Court Jurisdiction for Trademark Infringement can be invoked under CPC or Trade Marks Act, Delhi HC

The Delhi High Court recently reiterated that in trademark infringement suits, the jurisdiction of the Court can be invoked under Section 20 of the Code of Civil Procedure (CPC), 1908 in addition to Section 134 under the Trade Marks (TM) Act, 1999.

Justice Pratibha M Singh thereby clarified that a suit for trademark infringement or passing off can be brought before a court having jurisdiction

• where the plaintiff resides/carries on business or
• where the defendant resides/carries on business or
• where the cause of action arises

The observation was prompted in a suit brought by the US-based Burger King Corporation alleging passing off and infringement of its registered trademarks “Burger King” and “Hungry Jacks”.

The plaintiff, Burger King was represented by Advocate Pravin Anand, Managing Partner of Anand & Anand, along with Advocates Tusha Malhotra and Pankuri Malik. Advocates Amarjit Singh, Mahendra Rana and Pranav Sarthi appeared for the defendants.

Among other grounds, the defendants had contested the maintainability of Burger King’s plaint contending that the Delhi High Court did not have the jurisdiction to entertain the suit, given Section 134 (2) of the TM Act.

Section 134 (2) lays down that a suit for trademark infringement etc. can be brought before the Court where the plaintiff resides or carries on his business.

However, in this case the plaintiff i.e. Burger King had also invoked Section 20 of the CPC to file their suit before the Delhi High Court. Section 20 allows for the initiation of suits where the defendant resides/carries on business or where the cause of action arises.

On examining various precedents on the issue, the Court has concluded that either Section 20, CPC or Section 134 can be invoked when it comes to deciding the form for initiating a trademark infringement suit. Similarly, the CPC provision can also be invoked for initiating copyright infringement suits.

As noted in the judgment,

“Thus, the provisions of Section 134 of the TM Act and Section 62 of the Copyright Act are in addition to and not in exclusion of Section 20 of the CPC. If the Plaintiff can make out a cause of action within the territorial jurisdiction of this Court under Section 20, no reference needs to be made to Section 134.“

In this case, the Court noted that there was sufficient material on record to indicate that alleged trademark infringement had taken place within the jurisdictional limits of the Delhi High Court.

Such material included the defendants’ promotion of the mark Burger King in Delhi, entertaining franchisee queries from the territory of Delhi, open and public declaration by the defendants of their intention to expand across the country, including Delhi, advertising carried out in respect to such expansion etc.

In this background, the Court also emphasised that a trademark infringement would arise, not only on the unauthorised physical use of the mark, but also on unauthorised reference to such marks.

Citing Section 2 (2) (c) of the TM Act, which defines “use” for the purpose of trademarks, the Court noted,

“This provision stipulates that use of a mark in relation to goods could be either in any physical or in any other relation whatsoever to such goods. Thus, jurisdiction of a Court in a trademark action, could be invoked where there is use upon or in relation to goods.

The phrase `in relation to’ has been interpreted to include advertising, promotion, publicity, etc.

Thus, in addition to actual sale of goods and providing services, if a person advertises his or her business under the mark in a territory, promotes his or her business under the mark in a territory or for example invites franchisee queries from a particular territory, sources goods from a particular territory, manufactures goods in a particular territory, assembles goods in a particular territory, undertakes printing of packaging in a particular territory, exports goods from a particular territory, it would constitute `use of a mark’.”

With these observations, the Court dismissed applications made to reject Burger King’s suit.

Indiscriminate denial of documents the Bane of Civil Adjudication

Before parting with the case, the judge also made some stern observations regarding the oft resorted practice of indiscriminately denying an opposing party’s documents, which she termed as the bane of adjudication in civil suits.

The judge was prompted to make the observation after she was appraised that the parties, in this case, had not conducted the admission/denial of documents in this case in line with the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (Commercial Courts Act).

In intellectual property suits, a number of documents are matters of public record. In such cases, the Court pointed out that a blind denial of public documents does not serve any purpose apart from wasting of judicial time.

“Such denials are completely bereft of merit and tend to prolong the trial in a suit. The purpose of admission/denial is to deny only those documents whose existence, genuinity or authenticity is disputed and not to merely harass the opposite side into proving each and every document with certified copies/original.

Especially in commercial matters, the process of admission/denial deserves to be cut short where the dispute between the parties is very narrow. Documents such as e-mail correspondences, legal notices, replies, internet printouts, etc. ought not to be permitted to be denied.”

Summing up the effect of such practices, the Court went on to remark,

“The practice adopted by parties to deny in general all the documents of the opposite side has been the bane of adjudication of civil suits.“

The Court observed that these issues have been addressed by the Commercial Courts Act, as well as the recent amendments made to it in Delhi.

The Court has given the parties another opportunity to file their affidavits of admission/denial in accordance with the Commercial Courts Act. The same was directed to be filed within two weeks. The Court also made it clear that,

“Any unjustified denial would be liable to be dealt with as per the provisions of the Commercial Courts Act and Delhi High Court (Original Side) Rules, 2018.”

Read the judgment: