India: Jurisdiction Battleground: Should The Plaintiff Chase The Infringer

Last Updated: 2 January 2017
Article by N. Mahabir

The territorial jurisdiction to institute a trade mark infringement or copyright infringement case is turning into a battleground with contrary views being taken by the Delhi High Court and the Bombay High Court. Trade Marks Act and the Copyright Act, unlike the Patent Act and Design Act, create an additional / convenient forum for the Plaintiff to sue for infringement at the Plaintiffs place of business irrespective of the situs of infringement.

Section 134 (2) of the Trade Marks Act, 1999 and Section 62 (2) of the Copyright Act, 1957 states that a District Court for instituting the suit would include the District Court within whose jurisdiction, the person instituting the suit resides or carries on business or personally works for gain. Section 62(2) of the Copyright Act,1957 has already been interpreted by the Supreme Court of India in the case of Exphar S.A. vs. Eupharma Laboratories, in 2004 when the Court held that:

It is, therefore, clear that the object and reason for the introduction of sub-section (2) of Section 62 was not to restrict the owners of the copyright to exercise their rights but to remove any impediment from their doing so. Section 62 (2) cannot be read as limiting the jurisdiction of the District Court only to cases where the person instituting the suit or other proceeding, or where there are more than one such persons, any of them actually and voluntarily resides or carries on business or presently works for gain. It prescribes an additional ground for attracting the jurisdiction of a Court over and above the 'normal' grounds as laid down in Section 20 of the Code.

The Supreme Court of India on 01 July 2015 in the judgment in India Performing Rights Society Limited vs. Sanjay Dalia & Anr, interpreted Section 134 (2) of the Trade Mark Act, 1999 and Section 62 (2) of Copyright Act. It is pertinent to notice that in this case, the suit was filed at Delhi High Court asserting jurisdiction based on a branch office of plaintiff at Delhi whereas the principal place of business of the Plaintiff, the place of business of Defendant and the infringement was at Mumbai. Against this background, the Court held that:

20. In our opinion, in a case where the cause of action has arisen at a place where the plaintiff is residing or where there are more than one such persons, any of them actually or voluntarily resides or carries on business or personally works for gain would oust the jurisdiction of other place where the cause of action has not arisen though at such a place, by virtue of having subordinate office, the plaintiff instituting a suit or other proceedings might be carrying on business or personally works for gain.

21. At the same time, the provisions of Section 62 of the Copyright Act and Section 134 of the Trade Marks Act have removed the embargo of suing at place of accrual of cause of action wholly or in part, with regard to a place where the plaintiff or any of them ordinarily resides, carries on business or personally works for gain. We agree to the aforesaid extent that the impediment imposed under Section 20 CPC to a plaintiff to institute a suit in a court where the defendant resides or carries on business or where the cause of action wholly or in part arises, has been removed. But the right is subject to the rider in case the plaintiff resides or has its principal place of business/carries on business or personally works for gain at a place where cause of action has also arisen, suit should be filed at that place not at other places where the plaintiff is having branch offices, etc.

Delhi High Court:

One of the first decisions applying the Supreme Court decision was by Delhi High Court in the case of Ultra Home Construction Pvt. Ltd. vs. Purushottam Kumar Chaubey & Ors., of 20 July 2015, in which the Court held that the Delhi High Court did not territorial jurisdiction since the Plaintiff had a branch office at the place of infringement, Jharkhand notwithstanding that the Plaintiff had its registered office at Delhi. This decision came to be upheld in a very detailed order by the Division Bench of the Delhi High Court, delivered on 20 January 2016, Ultra Home Construction Pvt. Ltd. vs. Purushottam Kumar Chaubey & Ors. The Court presented a detailed chart visualising different situations for conferment of jurisdiction arising out of the Supreme Court judgment. The Court held that a Plaintiff cannot sue an infringer at its registered office or principal place of business but must go the infringers place of business / place of infringement if the Plaintiff has a subordinate office at that place. The Court held that:

The third case is where the plaintiff has a principal office at one place and the cause of action has arisen at the place where its subordinate office is located. In this eventuality, the plaintiff would be deemed to carry on business at the place of his subordinate office and not at the place of the principal office. Thus, the plaintiff could sue at the place of the subordinate office and cannot sue (under the scheme of the provisions of section 134 (2) and 62 (2) at the place of the principal office.

A discordant note was struck by a Single Judge of the Delhi High Court in the case of RSPL vs. Mukesh Sharma & Anr, delivered on 05 April 2016, when the Court held that the Supreme Court decision does not take away the right of the Plaintiff to invoke jurisdiction of the Court at the principal place of business. In the words of the Court:

64. In my humble view, there is nothing in the judgment of the Supreme Court in Indian Performing Rights Society Limited (supra) to suggest that the plaintiff is precluded from filing a suit where its head office/ principal office is situated, even though it has a subordinate office at a place where the cause of action arises by resort to Section 62of the Copyright Act and Section 134 of the Trade Marks Act. In such a situation, the plaintiff, in my view, could maintain a suit at either of the two places, namely, where its head office/ principal place of business is situated and where he resides or works for gain, and also at the place where the plaintiff may have subordinate office and a part of cause of action has arisen.

This decision of the Single Judge came to be struck down by the Division Bench of the Delhi High Court, RSPL vs. Mukesh Sharma & Anr, holding that the Single Judge was bound by their earlier decision in Ultra Homes.

Bombay High Court:

The Bombay High Court has in Manugraph India Limited & Anr. vs. Simarq Technologies Pvt. Ltd. & Ors., interpreted the decision of the Supreme Court in the same manner as that of the Single Judge in the case or RSPL. The Single Judge of the Bombay High Court has gone to the extent of disagreeing with the Division Bench decision in Ultra Homes of the Delhi High Court.

(b) Where the plaintiff has only one office, it presents no difficulty. Where the plaintiff has multiple offices, however, he has a limited choice. He may either bring a Suit under Section 134(2) or Section 62(2), i.e., within the jurisdiction where he resides; or he may invoke Section 20 and file a suit where the Defendants reside or work for gain or where the cause of action arose wholly or in part. The fact that the Plaintiff has the choice of bringing a suit based on Section 20 of the CPC does not mean that his rights under Section 134(2) or Section 62(2) are in any way eroded, curtailed or restricted.

Conclusion:

The Bombay High Court appears to have got it right. The Plaintiff does not have to chase the infringer. Judgments of courts are premised on the underlying facts. Courts generally do not venture to pass judgments on situations other than the one involved in the case. The Supreme Court in IPRS vs. Sanja Dalia felt that it would be abuse of process if the Plaintiff chooses to not sue the infringer at the Plaintiffs principal place of business but at a subordinate place even when the infringement occurs at the principal place of business. The way large organizations conduct business is to have a centralized legal team housed at the corporate office / principal place of business with business or marketing teams at subordinate offices. Therefore, it would not be fair to penalize a larger corporation because it happens to have subordinate branch where the infringement activity is occurring or the infringer is parked. Otherwise, it will be rendering the special jurisdiction created by Section 134 (2) and Section 62 (2) provision nugatory in the case of larger corporations with subordinate branches. As stated by the Supreme Court of India in the case of Exphar, taking take the words from the relevant extract of the report of the Joint Committee which preceded and laid the foundation for Section 62 (2) said:

"In the opinion of the Committee many authors are deterred from instituting infringement proceedings because the court in which such proceedings are to be instituted is situated at a considerable distance from the place of their ordinary residence. The Committee feels that this impediment should be removed and the new sub-clause (2) accordingly provides that infringement proceedings may be instituted in the district court within the local limits of whose jurisdiction the person instituting the proceedings ordinarily resides, carries on business etc."

The jurisdiction tussle does not appear to be abate any time soon unless the Division Bench of the Bombay High Court takes a different view from that of the Single Judge. Considering the divergent views, it appears the Supreme Court of India will again say what it meant to say in IPRS vs. Sanjay Dalia, albeit in an appropriate case.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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