Analysis of Tata Sons Private Limited v. Hakunamatata Tata Founders- Determining Territorial Jurisdiction
Introduction
Territorial Jurisdiction is a pertinent parameter to be considered by any judicial authority before delving into the facts and circumstances of the case at hand. Trademark law encapsulates such territorial jurisdiction under Section 134 of the Trademarks Act, 1999[1] (hereinafter “Trademark Act”). The aforementioned Section has to read with Section 20 of the Code of Civil Procedure, 1908[2] (hereinafter “CPC”) which determines whether the concerned court has jurisdiction to try the suit or not. Territorial jurisdiction is demarcated for the issue of institution of a suit and issuance of an injunctive direction. While the statutory position is clear regarding the former, the latter puts forth a moot question to be decided based on facts and circumstances of each individual case.
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Background to the case
The plaintiff in the present case, along with its subsidiaries, was involved in rendering financial services including crypto currency. However, it did not deal with crypto currency under any brand name or trade mark. On the other hand, Defendants 1 and 2 were situated in the U.K. and U.S.A respectively dealing in crypto currency under the name “TATA coin/$TATA”. The mark was not registered in India.
The plaintiff sought permanent injunction restraining the defendants from using the mark “TATA” as part of their corporate name, domain name or as part of the name under which their crypto currency is made available to the public.
Analysis of the case
The case at hand posed issues related to territorial jurisdiction of the Delhi High Court in such matters. The first limb of the discussion concerned institution of the suit before the court of competent jurisdiction.
Institution of the suit
The petitioner presented numerous arguments to establish jurisdiction of the Court based on the defendants’ presence in India through their virtual and social-media presence. A three-limbed argument was presented: first, there was “purposeful availment” of the jurisdiction of the present court by the defendants as they made their crypto currency available to customers located in India; second, there existed the requisite “connection” between activities of the defendants and prejudice caused to the petitioner; and third, the “effect” of the defendants’ activities could be witnessed in India. However, having analysed the petitioner’s primary contentions and verified the same through the statutory scheme of Trademarks Act and CPC, the court concluded that institution of suit was not the issue that invited controversy.
Issuance of injunctive direction
The Hon’ble Court recognized the issue at hand to be its territorial jurisdiction in terms of issuing an injunctive direction to the defendants who are located outside India.
Development of law- In Independent News Service Pvt. Ltd. v. India Broadcast Live LLC & Ors.[3](hereinafter “India TV”) similar issue came to be analysed by the court. On the aspect of Internet activities, it was opined that ‘passive’ posting of a website does not grant jurisdiction to the Court within whose jurisdiction, the complainant company is located. In the absence of any statutory framework regarding jurisdiction in respect of non-resident defendants, decision has to be reached in the light of defendant’s activities’ sufficient connection with the forum state, cause of action arising from such activities and reasonableness attached to exercise of jurisdiction.
In the subsequent judgement of CyberSell, Inc. v. CyberSell, Inc.[4], it was held that the level of interactivity is a relevant consideration to establish jurisdiction of a Court. CompuServe, Inc. v. Patterson[5] recognized such jurisdiction when such interaction involved selling of computer softwares on plaintiff’s Ohio based systems.
The law laid down in India TV was recognized to be the correct law for dealing with the issue.
The present case- The Court highlighted that the issue of whether infringing activities are being carried out within the Court’s jurisdiction poses difficulty when such alleged activities are carried out over the internet. However, mere accessibility of the website operated by the defendants by people located within the jurisdiction of the Court would not justify exercise of jurisdiction against the Defendants. The Court found the recitals contained in the “White Paper” issued by the defendants insufficient to conclude that they were targeting the Indian market. Similarly, the defendants’ activities over Twitter and Telegram did not identify the particular user’s nationality.
Conclusion
The Court did not issue any injunctive directions holding that the defendants are outside the territorial reach of the Court.
Critical Analysis- Subjective Perception
While the Hon’ble Court’s conclusion is agreed to in terms of indefinite expansion of territorial jurisdiction of courts in such cases if they are construed liberally, it is felt that such cases leave the petitioners in a critical spot. As in the present case too, the “harmful effect” principle proposed by the petitioner in view of its market being affected and diluted, deserves discussion. The economic loss to the petitioners in such cases appears inevitable through the decision. The necessity of establishing a “connection” between the defendants’ activities and India, though rational, a strict application of the same in cases involving internet presence may always work to the detriment of the petitioner.
With trade and commerce evolving virtually, a dynamic construction of statutory provisions related to territorial jurisdiction is needed.
Author: Shailza Agarwal- a student of Symbiosis Law School (NOIDA) and intern at IP And Legal Filings, in case of any queries please contact/write back us at support@ipandlegalfilings.com.
References:
[1] The Trademark Act, 1999, No. 47, Acts of Parliament, 1999 (India).
[2] The Code of Civil Procedure, 1908, No. 05, Legislative Department, Ministry of Law and Justice, 1908.
[3] Independent News Service Pvt. Ltd. v. India Broadcast Live LLC & Ors. (2007) 35 PTC 177 (Del).
[4] CyberSell, Inc. v. CyberSell, Inc. 130 F.3d 414 (9th Cir. 1997).
[5] CompuServe, Inc. v. Patterson 89 F. 3d 1257 (6th Cir. 1996).
