India: Chipping The Jurisdiction Issue

Last Updated: 1 September 2008

Simple pleasures sometimes invite a steaming brawl. The perfect example of such a scenario is the application for Special Leave to Appeal [K. Narayanan and Anr. v. S Murali, Civil Appeal Nos. 4480-4481 of 2002] that came forth the Supreme Court, involving manufacturers and sellers of Banana Chips. The appeal lies from the decision of the High Court of Madras.

Narayanan had applied for a trademark registration in1999 in respect of A-ONE, and the same remains pending. In 2000, a suit at the Court of the District Judge of Coimbatore was filed against Narayanan, seeking an injunction to restrain Narayanan from passing off their goods using the trade mark A-ONE. The said suit was dismissed and Narayanan moved to the High Court of Madras. It was only in 2000, that Murali applied for a trademark in A-ONE, claiming to be a user all over India. While the High Court granted leave to sue earlier, the learned Single Judge of the High Court later dismissed the injunction application and also revoked the leave to sue, granted by it to Narayanan.

In the course of vouching contentions, Section 18(1) and Section 28 of the Trade Marks Act, 1958 were examined. Narayanan also contended that the Division Bench of the High Court in its impugned judgment had taken a contrary view from the judgment in M/s. Jawahar Engineering Company and others, Ghaziabad Vs. M/s. Jawahar Engineers Pvt. Ltd. Sri Rampur, Distt. Ahmednagar, Maharashtra [1983 PTC 207]. They interpreted the judgment as reflecting that the point which lends the Court jurisdiction is not the place where the advertisement has appeared but the place for which the trade mark is sought for sale. They also stated that the judgment revealed that when an injunction is sought, it is not necessary that the threat should have become a reality before the injunction is granted or refused and it can even be sought for a threat that is still to materialize. Narayanan stated that a threat had been communicated regarding the use of the trade mark in Chennai, and it was immaterial whether there was actual use or not and that they were entitled to an injunction (being a prohibitive remedy) against the said mark. They concluded their arguments on the contention that Murali had based its application for registration of the trade mark on use of the mark throughout India without any geographical limitation thus including the city of Chennai, thus entitling Narayanan to file the suit at the High Court of Madras based on the claims made in the trade mark application.

Murali rebutted the arguments stating that mere filing of an application for registration of trade mark did not confer any territorial jurisdiction for the High Court at Chennai to entertain the present suit of Narayanan, when admittedly both the parties to the suit resided, conducted their business and sold their goods in Coimbatore. Further, they stated that as per Section 28 of the Act, the registration of a trade mark gave a person, exclusive ownership of the trade mark and right to take action against the infringement of the trade mark, therefore an action against infringement of trade mark could not be made in the court merely on the basis of an application for registration of trade mark. They also propounded that actual sale of goods was necessary to be proved in the case of passing off action and therefore the Court within whose jurisdiction the commercial sale of goods took place, had jurisdiction to entertain a suit for passing off.

In reply to Narayanan's interpretation of the case of M/s. Jawahar Engineering Company they stated the same to be inapplicable to the present case because therein the plaintiff was a registered owner of the trade mark and the action was for injunction regarding a threatened breach of registered trade mark, whereas in suit at hand, Narayanan was not a registered owners. A plethora of decisions was cited to substantiate its stand further.

The Supreme Court considered the arguments made by both parties and opined that filing an application for registration of a trade mark did not constitute a part of cause of action in a suit for passing off. The Hon'ble Judges stated that Narayanan could not file the suit in the High Court of Madras based only on the claims made in the trademark application of Murali. They dismissed the appeal stating that the requirements of an action for passing off were absent

© Lex Orbis 2008

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