In the vibrant arena of trademark litigation, where brand identity clashes with territorial boundaries, the case of Burger King Corporation vs. Techchand Shewakramani & Ors., decided by the Delhi High Court on August 27, 2018, emerges as a landmark exploration of jurisdictional competence in intellectual property disputes.

The plaintiff, Burger King Corporation, a U.S.-based fast-food giant, sought to protect its iconic trademarks "Burger King" and "Hungry Jack's" against alleged infringement by a group of Mumbai-based defendants operating under the same "Burger King" mark.

The defendants challenged the Delhi High Court's jurisdiction, arguing a lack of cause of action and territorial nexus. The court meticulously dissected the interplay of the Trade Marks Act, 1999, and the Code of Civil Procedure, 1908, dismissing the defendants' applications to reject or return the plaint. This case study delves into the factual matrix, procedural intricacies, legal issues, parties' arguments, judicial precedents, the court's reasoning, and the broader implications, painting a vivid picture of a jurisdictional chess game in India's trademark landscape.

• Detailed Factual Background:
  • Burger King Corporation, a renowned U.S.-based fast-food chain, holds global trademark registrations for "Burger King" and "Hungry Jack's," used for its restaurants and corporate identity. Planning to launch franchise outlets in New Delhi, the plaintiff had entered into agreements, sought regulatory approvals, and established a business presence in the city.
  • The defendants, all based in Mumbai, included individuals and companies allegedly infringing the plaintiff's trademarks. Defendant No. 5, Burger King Restaurant Pvt. Ltd., and Defendant No. 6, Hungry Jacks Fast Food Pvt. Ltd., were companies operating at 99/C, Rosewood Chambers, Tulsiwadi, Tardeo, Mumbai. Defendant No. 7, Ras Resorts and Apart Hotels Pvt. Ltd., shared the same address and was promoted by the same individuals.
  • Defendant No. 1 was a director of Defendants No. 5 and 7; Defendant No. 2 was an executive director of Defendant No. 7 and a director of Defendants No. 5 and 6; Defendant No. 3 was the managing director of Defendant No. 7 and a director of Defendants No. 5 and 6; and Defendant No. 4 was a director of Defendant No. 6.
  • The plaintiff alleged that the defendants were using "Burger King" for restaurants and carts in locations like Silvassa, Daman, and Pune, and were actively promoting the mark through a website, theburgerking.in, registered by Defendant No. 3 on July 9, 2014.
  • This website, linked to Ras Resorts, offered franchise opportunities and listed the administrative office as Ras Group of Hotels, suggesting a nexus with Defendant No. 7.
  • The plaintiff apprehended that the defendants planned to expand into Delhi, citing franchise queries from Delhi areas like Madangiri, Okhla, and Dwarka, and a Business Digest article dated July 30, 2014, quoting Defendant No. 3 on nationwide expansion plans.
  • The defendants' Memorandum of Association further declared intentions to establish branches across India, reinforcing the plaintiff's concerns.
    
• Detailed Procedural Background:
  • The dispute crystallized in CS(COMM) 919/2016, filed by Burger King Corporation before the Delhi High Court, seeking a permanent injunction to restrain trademark infringement and passing off, along with damages.
  • The suit was accompanied by a counterclaim, CC(COMM) 122/2017, by the defendants.
  • The defendants filed three applications:
    • I.A. 23496/2014 by Defendant No. 7 under Order VII Rule 11 CPC, seeking rejection of the plaint for lack of cause of action and territorial jurisdiction.
    • I.A. 17220/2015 by Defendants No. 1, 2, 3, and 5 under Order VII Rule 10 CPC, seeking return of the plaint for lack of jurisdiction.
    • I.A. 17221/2015 by Defendant No. 6 under Order VII Rule 11 CPC, mirroring the jurisdictional objections.
      
• Issues Involved in the Case:
  • Whether the Delhi High Court had territorial jurisdiction under Section 20 of the CPC, given the defendants' Mumbai-based operations and the plaintiff's claim of imminent infringement in Delhi?
  • Whether the plaintiff's invocation of Section 134(2) of the Trade Marks Act, based on its business activities in Delhi, conferred jurisdiction, or if it was barred by precedents limiting such claims.
  • Whether the defendants' promotion of the "Burger King" mark through websites, franchise queries, and public statements constituted "use" under the Trade Marks Act, creating a cause of action in Delhi?
  • Whether the plaintiff's apprehension of the defendants' expansion into Delhi was credible and sufficient to establish a cause of action under Section 20(c) of the CPC?
  • Whether subsequent events, such as franchise queries post-filing, could be considered to determine jurisdiction, or if jurisdiction was fixed at the date of filing?
    
• Detailed Submission of Parties:
  • The plaintiff argued that the Delhi High Court had jurisdiction under both Section 134(2) of the Trade Marks Act and Section 20 of the CPC. Under Section 134(2), the plaintiff claimed to carry on business in Delhi through agreements, contracts, and regulatory approvals for its imminent Burger King franchise launch.
  • Under Section 20(c), the plaintiff asserted a credible apprehension of the defendants expanding into Delhi, evidenced by franchise queries from Delhi, the interactive website theburgerking.in, and Defendant No. 3's public statements on nationwide expansion.
  • The defendants argued that the Delhi High Court lacked jurisdiction, as all defendants resided and operated in Mumbai, with no infringing activities in Delhi. They cited Indian Performing Rights Society Ltd. vs. Sanjay Dalia (2015) and Ultra Home Construction Pvt. Ltd. vs. Purshottam Kumar Chaubey (2016) to argue that Section 134(2) did not apply, as the plaintiff's Delhi presence was insufficient without a cause of action arising there.
  • Under Section 20, they contended that the plaintiff's apprehension was speculative, lacking evidence of actual sales or operations in Delhi. Defendant No. 7 emphasized its distinct business (Ras Resorts) and lack of connection to the "Burger King" mark, arguing that its website (rasresorts.com) was unrelated to the infringement.
  • The defendants asserted that the cause of action, if any, was quia timet and arose in Mumbai, where their operations were based. They further argued that subsequent events, like post-filing franchise queries, could not confer jurisdiction, and the issue was purely legal, not requiring factual inquiry.

Law Settled in this Case:
The judgment clarified several principles governing jurisdiction in trademark disputes: Section 20(c) of the CPC confers jurisdiction where a cause of action arises, including through trademark "use" such as promotion, advertising, or franchise solicitations in the forum's territory.

"Use" under the Trade Marks Act, per Sections 2(2)(c), 28, 29, and 56, encompasses non-physical activities like online promotions and franchise queries, reflecting e-commerce realities.Passing off and infringement actions consider future business harm, and jurisdiction is not fixed at the filing date, as each mark use creates a fresh cause of action .Section 134(2) of the Trade Marks Act supplements, but does not exclude, Section 20 of the CPC, allowing jurisdiction based on the plaintiff's business activities or cause of action (IPRS vs. Sanjay Dalia.

Interconnected defendants, sharing directors or addresses, can be joined in a suit if linked to the infringing mark, preventing jurisdictional evasion.In commercial suits, indiscriminate document denials violate the Commercial Courts Act's efficiency goals, and courts may impose sanctions for unjustified delays.A credible apprehension of trademark infringement, supported by promotional activities or expansion plans, suffices to establish a cause of action in quia timet actions.

Case Title: Burger King Corporation Vs. Techchand Shewakramani
Date of Order: August 27, 2018
Case No.: CS(COMM) 919/2016
Name of Court: High Court of Delhi
Name of Judge: Justice Prathiba M. Singh

Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: ajayamitabhsuman@gmail.com, Ph no: 9990389539