In a recent decision of the Gujarat High Court, Hasmukhbhai Bhagwanbhai Patel versus Husenali Anwarali Charaniya1 in its order dated September 25, 2023, the Court revisited and discussed the principles of the territorial jurisdiction in the matters of Trademark and Copyright suits elaborately.

Brief Facts

The Appellant (Plaintiff) had filed trademark suit No.1 of 2023 before the District Court, Dahod, for relief of permanent injunction, accounts of profit and damages under the Trademarks Act, 1999 and Copyright Act, 1957 for the use of the trademark "KRANTI KAKA" in connection with betel nuts. The plaintiff invoked the territorial jurisdiction of the District Court, Dahod, on the basis of invoices as proof of sale within the court's jurisdiction. However, the defendant raised the question of maintainability and filed an application to reject the plaint for want of jurisdiction as neither the location of the Plaintiff or Defendant's businesses nor the alleged infringement was within the Dahod district. Order dated April 18, 2023, was passed by the Learned Additional District Judge(ADJ), Dahod, whereby the Learned ADJ rejected the plaint under Order 7 Rule 11 of the Civil Procedure Code, 1908 (CPC) inter alia on the ground of lack of jurisdiction.

Legislative Background

Territorial jurisdiction in the matters of Trademark and Copyright is found under the Civil Procedure Code, 1908(CPC), as well as the respective specific statutes of the Trade Marks Act, 1999 and Copyrights Act, 1957. Under CPC, Section 20 lays down that the plaintiff can institute a suit at a place where the defendant(s) actually and voluntarily resides/carries on business/works for personal gain. Alternatively, the plaintiff can institute a suit at a place where the cause of action arises in part/wholly.2 Section 20 provides a choice of forum under the general procedure. The legislative intent of this provision is that the defendant does not face any inconvenience in defending themselves in a case. However, the specific statutes, Copyrights Act, 1957 and Trademarks Act, 1999, lay down provisions for the jurisdiction of the civil courts in infringement matters with the intent of not causing any inconvenience to the plaintiff to enforce its rights.

Section 62(2) of the Copyrights Act, 1957, with a non-obstante clause in its preamble, i.e., "notwithstanding anything contained in the Civil Procedure Code...", provides that the plaintiff can institute a suit in the District Court within whose jurisdiction he actually and voluntarily resides/carries on business/works for personal gain at the time of instituting the suit/proceeding.

Though Section 105 of the Trade and Merchandise Act, 1958 was similarly worded to Section 20 of CPC and provided for the plaintiff to file a suit for infringement/passing off in the District Court where the Defendant carried on their business, it was repealed with the Trade Marks Act, 1999. At present, Section 134(2) of the Trade Marks Act, 1999, in line with the Copyrights Act, 1962, with a non-obstante clause in its preamble, i.e., "notwithstanding anything contained in the Civil Procedure Code...", provides that a person can institute a suit in the District Court within whose jurisdiction he actually and voluntarily resides/carries on business/works for personal gain at the time of instituting the suit/proceeding. The explanation to Section 134 provides that a "person" under this section includes a registered proprietor as well as a registered user.

Interpretation of Section 62(2) of the Copyrights Act and Section 134(2) of the Trade Marks Act in light of Section 20 of CPC

Supreme Court, in the landmark case of Indian Performing Right Society Ltd. v. Sanjay Dalia3 observed that statutory interpretation of Section 62(2) of the Copyright Act and Section 134(2) of the Trade Marks Act and legislative intent clearly establish that these provisions provide a remedy to the plaintiff to institute a suit at a place where he resides or carried on business, not harass the Defendant by dragging him to farther places. The Court highlighted that the objective of incorporating the aforesaid provisions in the Copyright Act and Trade marks Act was to provide an additional forum in light of the impediment created to the plaintiff by section 20 of CPC and ensure that the plaintiff is not deterred from instituting infringement proceedings "because the court in which proceedings are to be instituted is at a considerable distance from the place of their ordinary residence". It was further observed that since this is against public policy, the convenience given to the plaintiff under these provisions needs to be bound by certain restrictions to prevent the abuse of these provisions. Thus, the Supreme Court held that if the "cause of action" arises wholly/in part at a place where the plaintiff is residing/carrying on business/has its head office, such place will be the appropriate forum for the plaintiff to initiate a suit. It was also held that Section 62 of the Copyrights Act and Section 134 of the Trade Marks Act are in pari materia, i.e. they must be construed together and given purposive construction. Thus, any "passing off" suits under these provisions must be governed by Section 20 of the Civil Procedure Code.

In another landmark case, Burger King Corporation v. Techchand Shewakramani & Ors.4, the Delhi High Court held that "the provisions of Section 134 of the Trade Marks Act and Section 62 of the Copyright Act are in addition to and not in exclusion of Section 20 of the CPC. If the plaintiff can make out a cause of action within the territorial jurisdiction of this Court under Section 20, no reference needs to be made to Section 134." Many other judicial precedents have reiterated the same principles enunciated in the aforesaid landmark cases.

Decision of the Gujarat High Court in Hasmukhbhai's case

In the present case, the plaintiff resided and owned a factory in Surat, while the Defendant conducted business in Moraiya and Ahmedabad while residing in Wadhwan. The plaintiff filed the lawsuit in Dahod District Court based on the sale of the product in Dahod. The plaintiff relied on the fact that part of the cause of action occurred within the territorial jurisdiction of the Dahod court.

The Court highlighted that in the case of a suit for infringement under the Trademark Act or Copyright Act, section 134 of the Trade Marks Act, as well as section 62 of the Copyright Act, give additional ground of territorial jurisdiction to the plaintiff over and above grounds available in section 20 of the CPC thereby expanding the bandwidth of territorial jurisdiction. In the present case, the plaintiff, who is residing in Surat and also carrying on his business at Surat, did not explain why he did not file the suit for infringement of trademark and copyright at Surat or at District Court, Surendranagar where the Defendant is residing or carrying on business for gain. The Court glaringly observed that there is no reason for the plaintiff to file the suit at the District Court, Dahod, when both the parties are not living at Dahod nor carrying on business at Dahod, clarifying that the lawmakers never intended to make the parties to travel to a distant place for agitating their grievance in respect of the fact that the plaintiff has remedy of suing the defendant at the place where cause of action arisen in view of section 134 of the Trade Marks Act read with section 62 of the Copyright Act or as per section 20 of the CPC.

Conclusion- Way Ahead

Thus, with this decision of the Gujarat High Court, it is clarified and reiterated that the non-obstante clauses in both Section 62 of the Copyright Act and Section 134 of the Trade Marks Act create an additional forum and do not have an overriding effect on Section 20 of the CPC. Further, it is worth noting that the plaintiff cannot, by merely showing the sale of goods at a particular place with a remote connection to the cause of action, invoke territorial jurisdiction as this is against the well-established tenets of the law and the raison d'etre of the relevant provisions under CPC as well as Trade Marks Act and Copyright Act. One must establish the territorial jurisdiction unequivocally and unambiguously for courts to not see it as an abuse of process of law or merely an attempt to harass the Defendant in trademark and copyright suits.

Footnotes

1. R/FA/2172/2023, Order dated 25/09/2023, Gujarat High Court

2. Section 20, Civil Procedure Code, 1908

3. (2015) 10 SCC 161

4. CS(COMM) 919/2016, decided on 27th August, 2018

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