Jurisdiction refers to the power of the court to render binding decisions. It may be territorial, pecuniary or subject matter related.[i] In India, territorial jurisdiction is still widely debated in the context of trademark or copyright infringement. The advent of the internet has given rise to new forms of intellectual property infringement like cyber piracy, domain name infringement including cybersquatting, unauthorized sale of e-books etc. Here, the traditional choice of law may seem inept if the conflict is extraterritorial.
The Civil Procedure Code, 1908 codifies the fundamental rules governing procedure, jurisdiction and authority of civil courts. Section 20 of the Code is a residuary provision to Sections 16-19 that deal with forum options.[ii] It provides two grounds to exercise territorial jurisdiction – (i) if the defendant resides/carries on business/personally works for gain in the territory (ii) if the cause of action arose there.
Sections 134(2) of the Trademarks Act, 1999 and 62(2) of the Indian Copyright Act, 1957 provide an additional third ground, which is the area of residence/business of the plaintiff. The legislative purpose of these provisions was to allow the plaintiff to file suit at a forum of convenience. In furtherance of this, and with the rise in e-commerce, the judiciary has liberally interpreted provisions concerning jurisdictional requirements.[iii]
However, at times, plaintiffs misused the said sections to pull defendants to distant forums. In the case of Sanjay Dhalia[iv], the judicial decision aimed to curtail such mischief and scaled-down liberal interpretation. The court held that if there is a common jurisdiction as per Sections 134(2) and cause of action, the suit must be filed there. The situation has been clarified with an illustration- “… plaintiff is carrying on business at Mumbai and cause of action has arisen there. Plaintiff is having branch offices at Kanyakumari and Port Blair. If interpretation suggested by appellants is acceptable, mischief may be caused by the such plaintiff to drag a defendant to Port Blair or Kanyakumari.”[v]
In Ultra Home Construction Pvt. Ltd. v. Purushottam Kumar Chaubey[vi], the court contemplated solutions for four possible situations. First, when the plaintiff has only one office and the cause of action arose at a different place, the plaintiff can file at the place of office. Second, the plaintiff has one principal office and branches elsewhere. If the cause of action arose at the place of principal office, the plaintiff can sue at the place of principal office only. The third scenario is similar to the second, but the cause of action arose at the location of its branch. Here, the plaintiff can sue only at the place of its branch. Lastly, the cause of action arose at neither place of principal or branch offices. The plaintiff can file suit at the place of the principal office, not a place of a branch.
E-commerce related case-laws
In today’s era of commercial transactions via the internet, there are situations where infringements (cause of action) happen on websites, and suits are filed in forums where neither parties have a physical presence.
In Banyan Tree Holding Pvt. Ltd. v. A Murali Krishna Reddy, it was held that the mere availability of a “passive” defendant’s website in the forum state without specifically targeting the consumers of such state does not grant jurisdiction. The plaintiff has to prove that the availability of the defendant’s website had a negative impact on his goodwill/reputation and that the transactions are real and not “trap” transactions.[vii]
In V Guard Industries Ltd v. Sukan Raj Jain & Anr., the court held that it had jurisdiction for the following reasons – (i) the defendant carried business in the place of forum using an e-commerce platform (ii) plaintiff had purchased defendant’s products at such place (iii) plaintiff can file suit in place of the branch office, as decided in the Ultra Home case. It was also noted that a “self-generated” sale cannot be construed as a trap sale.[viii]
In Bulgari Spa v. Notandas Gems Private Limited,[ix] the court has clearly distinguished between a mere interactive website and a commercially active one. The former only provides information whereas the latter permits purchase for consideration. For the former, jurisdiction exists only when it is proved that information has been accessed within the forum’s territory. For the latter, jurisdiction exists if transactions can be completed within territorial limits.
Indian courts favour a middle course approach between the ‘effects’ and ‘availment’ tests. The effects test establishes jurisdiction if the effects of the defendant’s acts are aimed at the forum state.[x] Purposeful availment is the situation where the defendant has taken deliberate efforts to avail the jurisdiction of the forum state.[xi] The theories such as ‘minimum contact’ and ‘target-based’ tests are more widely applied by forums in countries having strong intellectual property protection. Minimum contacts theory refers to the nonresident defendant’s associations with the forum state to determine the forum state’s jurisdiction.[xii] Target-based test (applied in the Banyan tree case) relies on whether the defendant had the intention to have commercial relations with consumers in that jurisdiction.[xiii]
Domain name infringement
In Tata Sons Ltd. V. Manu Kosari,[xiv] it was observed that with the emergence of cyberspace, domain names or internet sites qualify for protection as a trademark.[xv] The Zippo test is used for jurisdiction issues related to Internet domain names, where the defendant’s activities are treated as active/passive/interactive.[xvi]
At times, multiple jurisdictions may be involved as registration may be under one server, but there is an overlap of trademarks of entities of varied geographical locations. For this purpose, the ICANN ‘Uniform Domain Name Dispute Resolution Policy and Rules’[xvii] exists with an approved list of ‘Dispute Resolution Service Providers’[xviii]. In Arun Jaitley v. Network Solutions Private Ltd.[xix], the defendant was permanently restricted from using, advertising or promoting the domain name and was directed to handover the domain name to the plaintiff. The governing body under the ICANN was also required to block the domain name and transfer it to the plaintiff.[xx]
Extraterritorial jurisdiction in copyright infringement
When digital copies are transmitted through the internet, there is a likelihood of copyright infringement across multiple countries. WIPO is the global forum for intellectual property services, policy, information and cooperation.[xxi] It conducted the ‘Hague Conference on Private International Law’ wherein signatory states consent to enforce decisions of the forums of co-signatories provided the forum was chosen by an agreement signed by the parties. Yet, litigation may be inflexible in contrast to Alternate Dispute Resolution mechanisms like arbitration which give parties the freedom to customize their disputes and offers jurisdictional neutrality.[xxii] WIPO has a specialized Arbitration and Mediation Center.
Our judiciary is actively evolving norms to deal with uncertainties in relation to the discussed issues. It is vital to view the matter from an international perspective for internet-related disputes. It may be beneficial for our judicial system to refer to the approaches applied by countries that firmly protect their intellectual property right holders. An effective judicial system is founded on regulations that clearly define principles of law and jurisdictional authority.
[i] Territorial Jurisdiction of Courts in India, (2013), https://www.lawsenate.com/publications/articles/territorial-jurisdiction-of-courts-india.pdf.
[ii] Isaac, Jithin Saji. “Redefining the jurisdiction clause under copyright and trade mark laws in India.” Journal of Intellectual Property Law & Practice 10.1 (2015).
[iii] G Chakrabarty, S Dama, “Remedying mischief in deciding jurisdiction favouring the plaintiff in India” in Annotated Leading Trademark Cases in Major Asian Jurisdictions(1st edn, 2019).
[iv] Indian Performing Rights Society v. Sanjay Dalia & Anr on 1 July, 2015, https://indiankanoon.org/doc/51545606/
[v] id. ¶ 24.
[vi] Ultra Home Construction Pvt. Ltd v. Purushottam Kumar Chaubey, FAO (OS) 494/2015 & CM 17816/2015, https://indiankanoon.org/doc/123737198/ (last visited Nov 27, 2022).
[vii] Paridhi Jain, Territorial Jurisdiction in Intellectual Property Disputes, Manupatra, https://articles.manupatra.com/article-details/Territorial-Jurisdiction-in-Intellectual-Property-Disputes (last visited Nov 27, 2022).
[viii] V Guard Industries Ltd V. Sukan Raj Jain &Anr, CS(COMM) 25/2021, decision dated July 5, 2021, Nishith Desai Assoc., https://www.nishithdesai.com/SectionCategory/33/IP-Hotline/12/66/IPHotline/4761/1.html (last visited Nov 27, 2022).
[ix] Bulgari Spa v. Notandas Gems Private Limited, I.A. 16751/2021, https://indiankanoon.org/doc/84705826/ (last visited Nov 27, 2022).
[x] S.S. Rana & Co. Advocates, Internet And The Determination Of Jurisdiction In The Case Of Trade Mark Infringement – Trademark – India, https://www.mondaq.com/india/trademark/708968/internet-and-the-determination-of-jurisdiction-in-the-case-of-trade-mark-infringement (last visited Nov 27, 2022).
[xi] Purposeful availment, https://itlaw.fandom.com/wiki/Purposeful_availment (last visited Nov 27, 2022).
[xii] Minimum Contacts, LII / Legal Information Institute, https://www.law.cornell.edu/wex/minimum_contacts (last visited Nov 27, 2022).
[xiii] Kyra, Report: How ‘Targeting’ Establishes Jurisdiction in Trademark Usage on the Internet, International Trademark Association (2022), https://www.inta.org/report-how-targeting-establishes-jurisdiction-in-trademark-usage-on-the-internet/ (last visited Nov 27, 2022).
[xiv] 2001 PTC 432, (Del.)
[xv] K Thakur, S Sirkeck. “Dispute of Domain Name with Trademark: Jurisdictional Issue and Future Challenges.” 4 Indian J.L. & Just. 35 (2013)
[xvi] The Curious Case of ZIPPO Test – CyberPeace Corps, https://www.cyberpeacecorps.in/the-curious-case-of-zippo-test/ (last visited Nov 27, 2022).
[xvii] Overview of ICANN Uniform Domain Name Dispute Resolution Policy and Rules, https://www.wipo.int/amc/en/domains/registrar/overview.html (last visited Nov 27, 2022).
[xviii] The Uniform Domain Name Dispute Resolution Policy, as approved by the Internet Corporation for Assigned Names and Numbers on October 24, 1999; https://www.icann.org/resources/pages/providers-6d-2012-02-25-en
[xix] CS (OS) 1745/2009
[xx] S.Taslim, “Multi-territorial Intellectual Property Disputes over Cyber Space” SSRN 3328002, 2017.
[xxi] Inside WIPO, https://www.wipo.int/about-wipo/en/index.html (last visited Nov 27, 2022).
[xxii] S.Taslim, “Multi-territorial Intellectual Property Disputes over Cyber Space” SSRN 3328002, 2017.
Authored by Anupa A M, Legal Intern, LawDiktat.
Edited by Sahid, Team Member, LawDiktat.