Having considered what acts constitute infringement of a
registered trademark and copyright as also passing off, the next essential
question which arises is which Court would have the jurisdiction to try,
determine and dispose of a suit relating to the said issue. It may be
appreciated that apart from general rules of procedure which lay down the law
for the purposes of determining the jurisdiction of a Court, special provisions
are to be found in the Trade Marks Act, 1999 and the Copyright Act, 1957
(hereinafter referred to as the ‘Trade Marks Act’ and the ‘Copyright Act’,
respectively) which confer jurisdiction on additional fora. This month’s article
seeks to give an overview of the provisions which determine the jurisdiction of
a Court, in matters relating to violation of rights in trademarks and copyright,
with special reference to determining jurisdiction in respect of matters
relating to websites.
Code of Civil Procedure, 1908 :
The general rules for determining the jurisdiction of a Court
are to be found in S. 15 to S. 20 of the Code of Civil Procedure, 1908
(hereinafter referred to as ‘the CPC’). These provisions, inter alia, lay
down that in the first instance, a suit must be filed in the Court of the lowest
grade competent to try it. In suits for land, the same are to be filed where the
immovable property in dispute is situated. In other cases, the suit is to be
filed either where the defendant carries on business and/or actually and
voluntarily resides and/or works for gain or where the cause of action has
arisen. Hence, under the CPC, if an owner of copyright and/or registered
proprietor of a trademark wished to institute proceedings against an infringer,
he would be obliged to follow the infringer to wherever he resides and/or to the
place where the infringing goods are being sold. This would mean that, if
someone were selling goods bearing infringing trademark in a remote part of
Assam and only had an existence in that limited area, the proprietor of the
trade-mark, who may be situated in Kerala, would have to follow the said
infringer all the way to Assam and sue him there.
Special provisions :
In order to overcome this handicap/difficulty, certain
additional provisions for determining the jurisdiction of a Court are to be
found in the Trade Marks Act and the Copyright Act. S. 62 of the Copyright Act
and S. 134 of the Trade Marks Act, inter alia, allow a plaintiff i.e.,
the owner of the copyright and the registered proprietor of a trademark,
respectively, to initiate and file an action for infringement in the District
Court having jurisdiction to try the suit which shall include a District Court
within whose jurisdiction the person instituting the suit or proceeding actually
and voluntarily resides or carries on business or personally works for gain.
It may be noted that even though the provisions of S. 62 of
the Copyright Act have existed since 1957, no such provision was to be found in
the earlier Trade and Merchandise Marks Act, 1958. The Trade Marks Act
introduced such a provision for the first time in 1999. It may also be
appreciated that S. 134 of the Trade Marks Act allows a plaintiff to file a suit
where he actually and voluntarily resides or carries on business or works for
gain only in respect of the cause of action for infringement of registered
trademark and not for passing off. Hence, there could be situations where a
Court may have jurisdiction for the purposes of the cause of action of
infringement, but not for passing off. To illustrate, let us take a situation
where Hindustan Unilever Limited being the registered proprietor of the
trademark ‘DOVE’ having its registered office in Mumbai wants to sue a person
manufacturing and selling soaps, under an identical trademark, only in Ludhiana.
In such a case, since the defendant is neither itself present within the
jurisdiction of the Mumbai Courts, nor are its products available within Mumbai,
the plaintiff would be unable to file a suit for passing off in Mumbai. However,
in light of S. 134 of the Trade Marks Act, Hindustan Unilever Limited would be
entitled to file an action for infringement of its trademark in Mumbai. In such
cases at a practical level, the normal practice followed by lawyers in Mumbai,
would be to file a combined suit for both causes of action in Mumbai and then
seek leave under Clause XIV of the Letters Patent for joinder of causes of
action, thereby giving the Court at Mumbai jurisdiction to try, determine and
dispose of the suit in respect of both the causes of action. Clause XIV of the
Letters Patent is a provision whereby the Bombay High Court is empowered to
combine causes of action so as to, inter alia, avoid multiplicity of
proceedings.
Hence, in a matter relating to infringement of rights in a
trademark or copyright the above principles would apply for the purposes of
determining jurisdiction.
Websites :
The application of the above principles is relatively simple
in the real world, but causes quite a few problems when applied to the virtual
world or in cyberspace. In cases where the defendant is not resident within the
jurisdiction of the Court, but jurisdiction is sought to be fixed on the basis
that the cause of action has arisen within the jurisdiction of that Court,
several difficulties arise. It may be noted that in cases where the infringing
mark or work is found only on a website, the question which arises is under
which circumstances can it be said that a cause of action be said to have arisen
within the jurisdiction of that Court and under what circumstances can a Court
exercise jurisdiction over a website. This question has vexed lawyers and
jurists over the years as to in what circumstances can a Court exercise
jurisdiction over websites published on the worldwide web. Would the mere
accessibility of a website from within the territory of the Court confer
jurisdiction on that Court or is something further required to determine and
establish a cause of action. A website, under normal circumstances, would be
accessible to everyone in all countries. Hence, in such a case can it be said
that a cause of action arises in every jurisdiction, thereby allowing the
plaintiff to sue anywhere where the website is accessible.
This question of seminal importance has recently been
answered by a Division Bench of the Delhi High Court in Banyan Tree Holding
Private Limited v. A. Murali Krishna Reddy1 wherein the matter
had been referred by a Learned Single Judge to the Division Bench to determine
the law applicable for determining jurisdiction over a website.
The facts of the said case were that neither the plaintiff nor the defendant had their offices within the jurisdiction of the Delhi High Court, but the suit for passing off was brought on the basis that the defendant’s website which used the impugned mark ‘Banyan Tree Retreat’ was accessible in Delhi through the website of the defendant which was not a passive website and was an interactive web-page. The concept of a passive website as against an interactive website has been evolved by Courts for the purpose of determining jurisdiction as will be evident from the following.
The Division Bench, in light of the above facts, formulated and answered the following question— What principles would apply to determine jurisdiction in passing off or infringement actions where the plaintiff was not carrying on business within the jurisdiction of the Court, but the defendant was hosting a website within the jurisdiction of that Court?
In order to answer this question, the Division Bench made a detailed analysis of the law as it stood in the U.S.A., U.K., Canada, Australia and India. The Division Bench examined how several theories have been propounded over the years for the purposes of determining jurisdiction in cyberspace.
A vast plethora of judgments of US Courts was considered on the subject and it was found that initially, the Courts in the USA used to apply the ‘Purposeful Availment’ theory which was later modified to the ‘Zippo Sliding Scale Test‘ which was thereafter modified to the ‘Effects Test.’
The Purposeful Availment theory was initially pro-pounded by the U.S. Supreme Court in International Shoe Co. v. Washington2, wherein it was held that in order to establish jurisdiction over a particular defendant the plaintiff had to show that the Defendant had minimum contacts in the forum State, i.e., the State in which the plaintiff desired to institute his action, and that the defendant must have purposefully availed of the privilege of conducting activities in the forum state. Under this theory, it was found that the Courts were tending to exercise jurisdiction over websites merely on the basis that they were accessible within the jurisdiction of the forum court. However, it was later clarified that the effect of creating a site may be felt nationwide or even worldwide but without more, it would not be an act purposefully directed towards the forum State3. This led to the concept of whether a website could be categorised to be a passive website or an interactive website and that the purposeful avail-ment theory would be satisfied only if the website were interactive to a degree that reveals specifically intended interaction with the residents of the forum state4.
Hence, questions then arose as to whether websites were passive or interactive and if interactive, what was the level of interactivity needed to establish jurisdiction. This led to the Zippo Sliding Scale test wherein the Court set out a three-pronged test being that the defendant must have minimum contacts with the forum state, the claim asserted must arise out of those contacts and that the exercise of jurisdiction must be reasonable5. The Courts, however, then felt that since almost all websites are interactive to a certain extent, a shift was necessary so as to examine in each case, the nature of the activity performed using the interactive website.
In light of the above, the effects test was pro-pounded in Calder v. Jones6 wherein it was held that for the purposes of determining jurisdiction, it was essential to identify where the effect of the website would be felt i.e., at whom and/or where was it targeted.
The effects test however, did not find favour in its application to trademark infringement cases since it was felt that the effects test as would be applicable to an individual would not be applicable to a corporation/company, since a company would not suffer harm in a particular geographic location in the same sense that an individual would7.
The Division Bench then summarised the law in the U.S.A. as being that a plaintiff would have to show that the defendant purposefully availed of the jurisdiction of the forum state by specifically targeting the customers within the forum state.
The Division Bench also considered the law in the U.K., Canada and Australia before dealing with the limited Indian law on the subject. A perusal of these foreign judgments explains the fact that mere access to a website would not confer jurisdiction on a Court and that something more would be needed.
It was in light of the above, that the judgment of a Single Judge of the Delhi High Court in Independent news Service Pvt. Ltd. v. India Broadcast Live LLC8 was referred to. The finding in that case was that in order to exercise jurisdiction over a website it was essential to show that the website was interactive and that the level of interactivity involved would also be relevant.
The Division Bench has, however, gone a step further after considering all the law on the subject and has, inter alia, laid down that:
“This Court holds that jurisdiction of the forum court does not get attracted merely on the basis of interactivity of the website which is accessible in the forum state. The degree of the interactivity apart, the nature of the activity permissible and whether it results in a commercial transaction has to be examined. For the ‘effects’ test to apply, the plaintiff must necessarily plead and show prima facie that the specific targeting of the forum state by the Defendant resulted in an injury or harm to the Plaintiff within the forum state. For the purposes of a passing off or an infringement action (where the plaintiff is not located within the jurisdiction of the court), the injurious effect on the plaintiffs business, goodwill or reputation within the forum State as a result of the defendant’s website being accessed in the forum State would have to be shown. Naturally therefore, this would require the presence of the Plaintiff in the forum state and not merely the possibility of such presence in the future. Secondly, to show that an injurious effect has been felt by the Plaintiff it would have to be shown that viewers in the forum state were specifically targeted. Therefore the ‘effects’ test would have to be applied in conjunction with the ‘sliding scale’ test to determine if the forum court has jurisdiction to try a suit concerning internet based disputes.”
Thus, it would be evident that in order to establish that a cause of action has arisen within the jurisdiction of a particular forum, it would be necessary for the Plaintiff to prima facie establish that the defendant’s website which contains the infringing material is specifically targeting customers within the forum state and that the same has caused injury or harm to the Plaintiff within the jurisdiction of that forum not merely whether a website is active or passive.
In my opinion, the above judgment, though lays down certain guiding principles as to how a court can exercise jurisdiction over infringing acts in cyberspace, it still leaves many questions unanswered such as what is the level of injury or harm necessary to establish jurisdiction or how is one to determine and identify cases of specific targeting, what would happen in cases where the targeting is of specific individuals who are normally resident in another forum but have accessed the website within a different forum, etc. These issues still remain unanswered and one can only hope that they will be answered in due course of time. The only solace is that a lamp has been handed down by the Division Bench, which will, hopefully, light the path as we walk along and lay down and make more specific the law on the subject.
