Determination of Jurisdiction in cases of Trans-boundary Trademark Violations in the Cyberspace, in light of the Civil Procedure Code

Determination of Jurisdiction in cases of Trans-boundary Trademark Violations in the Cyberspace, in light of the Civil Procedure Code.

[Anushka Sharma]

The author is a 3rd year B.A.LLB.(Hons.) student of WBNUJS, Kolkata.

Introduction

The advent of internet has opened the doors for a wide range of inter-state and international transactions in the commercial setup. The content posted online can be accessed worldwide which opens up the possibility of it being contradictory to the laws of some faraway jurisdiction. Numerous companies have cited the risk of prosecution in distant jurisdictions as one of the most serious threats that they encounter. Thus, in order to ensure that the laws do not come in the way of economic development it is imperative to answer the question of jurisdiction with utmost diligence. This paper seeks to answer this question of jurisdiction with reference to trans-boundary trademark violations arising out of acts committed in the cyberspace, in context of The Civil Procedure Code (‘CPC’), while discussing some general principals which can be applied to other online torts as well.

The General Principle

The statutory provision that governs the jurisdictional questions pertaining to civil matters in India is the § 20 of the Civil Procedure Code, 1908 and the same is applicable for determining jurisdiction pursuant to torts committed online. As per the section the plaintiff might bring an action against the defendant either at the place where the defendant resides or carries on business or at the place where the cause of action arises.[1]

In addition to the above provision the Delhi High Court has evolved the following three fold test in the News Nation Networks Private Limited v. News Nation Gujarat & Ors[2] case relying on Cybersell v. Cybersell[3] to decide matters of jurisdiction pertaining to a non resident foreigner regarding the content displayed on a website. It confers jurisdiction on the forum court only when[4]-

  1. The acts of the defendant have sufficient proximity with the forum state.

  2. The resultant cause of action due to defendants acts falls in the forum state.

  3. The exercise of jurisdiction tends to be reasonable.

Trademark Violations

The technology today has made it possible for a person to create a website that can be used to conduct business across the globe. Now a company while offering its services on such a website might violate the trademark of another company in a faraway jurisdiction by virtue of the global accessibility of its website, which it neither targeted nor foresee. Can the courts exercise jurisdiction over such a company if it is not located within their territorial jurisdiction? Can the company said to be in the court’s jurisdiction by virtue of the accessibility of its website there? Earlier, there existed two contradictory opinions in this regard, each given by a single judge bench of the Delhi High Court. The first view which was given in the case of Casio India Co. Limited v. Ashita Tele Systems Pvt. Limited[5] (‘Casio’) held that the mere likelihood of a person getting deceived in the forum state due to the accessibility of the defendant’s website there is sufficient to establish jurisdiction of the forum court. While the other view given in the case of India TV Independent News Service Pvt. Limited v. India Broadcast Live Llc And Ors[6] (‘India TV’) warranted for a higher standard to be adopted and said that mere accessibility of the website cannot grant jurisdiction to the court. Additionally it should be established that the website is highly interactive for the court to exercise jurisdiction.[7]

The current governing precedent on this issue is Banyan Tree Holding Limited v. A Murali Krishna Reddy & Anr[8] (‘Banyan Tree’) which settled the position by overruling the Casio case and upholding the India TV case. This case was a passing off claim in which the court held that to establish jurisdiction in cases where the defendant does not reside/carry on business in the forum state but the website in question is ‘universally accessible,’ the plaintiff will have to show that “the defendant purposefully availed the jurisdiction of the forum court.”[9] This includes proving that (1) The website was used with an intention to effectuate a commercial transaction and (2) The defendant specifically targeted the forum state to injure the plaintiff.[10] While in cases where the website is ‘accessible in the forum state’ it needs to establish that (1) The website was not a passive but an interactive one (2) It was targeted towards the consumers of the forum state for commercial transactions (3) A commercial transaction was entered into by the defendant using such a website which resulted in injuring the plaintiff.[11]

A defining judgement on this issue post Banyan Tree was of World Wrestling Entertainment Inc. v. M/s. Reshma Collection[12] (‘WWE’). This case dealt with infringement of trademark in which the court had to decide whether the accessibility of the website of the plaintiff which was used to sell goods in the court’s jurisdiction can be held to mean that the plaintiff ‘carried on business’ there as required by the §64 of the Trademark Act. [13] The court observed that “the availability of transactions through a website at a particular place is virtually the same thing as a seller having shops in that place in the physical world” and thus, held that it had the jurisdiction to entertain the present suit.[14]

Contradictory or Not

Some authors have pointed out that the decision in WWE is in contravention to Banyan Tree because while in Banyan Tree the court held that the mere presence of an interactive website in a particular forum is insufficient, it must also be shown that the defendant has targeted the forum state and the culmination of commercial transactions via that website has resulted in injuring the plaintiff. In WWE they said that the mere presence of the website of the plaintiff in a particular forum which is used to conduct commercial transactions is akin to having a physical shop there and will confer jurisdiction on the forum courts. This, in my opinion is an incorrect view.

Firstly the two cases deal with the interpretation of two different statutes and are factually as well as legally differentiable. WWE was a suit for infringement of trademark and dealt with § 64(2) of the Trademarks Act while Banyan Tree was a passing-off claim and dealt with § 20(3) of CPC. The remark made by the court in WWE regarding the mere presence of the website being sufficient to grant jurisdiction to the court was with respect to establishing that the plaintiffs carry on business there. In Banyan Tree the court held that the mere presence of a website in the forum state is insufficient and it has to be interactive and should specifically target the residents of the forum state to establish ‘cause of action’ per § 20 of CPC.[15] Banyan Tree did not hold the requirement of a website being interactive and specifically targeting to establish the defendant’s place of business and therefore one cannot be said to contradict the other.

Recent Cases

The standard that was laid down in the WWE case for determining place of business was used to interpret the implication of ‘defendant’s place of business’ under § 20(a) of CPC by the Delhi High Court in a 2017 case of  Icon Health And Fitness, Inc vs Sheriff Usman And Anr[16] (‘Icon Health’) which was decided ex-parte. This was a claim for passing off in which the court held that since the defendant was marketing and selling its products via websites such as amazon.com and flipkart.com and also had an app on the Google play store which could be accessed in Delhi, the defendant shall be deemed to ‘carry on business’ there relying on WWE[17]. While this case was on the lines of the reasoning given in WWE it did not ascertain whether the defendants carried out a substantial part of their business from the forum state or not and decided upon jurisdiction merely based on the accessibility of the website there. This decision sets a bad precedent as it implies that the courts all over the country can exercise jurisdiction on the matter.

In the 2018 judgement of Impresario Entertainment v S & D Hospitality[18] the Delhi High Court determined the implication on jurisdiction of the listing of a restaurant on Zomato in which the plaintiff sued the defendant for infringement of trademark. It was contended that even though neither the plaintiff nor the defendant had their registered offices in the court’s jurisdiction, as a consequence of the listing of the defendant’s restaurant on interactive websites such as Zomato, Facebook and Dine-Out which could be accessed in Delhi and could be used for booking tables in the defendant’s restaurant the court will have jurisdiction based on cause of action under § 20 of CPC.[19] The court relied on Banyan Tree and held that for the court to exercise jurisdiction it needs to be shown that “some commercial transaction using the website was entered into by the defendant resulting in injury to the plaintiff.”[20] In the present scenario a commercial transaction will only be culminated when a customer as a consequence of the display on Zomato and Dine-out will go and eat at the defendant’s restaurant in Hyderabad.[21] The mere display on website is only an invitation to an offer and will not grant jurisdiction to the court.[22]

The principal given by the Delhi Court in the above case was used to decide a case concerning a defamatory YouTube post recently in the case of GMR Infrastructure Ltd vs Associated Broadcasting Company Pvt. Ltd. and Ors[23]. In this case the plaintiff sued the defendant for broadcasting defamatory material against them on their news channel which was additionally posted on youtube.com.[24] The court here held that since the website can be viewed in Delhi, the publication can be said to have happened there among other places.[25] Additionally, since the defamation was regarding the maintenance of the Delhi International Airport the injury to the plaintiff’s reputation was also caused primarily in Delhi and hence the court had jurisdiction.[26]

Conclusion

This paper outlined the various principles that govern the determination of jurisdiction of the courts in cases of trademark violations committed in the cyberspace. After several years of the existence of Internet and consequently Internet-related disputes, it is now safe to say that we in India, have now developed a body of set principals to govern jurisdiction in such cases. The principals pertaining of the determination of jurisdiction developed by the Indian courts are fairly comprehensive and ensure that there isn’t an unnecessary jurisdictional encroachment on the rights of the defendant while also protecting the rights of the plaintiff. The application of these principles though is a complex exercise as it varies from case to case and might form a slippery slope, because giving too narrow an interpretation to them might lead to the denial of rights to the plaintiff, while too broad an interpretation can open the doors for forum shopping. Therefore it is required on the part of the courts to ensure a balanced and a uniform application of these principals while keeping in touch with the continuous technological advancements.

[1] The Code of Civil Procedure, 1908, §20.

[2] News Nation Networks Private Limited v. News Nation Gujarat & Ors, 2017 SCC OnLine Del 12698. See also, India TV Independent News v. India Broadcast Live Llc and Ors, ILR (2007) 2 Del 1231.

[3] Cybersell, Inc. v. Cybersell. Inc. 130 F.3d 414 (1997)

[4] News Nation Networks Private Limited v. News Nation Gujarat & Ors, 2017 SCC OnLine Del 12698.

[5] Casio India Co. Limited v. Ashita Tele Systems Pvt. Limited ILR (2003) 2 Del 303.

[6] (India TV) Independent News Service Pvt. Limited v. India Broadcast Live Llc And Ors.,

ILR (2007) 2 Del 1231.

[7] Id.

[8] Banyan Tree Holding (P) Limited vs A. Murali Krishna Reddy & Anr. 2010 (42) PTC 361 (Del).

[9]  Id.

[10] Id.

[11] Id.

[12] World Wrestling Entertainment Inc. v. M/s. Reshma Collection. 2013 SCC OnLine Del 3987.

[13] Id.

[14] Id.

[15] Id.

[16] Icon Health And Fitness, Inc v. Sheriff Usman And Anr. 2017 SCC OnLine Del 10481.

[17] Id.

[18] Impresario Entertainment v S & D Hospitality 2018 SCC OnLine Del 6392.

[19] Id.

[20]Banyan Tree Holding (P) Limited vs A. Murali Krishna Reddy & Anr. 2010 (42) PTC 61 (Del) ¶ 58.

[21] Id.

[22] Impresario Entertainment v S & D Hospitality 2018 SCC OnLine Del 6392.

[23] GMR Infrastructure Ltd vs Associated Broadcasting Company Pvt. Ltd. and Ors. 2018 SCC OnLine Del 6866.

[24] Id.

[25] Id.

[26] Id.