Determination Of Jurisdiction In The Cyberspace From The Perspective Of Trademark Disputes, With Respect To CPC And Trademarks Act

Introduction

In the Age of “If your business is not on the internet, then your business will be out of business”, it naturally follows that more and more disputes arise from forums operating in the nebula that is the World Wide Web. Section 20(c) of CPC, and more specifically, Section 134(2) of the Trademarks Act and Section 62(2) of Copyrights Act, deal with the issue of determination of jurisdiction. However, none contemplated the age that we live in and the scale of its dependence on the Internet.

Trademark Dispute

[Image Sources : Shutterstock]

Analysis

Determination of Jurisdiction in Trademark violations on the Internet has been the bone of contention in the past two decades. The immense outreach of the Internet means that two parties who may be operating in different geographical locations, or even different demographics, find themselves disputing over similar trade names/marks. The questions that arise then before a Court are:

  • Whether the Court can assume Jurisdiction over a business not situated in its territory?
  • Whether the accessibility of the website of a business from the territory subject to the court’s jurisdiction is sufficient for it to try the case?

The Judiciary has time and again interpreted the scope of jurisdiction in cases like these, albeit not always reaching the same conclusion.

The currently predominant principle was laid down in the Banyan Tree Judgment[1], which now serves as the mould for the determination of jurisdiction in such cases.

The judgment also overruled the judgment in ‘Casio India Co. Ltd. v Ashita Tele Systems’[2], where it was held that the mere availability of a website in the territory of Delhi was enough to invoke the jurisdiction of the Delhi High Court. The overruling however, held that mere accessibility of a website in a given location would not satisfy the requirement of jurisdiction. The degree of ‘availment’ of such jurisdiction will be considered, i.e., the intent to conclude a commercial transaction with the consumer and such availment resulting in injury or harm to the plaintiff. Factors like payment gateways and IFSC codes for receiving payments on the website serve as strong indicators for fulfilling the ‘Availment test’.

The Banyan Tree Judgment also settled the confusion caused by another previous judgment[3], which held that the degree of ‘interactiveness’ offered to a substantial number of consumers shall form a consideration.

Previously, the mere accessibility of a website from a given location was considered enough to invoke jurisdiction. However, the Banyan Tree Judgment seems to be a step in the right direction as it reconciles the procedure back with the original intent of the law, that was to have such suits tried at the place where the defendant carried on their business. A mere presence online and its accessibility worldwide don’t equate to business being carried worldwide. A line must be drawn, the internet is vast and endless, but the real world and its constituents still remain unaltered and subject to real world limitations.

However, the law on the given matter is not set in stone and is still evolving. In the case of World Wrestling Entertainment Inc. v. M/s. Reshma Collection(‘WWE’)[4], the Court ruled that the accessibility of a website offering sales of goods in the Court’s jurisdiction would equate to the Plaintiff ‘carrying on business’ there, fulfilling the requirement of invoking jurisdiction under the Trademarks Act. The Court’s observations were 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”.

The judgment managed to ruffle a few feathers in the backdrop of the Banyan Tree judgment. Some went so far as to call it an overruling of the now settled standard as the previous judgment laid down that the mere presence of an interactive forum was insufficient to confer jurisdiction. However, the same was misplaced since the two cases are easily differentiable. Firstly, the Banyan Tree judgment was in respect of establishing cause of action as per Section 20(c) of CPC in a suit for passing off, whereas the WWE Case dealt with Section 134(2) of the Trademarks Act, invoking jurisdiction in a suit for infringement. The prior judgment shed light on the determination of the ‘defendant’s place of business’, whereas the latter dealt with the scope of the place where the plaintiff ‘carries on business’.

In the more recent case of ‘Exxon Mobil Corporation vs Exon Corp Pvt Ltd[5] the court, besides upholding the Banyan Tree judgment, ruled that if a corporation has made their business available in a given geographical location, with an intent to do so deducible from their previous conduct, the scope of jurisdiction will be extended to such areas.

The Defendant Company’s website and links on Social Media platforms carried the claim of “doing business throughout India”. The Company website provided for modes of online payment and contained “banking terms”. Relying on the Banyan Tree judgment, the Court held that if the defendant company has knowingly and intentionally made available its business in the territory subject to the jurisdiction of the Court, the Court shall have jurisdiction on the matter.

Conclusion

The Law has always been a dynamic field, but the onset of Internet and its widespread availability across the length and breadth of the country has only amplified the dynamism of law. The Internet is a world of its own and the preceding ‘Word of the Law’ may not always be clear on matters not foreseeable in the past. That’s why judicial pronouncements are indispensable in setting forth a standard procedure to deal with the new challenges presented in these times. It also goes without saying that one needs to be on the lookout for new judgements as the topic is far from being settled.

Author: Arihant Shrivardhan,  A Student of Institute of Law, Nirma University, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.

References:

Section 20© CPC; Section 134(2) Trademarks Act

Banyan Tree Holding (P) Limited v. A. Murali Krishna Reddy & Anr.

Casio India Co. Ltd. v. Ashita Tele Systems

World Wrestling Entertainment Inc. v. M/s. Reshma Collection

Exxon Mobil Corporation vs Exon Corp Pvt Ltd

[1] Banyan Tree Holding (P) Limited v. A. Murali Krishna Reddy & Anr. CS (OS) No.894/2008.

[2] 2003 (3) RAJ 506

[3] India TV Independent News Service Pvt. Limited v. India Broadcast Live LLC and Ors 2007 (35) PTC 177 Del

[4] FAO(OS) No. 506 of 2013

[5]CS (COMM) 111/2019

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