Supreme Court decision on jurisdiction likely to have impact on IP litigation strategies

India

In Indian Performing Rights Society Limited v Dalia and Advance Magazine Publishers Inc v Just Lifestyle Pvt Ltd (CA Nos 10643-10644/2010 with CA No 4912/2015 @ SLP (C) No 8253/2013), the Supreme Court has dismissed the appeals filed by the Indian Performing Rights Society Limited (IPRS) and Advance Magazine Publishers Inc against orders of the High Court of Delhi, and held that if a plaintiff is residing or carrying on business at a place where the cause of action has also arisen, either wholly or in part, it has to file suit at that place. Both cases concerned the place of institution of the suit - the IPRS case related to Section 62 of the Copyright Act 1957, while the Advance Magazine case related to Section 134 of the Trademarks Act 1999.

IPRS and Advance Magazine (collectively referred to as the plaintiffs) had filed suits for copyright infringement and trademark infringement, respectively, in the High Court of Delhi on the ground that they had a branch office in Delhi. In both matters, the Division Bench of the High Court of Delhi upheld the defendants’ objection that the suits could not be filed in the High Court of Delhi based merely on the fact that the plaintiffs' branch office was located in Delhi, without the cause of action also arising there.

In the appeals before the Supreme Court, the plaintiffs submitted that, under the provisions of Section 62(2) of the Copyright Act and Section 134 of the Trademarks Act, they had a 'special right' to file suit where they carried on their business. To support this argument, the plaintiffs referred to the ‘non-obstante clause’ to the applicability of the Code of Civil Procedure 1908 (which contains provisions relating to the institution of suits where the defendant resides or a cause of action arises) contained in those sections of the Copyright Act and the Trademarks Act, and submitted that the accrual of a cause of action (wholly or in part) as mentioned in Section 20 of Code of Civil Procedure was unnecessary.

On the other hand, the defendants contended that the abuse of those sections of the Copyright Act and Trademarks Act by multi-national companies, in order to harass and inconvenience defendants, could not be permitted.

After considering the submissions of the parties, the Supreme Court dismissed the appeals, holding as follows:

  1. A plaintiff’s 'special right' under the Copyright Act and the Trademarks Act is subject to the rider that, where the plaintiff resides or is carrying on business at a place where the cause of action has also arisen, wholly or in part, the suit should be filed at that place, and not at other places where the plaintiff has a branch office.
  2. As explained in Heydon’s Case [76 ER 637], the interpretation of the provisions "has to be such which prevents mischief". Similarly, avoidance of counter-mischief by the defendant is also necessary, while providing a remedy to the plaintiff (referring to the plaintiff’s 'special right').

The High Court of Delhi is known to grant ex parte orders more readily than other jurisdictions in India; over the years, this has prompted large companies to utilise (whether rightly or wrongly) their 'special right' under Section 62(2) of the Copyright Act and Section 134 of the Trademarks Act to institute suits. Having branch offices across India once proved to be an advantage in order to rely on that 'special right'; however, it may now become a disadvantage, as the plaintiffs are also likely to have branch offices where the defendants carry on business, thus requiring the plaintiffs to file the action at the defendants’ location. Unless subsequent decisions further clarify this point, the decision of the Supreme Court in this case should change the IP litigation strategy of many companies.

Adheesh Nargolkar and Smriti Yadav, Khaitan & Co, Mumbai

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