Jurisdiction in trade mark cases: settling for the unsettled

The jurisdiction under the trade marks law has always been under the clutches of misinterpretation and misuse by various IP owners in India. Though a well settled provision of law governs the scope of jurisdiction under the trade marks Act, 1999, still a torment has always been on the rail over the issue of jurisdiction. Section 134 of the trade marks Act, 1999 decides where a suit can be filed for infringement, etc. the provision under Section 134 of the trade marks Act, reads as follow:

Suit for infringement, etc., to be instituted before District Court.—

(1) No suit—

(a) for the infringement of a registered trade mark; or

(b) relating to any right in a registered trade mark; or

(c) for passing off arising out of the use by the defendant of any trade mark which is identical with or deceptively similar to the plaintiff’s trade mark, whether registered or unregistered, shall be instituted in any court inferior to a District Court having jurisdiction to try the suit.

(2) For the purpose of clauses (a) and (b) of sub-section (1), a “District Court having jurisdiction” shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908) or any other law for the time being in force, include a District Court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or proceeding, or, where there are more than one such persons any of them, actually and voluntarily resides or carries on business or personally works for gain. Explanation.—For the purposes of sub-section (2), “person” includes the registered proprietor and the registered user.

This section provides for jurisdiction for filing suits regarding infringement, passing off action. The trade marks provides that a plaintiff can file an infringement suit in a district Court within whose limits or jurisdiction the plaintiff reside or carries on his business or personally works for gain. Where there are multiple plaintiffs, even if one plaintiff has a place of business, the Court would have jurisdiction to adjudicate the matter. Also existence of sub-ordinate or subsidiary branch or office would amount to carrying on business under the Section 134(2) of the act, even if the cause of action does not arise in such places.

By inserting section 134(2) of the trade marks act, 1999 the Legislature has brought the trade marks law in tandem with the provisions under the Copyright Act. In section 62(2) of the Copyright Act as well as in Section 20 of the Code of Civil Procedure to enable the plaintiff to sue one who infringed his copyright within whose local limits he carried on business at the time of institution of the suit or other proceedings. The expression “carries on business” as provided under Section 62(2) and Section 134(2) of the Copyright Act and Trade marks Act respectively is restricted not only to the principle place of business but also covers branch or branches wherever the business is carried on.

In Ultratech Cement & Anr v. Dalmia Cement Bharat Limited the Bombay High Court held that even if one of the plaintiffs has place of residence or carries on business within the jurisdiction of the Courts, the Court is entitled to entertain the suit. The Court has further held that even if no cause of action arises at a subordinate place of business the plaintiff is still entitled to file a suit for infringement and passing off within the jurisdiction of the Court. There is a divergence from Section 20 of the CPC wherein the suits related to trade marks under can be filed even in a place other than the principle place of business i.e. where a branch office is situate , even if no cause of action arises.

In another case the Madras High Court while dealing with the territorial jurisdiction under Section 134 of the Act, held that the Section 134 of the Trade Marks Act does not oust the applicability of Section 20 of the Civil Procedure Code. Section 134 is an enabling Section which enables the Plaintiff to file a suit for infringement and passing off in a place where the plaintiff actually and voluntarily resides or carries on business. The Section prevents the plaintiff to further drag the defendant to some other place outside the statutory canons. Therefore, the Madras High Court following the decision of the Supreme Court has held that infringement suits can be filed in the Court within whose jurisdiction the defendant is selling the infringing goods. But this is in addition to the right to sue in the jurisdiction where the plaintiff resides or works for gain.

Recently the Supreme Court has settled the question of jurisdiction surrounding the special jurisdictional clause under Section 134 of the trade marks Act, 1999. In two cases the Supreme Court has rejected the lawsuits filed by PEPSICO and RASNA under Section 134 of the Act. The Court has set a new precedent to drawing a lot of attention from the foreign jurisdiction. Until this decision was passed the Indian subsidiaries of foreign companies used ti file the infringement cases in the branch offices in India. Most of the Indian subsidiaries have been following this rule which is bad in law, as, the Indian subsidiaries are neither the owners nor the licensees of the parent company whose registered offices are not in India but outside India. This practice has been there for several years.

This ruling of the Court has settled the entire issue and now the address of the registered office and not the branch office should be the basis of invoking the jurisdiction under section 134 of the Act.