Citation: CS (OS) No.894/2008 Date of Judgement: 23rd November, 2009
Citation: CS (OS) No.894/2008
Date of Judgement: 23rd November, 2009
Bench: S. Muralidhar (CJ)
Facts
- Plaintiff was a company involved in hospitality business and have registered office at Singapore. Since 1994, they were using the word ‘Banyan Tree’ and maintained the websites, namely, ‘www.banyantree.com’ and ‘www.banyantreespa.com’, since 1996 which were also accessible in India.
- Plaintiff was operating 15 spas in India in collaboration with the Oberoi group and does not hold registration for ‘Banyan Tree’ mark and device in India.
- Defendant registered at Andhra Pradesh initiated a project under the name ‘Banyan Tree Retreat’ which is similar to that of plaintiff and advertised it through their website ‘www.makprojects.com/banyantree’.
- Suit was filed by plaintiff for infringement of trademark. The issue was regarding the jurisdiction of court as neither the plaintiff nor the defendant resides or have registered office within the territorial jurisdiction of the court.
Decision
Court held that the prima facie it was proved that the defendant purposefully availed itself of the jurisdiction of the forum court and hence the court had jurisdiction to entertain the suit.
Key legal positions established in the case
1. For the purposes of a passing off action, or an infringement action where the Plaintiff is not carrying on business within the jurisdiction of a court, in what circumstances can it be said that the hosting of a universally accessible website by the Defendants lends jurisdiction to such Court where such suit is filed (“the forum court”)?
Court while rejecting the reasoning of Casio India Co. Limited v. Ashita Tele Systems Pvt. Limited[1] and supporting Independent News Service Pvt. Limited v. India Broadcast Live Llc and Ors.[2] held that a passive website with no intention to specifically target audiences outside the state where the host of the website is located, cannot vest the forum court with jurisdiction.
For the purposes of a passing off action, or an infringement action where the Plaintiff is not carrying on business within the jurisdiction of a court, and in the absence of a long-arm statute, in order to satisfy the forum court that it has jurisdiction to entertain the suit, the Plaintiff would have to show that the Defendant “purposefully availed” itself of the jurisdiction of the forum court. For this a conjunction of ‘effects test’ and ‘sliding scale’ is to be applied where plaintiff prima facie has to show that the nature of the activity indulged in by the Defendant by the use of the website was with an intention to conclude a commercial transaction with the website user and that the specific targeting of the forum state by the Defendant resulted in an injury or harm to the Plaintiff within the forum state.
2. In a passing off or infringement action, where the defendant is sought to be sued on the basis that its website is accessible in the forum state, what is the extent of the burden on the Plaintiff to prima facie establish that the forum court has jurisdiction to entertain the suit?
Court referred to Cybersell, Inc. v. Cybersell. Inc.[3] and Toys “R” US, v. Step Two[4] and applied the tighter version of the effects test. A mere hosting of website or posting of an advertisement on a passive website by defendant is not sufficient.
For the purposes of Section 20 (c) CPC, in order to show that some part of the cause of action has arisen in the forum state by the use of the internet by the Defendant the Plaintiff will have to show prima facie that the said website, whether euphemistically termed as “passive plus” or “interactive”, was specifically targeted at viewers in the forum state for commercial transactions. The Plaintiff would have to plead this and produce material to prima facie show that some commercial transaction using the website was entered into by the Defendant with a user of its website within the forum state resulting in an injury or harm to the Plaintiff within the forum state.
3. Is it permissible for the Plaintiff to establish such prima facie case through “trap orders” or “trap transactions”?
Yes
Court referred to Bostitch Inc v McGarry & Cole Ltd[5]; Thomas French & Sons Ltd v John Rhind & Sons Ltd[6]; Pearson Brothers v Valentine & Co[7]; Procea Products Ltd v Evans & Sons Ltd[8] and observed that evidence of trap orders has been accepted by courts in both trademark infringements and passing off cases, where the nature of business and nature of goods or services offered would be relevant.
Court held that the commercial transaction entered into by the Defendant with an internet user located within the jurisdiction of the forum court cannot possibly be a solitary trap transaction since that would not be an instance of “purposeful” availment by the Defendant. It would have to be a real commercial transaction that the Defendant has with someone not set up by the Plaintiff itself. If the only evidence is in the form of a series of trap transactions, they have to be shown as having been obtained using fair means. The Plaintiff seeking to establish jurisdiction on the basis of such trap transactions would have to aver unambiguously in the plaint, and also place along with-it supporting material, to prima facie show that the trap transactions relied upon satisfy the above test.
[1] 2003 (27) PTC 265 (Del).
[2] 2007 (35) PTC 177 (Del.).
[3] 130 F.3d 414 (1997).
[4] 318 F.3d 446 (2003).
[5] [1964] RPC 173.
[6] [1958] RPC 82.
[7] (1917) 34 RPC 267.
[8] (1951) 68 RPC 210.
