Jurisdiction issues further clarified by Delhi court

In Dharampal Premchand Ltd v Golden Tobacco Products (Case FAO (OS) 44 of 2007, May 8 2007), the Delhi High Court has clarified the rules on jurisdiction under Section 134 of the Trademarks Act 1999.

In a large country such as India, with several courts which could potentially have simultaneous jurisdiction, the choice of forum/court in which an action for violation of trademark rights and copyright is initiated could be of crucial importance for strategic reasons. A right owner has four options in deciding on the place where the infringement action may be initiated. Under the general rules of the Code of Civil Procedure, the plaintiff may initiate an action where the defendant resides or carries on business, or where the cause or part of the cause of action arises (ie, the place where the infringing goods are sold). Section 134 of the Trademarks Act and Section 62 of the Copyrights Act 1957 confer a third option upon the right owner to initiate an action at the place where the right owner resides or carries on business even if the defendant does not reside at that place and the infringing goods are not sold at that location. Thus, if the right owner carries on business in Mumbai, it would be entitled to initiate an action in the Mumbai High Court even if the infringer is not located in Mumbai and the infringing goods are not sold in Mumbai. The infringer will then be forced to defend the action in Mumbai, which is not its home territory.

The effect of the decision of the Madras High Court in Ajay Kumar Aggarwal Trading v Officine Lovato SpA (Lovato Case) is that so far as trademarks are concerned, the plaintiff may also file an infringement action in the court having jurisdiction where the mark has been applied for registration, even if:

• the plaintiff does not carry on business at such place;
  
  
• the defendant does not have a place of business within that jurisdiction; and
  
  
• the infringing goods are not sold within that jurisdiction.

However, it should be noted that the beneficial provisions of Section 134 of the Trademarks Act and the extension of jurisdiction as conferred by the Lovato Case are not available for passing off even if a passing off action is combined with an infringement action. This is confirmed by the decision of the Delhi High Court in Dharampal Premchand v Golden Tobacco Products. The effect of this decision is that if a right owner wishes to initiate action in Delhi while relying only on the provisions of Section 134 of the Trademarks Act or Section 62 of the Copyrights Act, on the basis that it carries on business within the territorial jurisdiction of the Delhi courts, it can do so only if it restricts its claim to trademark or copyright infringement. For the purposes of passing off, it must initiate a separate action in the place having appropriate jurisdiction. However, the Delhi High Court in the Dharampal Premchand Case held that if the plaintiff has mistakenly combined causes of action for trademark/ copyright infringement and passing off while claiming jurisdiction only under the provisions of Section 134 of the Trademarks Act or Section 62 of the Copyright Act, it can amend its statement of claim so as to restrict it to infringement only by deleting references to passing off.

It is normal to combine causes of action for infringement of trademark and copyright and passing off in a single action. However, if a plaintiff seeks to file an action where it carries on business and if the defendant does not reside at the same place and the goods are not sold at that place, it may have to file two separate actions at two different places for infringement and passing off.

For background discussion of the Lovato Case, see Choice of forum widened for trademark owners.

Mustafa Safiyuddin, DSK Legal, Mumbai