High Court: Mere advertisement cannot create territorial jurisdiction in Trademark Disputes

Introduction

The Hon’ble High Court of Delhi in the case of Hari Ram And Sons vs Vivek Purwar & Anr.[1] held that the trial court's decree issued without appropriate territorial jurisdiction shall not be binding on the parties. The High court, while rejecting the Plaintiff's plea of appropriating jurisdiction in Delhi, held that “merely because in the course of their business, the Defendants in the suit have advertised their products in the print as also electronic media, which may have a spill over circulation in Delhi (which also has not been proved by the Plaintiffs in the present case), it cannot be said that the learned Trial Court at Delhi would gain jurisdiction to entertain the suit of trade mark infringement and passing off against the Defendants in the suit”.

Background

In the present case, the underlying suit was filed by proprietors of M/s. Hari Ram and Sons (hereinafter referred to as the ‘Plaintiffs’) alleging that Vivek Purwar & Anr. (hereinafter referred to as the ‘Defendants’) adopted their trademark 'HARI RAM AND SONS & HR LOGO' for similar business.

The cross-appeals before the Hon’ble High Court of Delhi were filed on the basis of the judgment of the trial court, wherein it was decreed that the trial court lacked territorial jurisdiction to entertain the suit of infringement. However, since evidence had already been led in the suit, the trial court proceeded to issue a permanent injunction in favour of the Plaintiffs based on the merits of the case.

The Defendants were aggrieved as the trial court, having categorically held that it does not have territorial jurisdiction to try the suit, could not have proceeded to decree the same in the favour of the Plaintiffs. On the other hand, the Plaintiffs were aggrieved by the trial court’s finding on the issue of lack of territorial jurisdiction.

The Plaintiffs in the cross-appeal submitted that:

1) The Defendants are ‘soliciting’ the impugned mark within the territorial limits of Delhi, and the same was not denied by the Defendants in their written statement. Further, the Defendants had preliminarily objected to the trial court that it lacked territorial jurisdiction. Since the same did not change the position before trial court, it should be concluded that the trial court had the territorial jurisdiction to entertain the case of passing off and infringement.

2) The Defendants had been advertising and publishing the impugned mark in leading newspapers, magazines, and on channels within the territorial limits of Delhi.

3) The Defendants had applied for the registration of their trade mark with the Registrar of Trademarks at Delhi.

The Defendants on the contrary argued that:

1) They had categorically denied carrying out any business activities in Delhi and had explicitly mentioned that their business activities are confined to the city of Prayagraj. Further, the Plaintiffs could not produce any evidence to corroborate the business activities of the Defendants in the territory of Delhi.

2) They had clearly stated in their written statement that the newspapers had circulation only in the State of Uttar Pradesh and the TV channel also targeted the viewers in the State of Uttar Pradesh only.

3) The jurisdiction of the offices of the Trademark Registry for Uttar Pradesh has been fixed to Delhi and therefore mere filing of an application would not vest the Trial Court with the requisite territorial jurisdiction.

Analysis and Findings

The Hon’ble Delhi High Court noted that:

1) The contention of the Plaintiffs that the Defendants did not categorically deny the ‘soliciting’ of the impugned mark within the territorial limits of Delhi was untenable. The High Court observed that on the holistic reading of the written statements of the Defendants, it could be noted that the business activities of the Defendants are confined to the city of Prayagraj. Thus, the mere absence of the word ‘soliciting’ in the written submissions cannot lead to an inference of an admission against the Defendants. “It is trite law that the written statement has to be read as a whole and sentences cannot be read in isolation.”

2) On the basis of the additional plea filed by the Defendants it can be ascertained that the advertisements in print and electronic media were targeted to the customers in the State of Uttar Pradesh. Thus, a mere advertisement that may have spillover circulation in Delhi (uncorroborated) cannot give jurisdiction to the trial court to entertain the suit of passing off and infringement. “an advertisement cannot vest jurisdiction in a Court located at Delhi, as the said advertisements were not intended for the customers at Delhi.”

3) The argument of the Plaintiffs that the Defendants had applied for the registration of their trade mark with the Registrar of Trade Marks at Delhi would lead to the jurisdiction of the trial court, would have been a valid consideration at the preliminary stage of considering the jurisdiction of the Court. However, once the evidence had been dealt with and it has been noted that the Defendants neither carry out nor intend to carry out any business in Delhi, then mere filing of such an application before the Registrar of Trade Marks would not vest jurisdiction in the trial court to entertain the suit.

The Learned High Court thus clarified that when there is no genuine threat of use by the Defendants, the Court cannot be said to have jurisdiction and it would always depend on the facts and circumstances of the case to determine whether the Court has territorial jurisdiction to entertain a suit or not.

The Learned High Court thus observed that the plaint can be returned at any stage if the Court finds that it does not have territorial jurisdiction in order to be presented before the Court in which the suit should have been instituted. “Once the Court finds that it has no territorial jurisdiction to entertain or adjudicate the suit, it must return the plaint to be filed in a Court of appropriate jurisdiction. The finding thereafter rendered by it, though may have to be necessarily given in view of Order XIV Rule 2 of the CPC, shall not be binding on the parties; the same would be a nullity”

Therefore, keeping in view the facts of the case, the Learned High Court opined that the trial court, having held that it lacked territorial jurisdiction, could not have proceeded to decree the suit in favour of the Plaintiffs. Consequently, the plaint was returned to the Plaintiffs and the findings of the trial court were set aside and held to be non-binding on the parties.

Comment

The Hon’ble High Court has shed light on the importance of the circulation of the advertisement material or use of the infringing mark in that specific jurisdiction for a cause of action to arise. The decision highlights the factors to be considered for determining the appropriate territorial jurisdiction of a Court in passing off or an infringement suit.

[1] 2022/DHC/004649