Trademark Infringement and Jurisdiction – What it means to carry on business
Trademark law in India provides that a plaintiff can file a suit for trademark infringement in a district court within the jurisdiction where the plaintiff is actually and voluntarily residing or carrying on business or personally working for gain. It is a common phenomenon for the defence to challenge the jurisdiction, but in certain cases the court may itself refuse to take up the matter when there is more appropriate forum available to the parties. Invoking the doctrine of forum non conveniens (Latin for forum not agreeing) is an exclusive right which is available to the defendants and in most cases, the court. The below mentioned case is one such instance where the Delhi High court has exercised its discretionary power and refused to take jurisdiction over the matter giving a clearer perspective of the phrase “carry on business” as set out in Section 134(2) of Trademarks Act, 1999 and Section 62 Copyright Act 1957.
The plaintiff is a company registered under the Companies Act, 1956 and is situated in Mumbai whereas the Defendants’ place of business are Gurgaon and Karnataka. The trademark and service mark of the plaintiff is bookmyshow.com and the impugned trademarks of the defendants are bookmyoffer.com and bookmerashow.com. Hence, the plaintiff filed a suit seeking permanent injunction for trademark infringement in respect of their trademark bookmyshow.com against the defendants.
Though the plaintiff has no office in Delhi; be it a principal office or a head office or a registered office or even a branch office, plaintiff had claimed that the Delhi High Court was competent to hear and decide the matter brought forth mainly because the plaintiff’s services are availed by customers in Delhi. The present suit is filed for claiming jurisdiction on the basis that plaintiff is carrying on business in Delhi. The Court had returned the plaint filed by the plaintiff to be presented before a competent forum by invoking the Doctrine of Forum Non Conveniens.
The plaintiff relies on the judgment delivered by the Hon’ble Division Bench of Delhi High Court wherein it stated that “since the contracts and/or transactions entered into between the appellant/ plaintiff on the one hand and its customers on the other hand are being concluded in Delhi and since the offers are made by customers at Delhi and since the money also emanates from Delhi, it could be considered that the appellant/plaintiff is carrying on business at Delhi to a certain extent”. The Hon’ble Division Bench also went to the extent of equating virtual presence with physical presence mainly because of the advancements in technology and rapid growth of new models of conducting business over the internet. It held that “When a shop in the ‘physical sense’ is replaced by a ‘virtual’ shop because of the advancement of technology, in our view, it cannot be said that the appellant/ plaintiff would not carry on business in Delhi,” thereby allowing the appeal.
The learned Single Judge, however, was of the view that the judgment of the Division Bench would not be applicable to this case because of 2 main reasons. Firstly, it did not deal with the internet transactions of a company which is registered under the Companies Act, 1956 and secondly, even if the plaintiff company has no office at the place where the plaintiff’s website is accessed for carrying out the transactions, can it be brought within the purview of ‘carries on business’?
The Hon’ble Judge opined that the position of carrying on of a business by a natural person will not be similar to the position which would emerge when the plaintiff is not a natural person but a legal entity such as a company. The Hon’ble Judge also relied on the case of Patel Roadways Limited, Bombay Vs. Prasad Trading Company (1991) 4 SCC 270 and Indian Performing Rights Society Limited Vs. Sanjay Dalia and Another (2015) 10 SCC 161 to support his stance. A conjoint reading of the ratios of the judgments of both the above mentioned cases brings out that either a branch office or a principal office or a registered office has to exist where the cause of action is said to have arisen to come under the purview of ‘carries on business’.
Based on the above reasons, the court returned the plaint to the plaintiff as per Order VII Rule 10 of The Civil Procedure Code.
Many times, trademark owners file their cases for trademark infringement based on Courts that they select, either because the Bench there handles more IP cases or if that Court generally orders in favour of trademark owners. The Delhi High Court deals with a lot of IP cases and orders in favour of applicants, which is why the Plaintiff probably tried filing the case there.
The Delhi High Court would have had the jurisdiction to entertain the present case had the plaintiff filed the suit on the ground that the impugned activities of the defendants are taking place at Delhi [that the cause of action arose there] instead of filing the suit on the ground that they were carrying on the business there.