Passive website insufficient to confer jurisdiction, says court

In Lilly Icos LLC v Richie Laboratories Limited (Case CS (OS) 392/2005, August 21 2009), the Delhi High Court has held that a passive presence on the Internet was insufficient to confer jurisdiction over an out-of-state defendant.
Many websites are used solely or primarily as an advertising medium, rather than a way of conducting commercial transactions. The courts have had great difficulty in deciding whether they have territorial jurisdiction over cases involving such websites. By and large, the courts have concluded that the operation of a passive website - which makes information available for browsing, but does not allow users to execute transactions online - is insufficient to confer jurisdiction.

In the present case, US-based Lilly Icos LLC, the owner of the well-known CIALIS mark, alleged that Richie Laboratories Limited, a Mumbai-based entity, advertised drugs under the trademarks TADARICH and RICHCALIS on its website, which could be accessed from Delhi, and sold its drugs all over the world via orders placed on the website. Lilly argued that the Tadarich product used the same trade dress as its Cialis product, and that RICHCALIS was confusingly similar to its CIALIS mark.

The court found that the website was merely used to post information on the nature and purpose of the Tadarich product, and did not invite orders from consumers in Delhi. The court observed that this website could not be said to be interactive - that is, it did not allow users to buy Richie's goods. Thus, the advertisements posted on the website lacked the “interactive features” which would justify the exercise of personal jurisdiction. The court relied on India TV v India Broadcast Live LLC (145 (2007) DLT 521), in which it was held that:

"it would have to be seen whether the defendant’s activities have a sufficient connection with the forum state (India), whether the cause of action arises out of the defendant’s activities within the forum state and whether the exercise of jurisdiction would be reasonable.”

In the present case, the court concluded that the operation of a passive website did not confer jurisdiction to the court and that Lilly should "show something more to indicate that the cause of action arose in a substantial manner so as to invoke the jurisdiction of [the] court".

Further, the court held that “random, fortuitous or attenuated” contacts between a defendant and the forum state do not provide an adequate basis for jurisdiction. The maintenance of a website does not in itself represent a continuous and systematic contact sufficient to confer jurisdiction. To have a sufficient connection or contact with the forum state, the advertisement posted on the Internet must relate to the plaintiff’s cause of action.
Binny Kalra, Anand And Anand Advocates, New Delhi

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