Jurisdictional Challenge In Trademark Infringement Suit: Delhi High Court's Evaluation Of Territorial Jurisdiction

Summary

The present case involves a trademark infringement dispute between New Life Laboratories Private Limited (hereinafter referred to as “the Plaintiff”) and Dr. Ilyas New Life Homoeo and Herbals Private Limited and Another (hereinafter referred to as “the Defendants”).

Interestingly, in the present case, the Defendants have filed a reply to the application for ad-interim injunction even before summons could be issued, to prevent an ex-parte order.

During the hearing, the Court focused on the issue of territorial jurisdiction, which is not the usual course of action when deciding a matter at an interim stage. Plaintiff claimed that it conducts business in Delhi through distributors and dealers, and the Defendants are soliciting and marketing their products in Delhi. The Plaintiff also expressed its apprehension that the Defendants may expand their activities to Delhi and the nearby areas.

The Court examined the relevant provisions of the Trade Marks Act, 1999 and the Code of Civil Procedure, 1908 and noted that the Plaintiff's apprehension of future infringement must be based on tangible or reasonable material and mere conjecture, or imagination would not be sufficient to establish territorial jurisdiction. The Court found that the Plaintiff's current averments in the pleadings did not provide enough evidence to support its apprehension. Therefore, the Court could not grant the Plaintiff's application for interlocutory relief at that stage.

Plaintiff's Arguments:

1. Trademark Infringement: The Plaintiff alleges that the Defendants have infringed its registered trademarks. It is contended that the Defendants are using marks and taglines that are similar to its registered marks, causing confusion among consumers and diluting the distinctiveness of its brands.
2. Territorial Jurisdiction: The Plaintiff further asserts that the Hon’ble Delhi High Court has territorial jurisdiction to hear and decide the present suit under Section 134(2) of the Trade Marks Act, 1999, and Section 20 of the Code of Civil Procedure (CPC). It argues that it carries on business in Delhi through its distributors and dealers and sells its products in various shops, retail outlets, and online portals within Delhi's jurisdiction. The Plaintiff also claims that the Defendants are soliciting and marketing their products in Delhi.
3. Apprehension of Future Infringement: The Plaintiff points out that the Defendants have already expanded their activities pan-India and are likely to launch infringing products within Delhi's jurisdiction. The Plaintiff cites a genuine apprehension that the Defendants' infringing products may be sold in local markets of Delhi, further justifying the Court's territorial jurisdiction.

Defendants' Arguments:

1. Denial of Infringement: The Defendants deny the alleged infringement and assert that their marks and products are distinct and do not create confusion among consumers. The Defendants claim that their use of marks is entirely lawful and does not violate the Plaintiff's intellectual property rights.
2. Challenge to Territorial Jurisdiction: The Defendants challenge the Plaintiff's claim of territorial jurisdiction in Delhi. They argue that the Plaintiff's mere apprehension of future infringement is not sufficient to establish the Court's jurisdiction. They further contend that the Plaintiff has failed to provide concrete evidence or material to substantiate its claim that the Defendants intend to launch infringing products within the Court’s jurisdiction.
3. Expansion Pan-India: The Defendants admit that they are expanding their activities across India but argue that this does not automatically confer territorial jurisdiction on the Delhi High Court. They contend that the Plaintiff's claims are speculative and lack any supporting material to justify the Court's jurisdiction over the suit.

Judgment:

The Court finds that the Plaintiff's current averments in the pleadings do not provide enough tangible evidence to support its apprehension of future infringement within Delhi's jurisdiction. As such, the Court cannot grant the Plaintiff's application for interlocutory relief at this stage.

The Court, however, allowed the plaint to be registered as a suit, and the case will proceed to trial. The Plaintiff might have an opportunity to provide concrete evidence at later stage or during trial to establish territorial jurisdiction.

Analysis:

This judgement has interestingly dwelled into the issue of territorial jurisdiction at the interim stage while adjudicating on the aspect of the grant of ad-interim injunction and not while deciding the issue of territorial jurisdiction under Order VII Rule 10, CPC. It allows the Defendants to explore the ground of jurisdiction to evade any unfavourable interim order of injunction. In the past, we have seen a set pattern of 3 grounds for deciding an application for interim injunction i.e., Balance of Convenience, Irreparable loss and Prima Facie Infringement.

Further, the case also highlights the significance of the availability of tangible evidence, especially in cases involving online presence and cross-jurisdictional activities. The Court distinguishes this case from those where the Defendants have an online presence to those, whose goods or services can be purchased within the jurisdiction of the Court. Overall, the judgment serves as a reminder that Plaintiffs should present substantial evidence to support their claims of territorial jurisdiction.