Tag Archives: counterfeiting

WWE Versus Reshma Collection: Territorial Jurisdiction of Delhi High Court.

Last week, His Honour Vipin Sanghi of Delhi High Court has ruled on the point of the territorial jurisdiction in intellectual property civil actions. The matter was World Wresteling Entertainment versus Reshma Collection.

Briefly stated, World Wrestling Entertainment Inc. (WWE), a Delaware corporation, instituted a civil action in Delhi High Court against a Mumbai based company. The allegation of WWE was that the Defendants were selling apparels and related items prominently displaying WWE’s characters and talents.

WWE claimed jurisdiction of Delhi High Court on the basis of following: –

  1. The broadcast of its programmes in Delhi;
  2. Its merchandise being available for sale in Delhi; and
  3. The merchandise is available on its website which is accessible in Delhi.

At the inception stage before even registering the plaint and issuing the summons of the suit to the Defendants, His Honour wanted to satisfy himself whether the Court had jurisdiction to entertain the matter. Mr. Pravin Anand, representing WWE, submitted at length the arguments and various precedents to impress upon His Honour that the Court indeed had territorial jurisdiction.

It was  not the case of WWE that the goods of the Defendants were available in Delhi. So WWE invoked the jurisdiction of the High Court only on account of Section 134 of the Trade Marks Act, 1999 and Section 62 of the Copyright Act. Both the provision provides an additional ground to the Plaintiff to institute a civil action provided Plaintiff is residing or carrying on business within the jurisdiction of the Court.

Mr. Anand submitted that although WWE has no place of business in Delhi, the transactions taking place online, a Company should be deemed to carry on the business within the territorial limits of the Court since the website can be accessed by residents of Delhi. Mr. Anand further submitted that the issue whether the Plaintiff carries on business in a particular territory is a mixed question of law and fact can could be gone into at the final hearing of the trial.

Per His Honour Sanghi,

The test to be satisfied as regards the aspect of carrying on business has been laid down in Dhodha House (supra). The sum and substance of the criteria laid down in Dhodha House (supra) is that an essential part of the plaintiff‟s business , coupled with an element of control exercised by the plaintiff, must exist in such place where the plaintiff claims to be carrying on business either on its own or through an exclusive agent.

Mr. Anand submitted that the Courts should now take into account a concept of “New Media” and make arrangements for the technological advancements. His Honour, rejecting this argument, held that the advent of internet transaction can be also compared to the time when the transaction used to take place simply by telephones and fax involving more than one jurisdiction. The New Media, per His Honour, is as applicable as Old Media which has always been used.

Mr. Anand relied upon the ruling of Division Bench in Banyan tree Holding. In that case, the DB held that if a Defendant, through its website, targeting people of a particular jurisdiction then the Court in that jurisdiction can entertain a civil action. However, His Honour Sanghi categorically pointed out that the situation at hand was not the Defendant’s site but of WWE’s. Hence, the reliance was of no consequence.

Finally, per His Honour in paragraph 30: –

When it is clear to me that this Court has no territorial jurisdiction even in the face of the plaintiffs own averments in the plaint, I am not inclined to issue summons to the defendant. The Court is obliged to return the plaint under Order 7 Rule 10 CPC, once it becomes clear that it has no jurisdiction, to be presented to the Court in which the suit should have been instituted.

Territorial jurisdiction is always the most simple aspect in a civil action for intellectual property right. However, it is, at the same time, most contentious point of determination and takes up most of the judicial time of Delhi High Court.

Lets see if WWE challenges the order or files the action in Mumbai, where Defendants are situated.

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Resolving IP Infringement Lawsuits: Swifter.

Contrary to the popular belief, intellectual property actions can be settled faster among the category of usual civil action, in comparison to suit for specific performance, partition of properties, etc. Though I generally file action on behalf of the Plaintiff, so the present post might prove as counter productive since I’m giving a Defendant’s perspective in light of precedents.

Whenever a Plaintiff is approaching the Court in an IP lawsuit, the sine qua non relief prayed is that the Defendant should immediately cease from the counterfeiting activities. Incidental relief, thereafter, are delivery of infringing goods and paying damages to the Plaintiff.

After the recent increase in the Court Fees in Delhi, usual practice is not to seek damages but rendition of accounts of the Defendant. Though I have my separate reservation on that front. Nonetheless, since the focus is shifting from damages, job of a Plaintiff to seek speedy disposal only becomes easier and swift.

IP matters do not require the whole nine yards of a garden variety civil litigation. With minimal evidence, maximum result is possible. In 2006, His Honour Sanjay Kishan Kaul paved the way of culminating an IP lawsuit faster in cases where Defendant is willfully abstaining from the proceedings. In the Glaxo matter, His Honour held that where the Defendant is not joining the proceedings, no useful purpose can be served by asking the Plaintiff to bring witness before the Court for deposition. His Honour, under Order 19 Rule 2 sub-rule 2 of the Code of Civil procedure, not only exempted the witnesses from appearing personally, but also decreed the lawsuit then and there on the basis of the material before the Court.

His Honour S. N. Dhingra too followed the Glaxo ruling in Eco Labs and dispensed with the appearance of the witness of the Plaintiff in similar circumstances. Meaning thereby, in matters where the Plaintiff’s officials are not in Delhi generally, or even out of the Country, they need not come to the Court and can seek exemption.

However, these were the cases where the Defendant abstained from joining the proceedings. In some IP cases where the Defendant has put in his appearance, the matter can also culminate soon, in fact sooner, if the Defendant chooses not to contest the matter and suffers the decree with prejudice at the very first opportunity.

The landmark precedent is, again, by His Honour Kaul in Nestle vs Satya Prakash Maheshwari. The last order disposing off the lawsuit is here. In the matter, His Honour faced a situation where Nestle had instituted a lawsuit against infringing wrappers similar to its flagship ready-to-cook noodle brand Maggi. When the lawsuit came up for hearing for the first time, the High Court also allowed Plaintiff’s prayer for appointing Court Commissioners to conduct search and seizure action in the premises of the Defendants.

At the inception, the Defendants chose not to contest the proceedings and offered to suffer a decree of permanent injunction provided Nestle gave up relief of damages against the Defendant. Nestle was, obviously, not interested in giving up claim for damages. Counsel for the Defendant relied upon Section 135(3) of the Trade Marks Act to strengthen his submissions. The provision provides that when the Defendant has chosen to cease his activities in question, then the Court cannot pass any relief for damages, other than nominal damages in Court’s discretion.

Relying upon the provision, His Honour Kaul decreed the suit in favour of Nestle without any damages awarded. Nestle, understandably, took the matter in the Appeal Court before the Division Bench. Their Honours, comprising Mudgal and Shali, with one of the best counsel for IP matters, Mr. Saikrishna Rajgopal as Amicus deliberated on the matter at length.

The Appeals Court, in the comprehensive ruling, not only upheld His Honour Kaul’s judgment, but also cleared the way for the Defendants who want to avoid the rigmarole of long drawn out litigation, most probably resulting in injunction and damages.

This speedier resolution is more favourable to the Plaintiff than the Defendant in a more practical way. By and large, Delhi High Court does not award massive damages after a matter reaches culmination. Settling much earlier and for a token damage can save the Plaintiff a lot of cost and paperwork.

Frankly, a speedier disposal helps the counsels more than the parties. Once an ex-parte interim injunction is in favour of the Plaintiff, if an IP suit gets settled after first few hearings, the legal team can focus on other pressing matters.

Maybe because I had my training as a Mediator during my LL. M. that is why I have more resolution oriented approach towards litigation rather than prolonging it.

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