning for the above is contained in two sentences – “Though the defendants are not residing in Delhi, however, the defendants are offering their fitness apps and brands through App Store, Google Play Store and e-commerce portals like http://www.amazon.in which can be accessed and operated from all over the country, including from Delhi. Thus, it can be said that the defendants are carrying on business or working for gain at Delhi and this Court has territorial jurisdiction to try and decide the present suit as per section 20 of the CPC, 1908

Conclusion

At the outset, the Court does not subscribe to the view that mere accessibility of the Defendants website in Delhi would enable this Court to exercise jurisdiction. However, a passive website, with no intention to specifically target audiences in the forum State where the host of the website is located, cannot vest the forum court with jurisdiction.[7] The Court in Impresario Entertainment & Hospitality Pvt. Ltd. vs S & D Hospitality, took a very balanced stand and logically differentiated the concept of ‘mere presence of website’ and ‘targeting the forum state’. Thus, it is appreciated that the Court is not rigid and is flexible in providing a reasonable and tenable judgments by considering different facts and circumstances. Hence, it can be seen that the Indian Judiciary is swiftly moving towards a new jurisprudence on internet jurisdiction, in accordance to section 20 of CPC.

Author: Mr. Himanshu, Intern at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at   anirudh@khuranaandkhurana.com.

References:

[1] Decided on: 3rd January, 2018 ; CS(COMM) 111/2017

[2] The Code of Civil Procedure, 1908, S-20 (c) – Other suits to be instituted where defendants reside or cause of action arises.

[3] Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414

[4] CS (OS) No. 894/2008

[5] https://indiankanoon.org/doc/71641182/

[6] The Copyright Act, 1957, Section-62-Jurisdiction of court over matters arising under this chapter.

[7] Banyan Tree Holding (P) Ltd

Advertisements

A Reminder for Online Retailers

Here’s one case that involves an online retailing businesses that is having a link with Trade mark Law – Jadebay Ltd and others v Clarke-Coles Ltd (t/a Feel Good UK) [2017] EWHC 1400 (IPEC).

However, overlooking the customary practice of online retailing methods, the Intellectual Property Enterprise Court followed the theoretical root of the Trade mark laws and over-turned such practices by upholding that‘re-use of a third party’s Amazon listing without consent to sell the same goods may, on appropriate facts, amount to trade mark infringement or passing off.

The factual matrix of this case lies as below:

In this matter there were two claimant, the first one was the statutory and common law owner of the Trade mark ‘Design Elements’ for the purpose of  “flagpoles plastic storage box garden furniture”, while the second Claimant was the sole licensee since 2011 to sell the products of the first claimant.  These products were also sold through online shopping portal namely – www.amazon.co.uk, via three listings created by the second claimant.

Usually, the common practice while listing products for sale on Amazon or any such kind of online portals are that each new listing is given a Unique Amazon Identification Number (ASIN). It is pertinent to note that an Amazon listing created by one party can be used by multiple sellers selling common product. Amazon then tends to promote the cheapest of the offerings by selecting them as the default seller, allowing consumers to review each listing in more detail.

Thus, in this case, the issue arose when the defendant listed its product under the listing created by the claimants, with a low price due to which they appeared as the default seller, attracting majority of sales from the said listing.

Interesting fact about this case is, that the claimants sued the defendants for trade mark infringement and passing off and did not even involve Amazon, who encourages sellers to use pre-existing generic ASINs where possible.

Arguments

The claimant focussed on the basic concept of rights of trademark. Firstly, the owner of the trademark has the right to prevent the third party from commercially using any sign (without the permission of the TM owner) that is ‘identical to the trade mark in respect of goods or services which are identical to those for which the mark is registered (double identity) (section 10 (1), Trade Marks Act 1994) (TMA) (section 10(1))’ or ‘ by such use of trademark that causes a likelihood of confusion or association on the part of the public (section 10(2)(b), TMA) (section 10(2)(b)).”

Secondly, the law of passing off a trade mark, which is considered as an element of Tort, the essential feature that is considered to attract this tort is the goodwill attached to the trade mark, such misrepresentation leads to likelihood of confusion among consumers due to which the claimant suffer damage as mention in the case of Reckitt & Coleman Products Ltd v Borden Inc [1990] RPC 341.

However, the defendant relied on the generality of the Amazon listing number. They claimed that since the listing was generic and did not refer to a specific brand, it could list its product under the same listing and that the brands of the competing products were significantly different as the defendant’s brand was “Feel Good UK”.

However, the claimant argued that due to the use of the same listing number namely “20ft aluminium flagpole “by Design Elements”, any consumer can link the defendant’s product as that of the claimant’s product.The defendants should have sold their products through another Unique Identity ASIN number.

The question was not whether the Defendant attached the sign or trade mark to the product or packaging itself, but whether the use of the listing in this way infringed (and/or passed off) the Claimants’ rights.

Judgement

The Intellectual Property Enterprise Court  accepted the claimant’s argument and  further observed that by having the same listing number and linking one’s goods to a competitor’s branded product listing would undoubtedly cause a misrepresentation and confusion among the consumers leading to Trademark infringement and passing off.

Conclusion

The present case has shown the online businesses a reality that the presence of Trade mark law is every where. It is another reminder that these businesses should consider their online marketing very carefully. Attaching products to an existing Amazon listing when the products are clearly not the same could potentially be an infringing act.  Moreover, as per the Objective of Trade Mark law, that is to avoid confusion in the market place, the decision of the court was not strange and perhaps was very apt.

Author: Ms. Pratistha Sinha, Intern at Khurana and Khurana Advocates and IP Attorneys and can be reached at anirudh@khuranaandkhurana.com.

References:

[1] https://www.lexology.com/library/detail.aspx?g=55745fd6-0397-4222-9d31-a3b3a8447e19

[2] https://www.rpc.co.uk/perspectives/ip/flagging-the-risk-of-a-new-type-of-trade-mark-infringement

Appointment of Chairman of the Intellectual Property Appellate Board

IPAB is one of the most important IP tribunals in the country and was established by the Central Government by notifying in the Official Gazette on 15.07.2003. IPAB is an administrative body that has appellate jurisdiction over the decisions of the Controller of Patents, Registrar under the Trade Marks Act, 1999, and the Geographical Indications. However, IPAB has no statutory powers for trial infringement proceedings.

After the retirement of the Chairman of IPAB, K.N Basha on 13th May 2016, IPAB was run by only one member i.e. Mr.  Sanjeev Kumar Chaswal (Technical Member of Trade Mark) leaving behind other two posts vacant namely Vice-Chairman and Technical Member (Patents). This situation left IPAB almost non-functional for an year, leading to backlog of almost about 50,000 applications, due to which India was put under Priority watch list by US. Trade Representative.

As a result of which writ petitions were filed in Delhi as well as in Chennai, in order to fill up the vacant seats so as to make IPAB functional. This resulted in an expedited appointment of the Chairman, however, other positions are yet to be appointed. Therefore, through the Notice dated 1st January 2018 issued by IPAB (here) in accordance to the order dated 29.12.2017 of Ministry of Commerce and Industry (Department of Industrial Policy and Promotion), Shri Justice Manmohan Singh has been appointed as the Chairman of the said Board.

Justice Manmohan Singh is a well renowned persona in the field of IPR, who practiced the over 10 years and served as the Additional Judge of High Court of Delhi from 11th April, 2008- 21.09.2016.

As to who appointed the present Chairman and the constitutionality thereof are still contentious issues as the Madras High Court had upheld that the selection committee for appointing members of IPAB, shall have a predominant role of the Judiciary rather than of the Executive. Further, pointed that while appointing the ‘chairperson’, the recommendation of the Chief justice of India must be given ‘due consideration’. The concerned High Court,  elaborately explained and also struck down various parts of Section 85[1] of the Trade Mark Act, 1999 in order to upheld the ‘Doctrine of Separation of Power’[2], thereby making the IPAB, a constitutionally valid Judicial body.

However, it is alleged that this appointment has been made under Tribunal, Appellate and other Authorities (Qualifications, Experience and other conditions of Service of Members) Rules, 2017. The said Act provides for composition of the selection committee that consists of Chief Justice of India or his nominee, two secretaries to the Government of India and two experts nominated by the Central Government, leading to greater dominance of Executive rather than judiciary in the appointment procedure of the Chairperson. This blatantly violates the judgement of the Madras High Court as mentioned earlier.

Moreover, let’s wait whether the said appointment of Justice Manmohan Singh will be challenged on the ground of constitutionality or not, keeping in mind the rulings held by the Hon’ble High Court of Madras.

Author: Ms. Pratistha Sinha, Intern at Khurana and Khurana Advocates and IP Attorneys and can be reached at anirudh@khuranaandkhurana.com.

References: 

[1] Qualifications for appointment as Chairman, Vice-Chairman, or other Members.

[2]Shamnad Basheer vs Union Of India on 10 March, 2015, W.P.No.1256 of 2011; The petition challenged the constitutional validity of the eligibility criteria, appointment of the members of IPAB

Louboutin’s ‘Red Sole’ Declared as a Well-Known Trademark by Delhi HC

The news of famous French fashion designer Christian Louboutin’s ‘red sole’ shoes with their sky heel stiletto and iconic red sole often regarded as the fashion statement has recently been in the limelight for being declared as a well-known trademark by Justice Mukta Gupta, Delhi High Court, but very few know the story behind the iconic red sole until now. After dissecting Christian Louboutin’s Rizzoli book, it was discovered that while starting off his career as a landscape gardener, it was actually the nail polish that gave Louboutin his inspiration. The renowned reputation of the ‘RED SOLE’ trademark has not been hidden from anyone and is spilled over into India from various countries around the world and consumers are well aware of this goodwill and reputation.

The luxury shoe brand had recently moved the High Court seeking a permanent injunction to restrain the traders, i.e. ‘Kamal Family Footwear’ and ‘Adra Steps’ in Delhi’s Karol Bagh from manufacturing and selling or in any manner, the shoes using his trademarked sole or the design which is deceptively similar or identical to his distinctive design as shown below.

shoe

The Court observed that the Christian Louboutin’s red sole has been a well-known luxury brand with presence in over 60 countries including India and has been using its ‘red sole’ trademark extensively and continuously since 1992.

In the suit which proceeded ex parte, Justice Mukta Gupta observed as follows: “The plaintiff’s trademark is internationally recognizable and has extensive usage in India. The ‘RED SOLE’ trademark also enjoys trans-border reputation in India by virtue of a variety of factors including tourist travel, in-flight magazines, Internet and broadcasting of various films and television programmes…….”

The Court referred to Hindustan Unilever Limited Vs. Reckitt Benckiser India Limited and finally directed two footwear traders to pay compensation of Rs. 10 lakh to the luxury brand owner for infringing the trademark for over a year and a half and decreed the suit by permanently injuncting the defendants from manufacturing, selling, marketing and advertising foot-wears with the trademark ‘RedSole.’

Author: Rashi Gahlaut,  Trademark Associate at Khurana & Khurana Advocates and IP Attorneys can be reached at  rashi@khuranaandkhurana.com.

Source: 

[1] hfttp://lobis.nic.in/ddir/dhc/MUG/judgement/12-12-2017/MUG12122017SC7142016.pd

Trade Mark Infringement-Toyoto Jidosha Kabushiki Kaisha. vs. M/S Prius Auto Industries Ltd. and Ors.

Time for Considering Territoriality Principle over Universality Principle 

Courts are gradually shifting their focus to territorial nature of Trade Marks. The same was also quite evident in the Exide case, that has been discussed in the previous blog (here). However, no conclusion was drawn in the case due to ‘out of court settlement’. But, the Supreme Court of India in the instant Toyota case has left a landmark precedent of recent times and re-explained the character of Trademark law.

The case goes back to 2009[1], where Toyota, which is a car manufacturer, claimed that Prius Auto Industries that trades with auto parts and accessories, bore the Plaintiff’s registered ‘Toyota’, ‘Toyota Innova’, ‘Toyota Device’ and ‘Prius’ Trade Marks. The plaintiff approached the Trade Mark Registry for cancellation of registered mark of the defendants, and also filed the suit on the ground that the defendant was using their ‘well known mark’ without their consent, leading to an unfair advantage of their reputation and goodwill of the plaintiff. However, following the decade old practice, ‘global reputation and prior user was upheld’ by the Trial court and gave the judgment stating the Defendant liable for passing off of the Trade marks of the Plaintiff, thereby restraining them from using the said trade marks and imposing punitive damages of rupees ten lacks.

However, the Division Bench of the High Court of Delhi gave a very balanced view and held that the decision of Trial Court was acceptable as far as injunctions against the mark Toyota, Toyota Innova’ and ‘Toyota Device’ is concerned. Injunction against the use of Prius by the Defendant was not justified, as the Plaintiff has to give evidence for showing that there existed a cause of likelihood/actual confusion in the Indian market. Thus, this part of the judgement of the Trial Court was set aside. Therefore, the current case is an appeal filed by the Plaintiff before the Hon’ble Supreme Court which dealt with the question that ‘whether the defendant is liable of passing off due to the use of ‘PRIUS.’

The factual matrix lie in issue that revolves around the mark ‘Prius’. This was the  Mark under which the Plaintiff’s first commercial hybrid car was launched in Japan as well as in other countries since 1997. However, the Plaintiff did not get the Trade Mark “Prius” registered in India and its Prius car was introduced in India only in the year 2009, much later than the year when the Defendant got there Trade Mark ‘PRIUS’ registered in India in 2002.

The importance of the case pertains to the tussle between the two theories of Trade Mark Law. However, the true meaning of Trans-border reputation can very well be observed through this case.

Universality Principle on behalf of Appellant

The Appellantsmain argument was that their Trade Marks had acquired immense reputation and goodwill due to intense advertisement of the product worldwide through print media and internet that were even available in India. Reliance was even made on NR Dongre vs Whirlpool Corporation[2], where it was held that “wide advertisement of trade mark without existence if the goods in local market can well be considered as use of the Trade Mark in the local market”. Also the real test to determine the prior user is to establish that ‘who is the first in the market.’

Thus, the mark PRIUS was a well-known mark under section 2 (1) (zg) r/w Section 11(6) & 11(9) of the Act  as the mark PRIUS had acquired a great deal of goodwill in several other jurisdictions in the world much prior to Prius Auto’s use and registration in India.

Territoriality Doctrine on behalf of Respondent

The Hon’ble Court was convinced with the averments made by the Respondents that most of the courts globally has accepted ‘territorial doctrine over universality principle’, so as to establish the goodwill and reputation in a particular jurisdiction. Therefore, in order to follow the Territoriality Doctrine, one has to show adequate evidence that he has acquired the a substantial goodwill in India for its mark, relying on Starbucks v. British Sky Broadcasting, where the Court observed that:-

“No trader can complain of passing off as against him in any territory… in which he has no customers, nobody who is in trade relation with him.”

Therefore, prior use of the trade mark in one jurisdiction would not ipso facto entitle its owner or user to claim exclusive rights to the said trade mark in other jurisdiction as observed by Division Bench of Delhi Court.

Judgment

Thus, the Supreme Court held that “likelihood of confusion” would be a better test of proving a passing off action, which can only be established from evidentiary documents, which the Appellants failed to provide. In furtherance of this, the Supreme Court also insisted on the Trinity Test as laid down by Reckitt & Colman Products Ltd. v Borden Inc[3] :

  • The goods or services have acquired goodwill or reputation in the marketplace that distinguishes such goods or services from competitors;
  • The defendant misrepresents his goods or services, either intentionally or unintentionally, so that the public may have the impression that the offered goods or services are those of the claimant; and
  • The claimant may suffer damages because of the misrepresentation.

These seven years of clash between the Toyota and Prius automobile company came to an end and the Supreme Court concluded that trademark rights are territorial and not global, thus one has to prove that one has acquired its reputation and goodwill in a territory, only through actual evidence, thereby rejected the trade mark case brought by Toyoto jidosha kabushiki kaisha.

Analysis

The Hon’ble Supreme Court has reiterated the much-needed revision of foundational basis of Trade Mark law, which has also very well described and explained the two most important Doctrine of the Trade Mark law that helps in determining the right owners – Universality Principle and Territoriality Doctrine. Also, Division Bench of High Court has played a very significant role in highlighting the groundbreaking principle and it was very consistent with its view towards the territorial aspect of the Trade Mark law. (which can be seen Exide case). Moreover, the Court Aptly relied on Trans Tyres India Pvt. Ltd vs. Double Coin Holdings Ltd & Anr., which observed that Universality Doctrine (which posits that a mark signifies the same source all over the world) has not been accepted by the courts. Modern day trade; globalization have brought in multi-channel modes of sale in the market and therefore it is the territoriality Doctrine (trade mark being recognized as having a separate existence in each sovereign country) would hold the field.

Thus, it is time to also look into the territorial character of the Trade Mark above the rights of prior user and Trans-border reputation.

Sources:

[1]  http://supremecourt.gov.in/supremecourt/2017/9646/9646_2017_Judgement_14-Dec-2017.pdf

[2] 1996 (2) ARBLR 488 SC

[3] [1990] 1 WLR 491

Author: Ms. Pratistha Sinha, Intern at Khurana and Khurana Advocates and IP Attorneys and can be reached at anirudh@khuranaandkhurana.com.

Exide Industries Limited vs. Exide Corporation, U.S.A. & Ors.

The case Exide India v Exide US brings into effect the perplexing issue of Trade Mark law. The dispute dates back to 1997 when the US based Company ‘Exide Technologies’ entered the Indian market post Liberalisation, where Indian company ‘Exide Industries’ was already present over the decades in the local market selling automobile batteries under the trademark “EXIDE”. As soon as the US based company started its operation in India, Indian company “Exide Industries” filed a suit for infringement of trademark in Delhi High Court. After a significantly long and much converse legal conflict, the Court in 2012 restrained Exide Technologies from using “Exide” trademark in India. Exide Technologies further filed an appeal to Division Bench against the judgement of 2012, which was though dismissed the Division Bench held that there was neither infringement nor passing off done by Exide Technologies as both the commercial ventures were genuine users of the mark. Further to this decision, Exide Industries filed an appeal before the Hon’ble Supreme Court, which was disposed off by the court, as the parties to the dispute opted for an out of court settlement. The foremost dispute of the case was as to who is the real owner of the mark EXIDE.

The case is important as it includes the aspect of prior-use of identical trademark by two commercial entities and its legitimate ownership. The case involves a significant concept of trademark law according to which the prior use and adoption of trademark show distinctiveness of the trademark on account of sale of the goods in market which makes the seller, owner of the trademark. The Delhi High Court single judge held that the trans-border use of the trademark by the registered owner of a mark in a particular jurisdiction does not make him the owner in another jurisdiction where the similar mark is in simultaneous use by other local registered proprietors with proven prior use of that trademark. But subsequently the Division Bench declared the judgement to be impugned and thus held that the trans-national use of the trademark is one of the significant aspects to look for the ownership of the trademark and also the goodwill of the trademark continues to be with the assignor of the trademark even if it is assigned to some other company for use in another jurisdiction.

Case background:

M/s. Electric Storage Battery Company (ESBC) was incorporated in USA in 1888 and subsequently was granted the trademark ‘EXIDE’ in USA. It incorporated a subsidiary company in UK in 1891 named as M/s. Chloride Electric Storage Co. Ltd. (CESCO) which was permitted to use the trademark as it was a subsidiary of the parent US Company. Later, CESCO was also granted registration of trademark ‘EXIDE’ in UK. In 1947, following an order of a US District Court, ESBC and CESCO broke connection but CESCO continued to have right to use trademark ‘EXIDE’ pursuant to an agreement between the two. CESCO started selling batteries under the name ‘EXIDE’ in India and subsequently, in 1942 it was granted registration of the trademark ‘EXIDE’ even in India. CESCO is the parent company of the present plaintiff company to which the trademark was transferred. In 1978, by executing a deed of assignment, trademark ‘EXIDE’ was assigned to the present plaintiff company. Thereafter, the plaintiff company applied for transfer of registration of trademarks in its favour which was also granted. Therefore, it was selling batteries under the name ‘EXIDE’ for quite a long time in India.

After liberalisation, when US company Exide Technologies started selling batteries under the name ‘EXIDE’ in India, The Indian Company brought a suit for infringement and passing off against it which became a long drawn battle.The ownership of the trademark EXIDE was the primary issue in this case. The Indian Company Exide Industries claimed ownership on two grounds:

  • It was the registered owner of the trademark in India. This ownership was transferred from the transferor-company.
  • It was the prior user of the trademark in India and thus it acquired the ownership of the trademark ‘EXIDE’ in India.

Similarly the US based company, Exide Technologies claimed the ownership on two grounds:

  • It is the parent company (US based ESBC) of the former transferor-company (UK based CESCO) which owned the trademark ‘EXIDE’ and thus only Exide Technologies have the exclusive right of the ownership of the trademark ‘EXIDE’ even in India.
  • The trademark ‘EXIDE’ is registered in its name in about 130 countries and thus it is the worldwide owner of the trademark. As the company has a transnational existence, it is the real owner of the trademark ‘EXIDE’ even in India.

In the present case, the concept of prior use was applied, which implied that the plaintiff company was using the trademark by selling batteries under the name ‘EXIDE’ in India. The defendant claimed that it was the owner of the trademark in India as well because it was the parent company of the transferor-company from which the plaintiff acquired the trademark ‘EXIDE’ and the defendant pleaded that it had not abandoned its right by not using the trademark in India and instead didn’t use the trademark in India for long period of time because of some ‘special circumstances’. The court did not accept the Defendant’s plea as it failed to show any ‘special circumstances’ for not using the mark over such sufficiently long period of time in India. The result was that the court accepted the fact that the transferor-company was manufacturing batteries under the name ‘EXIDE’ in India from around 1960 from which the plaintiff company got the trademark assigned. Thus automatically, as far as India is concerned, the plaintiff and their predecessors are the prior user of the trademark ‘EXIDE’.

Judgement:

The Delhi High Court in 2012 through Valmiki Mehta, J. restrained Exide US from using the Exide mark in India and held the plaintiff as the legitimate user and owner of the mark in India due to its prior use by plaintiff. Both, infringement and passing off by US Company Exide Technologies were confirmed by the court. The Defendant’s plea of non-use of trademark in India due to special circumstances was also rejected as Court observed that the Defendant failed to establish any special circumstances.

However, the case came up as an appeal to the Division Bench of Delhi High Court which considered both the issues, the prior use of the trademark by Exide Industries and whether Exide Technologies is liable for the infringement and passing off. Relying on the landmark Supreme Court judgement like Cadila Healthcare, Dyechem v Cadbury and Durga Das Sharma v Navratan Pharmaceutical laboratories, the court inferred that passing off and infringement are both different concepts wherein, an impression of deception or confusion relating to the manufacture or origin of the goods is created in the minds of the buyers. Court observed that the trademark ‘Exide’ used by both the parties is identical, and both were genuine users of the mark. The judgement of the court was quite inventive and only one of its kind wherein the court outlined that US based Company was kept out of the Indian market due to trade restrictions but however on record of evidence Exide Batteries manufactured by Exide US was substantially known in India as well. Another point that the Court illustrated was that though, through an assignment deed, the mark was assigned to Exide India, yet the goodwill in the mark was retained by Exide US because the agreement did not specifically transfer the goodwill. Thus, the transnational reputation was highlighted and the court allowed Exide US to be in possession of the goodwill of the trademark ‘EXIDE’ despite of transfer of rights of ownership of the trademark. At the end, the court confirmed that there was no circumstance of passing off or infringement by the Exide US as it had legitimate rights to the mark. The court termed the use of the mark by Exide Technologies as “bona fide and legitimately concurrent”. Moreover, the counterclaim against Exide India was not maintainable since they were the registered owners of the mark in India.

The order of the division bench was further stayed by the Supreme Court after an appeal was filed by Exide Industries. The apex court restrained the Exide Technologies (defendant) from using the mark until the final adjudication of the matter but the parties before the decision of the court brought about an out of court settlement.

Present scenario and analysis:

In the event of widespread reputation through immense technology (internet, websites), globalisation and restructuring of Indian market, Exide case comes as an exception and as a tenet that considers territorial character of Trademark above trans-border reputation. The Delhi High Court judgement of 2012 clearly delineated that the territorial prior use of the trademark by a registered user in one jurisdiction weighed more than the worldwide reputation of the trademark used by another registered user in other jurisdictions. The case was twirled when the Division Bench restored the rights to the mark to both competing proprietors in a way. In this case the true scope and effect of concurrent use of an identical trademark for similar products in different jurisdictions were brought into light. Both concurrent users of the identical trademark in different jurisdictions were held to be the legitimate users in their respective jurisdictions. The allowed of the retained goodwill for substantiating bona fide claim to the mark was an exclusive and unique approach.

However, out of the court settlement by the parties clearly marked an end to the hopeful jurisprudence in cases of use of identical trademark by different commercial proprietors in different jurisdictions. The parties mutually agreed subject to certain terms and conditions to fully and finally settle all disputes and their rights and obligations with respect to the mark in the way set out in the agreement. As a result of the settlement, the Supreme Court disposed off the case without a proper jurisprudence on the issue.

Source:

[1]   MANU/DE/4642/2012

Author: Ms. Pratistha Sinha, Intern at Khurana and Khurana Advocates and IP Attorneys and can be reached at anirudh@khuranaandkhurana.com.

Why Do You Need to Register a Trade Mark?

Recognition of a Trade Mark or a Brand is created through consistent quality products/services, advertising/marketing campaigns, brand recall, geographic presence, sales team, positioning, among many other parameters. However, with growing competition, every market player is required to have an edge over the other in order to win the race of profitability, along with gaining trust of the consumer as well as to build a strong reputation and goodwill for its goods/services so as to maintain its position in the Market. Registration of a Trade Mark gives one such exclusive competitive advantage, wherein, for instance, Trade Marks such as the ‘arches’ of  or the ‘swoosh’ of  creates an impact on the consumer’s mind, and easily connects with the masses of consumers worldwide. However, there are lot of chances that these Trade Marks are infringed, duplicated or counterfeited, hampering the business. In order to prevent these incidents, Registration of Trade Marks provides a strong protection against such incidents.  There are other various reasons for registering Trade Mark that can be categorised as:

LEGAL IMPORTANCE

Trade Mark helps in identifying the source of origin of goods/ services, the very first step taken by the company is to have a distinctive Trade Mark that becomes a crucial factor for business identity. With successful Trade Mark and brand comes a greater risk or misuse of mark or stealing of mark by the competitors.

Registering a Trade Mark can help avoid various sorts of legal proceedings that may otherwise run the business into loss and create undesired ownership/reputation issues/loss. In the event of unfair competition, counterfeit, or fraud; owner of a Trade Mark (TM) may rightfully seek the doors of court for injunction[1], wherein adopting or commercially exploiting a pre-existing Trade Mark may also lead to trial and strong damages. This statutory right extends to 10 years and can be re-registered, wherein one can be a perpetual owner of his/her Trade Mark, 1999[2] and keep on taking advantages provided by the registered Trade Mark.

 

SIGNIFICANCE OF REGISTERED TRADE MARK AMONG CONSUMERS

A registered Trademark i.e.  associates a comprehensive value to the goods and services of the businesses that are registered by the Trade Mark registry, assuring the quality of product or services. This influences the consumer’s purchasing decisions.[3] Registration of a Trade Mark affirms the reliability of the product/services, which is later converted to consumer loyalty. For example, a consumer won’t think twice before choosing an  product/services over XYZ product due to its assurance of good quality, goodwill and brand value that ITC has built over the years through various actions/initiatives, one of which being – registration and enforcement of their Trade Mark. We can say that Registration of Trade Mark makes the business unique and distinguishing from others, which attracts customer’s attention and therefore prevents any sort of market confusion

COMMERCIAL ASPECT

Registration of Trade Mark by the Trade Mark Office compliments a business strategy by giving it a statutory right to use its mark (business name/logo) exclusively and gives right to restrain others from using the same or similar mark.[4] Hence, bare minimum due diligence is a prerequisite before filing a trademark application in the Trade Mark Office. Moreover, this provision of exclusive right not only gives the right to the owner to sue the infringers but also builds its face value, brand value and reputation. A registered Trade Mark has the biggest role to play in commercial aspect of the business.

An extensive use and success of the goods/services through word of mouth, consumer’s acceptance, Internet or social media etc, which helps in attracting more consumers, leads to making of a trade Mark in to a brand identity of the business, which becomes very important to be protected from its misuse. In case these brands are infringed, the business can be expected to incur a huge amount of loss on account of creation of confusion in the market place deviating a large section of consumers, which in turn damages the brand, reputation and business as a whole. Also, a Registered Trade Mark can attain so much value apart from the core business that it paves way for brand expansion. For example, AMUL-THE TASTE OF INDIA,  has been the most successful brand with respect to dairy products, its promotion and quality of goods have been up to the mark since its inception i.e. 1965. Thus, its registration in the Trade Mark Office and wide promotion through its Website www.amul.com has given it a higher brand value, reputation as well greater protection against the infringer. The presence of awareness of the brand all over the world has made it a ‘well – Known mark’[5] and has helped it to achieve a Trans-border Reputation[6], thereby giving it a protection all over the world.

Further, Trademarks are an important part of the merger and acquisition process, and can contribute to the overall value of a business. Trademark validation not only provides both sides of the deal with the necessary transparency to assess this value, but also prevents the occurrence of any unexpected issues after the merger or acquisition has been completed.

Because of the above reasons, the potential investors will always be interested in a business that has a registered Trade Mark for its goods/services. A trademark only holds value if it has been properly registered and maintained. Therefore, a registered Trade Mark not only affirms the security, but also aids clarity in any merger or franchising of the business, positively influencing its perceived value.

 

CONCLUSION

A brand/trademark is built based on a good quality of service or product, and through accessibility of the service/product to consumers across globe, which has become easier over the years through Internet. This brand value or value of the trade mark, opens up a window for a business to enter into a different line of goods/products. What can be a more substantial example for this than the Trade Mark ‘Kolkata Knight Riders’, which began as an IPL team for cricket that shot to fame so much so that it became a brand in itself attaining a value of about $ 3.8 Billion. This large recognition and huge brand value paved way for the owner to enter into different line of business such as sale of KKR sports jerseys. Moreover, anyone who intends to sell the same in the name of KKR, has to seek permission from the owner.

Now a days, building a brand is easier, but maintaining the brand from external interference (counterfeiters/infringers) is a bigger problem. This external interference not only infringes the product and makes the company suffer huge loss, but also leads to lower the reputation of the company, thereby having a negative impact on the reliability and faith of consumers for the goods/services of a product.

Registered trademarks are one of the few assets of a business that can provide you with a long-term competitive advantage through protection, especially in today’s highly competitive and brand-driven marketplace.

Therefore, to summarize, a Trade Mark plays a vital role preventing unfair competition and confusion in the market, a strong marketing strategy and in identifying the source of the product/services. A registered Trade Mark, thus increases reliability of a business.

References:

[1] Hearst Corporation Vs Dalal Street Communication Ltd., 1996 PTR 1 (Cal)

[2] Section 25(1) of The Trade Mark Act,1999.

[3] Qualitex Co. v. Jacobson Products Co, 514 U.S. 159 (1995).

[4] Section 29 of The Trade Mark Act, 1999;

[5] OA/56/2011/TM/KOL

[6] Whirlpool &Anr vs. N.R. Dongre, (1996) PTC 415 (Del).

[7] http://www.trademarkeagle.co.uk/why-register-a-trademark

[8] https://www.wardtrademarks.com/why-you-should-register-your-trade-mark/

Effect of Acquiescence on Trademark

The dictionary meaning of acquiescence is the reluctant acceptance of something without protest.

The Trade Marks Act 1999 talks about the “acquiescence” under Section 33 of the Act and is based on the well settled principle-

 “Equity aids the vigilant, not those who slumber on their rights.”

It means a person who has been wronged must act relatively swiftly to preserve his rights.

The proprietor of the trade mark must remain vigilant about any unauthorized use of his mark by others and if he doesn’t, he would not be entitled to claim any relief under the Act due to inaction on his part.

Condition prior to Trade Mark Act 1999

Prior to the provisions in Trade Marks Act, 1999 there was not any clear and precise law regarding the defense of acquiescence under the Trade Marks Act, 1940 and under the Trade and Merchandise Act, 1958 and the scope of acquiescence was based on judicial pronouncements. Under Trade Mark Act, 1940 the court permitted the defendant to take the defense of acquiescence under ‘special circumstances’ in Section 10(2) of the 1940 Act which says,“In case of honest concurrent use or of other special circumstances which, in the opinion of the Registrar, make it proper so to do, he may permit the registration by more than one proprietor of trade mark which are identical or nearly resemble each other in respect of the same goods or description of goods subject to such conditions and limitations, if any, as the registrar may think fit to impose.

 Under Trade and Merchandise Act, 1958 the plea of acquiescence can be availed by the defendant under the ‘special circumstance’ under clause (1) of sub-section (b) of Section 30 of 1958 Act which is as follows –

Section 30 – Acts not constituting infringement :- (1) Notwithstanding anything contained in this Act, the following acts do not constitute an infringement of the right to use of a registered trade mark – (b) the use by a person of a trade mark in relation to goods connected in the course of trade with the proprietor or a registered user of the trade mark if, as to those goods or bulk of which they form part, the registered proprietor or the registered user conforming to the permitted use has applied the trade mark and has not subsequently removed or obliterated it, or has at any time expressly or impliedly consented to the use of the trade mark.

 Acquiescence under Trade Marks Act 1999

 The act came into force in 2003 and it clearly lays down the provision for acquiescence under Section 33 which is mainly evolved from the various opinions and judgments of the courts over the years.

 Section 33– Effect of acquiescence:

(1) Where the proprietor of an earlier trade mark has acquiesced for a continuous period of five years in the use of a registered trademark, being aware of that use, he shall no longer be entitled on the basis of that earlier trade mark—

(a) to apply for a declaration that the registration of the later trade mark is invalid, or

(b) to oppose the use of the later trade mark in relation to the goods or services in relation to which it has been so used unless the registration of the later trade mark was not applied in good faith.

(2) Where sub-section (1) applies, the proprietor of the later trade mark is not entitled to oppose the use of the earlier trade mark, or as the case may be, the exploitation of the earlier right, notwithstanding that the earlier trade mark may no longer be invoked against his later trademark.

Section 33 of the Act in simple words allows the defendant to take the plea of ‘acquiescence’ against the proprietor of the trademark for his ignorance and inaction even after being aware of the use of the proprietor mark in good faith for the period of continuous five years.

The Supreme Court in the Ramdev Food Products Ltd. Vs. Arvind Rambhai Patel [AIR 2006 SC 3304] crystallized the law on the point as – The principle of acquiescence would apply where the plaintiffs found (i) sitting by or allowing another to invade the rights and spend money on it, (ii) it is a course of conduct inconsistent with the claim for exclusive rights for trademark, trade name, etc.

The Delhi High Court in Jolen Inc. Vs. Doctor & Company [2002 (24) PTC 29 (Del)] observed that the defendant can avail the plea of acquiescence not only if he proves that the plaintiff is standing by but he has also to prove that the plaintiff has turned a blind eye for a substantial period. Bombay High Court in the case of Emcure Pharmaceuticals Ltd. Vs. Corona Remedies Pvt. Ltd. upheld that a mere failure to sue without a positive act of encouragement is no defense and is no acquiescence.

The exception to this section is in the words “good faith”. If the proprietor of the mark is able to prove that the defendant adopted the mark in bad faith, to trade upon the reputation and goodwill of the proprietor’s mark for commercial gains, then the plea of acquiescence doesn’t hold good. In the case of  M/s. Hindustan Pencils Pvt. Ltd. Vs. M/s. India Stationary Products Co. Ltd. [AIR 1990 Del. 19]- Delhi High Court held, if the user even after knowing that he is violating the right of the owner of the trademark, acts fraudulently, the relief of injunction is not denied.

Thus a mere delay in filing a suit would not amount to acquiescence. If the plaintiff even being aware of the use of a similar mark sits idle and allows the defendant to grow and popularize its business under the similar mark over a substantial period of time. However, it is clear that the defendant can only be allowed to raise the plea of acquiescence if he proves that he adopted the mark in good faith and without knowledge of the earlier similar mark being in use. Acquiescence can be a ground for granting injunction and factors such as knowledge of unauthorized use of the mark, ignorance, and inaction by the proprietor for a substantial period of time, mala fide intentions of the user are to be considered while deciding the plea of acquiescence, thereby, not only allowing the defendant to use the mark concurrently, but also to get the mark registered!

About the author:     Ankit Chaudhary, Faculty of Law, Delhi University, intern at Khurana & Khurana Advocates and IP Attorneys and can be reached at info@khuranaandkhurana.com

100 and counting: Indonesia joins Madrid Protocol

The Madrid Protocol is an international treaty which simplifies the procedure for international registration of trademarks by filing a single application along with onetime payment fee. The protocol was adopted at Madrid on June 27, 1989, amended on October 3, 2006 and further amended on November 12, 2007 [1]. The Protocol provides for convenient and effortless managing and registration of trademarks worldwide. A landmark moment in Madrid System history was October 2, 2017 as Indonesia officially became 100th member of the Madrid Union on this day. The instrument of accession to the Madrid Protocol with WIPO’s Director General was completed through the issuance of the Presidential Decree No. 92 of 2017. The Protocol will become effective for Indonesia on 2 January 2018 [2].

Indonesia is one of fastest growing top five G20 economies and a leader in global marketplace and membership in   Madrid Union opens up a direct path for Indonesian enterprises in new marketplaces like US, China, Europe and Japan. Indonesia is the eighth member of the Association of Southeast Asian Nations (ASEAN) to join the Madrid System after Vietnam which became member in 1995 [4]. It further reinforces the motto of ASEAN, to promote technology transfer throughout the region and stimulate innovation through strengthened IP-rights co-operation.

Once the Madrid Protocol comes to force, local economic growth will be stimulated as the Indonesian nationals will be able to seek protection of their trademark in the territory of other member countries. Likewise, the owner of an existing International Trademark Registration (IR) will be able to expand the scope of their protection by filing a subsequent designation to its existing IR, in order to seek additional protection in Indonesia.

The Presidential Decree No. 92 of 2017 provides that Indonesia has made the following declarations in regard to its accession to the Madrid Protocol [3]:

  1.  With respect to Article 5 (2)(b) of the Madrid Protocol, time limit of 18 months will be given to notify a refusal to the International Bureau against an international application made under the Madrid Protocol.
  2. With respect to Article 8 (7)(a), the Government declares its rights to receive fees produced from supplementary and complementary fees, in the event:
  • An international trademark application is intended for Indonesia
  • Indonesia becomes the next appointed country in the international registration
  • A renewal for an international registration is intended for Indonesia.
  1. With respect to Rule 20 bis(6)(b) of the Common Regulations (recording of licenses in the International Register), further on it will not have any effect in Indonesia.

The Madrid Protocol after gaining instrument of accession from Indonesia becomes the fifth WIPO administered treaty after the WIPO Convention, the Paris Convention, the Berne Convention and the PCT. Indonesia’s entry into the Madrid system as its 100th member clearly showcases its significance of being a key component of global protection of trademarks. It also highlights a cost-effective and reliably convenient solution it provides to global brand owners.

For an applicant to apply for trademark protection in Indonesia, he/she must browse the Global Brand Database which has almost 870,000 marks currently registered in that market before he/she files an international application.

Just before Indonesia entering into the Madrid system, Thailand became the 99th member of the Madrid System. The Protocol will enter into force for Thailand on November 7, 2017 [5]. This development can be seen as indication of news from remaining two ASEAN members, Malaysia and Myanmar.

Author: Shilpi Saxena, Jr. Patent Associate at Khurana & Khurana Advocates and IP Attorneys can be reached at shilpi@iiprd.com.

 [References]

[1]http://www.wipo.int/treaties/en/text.jsp?file_id=283484

[2]http://www.wipo.int/madrid/en/news/2017/news_0020.html

[3]http://www.wipo.int/madrid/en/members/declarations.html

[4] https://www.state.gov/p/eap/regional/asean/

[5]http://www.wipo.int/madrid/en/news/2017/news_0015.html

The Question of Internet Jurisdiction

With the explosion of Internet and domain names, various disputes have occurred relating to many cyber-crimes and infringement of Trademark laws over domain names[1], and in order to seek justice before the Court of Law, dispute regarding jurisdiction arise owing to Internet having a multi-jurisdictional character.

The issue of jurisdiction has been the most debated and has been a focal point of the whole globe. In absence of a specific legal framework for cyberspace, much reliance is placed on judicial pronouncements of various countries that have developed the concept of ‘Internet Jurisdiction’.

International Shoe Co. V. Washington.[2] was among the first cases that introduced ‘Minimum Contact Test’, which further became the basis of determining Internet jurisdiction globally. In this case, International Shoe did not own any property/ permanent location in Washington, however, the plaintiff earned about $30,000 annually from customers in Washington. The state enacted a tax on companies doing business there that functioned as a mandatory contribution to its Unemployment Compensation Fund, which was stated to have been applied to the Plaintiff.  US court of law held that the court can exercise its jurisdiction over non-resident defendant if certain ‘minimum contacts’ with forum state exist such that maintenance of the suit does not offend traditional notions of fair play and substantial justice.’ This theory was further limited to ‘purposeful availment’ of the defendant to the forum state.[3] The forum court may exercise its jurisdiction over a non-resident defendant/ defendants not physically present where an alleged injury arises out of or relates to actions by the Defendant himself that are ‘purposefully directed’ towards residents of the forum state. It was held that ‘purposeful availment’ would not result from ‘random’ or ‘fortuitous’ contacts by the Defendant in the forum state.[4]

However, a proper analysis of nature and quality of commercial activities of a website in terms of determining the jurisdiction was considered in Zippo Manufacturing Co. v. Zippo Dot Com, Inc.[5], which introduced ‘sliding scale analyses’ based on passive, active, and interactive websites. Court observed that mere passive websites do not form personal jurisdiction but those websites that enable parties of forum state to enter into contracts contemplating business with the forum state, may confer personal jurisdiction.

Further, jurisdiction on the effect of online interaction in the forum state was evolved by the Supreme Court in Calder v. Jones.[6] The effect test is applied in cases with insufficient interactivity or minimum contacts but where an action is targeted at a particular forum. In the Internet context, the effect test can be used to examine the exact nature of a Defendant’s Internet activities to determine whether it’s out-of-state actions were directed at parties or entities within the forum state. Further in Calder v. Jones, it was held that “purposeful direction requires (a) an intentional action that was (b) expressly aimed at the forum state, with (c) knowledge that the brunt of the injury would be felt in the forum state. If a court finds that a Defendant’s actions meet the standard of purposeful direction, personal jurisdiction may be asserted based on Internet activities that do not meet the requisite level of interactivity or minimum contacts needed for other tests of personal jurisdiction in Internet cases.”

Although these tests are referred by many courts of law across the world, Indian courts too have considered these theories for determining Internet Jurisdiction keeping in mind the fundamental provision for determining jurisdiction under section 20 of CPC and section 134[7] of Trade Mark Act considering domain name to be of nature of Intellectual Property.[8]

The first case to ponder over the Internet jurisdiction was Casio India Co. V Ashita Tele Systems Pvt. Ltd[9], where the court passed an injunction against the Defendant from using the website http://www.casioindia.com because of the fact that the website of Defendant is accessible in Delhi, which is sufficient to invoke the territorial jurisdiction of this Court. The High Court of Delhi held that the mere ability to access the website gave the court territorial jurisdiction to decide on the matter at hand. In 2007, the Delhi High Court reiterated the US courts holdings that,  where the website is an interactive one, having target audience in another place, the court of those places has the jurisdiction of dispute arising from that website activities, irrespective of the place of defendants.[10]

(judgement can be found here : https://indiankanoon.org/doc/1043775/).

Indian Position on this issue was made quite clear by the Delhi High Court in the case of Banyan Tree Holding (P) Limited v. A. Murali Krishna Reddy and Anr[11]. The most interesting fact of the case was that both the parties to the case were not situated within the territorial jurisdiction of the court but the websites of both the parties were accessible in Delhi. The court’s view changed from the Casio case and observed that mere accessibility of a website in Delhi is not sufficient to provoke jurisdiction by the Delhi Court. It reiterated US case laws and held that ‘The plaintiff has to show Defendant’s ‘purposeful availment’ directed towards the forum state, indicating that the use of website was with the intent of commercial transaction with the site user which leads to a damage or injury to the plaintiff.’ The court, also concluded the law of determining jurisdiction over internet on following conditions:

  1. Commercial transaction must have taken place due to the website.
  2. The defendant must have specifically targeted the forum state.
  3. Some injury must have resulted to the plaintiff due to the actions of the defendant.
  4. The plaintiff must have a presence in the forum state, and not merely the possibility of forum state.

The High Court of Delhi cleared the position of determining Internet jurisdiction in World Wrestling Entertainment, Inc. vs. M/s. Reshma Collection &Ors[12], where it held that mere accessibility of website in a forum state which ‘solicits’ its business, through which Defendent’sgoods and services are sold, is enough to raise cause of action and in determining the personal jurisdiction in Delhi.[13] The same was reiterated in Choice Hotels International Inc. v. M. Sanjay Kumar and Ors[14] by the single judge bench in the High Court of Delhi.

CONCLUSION

The issue of Internet jurisdiction has been challenging because of the involvement multiple locations. However, Indian Courts have definitely welcomed the Internet jurisdiction with a broad perspective by referring to various case laws globally. Through analysis of plethora of case laws, we can observe that Indian Courts have very well merged the fundamental laws of jurisdiction, i.e. section 19 and 20 of CPC, in determining the Internet jurisdiction. It can also be noted that mere presence of a website is sufficient to invoke jurisdiction even though the website has been used only to solicit businesses at a particular place, thus, mostly recognizing the effect test as laid out by the US court in Calder case. However, the practice of following only precedence on case laws, without having any specific guidelines or laws will definitely make these theories of determining jurisdiction vulnerable.

Sources

[1] M/s Satyam Infoway Ltd vs. Sifynet Solutions Pvt. Ltd, (2004) 6 SCC 145;  Supreme Court Held that Domain names are subject to the legal norms applicable to other intellectual properties, such as Trademarks; Yahoo Inc. v. Akash Arora, 1999 PTC 201:  Supreme Court held that general Trademark law to be applied to internet in cases of Domain Name. [In cases of Domain Name, if Infringement takes places it shall be treated as if Trademark Infringement and thus, the remedies granted under trademark infringement/passing off shall be granted]

[2] 326 U.S. 310 (1945)

[3] Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987)

[4] Burger King Corp v. Rudzewicz

[5] 952 F. Supp. 1119 (W.D. Pa. 1997)

[6] 465 U.S. 783 (1984)

[7] Section 134, Trade Marks Act, 1999; provides statutory provisions for instituting suit against passing off or infringement

[8]Satyam Infoway Ltd. v. Sifnet Solutions Pvt. Ltd., AIR 2004 SC 3540; Tata Sons Ltd. &Anr. vs Arno Palmen&Anr; 199(2013)DLT437

[9] 2003 (27) PTC 265 (Del)

[10] Independent News Service Pvt. Limited v. India Broadcast Live Llc And Ors; 2007 (35) PTC 177 (Del)

[11] CS (OS) No. 894/2008

[12] 2014 (60) PTC 452 (Del)

[13] World Wrestling Entertainment, Inc. vs. M/s. Reshma Collection &Ors; “that it “carries on business” in Delhi because, according to it, its programmes are broadcast in Delhi; its merchandise and books are available for sale in Delhi; and its goods and services are sold to customers in Delhi through its website which can be accessed in Delhi over the internet.” (para 12).

[14] MANU/DE/0443/2015