|In the Supreme Court of India|
|Name of the Case||Impresario Entertainment & Hospitality PVT. LTD. Vs S & D Hospitality|
|Year of the Case||2018|
|Appellant||Impresario Entertainment & hospitality PVT. LTD.|
|Respondent||S & D Hospitality|
|Bench / Judges||Hon’ble Ms. Justice Mukta Gupta|
|Acts Involved||Company Act, 1956, CPC,|
|Important Section||Section 89 of CPC, Order XXXIX Rule 1 and 2 CPC and Order VII Rule 10 CPC|
The Delhi High Court clarified the issue of jurisdiction regarding trademark infringement arising out of acts committed on the Internet in Impresario Entertainment & Hospitality Pvt Ltd v S & D Hospitality,. The Court supported its previous decision of Banyan Tree Holding (P) Limited v A Murali Krishna Reddy & Anr, 2009, and resolved the conflicting results over the subject.
The Delhi HC has become the center for cases relating to IP litigation.[i] This stimulus parties to pledge proceedings in Delhi HC relating to IP laws which have eventually raised questions regarding the jurisdiction of the court particularly in online dealings over the decades. This issue has been allocated by Mukta Gupta, J. in the current case.
Background of the case
The plaintiff is a company that offers restaurant services with its listed office in Mumbai and is carrying its occupation in HKV, New Delhi, and a restaurant under the name and style of ‘SOCIAL’ which it has trademarked and has several coffee shops as well. It came to know in 2017 that the defendant has 2 restaurants in Hyderabad under the name ‘SOCIAL MONKEY’. Also, it has a widespread beverage by the name ‘A GAME OF SLING’ and the defendant has named a beverage as ‘HYDERABAD SLING’ which is matching and/or illusorily alike to the plaintiff’s beverage.
Hereafter, the plaintiff had filed for seeking an enduring injunction against the defendant from manufacturing, selling, marketing, advertising, and/or offering its facilities under the trademarks ‘SOCIAL’ and ‘STONE WATER’ or anything alike to them or any effort to pass off its trademark in defendant’s outlets.
Both these outlets have arrived into a contract with prevalent websites like Zomato and Dine Out and so the material of both, along with menu and contact info is obtainable on the websites of Zomato and Dine Out.
The court must first satisfy itself that it has the jurisdiction to entertain the case without going into the merits of the case, So, the issue before the court was whether it had the jurisdiction to entertain the case or not in this case?
The main contention of the defendant was that the court didn’t have the jurisdiction to divert the suit as it neither had its listed office in Delhi nor it carried on any business in Delhi. Also, the plaintiff’s listed office was situated in Mumbai which was also outside the jurisdiction of Delhi HC. Defendant’s other contention was that the plaintiff unsuccessful to show its principal office’s location as Delhi.
Responding to this, the plaintiff resisted that it didn’t have any workplace or branch in Hyderabad and that its principal office for funding and licensing of all its brands was situated in Delhi only.
The plaintiff also opposed that due to the occurrence of the defendant on websites like Zomato and Dine-out, it was in a situation to call the customers of its plaintiff to visit its outlet in Hyderabad. This was fervently opposed by the defendants as an ill-conceived proposal as meager booking or placing an order over the internet was deficient to accomplish that a transaction had occupied the place.
The plaintiff had also opposed that the defendant was scheduled to increase pan India as it had filed for trademark submission which was contrasting by the defendant stating that the plaintiff’s qua time action absences the required ingredients of any looming danger.
Plaintiff also claimed that at least one customer from Delhi had reserved a table in the defendant’s outlet in Hyderabad and so the reason for action had arisen in Delhi.
Gupta J discharged the case, for want of jurisdiction.
The court relied deeply on the values of jurisdiction set by the Delhi HC In reaching this decision, in the case of Banyan Tree Pvt Ltd. v. A. Murali Krishna Reddy. In the Banyan Tree case, the court has held:
“…that the mere accessibility of the Defendants website in Delhi would enable this Court to exercise jurisdiction. A passive website, with no intention to specifically target audiences outside the State where the host of the website is located, cannot vest the forum court with jurisdiction.”[ii]
The obligatory difference was made between the ‘purposeful availment’ test and the ‘purposeful avoidance’ test. The court detained that to found the case, it was mandatory upon the plaintiffs to display that the defendants had deliberately tried to target the customers of the jurisdiction of Forum State. Once it was recognized, it was now upon the defendants to show that they had planned to avoid the ailment of the jurisdiction of the Forum State. Applying this in the case of the websites, the court detained that mere interactivity of the website in the Forum State did not fascinate its jurisdiction.
Considering the degree of burden of proof on the plaintiff to display that the defendant had decisively availed the jurisdiction of the Forum State, the court detained that the defendant must enter in some profitable transaction with the customers of the Forum State meaning to pass off their goods as that of the plaintiffs. The material must be formed to the court by the plaintiff regarding the same and not the meager option of it.
The court, therefore, detained that even if the defendant involved or had been able to fascinate the customers from other jurisdictions by way of Zomato and Dine-out, the customers would still be mandatory to go to Hyderabad to avail the services. The best that could be done by the customers of other authorities, the court held, was to reserve a table at the defendant’s restaurant which eventually led the achievement of the transaction at Hyderabad where the cause of action would finally lie.
Despite being a well-reasoned judgment, the court has envisioned connecting the cause of action with the conclusion of the transaction in this case. So, clouds of insecurity still hover over the condition where transport of goods can be made to the Forum State or where the help of an intermediary can be got. Not much can be said where the defendants are set ex parte as has occurred in the earlier case of Impresario Entertainment & Hospitality Pvt. Ltd v. Urban Masala2 where Manmohan J. granted an ex parte injunction in the favor of the plaintiff against the defendant without even seeing the jurisdictional claim.
Indian Performing Rights Society Ltd. v. Sanjay Dalia & Anr. –The Supreme Court of India interpreted section 62 of the Copyright Act, 1957, and section 134(2) of the Trade Marks Act, 1999 concerning the place where the plaintiff can file a suit. Where it detected that “The very intendment of the insertion of a provision in the Copyright Act and Trade Marks Act is the convenience of the plaintiff. The rule of the convenience of the parties has been given a statutory expression in section 20 of the CPC as well. The interpretation of provisions has to be such which prevents the mischief of causing inconvenience to parties.”[iii]
Banyan Tree Holding (P) Limited vs A. Murali Krishna Reddy & Anr. on 23 November 2009– The division bench of the Delhi High Court detained that “Under clauses (a) to (c) of section 20 CPC, a plaintiff has a choice of forum and cannot be compelled to go to a place of business or residence of the defendant and can file a suit where the cause of action arises.”[iv]
In Icon Health And Fitness, Inc vs Sheriff Usman And Anr. – the Delhi High Court expected jurisdiction under Clauses (a) and (b), uttering that the defendants ‘carried on business’ in Delhi. The sum of the Court’s reasoning for the above is limited in two sentences – “Though the defendants are not existing in Delhi, however, the defendants are proposing their fitness apps and brands by App Store, Google Play Store and e-commerce porches like www.amazon.which can be retrieved and operated from all over the country, counting from Delhi. Thus, the defendants are resounding on business or working for gain at Delhi and this Court has regional jurisdiction to try and choose the current suit as per section 20 of the CPC, 1908.[v]
The current case has dealt with distance with the capability of the courts to divert cases related to online transactions. Mere convenience of the defendant’s website in the forum State can no longer be powdered for the courts to exercise jurisdiction.
Further, the law laid down in Banyan Tree [vi] has been supported and the court has further pointed down. The judgment, in this case, has covered the way for a more difficult and consistent standard in shaping the ability of the courts to entertain cases in case of online transactions.
- 1. Decided on: 3rd January 2018; CS(COMM) 111/2017
- 2. Jurisdiction of the courts in online transactions: Impresario Entertainment & Hospitality Pvt. Ltd. Vs S & D Hospitality
- 3. The Code of Civil Procedure, 1908, S-20 (c) – Other suits to be instituted where defendants reside or cause of action arises.
- 4. https://indiankanoon.org/doc/71641182/
- 5. The Copyright Act, 1957, Section-62-Jurisdiction of court over matters arising under this chapter.
- [i] https://www.khuranaandkhurana.com/infringement-of-intellectual-property-rights/
- [ii] https://www.itlaw.in/banyan-tree-holding-p-limited-v-a-murali-krishna-reddy-2009/
- [iii] https://advocatespedia.com/Indian_Performing_Rights_Society_Ltd._V._Sanjay_Dalia_%26_Anr.
- [iv] https://www.itlaw.in/banyan-tree-holding-p-limited-v-a-murali-krishna-reddy-2009/
- [v] https://www.mondaq.com/india/trademark/644000/icon-health-and-fitnes-inc-vs-sheriff-usman-and-anr-cscomm-2162016
- [vi] https://www.iiprd.com/the-question-of-internet-jurisdiction/