Operation of Trademarks Act and CPC statutorily extend only to boundaries of India: Delhi HC

Read Judgment: TATA SONS PRIVATE LIMITED v. HAKUNAMATATA TATA FOUNDERS & ORS

Pankaj Bajpai

New Delhi, October 29, 2021: The Delhi High Court has opined that suit for infringement of a registered trademark, or for passing off, by any person, of its goods or services as the goods or services of the plaintiff, can be instituted only in a district court, or a court superior thereto, “having jurisdiction to try the suit”. 

The issue of whether the court has jurisdiction to try the suit, or not, would have to be reckoned on the anvil of Section 20 of the CPC, and that operation of the Trademarks Act, 1999 and the CPC statutorily extend only to the boundaries of India, added the Court. 

The Bench of Justice C. Hari Shankar therefore refused to issue directions as sought, to the defendants as they were outside the territorial reach of this Court. 

Justice Shankar said that the mere fact that Defendant’s crypto-currency can be purchased by customers located in India and that, as a result, Plaintiff’s brand value may be diluted, even seeing cumulatively, cannot justify in interfering with Defendant’s activities or with its mark. 

The background of the case was that Tata Sons Limited (Plaintiff) has been operating under the trademark “Tata” providing financial services including crypto-currencies services, whereas Hakunamatata Tata Founders & Ors (Defendant) deal in crypto-currency, under the name “Tata coin/$Tata” in US and UK, and there have been no outlets of Defendants in India.

The Plaintiff filed a suit against Defendant seeking a permanent injunction, restraining Defendants from using the trademark “Tata”, as part of the name under which their crypto-currency is made available to the public, or as part of their corporate name or domain name. 

The Plaintiff alleged that defendant’s crypto-currency can be purchased by any person in India, from their website – www.hakunamatata.finance wherein it had 50 visitors from India each day. 

Plaintiffs also urged that Defendants were also operating their social media posts in order to target Indian customers using “Tata coin/$Tata” name, thereby diluting its brand reputation.  

After considering the submissions and averments, the High Court opined that Section 134(2) of Trademarks Act expands the provinces of the jurisdiction otherwise available u/s 20 of the CPC r/w/s 13(1) of the Trademarks Act, by also conferring jurisdiction, to try the suit, by a court, within whose territorial limits the plaintiff resides or carries on business or personally works for gain.

“The plaintiff has provided its business address in Delhi. That the plaintiff is entitled to institute the present suit in Delhi, cannot, therefore, be gainsaid, in view of Section 134(2) of the Trademarks Act, 1999. The moot question is whether this court has the territorial jurisdiction to issue any injunctive direction to the defendants, who are both located outside India with, admittedly, no physical Indian presence, or injunct the use, by them, of their “Tata Coin/$TATA” mark. In my considered opinion, it does not”, observed Justice Shankar.

While distinguishing from the decision in case of Juggernaut Books Pvt. Ltd. v. Ink Mango Inc [Order dated 9th August, 2019 in CS(COMM) 421/2019], Justice Shankar noted that indicators of a conscious attempt by the defendants to target the Indian market are absent in the present case. 

“The mere fact that the “India Development and Relief Fund” happens to be one of the charities which the defendants intended to contact, to aid relief groups and alleviate disaster impact, can hardly constitute a basis to indicate targeting of India, by the defendants, as a customer base for its crypto currency market”, observed Justice Shankar. 

The mere fact that the defendants’ identity may not be readily available from its website cannot empower this Court to exercise jurisdiction over the defendants, who are admittedly located outside India, added Justice Shankar. 

The High Court therefore concluded that operation of the Trademarks Act and the CPC statutorily extend only to the boundaries of India, and in case of internet infringements, no doubt, the decision of the Court may, at times, operate against entities located outside India, however, would be subject to existence of the necessary connection between the activity of the foreign-seated defendants and India. 

More specifically, intent, of the defendants, to target India, must be established, added the Court.