Picking the right jurisdiction – Eshwars
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Picking the right jurisdiction

[First published in World Intellectual Property Review on 18th February 2019. To read Article in WIPR Click here]

MR. N V SAISUNDER

PARTNER – IPR & TECHNOLOGY LAW PRACTICE

MS. AANCHAL M NICHANI

ASSOCIATE – CORPORATE ADVISORY & INTELLECTUAL PROPERTY

BACKGROUND:

Trademark enforcement in every country has its complexities, and India is no different. In India, courts are vested with territorial jurisdiction, and within such jurisdictions, there are hierarchical courts with pecuniary jurisdiction.

This article is aimed at providing a quick understanding of matters relating to choice of jurisdiction available to an IP owner in light of statutory and judicial principles.

Earlier position

Before the present legislation—the Trademarks Act, 1999—the aspect of geographical jurisdiction of courts for trademark infringement and passing off actions was covered only under section 20 of the Civil Procedure Code, 1908 (CPC). Section 20 of CPC required institution of suits in the court having territorial jurisdiction of the place where the defendant resides; or carries out business; or works for gain; or where the cause of action arises. This provision continues in the statute book to date.

Additional forum of convenience

The Trademarks Act, 1999 introduced an additional forum for convenience of brand owners to initiate trademark infringement suits. As opposed to instituting a suit in the place where the defendant resides or carries out business, section 134 of the act enabled a registered trademark owner to institute a suit for infringement in a court that has jurisdiction over the place where the registered trademark owner resides or carries out business.

However, the jurisdiction relating to filing of a passing off suit would still be determined under section 20 of CPC, where such actions will have to be instituted in the place where the defendant resides or carries out business; or at the place where the cause of action arose.

Carrying out business

The term ‘carrying on business’ was construed by companies to be any place where they had a place of business and led them to initiate infringement suits at places where they had subordinate offices, sometimes inconveniencing the defendant. The Supreme Court of India in 2015 put this to rest in its decision in Indian Performing Rights Society Limited v Sanjay Dalia, explaining the interplay between section 134 of the act and section 20 of the CPC.

The court in this case said that the convenience of the registered trademark owner is the intent of section 134, and the causing of inconvenience to parties must be prevented. For a company, its principal place of business should be construed as the place where it ordinarily carries out business and, hence, it can institute a suit for infringement either at the court having jurisdiction over the place where its principal place of business is situated; or at the place where the cause of action arose.

This position was followed by the High Court of Delhi in Ultra Home Construction v Purushottam Kumar Chaubey & Ors in 2015, and again in Burger King Corporation v Techchand Shewakramani, decided on August 27, 2018. The courts in these judgments laid the rules relating to geographical jurisdiction for initiating suit for infringement and/or passing off in four scenarios under section 134 of the act.

Scenario 1:

If the plaintiff has a sole office and the cause of action arose at a different place, the place for initiating the suit for infringement is the court having jurisdiction over the sole office.

Scenario 2:

If the trademark owner has a principal office at one place and a subordinate or branch office at another place, and the cause of action arose at the place of the principal office, the venue for initiating an infringement suit is the court having jurisdiction over the principal office, not at the subordinate office.

Scenario 3:

Where the plaintiff has a principal office at one place and the cause of action arose at the place where its subordinate or branch office is located, the venue to commence a suit for infringement is the court having jurisdiction over the subordinate office, not the principal office.

Scenario 4:

If the cause of action arose at a place other than the place of the principal office and the subordinate office, the venue for instituting an infringement suit is the place of the principal office.

In all of these scenarios, a suit for passing off can be instituted either where the cause of action arose or where the defendant resides or carries on business as per section 20 of CPC.

Conclusion

These decisions interpreting the statutory provisions have brought clarity on the issue of choice of jurisdiction with respect to trademark infringement suits and passing off actions. With commercial courts being set up under a separate legislation, it brings into being specialised courts for trying matters related to trademarks. These judgments should enable companies to determine the appropriate jurisdiction for enforcement and protection of their brands/trademarks in India.

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