Lawyers flag concerns over Delhi High Court ruling on IP jurisdiction before full bench

A recent Delhi High Court judgment saying that its territorial jurisdiction was stalling intellectual property suits was questioned before a full bench of the Court on Friday as lawyers questioned several findings in the ruling.

In a 246-page judgment delivered on November 3, Justice Purushaindra Kumar Kaurav had also taken a dim view of the High Court entertaining such IP suits that had little connection to the national capital.

Concerns over this verdict were raised before a Bench of Justices C Hari Shankar, Jyoti Singh and Vinod Kumar, which today reserved its verdict on a reference concerning jurisdiction in IP disputes. The Bench clarified that it was not hearing an appeal against the single judge’s judgment.

Advocate Saikrishna Rajagopal flagged the judgment at the outset, expressing concern about its impact on pending suits.

“Our only concern, Milords, was that our suits are all getting stalled and our concern was that there are at least two issues for reference which have a direct bearing on a finding,” he submitted, before the Bench intervened.

The Bench said that challenges to Justice Kaurav’s judgment would have to be pursued through appellate remedies.

“You can’t convert this into an appellate bench for that,” it observed.

The reference arose from Hindustan Unilever v. Kwick Living and concerns surrounding the interplay between Section 20 of the Code of Civil Procedure (CPC) and the jurisdiction provisions in trademark and copyright law, including in online disputes.

Section 20 CPC generally allows a civil suit to be filed where the defendant resides, carries on business or personally works for gain, or where the cause of action arises wholly or partly.

In these IP cases, the dispute concerns whether activities such as online advertisements, product sales or deliveries create a sufficient connection to Delhi for its courts to hear the suit.

Justice Kaurav’s November 3 judgment examined the territorial connections relied upon in 17 commercial suits and returned the plaints for presentation before appropriate courts. It also applied forum non conveniens, under which a court with jurisdiction declines to hear proceedings in favour of another forum.

Today, Advocate Shwetasree Majumder placed a note identifying Division Bench decisions that the single judge had distinguished or treated as lacking binding force on particular issues.

Majumder also submitted that Banyan Tree, an earlier Division Bench ruling, broadly disapproved of purchases arranged through investigators. However, she said that evidence gathered by a plaintiff’s investigator could not automatically be a ground to refuse jurisdiction.

“It’s not as if anything that is evidence introduced by the plaintiff’s own investigator must be frowned upon, or must be seen as a ground to refuse jurisdiction.”

She also addressed the judgment’s treatment of passing off primarily through goods-related transactions, submitting that services required different considerations.

Senior Advocate Chander M Lall, without directly addressing Justice Kaurav’s judgment, argued on the broader jurisdiction question that a completed commercial transaction could not be required in every IP case. A disparaging advertisement or an unauthorised copyright broadcast could give rise to infringement without a purchase, he submitted.

“There is no commercial transaction being concluded, and yet infringement is occurring.”

He also argued that restrictions concerning where companies carry on business under Section 20(a) and (b) of the CPC could not automatically be extended to Section 20(c), which permits suits where the cause of action arises wholly or partly.