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Indian Trademark law applicability to Foreign Defendants with No Physical Presence in India

January 19, 2022
Delhi High Court

Tata Sons recently filed a suit seeking permanent injunction to restrain foreign Defendants dealing in crypto currency, from using the trade mark “TATA” as part of the brand under which their crypto currency is made available to the public, that is, “TATA coin/$TATA”, or as part of their corporate name or domain name. The judgment of the Delhi High court dated October 26, 2021[i] in the said matter brought out certain interesting points for consideration regarding the jurisdiction of the Indian courts, whether the Plaintiff could seek an injunction against the Defendants’ mark, the Defendants being located outside the sovereign borders of India and the requirement of the intention to target the Indian market.

The Plaintiff

The Plaintiff in the given case was Tata Sons Private Limited, who provided a platform for trading in crypto currency under their well-known trade mark “TATA”.

The Defendants

The Defendants, Hakunamatata Tata Founders and others, were dealing in crypto currency under the trade mark “TATA coin/$TATA” in the U.K. and the U.S. However, they did not have any outlets in India nor were they carrying out any overt manufacturing or marketing activities within India.

Contentions of Tata

Tata argued a number of grounds in order to assert the territorial jurisdiction of the Delhi High Court over the Defendants, including:

Factual Contentions:

  • That Indians could purchase the Defendant’s crypto currency from their website, which was accessible in India.
  • That there is an admission, in the “White Paper” of Defendant no. 1, that it was involved in financial activities relating to India.
  • That the Twitter page of the Defendant reflected queries from various Indians regarding the process to purchase the Defendant’s “TATA coin/$TATA” crypto currency.
  • That India had the second highest internet traffic to the defendant’s website named, hakunamata finance with 50 visitors each day.
  • The Defendant had various Indian followers on the social media site Telegram.

Legal Contentions

  • That the Defendants had purposefully availed the territorial jurisdiction of the Court by making available their crypto currency under the infringing mark “TATA coin/$TATA”, in India, through the abovementioned website.
  • That there existed sufficient connection as required, between the infringing activities of the Defendants and the prejudice caused to the Indian customers and Tata, including the dilution of its goodwill.
  • That the jurisdiction of the Delhi High Court over the impugned activities of the Defendants was also bolstered by the effect of the said acts being felt with the Court’s jurisdiction, as the “TATA coin/$TATA” crypto currency could by purchased online by anyone situated in India, including Delhi.
  • That the Defendants had a clear intention to target the Indian customers.

Issue and Findings by Delhi High Court

Whether the Delhi High Court had the territorial jurisdiction to issue any injunctive direction to the Defendants, who were located outside India, with no physical Indian presence, or injunct the use, by them, of their “TATA coin/$TATA” mark?

The Hon’ble High Court discussed the case of (India TV) Independent News Services Pvt. Ltd. vs. India Broadcast Live LLC (2007) 35 PTC 177 (Del) at length, where, under similar facts and circumstances of the Defendants being located in the U.K. and the U.S., India TV, the Plaintiff, had claimed to be aggrieved by the Defendant’s use of the domain name “www.indiatvlive.com” and had been successful in availing an ex parte ad interim injunction, restraining the Defendants from using any combination of the terms “India” and “TV” in their domain names.

However, some key differences in the facts of the India TV case, as noted by the Delhi High Court in the present case, were:

  • That the Defendant’s website therein, expressly mentioned India as one of the countries whose residents could subscribe to their services through their website,
  • That the Defendant’s CEO in a public statement had acknowledged the opportunity provided by their website to target the Indian customers,
  • That the Defendants had acknowledged their Indian presence in their written statement, and
  • That they claimed to be the first IPTV delivery system of Indian content from India.

The Court examined Tata’s contentions and observed that:

  1. The accessibility of the website of the Defendant to persons within the jurisdiction of the Court would not, by itself, empower the Court to exercise jurisdiction over the Defendant.
  2. Something more substantial, indicating purposefully directed activity, by the Defendants to persons located within the territorial jurisdiction of this Court, is necessary.
  3. It was not the case of the plaintiff that the Defendants invited customers from India to purchase its crypto currency or responded to the queries posted on their Twitter page.
  4. 50 Indian visitors each day to the Defendant’s website was a remarkable small number and neither this, nor the alleged Telegram followers indicated that the Defendant was selling in/targeting the Indian market.
  5. Unlike in the India TV case, where the Defendants were admittedly, targeting India overtly as a customer base (refer to the key differences in the facts of the India TV case mentioned above), there were no facts on record to depict the same for the Defendants in the present case.
  6. The mere fact that some queries happen to be posted by persons in India, again, cannot indicate, any intent on the part of the Defendants to target the Indian market.
  7. There is no specific reference to India, on the website of the Defendants, as one of the preferred markets from where the Defendants’ crypto currency could be purchased. No conscious targeting of India, therefore, exists. Apparently, the Defendants’ crypto currency could be purchased, using the QR Code and the methodology indicated on the Defendants’ website, by a customer located anywhere in the world. This factor, therefore, too, cannot indicate any conscious targeting of the Indian customer base by the Defendants.

Therefore, the Court distinguished the facts of the present case from those of India TV and culled out certain criteria that needed to be met in order for the Indian courts to exercise territorial jurisdiction over foreign Defendants in online/internet trade mark infringement cases. These included:

  • The Defendant had to be carrying out infringing activities within the jurisdiction of the Indian courts,
  • The Defendant’s website had to be accessible by persons situated within such jurisdiction,
  • The said website of the defendant must be interactive, and
  • The level of interactivity of the said website should be such as to confer upon the Defendant, an irrefutable overt intent to target the Indian customers.

Therefore, orders which would operate to the prejudice of nonresident Defendants can, therefore, be passed by Indian Courts only if (a) the defendants’ activities have a sufficient connection with India, (b) the cause of action, for the Plaintiff, arises out of such activities and (c) the exercise of jurisdiction would be reasonable.

The Hon’ble High Court accordingly postulated that the intent of the Defendant to target the customer base in India was a sine qua non for the Indian courts to exercise territorial jurisdiction over such foreign Defendants. The Court held that such an intention, to target the Indian market, was evidently absent in the facts of the present case.

Conclusion

This judgment holds an “intent to target” as a mandatory requirement in internet trade mark infringement cases for the Indian courts to exercise jurisdiction over foreign defendants and the Court did not issue directions, as sought, to the Defendants as they were outside the territorial reach of the Court. Tata was unable to secure an injunction restraining the Defendants situated in the U.K. and the U.S., from using the trade mark “TATA coin/$TATA” as the Court did not find any such intent to target the Indian market on the part of the foreign Defendants. However, this was a prima facie view which was taken by the Court, and Tata might still have a shot at a favorable outcome post the trial, if they are able to delineate facts showcasing the Defendant’s intent to target the Indian customers.

[i] http://164.100.69.66/jupload/dhc/CHS/judgement/26-10-2021/CHS26102021SC3162021_182724.pdf

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