Looming presence of a website in a territory and access by customers is sufficient for territorial jurisdiction: delhi high court

I. INTRODUCTION

The Division Bench of the Delhi High Court vide judgment dated 19th September 2022 in the case titled ‘Tata Sons Pvt. Ltd. v. Hakunamatata Tata Founders & Ors.’ restrained the Respondents/Defendants (hereinafter referred to as ‘Respondents’) (registered in US and UK) from using the trademark ‘TATA’.

The present appeal was filed challenging the order dated 26.10.2021 passed by the Ld. Single Judge of the Delhi High Court, where the Ld. Single Judge had dismissed the application for interim injunction of the Plaintiff/Appellant (hereinafter referred to as ‘Appellant’) on the grounds of incompetent territorial jurisdiction to grant an injunction against the Respondents which are located outside India.

II. FACTS OF THE CASE:

It was the case of the Appellant that the Respondents whose businesses are registered in United Kingdom and United States, are using its trademark for offering online trading and cryptocurrency through their website(s) ‘www.tatabonus.com’ and ‘www.hakunamaTATA.com’ (emphasis added). Through their website ‘www.tatabonus.com’, the Respondents were offering for sale and exchange of cryptocurrency under the name “TATA” coin. Besides cryptocurrency, the Respondent No.1 was also selling merchandise, such as t-shirts, shorts, caps, facemasks etc, under the name ‘TATA’

When the Ld. Single Judge questioned the existence of the territorial jurisdiction of the Court over the Respondents, the Plaintiff/Appellant provided the following reasons:

a. Purchase of the Respondents’ cryptocurrency by any person in India from the Respondents’ website

b. The Respondents’ website ‘www.hakunamatata.com’ ranked India 2nd for its contribution to the internet traffic on its website

c. Website of the Respondents contained a QR code and instructions on how to purchase the cryptocurrency of the Respondents sold under the name ‘TATA coin/$TATA’.

d. Effect of the infringing activities of the Respondents could be felt within the jurisdiction of the Court, as the Respondents’ cryptocurrency could be purchased online by anyone located within such jurisdiction.

The, Ld. Single Bench dismissed the application for interim injunction of the Appellant after providing the reason that the Court did not have any extra-territorial jurisdiction to injunct parties situated overseas The Single Judge opined that there was no evidence that Respondents’ websites were targeting the customers in India to sell their digital and physical merchandise. Further, the Indian traffic on the Respondents’ website was considered too insignificant by the Ld. Single Judge to call it an interactive website, which is an essential factor recognised by Indian courts for attracting territorial jurisdiction in the cases of online trade. Also, there is no “purposeful availment” by the Respondents of their activities in the jurisdiction of this Court.

III. ANALYSIS BY THE COURT

The Division Bench observed that while the Ld. Single Judge was not doubtful of the Appellant’s entitlement to file the suit in Delhi, it was doubtful of the territorial jurisdiction to pass an injunctive order against parties situated outside India.

A. Whether the Court has territorial jurisdiction to adjudicate the allegations of infringement by the Plaintiff?

The Court relied on the finding in ‘Banyan Tree Holding Pvt. Ltd. v. A. Murali Krishna Reddy and Anr. [2009 SCC Online Del 3780]’ wherein it was held that in order to showcase territorial jurisdiction of the court, the Plaintiff would have to demonstrate that the Defendant ‘purposefully availed’ itself and that the nature of the activity indulged by the Defendant has been with an intention to conclude a commercial transaction with the website user specifically targeting the forum state of the Plaintiff. It also relied on ‘Millennium & Copthorne International Limited v. Aryans Plaza Services Private Limited & Ors. [2018 SCC OnLine Del 8260]’ wherein it was held that the place where the injury or deception has been caused to the Plaintiff, such place would have jurisdiction.

The Court also took assistance of the finding by the England and Wales Court of Appeals in ‘Lifestyle Equities CV and another company v. Amazon UK Services Ltd and other companies [(2022) EWCA Civ 552]’ wherein it was held that even if a website is not directed at customers in a particular country, the fact that they are not restricted by the website to have access ti it, is enough to characterise as targeting. Targeting need not be a very aggressive act of marketing aiming at a particular set of customers. Mere looming presence of a website in a geography and ability of the customers therein to access the website is sufficient.

Applying the principles of the above precedents, the Court observed that apart from the fifty-hitin-a-day traffic on the Respondents’ website from India, the ‘White Paper’ and printouts of its social media pages show the Respondents’ looming presence in the virtual world over India, including in the territorial jurisdiction of the present Court. It further stated that the mere fact that the persons behind the offending websites are situated in UK and are nations of Pakistani origin does make the motives of such persons suspicious provided the popularity of the ‘TATA’ brand among the people from the Indian sub-continent.

B. Whether the Respondents’ action constitute infringement of the registered trademark ‘TATA’?

The Court opined that it cannot be ruled out that the Respondents were aware of the trade mark ‘TATA’ which can be inferred by the way the trademark had been lifted and adopted as it is, without any attempt to disguise it with a prefix/suffix to claim distinctiveness. It also held that the Respondents’ had also attempted to sell inferior goods to the customers in the name of the ‘TATA’ brand.

With respect to the website ‘www.hakunamatata.com’, the Court did not find any prima facie ground to grant any relief to the Appellant as it was of the opinion that ‘HAKUNAMATATA’ is a generic word and the word ‘TATA’ is merely a part of a partial phonetic overlap and is naturally embedded in the word, and does not infringe the Appellant’s trademark ‘TATA’.

However, while setting aside the order of the Ld. Single Judge dated 26.10.2021, it directed the Respondents’ from using the trademark ‘TATA’ which is a part of their digital token/cryptocurrency ‘TATA Coin/$TATA’. It also directed the Respondents to take down the website ‘www.tatabonus.com’ and to delist any crypto assets bearing the trademark ‘TATA’.