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The Jurisdictional Dispute in Trademark and Copyright Infringement Litigation

There has been a prolonged debate on which court's territorial jurisdiction is to be invoked when it comes to the disputes under the Trade Marks Act, 1999.

This article showcases the jurisdictional dispute of section 20 of the Code of Civil Procedure, 1908 with section 134 of the Trade Marks Act, 1999 and section 62 of the Copyright Act, 1957.

A series of judicial precedents and interpretations by the Hon'ble Supreme Court and Hon'ble High Courts have been cited to understand the issue and discuss the various aspects of law relating to Trademark and copyright litigation.

Code Of Civil Procedure, 1908

Every court has its powers and limitations over cases which it can entertain. The District Courts, High Courts and the Supreme Court have their boundaries in exercising their territorial jurisdictions. Matters relating to Intellectual Property Rights are admissible in Commercial Courts. In all of the above cases, territorial jurisdiction is determined in accordance with section 20 of the Code of Civil Procedure, 1908, which lays the jurisdiction for filing suits:
  1. Place where the defendant resides.
  2. Place where the defendant carries out business or works for gain.
  3. Place where at least a portion of the cause of action arises.
Thus, ordinarily the defendant has the advantage to select the court for filing the suit. However this provision act as a deterrent for the plaintiff if he does not reside within the defendant's jurisdiction.

Trade Marks Act, 1999

According to section 134 of the Trade Marks Act, 1999, all the disputes pertaining to Trademark and Copyright have to be instituted before a District Court and sub-section (2) of the Act expressly gives the plaintiff the authority to institute a case where he resides or carries on business or personal works for gain. It reads as under:

“For the purposes of clauses (a) and (b) of sub-section (1), a "District Court having jurisdiction" shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908) or any other law for the time being in force, include a District Court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or proceeding, or, where there are more than one such persons any of them, actually and voluntarily resides or carries on business or personally works for gain.”

Copyright Act, 1957

When it comes to the Copyright Act, 1957, section 62 states that:
“For the purpose of sub-section (1), a "district court having jurisdiction" shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908), or any other law for the time being in force, include a district court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or other proceeding or, where there are more than one such persons, any of them actually and voluntarily resides or carries on business or personally works for gain.”

It is important to understand that both sections 134 and 62 are pari materia or categorical in nature. Their very 'inclusive' nature can be inferred from the fact that they are not prejudicial towards any of the parties.

If the plaintiff is to take recourse under section 20 of the Code of Civil Procedure, 1908, he does not lose the right to institute a suit in the place where he resides or conducts business for profit.

When sections 134 and 62 are read with section 20, the plaintiff is not barred from instituting suit at place where cause of action has arisen wholly or in part or at a court having jurisdiction where the defendant resides or works for gain even if the plaintiff does not reside or work in the same area.

Here are a few judicial pronouncements to establish that sections 134 and 62 are not in derogation with section 20, but in coherence.

In the case of Exphar SA and Ors. v. Eupharma Laboratories Ltd. And Ors., the Hon'ble Supreme Court considered section 62 of the Copyright Act to be wider than that under the Code of Civil Procedure, 1908. It opined that Section 62 cannot be read as limiting the jurisdiction to the persons who reside at a place or work there for gain, but it prescribes an additional ground for attracting the jurisdiction of a court above the 'normal' grounds laid down in section 20 of the Code of Civil Procedure, 1908, which means it is not derogatory to section 20.

In the famous case of Indian Performing Rights Society Ltd. v. Sanjay Dalia and Ors., the respondents contented Heydon's Rule of Mischief while interpreting section 134 of the Trade Marks Act, 1999 and section 62 of Copyright Act, 1957. It was contended that both these sections confer power to the plaintiffs to institute a suit in any of their branch offices in the country, even if the cause of action has arisen at some other place, which was opposed by the defendants. In the instant case the place of business of the plaintiffs was in Mumbai, their residence was also Mumbai but they initiated proceedings in Mumbai.

The Hon'ble Supreme Court opined that the provisions of law never intended to be oppressive towards the defendant. The plaintiffs had branch offices at Kanyakumari and Port Blair too, but that does not give them the right to initiate proceedings in those courts, which would amount to abuse of law.

Therefore, the Hon'ble Supreme Court read down the explanation of sections 134 and 62 and deduced that the plaintiff corporation shall carry on business at a place where its sole or principal office is situated or any subordinate office in the place where the cause of action has arisen.

The dictum of the Hon'ble Supreme Court in the above case was relied upon by the Hon'ble Delhi High Court in the case of Ultra Home Construction Pvt.Ltd. v. Purushottam Kumar Chaubey and Ors. and it held that although the term “carries on business” is present in all the three provisions (being sections 134, 62 and 20 of their respective acts), the explanation provided in section 20 of the Code of Civil Procedure, 1908 has not been expressly provided in the other two provisions. In the same case the Hon'ble Delhi High Court laid down an explanation of the applicable jurisdiction that may arise in different cases.

In a very recent judgment of Burger King Corporation v. Techchand Shewakramani and Ors, the Hon'ble Delhi High Court has opined regarding what constitutes quia timet cause of action in a trademark dispute. The plaintiff who was a U.S.A based company had alleged the defendants who were Mumbai based, of infringing its registered trademark which is Burger King. The plaintiff filed the suit under section 134 (2) of the Trade Marks Act, 1999 and section 20(c) of the Code of Civil Procedure, 1908. The plaintiff averred that the defendant's cause of action was Delhi hence the territorial jurisdiction has to be Delhi.

The Court held that the act of promoting, seeking franchise requests, entertaining franchise inquiries, expressing intention to expand in Delhi, allowing franchisees to apply through website would constitute use of the mark in Delhi and hence Delhi High Court has jurisdiction to entertain the suit.

The Court rightly held that both sections 134 of Trade Marks Act, 1999 and 62 of the Copyright Act, 1957 are inclusive of section 20 of the Code of Civil Procedure, 1908 and not exclusive or derogatory. If the plaintiff places reliance upon the jurisdiction under section 20 then he shall not be required to refer to section 134 for jurisdiction.

To conclude it is important to understand that the intention of the legislature in drafted section 20 of the Code of Civil Procedure, 1908, is to provide a recourse to the plaintiff to express his grievance against the defendant in whose jurisdiction the cause of action has arisen. If a person chooses to come under section 134, he need not chose the recourse of section 20. Both sections 134 and 62 of their respective acts are inclusive of section 20 and not derogatory.

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