Can IP suits be instituted anywhere because products available online pan-India? Delhi HC larger bench to decide

Companies cannot institute intellectual property suits virtually anywhere in the country merely because products or advertisements are accessible online, the Delhi High Court recently said [HUL Vs Kwick Living].

Justice Anup Jairam Bhambhani opined that internet cannot become a basis for companies to claim territorial jurisdiction anywhere in India for instituting IP suits.

He made the observation while referring to a larger bench three questions concerning territorial jurisdiction in intellectual property disputes, particularly those involving online transactions.

“It is extremely important to point-out that, by reason of the advent of the internet and the accessibility of goods at any remote location via the world-wide-web, the principles of law in relation to territorial jurisdiction of courts cannot be so diluted or be made so vague that a corporation could sue in just about any location within the country.”

The Court added that such an approach would throw the very concept of territorial jurisdiction of courts to the winds.

Therefore, it referred the following three questions to a larger bench:

- Whether IP suits are governed solely by Section 20 of the Code of Civil Procedure, by Section 134 of the Trade Marks Act or Section 62 of the Copyright Act or by an interplay of all those provisions and if so, how?

- Whether a corporate plaintiff must sue only where its principal or registered office is located when part of the cause of action has arisen there.

- What jurisdictional rule should apply to online transactions in IP disputes in light of conflicting approaches in earlier Delhi High Court judgments.

The case arose from a suit filed by Hindustan Unilever Limited (HUL) against Kwick Living (India) Private Limited. HUL sought to restrain Kwick Living from publishing an advertising campaign titled War on What’s Hidden.

HUL sought an injunction against Kwick’s advertising campaign titled War on What’s Hidden. It alleged that the campaign targeted its Vim and Surf Excel products. The claims in the campaign were unsubstantiated and misleading, HUL said.

Kwick Living objected to the Delhi High Court hearing the case. It argued that the Court lacked territorial jurisdiction.

Both companies have their registered offices in Mumbai. HUL had also specifically referred only to a disputed hoarding in Mumbai, Kwick Living said.

HUL argued that it has a corporate office in Delhi. The campaign was also available through YouTube, Instagram and Kwick Living’s website and the same could be accessed in Delhi, it was submitted.

Consumers in the city could also use it to purchase the products. HUL, therefore, argued that part of the cause of action had arisen in Delhi.

The Court examined several judgments on jurisdiction in IP disputes and found apparent conflicts in the law laid down by various courts.

While some judgments required proof that a website specifically targeted consumers within the territory of a particular court, others suggested that the ability to complete an online commercial transaction may itself establish jurisdiction.

The Court cautioned against allowing companies to sue anywhere in India merely because online content or products were accessible there.

Hence, it referred the matter to a larger bench for conclusive determination.

The registry was directed to place the judgment before the Chief Justice within one week. The Chief Justice will consider constituting a larger Bench.

The Court did not pass any direction on HUL’s request for interim relief.

Senior Advocates Amit Sibal and Swathi Sukumar appeared for HUL. They were assisted by a team from Saikrishna & Associates comprising advocates Saikrishna Rajagopal, Sidharth Chopra, Nitin Sharma, Sneha Jain, Vivek Ayyagari, Abhinav Bhalla, Saksham Dhingra and Smriti Nair.

Senior Advocate Chander M Lall appeared for Kwick Living. He was assisted by a team from Fidus Law Chambers comprising advocates Shwetasree Majumder, Prithvi Singh, Jahnvi Chadha, Rohan Krishna Seth, Devyani Nath, Krtin Bhasin, Ritwik Marwaha, Vanshika Singh and Annanya Mehan.

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