Delhi High Court takes strict view of territorial jurisdiction

India
In Archie Comics Publications Inc v Purple Creations Pvt Ltd (FAO (OS) 260/2008, September 10 2010), the division bench of the Delhi High Court has dismissed an appeal filed by New York-based Archie Comics Publications Inc on the grounds that it lacked territorial jurisdiction to hear the case. Archie Comics alleged that Mumbai-based Purple Creations Pvt Ltd, which manufactures and sells children's clothing under the trademark ARCHIES, infringed its ARCHIE mark.

Archie Comics challenged the single judge’s conclusion that the complaint should be filed before the competent court. In particular, the single judge had held as follows:
  • The court did not have territorial jurisdiction to hear the case.
  • Archie Comics' claim that the court had territorial jurisdiction over the case because Archie Comics "carried on business" in Delhi through the sale of Archie comics by Variety Book Depot was insufficient.
  • Archie Comics had to show that it exercised control over Variety Book Depot in order to prove that it carried on business in Delhi.
On appeal, Archie Comics submitted that the Delhi High Court had jurisdiction to try the case under Section 134 (2) of the Trademarks Act 1999, as its comics had been imported into Delhi by Variety Book Depot since 1979. Archie Comics thus argued that it carried on business in Delhi through an agent. Moreover, Archie Comics claimed that the cause of action arose in Delhi due to the publication of:
  • Purple Creations’ marks in the Trademark Journal, which is available in Delhi; and
  • advertisements for Purple Creations’ products in one of the city’s newspapers.
In response, Purple Creations argued that the Delhi High Court had no jurisdiction over the case because:
  • Archie Comics was a US corporation with no direct business presence in India;
  • Purple creations had no office in Delhi; and
  • the import of Archie comics by Variety Book Depot was insufficient to show that Archie Comics was carrying on business in Delhi.
The court first pointed out that Section 134 of the act does not whittle down the provisions of Section 20 of the Code of Civil Procedure, but provides an additional forum in trademark infringement cases. The court also made the following observations:
  • The phrase 'carries on business in a certain location' means having an interest in a business in that particular location - that is, a share in the gains or losses and some control over the business. Variety Book Depot was clearly not the agent of Archie Comics in India, as the latter had no control over the workings of Variety Book Depot. Thus, it could not be said that Archie Comics carried on business in Delhi.
  • An advertisement in a journal or newspaper in a particular city does not, in itself, confer jurisdiction on the court which has jurisdiction over that territory and, therefore, would not constitute an integral part of the cause of action. As a consequence, Archie Comics could not invoke jurisdiction based on the publication of Purple Creations' marks in the Trademark Journal or of advertisements for its products in a newspaper.
  • Jurisdiction cannot be created if it does not exist in the first place.
The division bench thus dismissed Archie Comics' appeal and stated that the action should be filed before the competent court.

Gauri Kumar, Ranjan Narula Associates, Delhi

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