Territorial Jurisdiction – Infringement of Copyright and/or Trademark

The determination of territorial jurisdiction of a
civil court is governed by the Code of Civil Procedure,1908(“CPC”)1
Section 20 of the CPC which would be the relevant Section with respect
to cases of infringement of copyright and/or trademark provides that a
Suit may be filed, inter alia, either where the Defendant actually and
voluntarily resides or carries on business or works for gain or where
the cause of action arises wholly or in part. An explanation appended to
the said Section provides that a Corporation is deemed to carry on
business at its sole or principal office in India or at a place, where
in respect of any cause of action arising at such place it has a
subordinate office.

Hence, under these provisions, a Plaintiff
would be obliged to travel to where the Defendant actually and
voluntarily resides or carries on business or works for gain or where
the cause of action has arisen, wholly or in part. To illustrate this
point, consider a a case where an owner of copyright in a musical work
resides in Delhi, however, his musical work is being infringed by a
Defendant in Chennai by causing unauthorised communication thereof in a
bar in Chennai itself and nowhere else. In such a case, the Plaintiff
copyright owner would be constrained to travel to Chennai to file a
proceeding to restrain the acts of infringement of copyright since both
the Defendant is residing in Chennai as also the cause of action has
arisen in Chennai. Such acts of infringement often take place in remoter
parts of the country, making it even more cumbersome for a Plaintiff to
travel to every nook and corner of the country to protect his
intellectual property rights.

These difficulties were noted by
the Joint Committee that was constituted prior to the passing of the
Copyright Act, 1957 (“CA”) in as much as it was observed that many
authors are deterred from instituting infringement proceedings because
the court in which the proceedings are to be instituted are at a
considerable distance from the place of their ordinary residence. The
Joint Committee recommended that such impediments should be removed and
the proceedings should be allowed to be instituted in the local court
where the person instituting the proceedings ordinarily resides, carries
on business etc2.

Hence, it was in this background that an
additional forum was provided for by Legislature in section 62 of the CA
to enable authors to file a suit for infringement of copyright where
they reside or they carry on business or work for gain3. Subsequently,
section 134 was also brought into effect in the Trade Marks Act, 1999
(“TMA”) to provide an additional forum even in case of infringement of
trademark at a place where the Plaintiff resides or carries on business
or works for gain.

It is the scope and purview of both these
provisions that is sought to be explained and commented upon in this
Article. In fact, the Supreme Court has in a recent judgment dated 1st
July, 2015 in the case of IPRS vs. Sanjay Dalia4 dealt extensively with
the ambit and scope of the said provisions. My effort shall be to
explain the ratio decidendi of the Apex Court and thereafter highlight
certain issues which may still need to answered by the Hon’ble Courts to
afford complete clarity on these provisions.

STATUTORY PROVISIONS
Before
adverting to the aforesaid decision of the Apex Court in the case of
IPRS vs. Sanjay Dalia5, it would be helpful to consider the actual text
of the relevant provisions which provide, inter alia, as under :-

CA
“Section
62. Jurisdiction of court over matters arising under this Chapter. —
(1) Every suit or other civil proceeding arising under this Chapter in
respect of the infringement of copyright in any work or the infringement
of any other right conferred by this Act shall be instituted in the
district court having jurisdiction.

(2) For the purpose of sub-section (1), a “district court having jurisdiction” shall,
notwithstanding anything contained in the Code of Civil Procedure, 1908
(5 of 1908), or any other law for the time being in force, include a
district court within the local limits of whose jurisdiction, at the
time of the institution of the suit or other proceeding, the person
instituting the suit or other proceeding or, where there are more than
one such persons, any of them actually and voluntarily resides or
carries on business or personally works for gain.”

TMA
“134. Suit for infringement, etc., to be instituted before District Court. —
(1) No suit– (a) for the infringement of a registered trade mark; or
(b) relating to any right in a registered trade mark; or (c) for passing
off arising out of the use by the defendant of any trade mark which is
identical with or deceptively similar to the plaintiff’s trade mark,
whether registered or unregistered, shall be instituted in any court
inferior to a District Court having jurisdiction to try the suit.

(2) For the purpose of cls. (a) and (b) of sub-section (1), a “District Court having jurisdiction” shall,
notwithstanding anything contained in the Code of Civil Procedure, 1908
(5 of 1908) or any other law for the time being in force, include a
District Court within the local limits of whose jurisdiction, at the
time of the institution of the suit or other proceeding, the person
instituting the suit or proceeding, or, where there are more than one
such persons any of them, actually and voluntarily resides or carries on
business or personally works for gain…”

It may be noted
that though the current TMA contains Section 134 which provides an
additional forum to a Plaintiff, the earlier Trade and Merchandise Marks
Act, 1958 contained no such provision. Under the Trade and Merchandise
Marks Act, 1958, a Plaintiff was constrained to follow the Defendant
and/or the cause of action for vindication of his rights as u/s. 20 of
the CPC. This position has, however, now changed u/s. 134 of the TMA. A
bare perusal of both section 62(2) of the CA and section 134(2) of the
TMA which are pari materia6 in nature would show that they make a
significant departure from the provisions of the CPC and provide for the
existence of an additional forum in a Suit relating to infringement of
copyright and/or trademark, before a Court, where the Plaintiff actually
and voluntarily resides or carries on business or works for gain.

Both section 62(2) of the CA and section 134(2) of the TMA are additional forums and do not take away or abridge the right of a Plaintiff, if he so chooses to follow the Defendant and/or the cause of action u/s. 20 of the CPC. Hence, a Plaintiff in a suit for infringement of copyright and/or trademark would be entitled to approach the appropriate Court either u/s. 20 of the CPC or u/s. 62(2) of the CA or u/s. 134(2) of the TMA, as the case may be. It is possible, in a given case, that the appropriate Court could be the same Court whether section 20 of CPC is applied or the provisions of the CA or TMA are applied. An illustration would be that, take a case where an owner of copyright in a musical work resides in Delhi. The Defendant is also residing in Delhi and is infringing the musical work by causing unauthorised communication thereof in a bar in Delhi itself and nowhere else. In such a case, the Courts at Delhi would have the necessary territorial jurisdiction to entertain such a Suit for infringement of copyright since firstly, as u/s. 62 of CA, the Plaintiff resides in Delhi. Secondly, u/s. 20 of CPC, the Defendant also resides in Delhi and thirdly, even the cause of action is arising in Delhi. Hence, in such a case, it would only be the Courts at Delhi which would have the necessary territorial jurisdiction.

The question however, is of cases where only section 62 of the CA and/or section 134 of the TMA are invoked as conferring territorial jurisdiction on the Court.

    IPRS VS. SANJAY DALIA7

The Apex Court was dealing with two appeals from the Delhi High Court in this case. In the first Appeal, the facts were that the the Plaintiff was carrying on business through a Branch Office situate at Delhi and it was on this basis that the territorial jurisdiction of the Delhi High Court had been invoked. In the second Appeal, also the territorial jurisdiction of the Delhi High Court was invoked on the basis that the Plaintiff had a branch office at Delhi. In both these matters, the admitted position was that the registered office of the Plaintiffs was not in Delhi nor had any cause of action arisen in Delhi at the time of filing the suits but only the Branch Offices were in Delhi. Proceedings had been filed on the basis, as a suit could be filed wherever the Plaintiff was carrying on business and since these Plaintiffs had a branch office in Delhi, they must be deemed to carry on business in Delhi thereby, rendering the Delhi High Court as the Court having the necessary territorial jurisdiction. Objections were however, raised by the Defendants to the territorial jurisdiction of the Delhi High Court, on the basis that in both these matters the Plaintiff had a registered office in Bombay where the cause of action had also arisen and hence, it should be the Courts at Bombay which would have the necessary territorial jurisdiction. A Division Bench of the Delhi High Court upheld the objection of the Defendant in the first matter whilst in the second matter, the Division Bench of the Delhi High Court, allowed an amendment to be made to the Plaint to add averments to the effect that the infringing magazines were being circulated in Delhi as well thereby showing that cause of action had arisen in Delhi, and on this basis rejected the plea of the Defendant of lack of territorial jurisdiction. It was against these two Orders of the Delhi High Court, that appeals were preferred before the Apex Court.

The Supreme Court was thus called upon to answer whether in light of section 62 of CA and section 134 of TMA could a Plaintiff Corporation file a Suit anywhere it chose to, based on the existence of a branch office or must the Plaintiff Corporation be constrained to file proceedings at a place where either its registered office is situated or at a place where it has a branch office and where the cause of action has also arisen akin to the Explanation to section 20 of the CPC. The Explanation to section 20 of the CPC as mentioned earlier provides that a Corporation is deemed to carry on business at its sole or principal office in India or at a place, where in respect of any cause of action arising at such place it has a subordinate office.

The Supreme Court after considering the legislative history and the purpose for which the provisions had been brought onto the statute book observed that if the provisions are not interpreted purposively, as is being suggested by the Supreme Court, it could lead to abuse of the provisions, in as much as the Plaintiff will institute a suit in a wholly unconnected jurisdiction based solely on the existence of a branch office. The Supreme Court illustrated the possible abuse and observed, inter alia, that “There may be a case where plaintiff is carrying on the business at Mumbai and cause of action has

arisen in Mumbai. Plaintiff is having branch offices at Kanyakumari and also at Port Blair, if interpretation suggested by appellants is acceptable, mischief may be caused by such plaintiff to drag a defendant to Port Blair or Kanyakumari. The provisions cannot be interpreted in the said manner devoid of the object of the Act.” It has also been observed that such a counter mischief to the defendant was unforeseen by Parliament and it is the court’s duty to mitigate the counter mischief.

Hence, the Supreme Court has held that the additional right to institute a suit at a place where the Plaintiff resides or carries on business has to be read subject to certain restrictions, such as in case plaintiff is residing or carrying on business at a particular place/having its head office and at such place cause of action has also arisen wholly or in part, plaintiff cannot ignore such a place under the guise that he is carrying on business at other far flung places also. The very intendment of the insertion of provisions in the CA and TMA is the convenience of the plaintiff. The interpretation of provisions has to be such which prevents the mischief of causing inconvenience to parties. The Supreme Court whilst interpreting these provisions was also of the view that the issue raised before it had not been raised in any of the earlier cases cited before it

It was in light of these findings that the Supreme Court was pleased to dismiss both the appeals by holding that the provisions of section 62 of the CA and section 134 of the TMA have to be interpreted in the purposive manner. There is no doubt about it that a suit can be filed by the plaintiff at a place where he is residing or carrying on business or personally works for gain. He need not travel to file a suit to a place where defendant is residing or cause of action wholly or in part arises. However, if the plaintiff is residing or carrying on business etc. at a place where cause of action, wholly or in part, has also arisen, he has to file a suit at that place.

Whilst this judgment, brings much required clarity to the issue as to the interpretation of these provisions of the CA and TMA, in my opinion, these findings of the Supreme Court amount to introducing an Explanation or a Sub-section (3) to both section 62 of the CA and section 134 of the TMA, which explanation or sub-section had not been provided even by the Legislature whilst passing the said statutes.

The effect of this judgment would be to limit the scope and effect of these provisions. Plaintiffs would now be obliged to file proceedings in accordance with these principles laid down by the Apex Court. The effect of this judgment will, in fact, be felt in several pending proceedings, which proceedings may have been initiated prior to this judgment at a place where the Plaintiff had only a branch office but no cause of action, based on the bare language of these provisions. Already in several proceedings in different High Courts, to my knowledge, applications have been moved for rejection/return of plaint on account of lack of territorial jurisdiction of that Court based on this judgment.

    CONCLUSION

Even though this judgment does bring forth a fair amount of clarity on the issue of territorial jurisdiction in cases of infringement of copyright and/or trademark, in my opinion, certain important issues still remain to be answered in connection with the interpretation of these provisions.

To illustrate an issue which still needs to be addressed and has not been conclusively determined by the Supreme Court, consider a situation, where the Plaintiff is having a branch office in Delhi and the cause of action has also arisen there whilst its registered office is at Bombay. In such a case, can it be said that the Plaintiff is precluded from approaching the Courts at Bombay and must only file his case in the Courts at Delhi or is it still his option to choose the forum of his convenience between these two forums.

It may be noted that the Supreme Court in the IPRS judgment, was dealing with two cases where factually this position did not arise and in both cases, jurisdiction had been invoked only on the existence of a branch office and not on the basis of a combination of branch office plus cause of action. It is trite law that a decision is an authority for what it actually decides8 and hence, considering the nature of the facts involved, it would be difficult to assert that this issue has been conclusively adjudicated upon.

In my opinion, however, in the IPRS case itself, the Supreme Court had referred to its earlier judgment in Patel Roadways vs. Prasad Trading Co.9 wherein the Court whilst explaining the provisions of Section 20 of the CPC had observed, inter alia, that “The clear intendment of the Explanation, however, is that, where the corporation has a subordinate office in the place where the cause of action arises, it cannot be heard to say that it cannot be sued there because it does not carry on business at that place.”

Thus, from the perspective of the convenience of the Defendant and not the Plaintiff, the Supreme Court has already opined that it is the location of the subordinate office, within the local limits of which a cause of action arises, which is to be the relevant place for the filing of a suit and not the principal place of business.

On an analogy of this principle of convenience of parties as explained by the Supreme Court, in my opinion, it could be urged that a Plaintiff corporation which has a subordinate office in the place where the cause of action arises, ought not to be heard to say that it will not sue there since it would like to sue at a place where it has its registered office. The obvious convenience involved of both parties would have to be considered as has been explained by the Supreme Court. Considering that the Plaintiff has a branch office at that place he can hardly be heard to complain that the place is not convenient and also from the perspective of the Defendant, considering cause of action is arising at that place, it would mean that the Defendant and/or its products and/or services are to be found at that place thereby indicating that such a place would be convenient to the Defendant also. Hence, on the basis of convenience of both parties, it ought to be held that it is only the Court where the cause of action has arisen and where the Plaintiff also has a branch office which is the Court having the necessary territorial jurisdiction.

Another issue which has remained unanswered is the effect of this judgment on the Chartered High Courts i.e. the High Courts of Bombay, Calcutta and Chennai. As explained herein above, the Supreme Court has in a sense incorporated the Explanation to section 20 of CPC into the provisions of the CA and the TMA, however, by virtue of section 120 of CPC, section 20 of CPC itself does not apply to the Chartered High Courts. The territorial jurisdiction of the Chartered High Courts is governed by their respective Letters Patent and not by section 20 of CPC10. Hence, in such a situation can it be said that this interpretation would apply to these Chartered High Courts or would these Courts be able to exercise a more unrestricted jurisdiction than the other High Courts.

Whilst in my opinion, the judgment in IPRS does leave door ajar for several new issues to be resolved upon to bring forth complete clarity on the subject, the judgment is an important step forward towards interpreting and laying down the contours of the territorial jurisdiction of a Court in respect of proceedings initiated u/s. 62 of the CA or section 134 of the TMA.