India: Territorial jurisdiction in cases involving online transactions

In recent decisions, two different single judges of the Delhi High Court, while adjudicating trade mark infringement and/or passing off cases involving online transactions, interpreted Section 20(c) of the Code of Civil Procedure 1908. The judges asserted that every suit should be brought in a court in whose jurisdiction the cause of action, wholly or in part, arises. They also reiterated that the court will have territorial jurisdiction to decide on such cases only where the plaintiff is able to establish that the defendant has entered into a commercial transaction using a website with a user within the forum state. This must have resulted in injury or harm to the plaintiff within the forum state.

The single judges in both cases relied upon the earlier decision of the division bench of the Delhi High Court in Banyan Tree Holding (P) vs. A Murali Krishna Reddy and Anr. (2010 (42) PTC 361 (Del)). In this case, the division bench held that it was not enough merely to show that the website hosted by the defendant was an interactive one. It asserted that the plaintiff would have to show that the defendant's activity was done with the intention to conclude a commercial transaction with the website user within the specific court's territorial jurisdiction.

Accordingly, in the case of Impresario Entertainment & Hospitality Pvt vs. S&D Hospitality, the single judge held that the plaintiff was unable to establish a commercial transaction within the jurisdiction of the Delhi High Court. The single judge stated that merely because the defendant's restaurant in Hyderabad bearing the allegedly infringing trade mark could attract customers from other jurisdictions, such as Delhi, by way of software applications like Zomato and Dine-Out, jurisdiction was not established because the services of the defendant could not be availed unless the customers actually went to Hyderabad and dined at the restaurant. The single judge held that at best only reservation for dining at the defendant's restaurant at Hyderabad could be made in Delhi and merely by reserving a table in the defendant's restaurant in Hyderabad, a contract did not come into existence. The single judge also rejected the plaintiff's claim that the jurisdiction of the Delhi High Court was invoked because at least one customer booked the table at the defendant's restaurant from Delhi through a website believing that it was a restaurant of the plaintiff. The single judge held that on the basis of a solitary transaction through the internet, the plaintiff could not claim that the cause of action arose in Delhi so as to establish jurisdiction.

Further, in the case of News Nation Networks Private v News Nation Gujarat and Ors, the single judge rejected the plaintiff's request for the jurisdiction of the Delhi High Court. The plaintiff alleged that although the defendant's newspaper was sold under an identical trade mark to that of the plaintiff in the state of Gujarat alone, it was published on a page on Facebook, which is an interactive site accessible in Delhi. According to the plaintiff, users could therefore place their comments on the Facebook page. The plaintiff also asserted that they had received queries from one M/s Prime Time Communications expressing its intention to advertise in the newspaper published by the defendants and thus the cause of action arose in Delhi. The single judge rejected both grounds and held that merely because Facebook is an interactive site and permits users to offer comments or indicate whether they like what they see on the site, this was not sufficient to provide a cause of action for passing off in a jurisdiction where the defendant did not enter into any commercial transactions. The single judge also held that the mere fact that the plaintiff had received queries for advertisement was not enough for the matter to fall under the jurisdiction of the Delhi High Court.

Lakshmi Kumaran & Sridharan

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