On July 01, 2015, the Hon’ble Supreme Court of India gave an authoritative Judgement on the issue territorial jurisdiction for filing of Trademark and Copyright cases. The Supreme Court primarily dealt with the question that in case when the cause of action arises at a place where the Plaintiff has an office (head or subordinate), can they sue in another jurisdiction?
It held that these suits could be instituted only in the District Court that exercised jurisdiction over the place where the cause of action (in whole or in part) arose, if the Plaintiffs instituting the suit had an office in that jurisdiction.
Under the Code of Civil Procedure (Section 20), a suit can be instituted in a Court within whose territorial jurisdiction the Defendant resides or carries on business or personally works for gain or where the cause of action arose. However, an exception to the normal rule is provided under the Trade Marks Act, 1999 (Section 134) and the Copyright Act, 1957 (Section 62). It provides that ‘District court having jurisdiction’ shall notwithstanding anything contained in the Code of Civil Procedure, 1908 or any other law for 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(i.e the Plaintiff) actually and voluntary resides or carries on business or personally works for gain.
The issue of how Plaintiffs have been using (misusing) the provisions under Section 62 and Section 134 of the Copyright Act and the Trade Mark Act respectively has been considered by the Hon’ble Supreme Court.
Brief Facts leading to the present Appeal
- The Indian Performing Rights Society Ltd. filed a suit for copyright infringement in the Hon’ble Delhi High Court invoking territorial jurisdiction under Section 62 of the Copyright Act, 1957 (“Copyright Act”).
- The Advance Magazine Publishers Inc. filed a suit for trademark infringement under Section134 of the Trade Marks Act, 1999 (“Trade Marks Act”) at the Hon’ble Delhi High Court.
- The objection was raised by the Defendants with regard to the territorial jurisdiction of the Court at Delhi. The Plaintiffs have their principle office at Mumbai and alleged infringement and cause of action also arose in Mumbai, however the suits for infringement were filed in the High Court of Delhi where the Plaintiff companies have their branch office.
- The Learned Single Judge and the Division Bench of the Hon’ble Delhi High Court upheld the objections and held that the suit should have been filed at Mumbai.
- Aggrieved by the decision of the Hon’ble High Court, the present appeal was filed before the Hon’ble Supreme Court of India.
Contention of the Plaintiff
The Plaintiffs contended that under Section 62 of the Copyright Act and Section 134 of the Trade Marks Act , the party instituting the suit has the right to file a suit for infringement of a Copyright or a registered trade mark in any court within whose territorial jurisdiction the filing party (owner of the copyright/registered proprietor/registered user) carries on its business and keeping in mind the fact that the Plaintiffs/Appellants have their regional/branch offices in Delhi, the Hon’ble High Court of Delhi would have the territorial jurisdiction to hear, try and adjudicate the suits.
Contention of the Defendant
The Defendants objected the Plaintiffs’ contention stating that this would be an abuse of the provisions under the aforementioned sections of the two Acts and same cannot be permitted at the hands of the multi-national corporations to harass the Defendants. The Defendants/Respondents relied on Haydon’s rule of mischief.
The said rule directs that the courts must adopt the construction which “shall suppress the mischief and the advance remedy”. In other words, while interpreting a statue, the problem or mischief that the statue was designed to remedy should first be identified and then a construction that suppresses the problem and advances the remedy should be adopted.
Decision of the Supreme Court
The Hon’ble Supreme Court held that:
“If the interpretation as suggested by the Plaintiffs is accepted, several mischiefs may result, intention is that the Plaintiff should not go to far flung places than that of residence or where he carries on business or works for gain in order to deprive Defendant a remedy and harass him by dragging to a distant place
If such an interpretation is permitted, as rightly submitted on behalf of the Defendants/Respondents, the abuse of the provision will take place. Corporations and big conglomerates etc. might be having several subordinate offices throughout the country.
The avoidance of the counter mischief of the Defendant is also necessary while giving remedy to the Plaintiff under the provisions in question. After discussing the Parliamentary Debate with respect to the provisions in question. The Hon’ble Supreme Court held that the right to remedy given is not unbridled and is subject to the prevention of abuse of the aforesaid provisions, as discusses above. Parliament never intended that the subject provisions to be abused by the Plaintiff by instituting suits in wholly unconnected jurisdiction.”
The Hon’ble Supreme Court also held that there is no doubt that a suit can be filed by the Plaintiff at a place where he is residing or carrying on business or personally works for gain. He need not travel to file a suit to a place where the Defendant is residing or cause of action wholly/partly arises. However, if the Plaintiff carries on business or has his principle place of business or works for gain at a place where cause of action also arose, the Plaintiff has to file the suit at that place and not at its branch office in a different location.
Multi-nationals and Indian Conglomerates alike will have to take into consideration the present Judgement before filing an infringement suit under Sections 62 of the Copyright Act and Section 134 of the Trade Marks Act. The branch office will not give companies territorial jurisdiction and needs to be distinguished from their principle office.
This will put an end to forum shopping where only a few High Court or lower Courts were burdened with IP matters. Further it will speed up and take IP awareness to different areas/cities in India as other courts will also have the benefit of IP litigation and in the long run would result in better understanding of IP laws by the Judges as well as lawyers, thus raising the bar.