The Bombay High Court in the case of Dalmia Cement Bharat Limited v. Ultratech Cement Limited  recently ruled on the issue of cause of action and jurisdiction of Courts in cases of trademark infringement and passing off. The Court discussed various aspects of Section 134 of the Trademarks Act in a very well-reasoned manner.

Section 134 states that no suit for infringement or any right relating to a registered trademark or passing off shall be filed in a Court inferior to the District Court. This section further states that the person instituting the suit or any of the persons instituting the suit should actually reside or carry on business within the limits of that particular Court. Such persons includes registered user and proprietor.

Facts:

The plaintiffs have filed a suit for infringement and passing off against the defendants. The defendants filed a notice of motion on the grounds that the plaint is barred by law for the reason that the suit has been filed in Bombay even though the cause of action hasn’t arisen in that place. The present order by the Court is only with reference to the jurisdiction of the court and not on the merits of the case.

Arguments:

a)     Defendants

In addition to stating that the suit is barred by law for want of jurisdiction, the defendant also stated that the Plaintiff No. 1 only being a licensee of the mark, cannot be made party to the suit and termed this as ‘jurisdictional joint venture’. Furthermore, that the Plaintiff No. 2 has a corporate office in Karnataka but hasn’t filed a suit there even though the Defendant also resides there by reason of ‘artful pleading’.

The Defendant also submitted that the definition of ‘carries on business’ should be rightly interpreted in this case and in support of that quoted two Supreme Court judgments. They stated that allowing addition of plaintiffs solely for the purpose of indicating cause of action will result in oppression and abuse.

b)    Plaintiffs

The plaintiffs refuted all the submission made by the defendants and submitted that the Section 134 of the Trademarks and Section 62 of the Copyright Act clearly state that the courts suit can be filed when any of the plaintiffs ‘actually and voluntarily reside or carry on business’ in that particular place. Further, they also stated that the defendants’ submission that only a registered proprietor or user can file a suit and that the present case is that of a jurisdictional joint venture is also unsustainable.

With regard to Section 134, they stated that it cannot be curtailed by Section 20 of the Civil Procedure Code or that the Letters of Patent do not require that the cause of action should have arisen in the jurisdiction of the court.

Court’s ruling:

The Bombay High Court accepted most of the arguments made by the plaintiffs and discussed five important issues in this connection.

1)     Rejection of plaint on basis of the defendant’s defence

The Court held that as per Order VII Rule 11, the averments in the plaint are to be considered as true and the defendant’s defence will not be considered. Further, it was stated that since use of the mark by Plaintiff No. 1 ensures goodwill and reputation to the owner of the mark, Plaintiff No. 2, there is no reason to suggest that the former is not a proper and necessary party to the suit.

2)     Jurisdictional Joint Venture

The Court did not take into consideration the submission of the defendants and held that the Plaintiff No. 1 was a licensee of the mark for the purpose of manufacture and sale and did not deal with all third party goods and that therefore, it cannot be called a Jurisdictional Joint Venture.

3)     Definition of ‘person instituting suit’

With regard to the ‘person instituting the suit’, the Court clarified that it is not limited to the registered user or proprietor as contended by the defendants. They stated that Section 134 uses the word ‘includes’ and is therefore inclusive. If the intention of the legislature was to include only the registered user or proprietor, they would’ve used the words ‘means’ and not ‘includes’.

4)     Definition of ‘carries on business’

The Court began with explaining that the Civil Procedure Code and the Letters of Patent only refer to the cause of action from the point of view of the defendant. On the other hand, Section 134 confers jurisdiction in addition to what is provided by these two laws. Further, since the letter of law in Section 134 is unambiguous, it has to be read as it is and if the intention of the legislature was otherwise, they would have worded it accordingly.

5)     Present issue in light of Pratap Singh v. Bank of America

The Court explained this case in detail in order to explain the position of law on cause of action. A suit was filed in the Bombay HC against a foreign corporation having a registered office in Bombay even though the cause of action did not arise in Bombay. The Defendant raised this objection and it was accepted by the Trial Court Judge. However, the Division Bench held a contrary view and stated that the term ‘defendant’ includes natural and artificial person; including corporations incorporated in India and outside. Also, that the Letters of Patent grants jurisdiction which cannot be refused on the ground that it won’t be enforced by foreign jurisdictions.

In light of this ruling, the Court in the present case stated that it is not necessary that the cause of action must have arisen where the defendant resides.

Conclusion:

All the legal talk aside, the bottom line is that a plaintiff can file a suit for infringement and passing in a place where the plaintiff carries on business, irrespective of whether it’s a registered or corporate or subordinate office. In the words of the Court, a special right has been conferred on trademark and copyright owners to file a suit for infringement regardless of other laws.

This article has been authored by Nikita, an IP Law practitioner.