Guidelines for determining jurisdiction in online infringement cases provided

In Banyan Tree Holding Pvt Ltd v Reddy (CS (OS) 894/2008, November 23 2009), the division bench of the Delhi High Court has taken the interpretation of internet-based territorial jurisdiction to a new level. The judgment clarifies the Indian position on the subject in the absence of a long-arm statute.
The case arose from the use of the trademark BANYAN TREE RETREAT (and banyan tree device) by the defendants on their website. The matter was referred to the division bench by a single judge who entertained the suit at the admission stage.

Neither the plaintiff, Banyan Tree Holding Pvt Ltd, nor the defendants were located within the territorial jurisdiction of the Delhi High Court. Banyan Tree claimed before the single judge that the defendants solicited business through the use of the BANYAN TREE mark in Delhi. It relied on a 'trap order' to argue that the defendants' services were being offered to customers in Delhi because of the ubiquity and universality of the Internet. Banyan Tree thus claimed that the court had territorial jurisdiction under Section 20 of the Code of Civil Procedure 1908.

The Delhi High Court divided the arguments into three main issues and held as follows:
  • For the purposes of a passing off or infringement action involving the Internet, the burden is on the plaintiff to show that the defendant “purposefully availed” itself of the jurisdiction of the forum court. The plaintiff must demonstrate not only that the defendant intended to conclude a commercial transaction with internet users in the forum state, but also that the defendant’s website was specifically targeted at users in that forum, resulting in harm to the plaintiff.
  • For the purposes of Section 20(c) of the code, in order to show that part of the cause of action has arisen in the forum state, the plaintiff must show that the defendant's website was specifically targeted at users in that forum. The plaintiff must provide evidence that the defendant has entered into a commercial transaction with a user in the forum state via its website.
  • A lone 'trap transaction' is insufficient to prove that the defendant “purposefully availed” itself of the jurisdiction of the forum court. A plaintiff seeking to establish jurisdiction on the basis of trap transactions must provide evidence of such transactions with supporting materials.
In view of the foregoing, the case was remanded to the single judge to determine whether Banyan Tree has successfully established that the court has jurisdiction over the case.

The decision is significant in that it provides clear guidelines for determining jurisdiction in online infringement cases.

Binny Kalra and Vaishali Mittal, Anand And Anand Advocates, New Delhi

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