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M/s Dhodha House vs. S.K. Maingi (AIR 2006 SC 730)

The case pertains to determining the jurisdiction in a composite suit involving infringement under Copyright Act, 1957 (hereinafter referred to as ‘the 1957 Act’) and passing-off under the Trade and Merchandise Marks Act, 1958 (hereinafter referred to as ‘the 1958 Act’).

Facts

The instant matter dealt with two decisions, both from Delhi High Court, addressing the same issue, but taking contrary views.

Civil Appeal No. 6248 of 1997 (M/s Dhodha House vs. S.K. Maingi (AIR 2006 SC 730):

The Appellant alleged that Respondent infringed upon the label/trade mark ‘Dhodha House’ for which the Appellant had a trademark registration (No. 277714-B in Class 30) under the 1958 Act and also a copyright for the same under the 1957 Act (No. A-5117 and A-5330).

The Appellant carried on business of sweet meats in Ghaziabad, Uttar Pradesh while the Respondent carried on similar business in Kotkapura, Punjab. The Appellant had earlier filed a suit for Copyright infringement and Trademark passing-off in Ghaziabad District court. In said matter, the Ld. ADJ had granted injunction restraining Respondents and their agents from using the label or passing-off their goods under impugned trade mark.

The Respondent consequently preferred an appeal against the order at Allahabad High Court and the said order was set aside. Among other grounds, the High Court held that the District Court, Ghaziabad did not have the jurisdiction to try the suit.

The present Civil Appeal was filed against the order of High Court.

Civil Appeal No. 16 of 1999 (M/s Patel Field Marshal Industries & Ors vs. M/s P.M. Diesels Ltd):

It’s an appeal against the judgment of Delhi High Court wherein the Plaintiff (Respondent No. 1 herein) alleged that Defendant (Appellant herein) had infringed its registered trademark and copyright label ‘Field Marshal’. Both parties carried on business in diesel engines at Rajkot, Gujarat. It was alleged that Defendant had made an application for registration of ‘Field Marshal’ as a trade mark at Trade Mark Registry, Delhi. Further, it was alleged that Defendant was selling good exhibiting Plaintiffs’ trademarks in Delhi. The Plaintiffs’ application for injunction on restraining use of trade mark and copyright infringement was earlier rejected by Ld. Single Bench for want of jurisdiction. The Plaintiff-Respondent No. 1 thereafter preferred an appeal to Division Bench which was allowed. The Division Bench’s decision was based on two grounds:

1. That under Section 62(2) of Copyright Act, 1957, Delhi High Court would have jurisdiction to try the composite suit involving infringement of copyright, trade mark and passing off.
2. That since the defendant had made their application for registration in Trade Mark Registry, Delhi and considering their earlier decision in Jawahar Engineering Co. & Ors Vs. M/s. Jawahar Engineering Pvt. Ltd. [AIR 1984 Delhi 166], the cause of action arose within jurisdiction of Delhi High Court.

Law

Jurisdiction

Code of Civil Procedure, 1908 (hereinafter referred to as ‘the Code’)

Sections 16 to 20 provide for determination of territorial jurisdiction of civil courts. In the present case, Section 20 is relevant as it deals with ‘Other suits to be instituted where defendants reside or cause of action arises’ (invoked for IP infringement). It has following provisions:

‘Subject to the limitations aforesaid, every suit shall be instituted in Court within the local limits of whose jurisdiction-

1. The defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
2. Any of the defendants, where there are more than one, at the time of the commencement of the suit actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or
3. The cause of action, wholly or in part, arises.’

The Copyright Act, 1957

Section 62(2) of the 1957 Act provides for an additional forum, while referring to jurisdiction of the suit for infringement of Copyright, wherein it states that:

‘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 other 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’.

It must be noted that no such additional forum has been mentioned in the Trade and Merchandise Marks Act, 1958. The present civil appeal addresses this pertinent question whether jurisdiction of additional forum would exist in a composite suit involving infringement of both Copyright and Trademark under 1957 Act and the 1958 Act respectively. The Court clarified that it is not concerned with the maintainability of composite suit, but the forum where such suit can be instituted.

Cause of Action

Besides place of residence or carrying of business, Section 20(d) mentions place of ‘cause of action’ while determining the territorial jurisdiction. Black’s Law Dictionary (9th Ed. pp. 251) defines cause of action as ‘A group of operative facts giving rise to one or more bases for suing; a factual situation that entitles one person to obtain a remedy in court from another person’. Further the Supreme Court in A.V.M. Sales Corporation V. M/S. Anuradha Chemicals Pvt. Ltd. [SLP (C) No. 10184 of 2008] held that cause of action ‘comprises a bundle of facts which are relevant for the determination of the lis between the parties.’ The Court in present Civil Appeal delved into inquiring whether the location of filing of the trade mark application is a necessary fact to be proved in action of passing off or trade mark infringement.

Composite Suit

Order II Rule 3 of the Code allows for joinder of causes of action wherein plaintiff may unite in the same suit, several causes of action against the same defendant (s).

1. Save as otherwise provided, a plaintiff may unite in the same suit several causes of action against the same defendant, or the same defendants jointly; and any plaintiffs having causes of action in which they are jointly interested against the same defendant or the same defendants jointly may unite such causes of action in the same suit.
2. Where causes of action are united, the jurisdiction of the Court as regards the suit shall depend on the amount or value of the aggregate subject-matters at the date of instituting the suit.’

The Delhi High Court in Tata Oil Mills Co. Ltd. vs. Reward Soap Works [AIR 1983 Delhi 286] held ‘that a composite suit based on infringement of trade mark, copyright, passing off and for rendition of accounts of profits, seeking to restrain the defendants from infringing its trade mark and wrapper claiming the same to be identical with or deceptively similar to the wrapper of the plaintiff mark, is maintainable.’

Issue

While causes of action in terms of both the Copyright Act, 1957 and the Trade and Merchandise Marks Act, 1958, may be different, would a suit be maintainable in a court only because it has the jurisdiction to entertain the same under Section 62(2) of the 1957 Act?

Analysis

Jurisdiction

In terms of jurisdiction, the Code while determining the territorial jurisdiction under Section 20 gives preference to the place where defendant(s) ‘actually and voluntarily resides, or carries on business, or personally works for gain’ or the place where ‘cause of action, wholly or in part, arises’. This is based on the judicial principal that plaintiff should not put defendants to undue inconvenience. However, Section 62(2) of the 1957 Act provides for a non-obstante clause, which allows for territorial jurisdiction based on place of residence or business of plaintiff, thus being at marked difference from said judicial principal.

Consequently, the court inquired the legislative intent behind Section 62(2) of the 1957 Act. While going through the objects and reasons for the said provision, it was found in the objects and reasons that same was done to enable authors, creators to file suits at the place where they reside.

It should be noted that the 1958 Act does not confer such jurisdiction upon a district court where the plaintiff resides or carries on business. The Court observed that the parliament made a conscious decision to not provide for an additional forum for trade mark infringement under the 1958 Act.

It is also pertinent here that expression ‘…include a district court within the local limits of whose jurisdiction…’ does not exclude the options for territorial jurisdiction provided for in Section 20 of the Code. It merely provides for an additional forum where suit for Copyright infringement could be instituted. This view was supported by Supreme Court in Exphar SA & Anr vs. Eupharma Laboratories Ltd. & Anr [(2004) 3 SCC 688]: wherein it was held ‘Section 62(2) cannot be read as limiting the jurisdiction of the District Court only to cases where the person instituting the suit or other proceeding, or where there are more than one such persons, any of them actually and voluntarily resides or carries on business or presently works for gain. It prescribes an additional ground for attracting the jurisdiction of a court over and above the “normal” grounds as laid down in Section 20 of the Code.’

Considering contentions made under Section 62(2) of the 1957 Act, the Court found that the Plaintiff-Appellant neither resided at Ghaziabad nor carried on any business at the place in Delhi. Also, the plaintiff had no branch or manufacturing facilities in Delhi.

While referring to Order II Rule 3 of the Code, the Court held that a mere application under the said order, which seeks uniting of different causes of action (infringement of copyright and trademark/passing off in present case) would not ‘ipso facto confer jurisdiction upon a court which had none so as to enable it to consider infringement of trade mark under the 1957 Act as also the 1958 Act.’ The Appellants while making averments relied on decision of Delhi High Court in M/s Jawahar Engineering Company & Ors vs. M/s Jawahar Engineers Pvt. Ltd. [1983 PTC 207], wherein the Court held that the ‘fact that an advertisement had appeared in the Trade Marks Journal as regard application for registration of the trade mark of the defendant therein, the Delhi High Court would have jurisdiction in the matter.’

However, the Supreme Court held that said decision had no application in the present civil appeal. Firstly, in Dhodha House (supra), the defendants made no such trademark application. Secondly, it referred to the notification of Central Government wherein territorial limits of Trade Mark Registry were set under Section 5(3) of the 1958 Act. As parties in Patel Field Marshal (supra) were residents of Rajkot, and trade mark application was filed by Appellant-Defendant in Bombay, Delhi would have no jurisdiction. More importantly, the Court relied on ONGC vs. Utpal Kumar Basu & Ors [(1994) 4 SCC 711] where it was held that an ‘advertisement by itself in a journal or a paper would not confer jurisdiction upon a court’.

Thereafter, the Court examined existence of cause of action in present civil appeal. It emphasized on ‘use’ and ‘infringement’ as pertinent facts involving the cause of action and that location of registration of trademark or place of filing would not be a pertinent fact in terms of cause of action. Section 134 (1) (c) is also relevant here while determining key ingredients of ‘passing-off’. Here, again the emphasis is put on ‘…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’. Thus it is clear that the fact the trade-mark is registered is not relevant while determining passing-off.

More emphasis is to be given to the fact that the present Civil Appeal is a composite of two causes of action i.e. infringement of Copyright and Trademark. Thus, even if Section 62(2) allows an additional forum based on residence or place of business of plaintiff, no such additional forum is available for trade mark infringement in 1958 Act. In Dodha Civil Appeal, the court was of the view that Ghaziabad court might have jurisdiction to entertain suit under the Copyright Act, 1957 but not under Trade and Merchandise Marks Act, 1958.

The Court relied on Premier Distilleries Pvt. Ltd. v. Shashi Distilleries [2001 PTC 907(Mad)] wherein a Division Bank of Madras High Court held, ‘the cause of action in a suit for passing off… has nothing at all to do with the location of the Registrar’s office or the factum of applying or not applying for registration.’

The Court held that in composite suits, while determining jurisdiction, the appropriate forum for one cause of action would not automatically confer authority to the same forum to try the second cause of action. Further, the place of filing trade mark application is not a relevant fact while proving cause of action.

In the instant case, the Court held that the mere fact that the District Court Ghaziabad has jurisdiction to try suit under the Copyright Act, 1957 would not give the same court authority to entertain a suit under the Trade and Merchandise Marks Act, 1958, irrespective of joinder of causes of action.

The Civil Appeal 6248 of 1997 [Dhodha House (supra)] was thereby dismissed.

MCA along with the OpenChain Project is organizing the MCA OpenChain India Working Group Meetup on 20th August, 2020 (Thursday) between 5:30 pm – 6:50 pm (IST). The meetup would include sessions and discussions on Open Source Compliance and services being provided by the OpenChain Project. It would also include a discussion on the various open source tools for open source compliance which are being adopted by companies. This is an excellent opportunity for exchange of ideas on the challenges which are being faced by the open source community in India.

OpenChain Project is a project of the Linux Foundation and a community effort to establish common best practices for effective management of open source software and compliance with open source licenses. The project aims to help reduce costs, duplication of effort, and ease friction points in the software supply.

The event would involve participation from open source enthusiasts, technology companies which are building or using open source software and entities which are interested in exploring and learning more about OpenChain and open source compliance.

With the increase in development of Artificial Intelligence, all over the world, the challenges with respect to its use as well as the opportunities it offers raises several questions. In continuation of the previous session of the webinar on “Law and Artificial Intelligence: A Primer, this webinar intended to discuss burning questions of law with respect to Artificial Intelligence and its use. The speakers discussed the use of Artificial Intelligence in education sector and in the criminal justice system. They also reviewed the issues it poses from a gender perspective and discuss the need for transparency and ethics in its use. The panelists for the events were:

Mr. Prasanth Sugathan, Legal Director of SFLC India and Partner, Sugathan and Associates.

Abhayraj Naik, an advisor, consultant and educator based in Bengaluru, India. He is currently a visiting faculty at Azim Premji University, Bengaluru where he teaches courses on climate chance, justice and law. He is a graduate of the National Law School of India University and the Yale Law School.

Smriti Parsheera, a lawyer and policy researcher with the National Institute of Public Finance and Policy in New Delhi. She has previously worked with the UN Development Programme and Competition Commission of India. She is a graduate of the National Law School of India University and the University of Pennsylvania.

Ameen Jauhar, Senior Resident Fellow at Vidhi Centre for Legal Policy. He is a graduate of Juridicial Sciences and University College London.

The panel discussion was moderated by Ms. Apurva Singh, Associate at Mishi Choudhary & Associates.

files_Report-Webinar-2-1

The first webinar titled “Law and Artificial Intelligence: A Primer” was organized on June 25, 2020. The speakers for the Webinar were Mr. Kabir Darshan Singh Choudhary, a technology attorney based in New York and Ms. Apurva Singh, Associate, Mishi Choudhary & Associates. The webinar intended to provide a brief overview of AI’s discourse covering certain important milestones in AI and how it will affect the practice of law. The speakers covered agreements by computer programs, AI and agency, criminal liability of AI systems et. al. The report for the event can be found below.

files_RSRRxMCA-Webinar-Report-25-06

The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry recently notified Draft Geographical Indications of Goods (Registration and Protection) (Amendment) Rules, 2019. The Department has solicited comments which ‘any person’ can provide within 30 days from date of Notification.

Major amendment pertains to Rule 56(1), which refers to the application for registration as an Authorised User under the Act. Section 17 provides that ‘any person claiming to be the producer of the goods in respect of which a geographical indication has been registered’…’may apply apply in writing to the Registrar in the prescribed manner for registering him as an authorised user of such geographical indication’.

Under the present Rule 56(1), an application for registration as an Authorised User shall be made jointly by proposed Authorised User and the registered proprietor of the said geographical indication. Further, the proposed Authorised User must file a Statemtent of Case along with the application substantiating his claim to be the producer of the registered Geographical Indication.

Registered Proprietor here refers to ‘any association of persons or of producers or any organisation for the time being entered in the register as proprietor of the geographical indication’.

The Draft (Amendment) Rules, 2019 have removed the requirement of filing a joint application with registered proprietor of the Geographical Indication. Now, the proposed Authorised User can himself/herself file an application for registration under Section 17. Nevertheless, the Statement of Case mentioned in present Rule 56(1) has to be filed.

Also, the Draft Rule 56(1) has made it mandatory for applicant-proposed Authorised User to serve a copy of application to the registered proprietor. The intent is to give an opportunity to the register proprietor to oppose the application.

Further Rule 56(2) in the present Rules require the proposed Authorised User to furnish a letter of consent, along with the application, from the registered proprietor of the geographical indication. In cases where such consent letter is not provided, a copy of application shall be endorsed to registered proprietor for information. This Rule 56(2) has been deleted in the Draft (Amendment) Rules, 2019.

Another amendment has been proposed in Rule 59(1) which presently provides for issuance of registration certificate to the Authorised User where no opposition is filed or when filed, it is dismissed. The present Rule bars issuance of registration certificate during appeal period (in case of dismissal of opposition application). This bar has been removed in the Draft (Amendment) Rules, 2019. Further, the requirement under present rules for filing a separate request issuance of registration certificate (where no opposition is filed or when filed, it is dismissed) has been done away in draft rules. The GI Registry will suo moto issue registration certificate in such a case. Consequently, the requirement to file a GI-3 application for the same under First Schedule has been removed under draft rules.<

Furthermore, Cl. 59(2)(f) and Cl.59(2)(f) which referred to entry in the register of priority date (with respect to the convention application) and appropriate office of GI Registry respectively have been deleted.

Additionally, under the current rules, the authrorised user while applying for duplicate copies of registration certificate is required to provide the ‘unmounted representation’ GI as filed in the registration application. This requirement has been removed.Following amendments have been made in the First Schedule (Fees):

1. Fee of Rs. 300 to be paid along-with application for registration of an authorised user has been removed.
2. Fee of Rs. 1000 to be paid along-with application for renewal of registration of has been removed.

Form GI-3 (Application for the registration of an authorised user) has been replaced by two forms: Form GI 3A (For registration of an Authorised User) and Form GI 3B (For Renewal of Registration as Authorised User).

Mishi Choudhary & Associates, the law firm partner (India) of OpenChain Project is organizing the first OpenChain Project’s India Working Group Meet-Up in Bangalore on 7th September, 2019 (Saturday).

The event would include sessions on Open Source Compliance and services provided by OpenChain Project such as OpenChain Conformance, which helps organizations adhere to compliance requirements and OpenChain Certification, which identifies core requirements of quality compliance program. There would be discussions on OpenChain’s industry standard for managing compliance throughout the supply chain. This would be followed by a few case studies.

Intended participants would be open source enthusiasts, tech-companies building or using products on open source and entities interested in learning more on open source compliance. The event would also include a session on data protection and India’s anticipated data protection legislation.

OpenChain Project is one of the Linux Foundation Projects, which identifies key recommended processes for effective open source management. It is centred on managing enterprise compliance in open source supply chains. The project is described as “a community effort to establish best practices for effective management of open source software compliance”. OpenChain builds trust in Open Source by making things simpler, more efficient and more consistent.

For invitations, please write to mail@mcalaw.in

The Draft Personal Data Protection Bill, 2018 was released by Justice BN Srikrishna Committee on Data Protection Framework in August 2018. The Bill, yet to be tabled in the parliament, is a significant move towards codifying privacy and data protection standards in digital space. Estimating the key provisions on the edifice of the ubiquitous European General Data Protection Regulation, 2016; we have published a comparison table of both.

PDPBGDPRFinal

April 17, 2019, OpenChain Project announced Mishi Choudhary & Associates LLP as its first law firm partner in India. MCA would now be providing legal advice about OpenChain Conformance and other OpenChain matters. OpenChain Conformance allows companies of all sizes and in all sectors to meet the OpenChain Specification. This builds trust between organizations in the supply chain. It makes procurement easier for purchasers and preferred status easier for suppliers.

OpenChain Project is one of the Linux Foundation Projects, which identifies key recommended processes for effective open source management. It is centred on managing enterprise compliance in open source supply chains. The project is described as “a community effort to establish best practices for effective management of open source software compliance”¹.More information on OpenChain Project is available on their website at: https://www.openchainproject.org

We welcome this partnership and look forward to working with together.

1. https://www.openchainproject.org/news/2019/04/17/openchain-announces-partner-in-india

The World Intellectual Property Organization (WIPO) recently released its IP Facts and Figures Report, 2018.¹ This is an annual document which provides an insight on intellectual property filings around the world. It is based on the filing statistics from member patent offices in the years 2016 and 2017. It indicates filing trends of four types of intellectual property i.e. patents, utility models, trademarks and industrial designs.

There were 3.17 million patent applications filed in 2017, 1.24 million industrial designs and 1.76 million utility models. However, there was 26.8% spike in trademark filings at 12.39 million.

Asia took the lion’s share in intellectual property filings across the world averaging at 74%. These include 65.1% of global patents, 66.6% of trademarks, 67.9% of industrial designs and 97.1% of utility models filings.

Patents

Country wise patent filings shows a skewed trend with five patent offices accounting for 85% of world total. These are China (43.6%), United States (19.2%), Japan (10.1%), South Korea (6.5%) and European Patent Office (5.3%). India was positioned seventh in the world in patent applications at 46,582 in 2017. Comparatively, China had 1.38 million patent applications filed for the same year. However, India witnessed one of the highest growth in patent application filings at 3.4% from 2016 to 2017.

Under Patent Cooperation Treaty (PCT) system, United States is the largest source with 56,680 PCT applications. However, China became the second largest source at 48,900 applications with 13.5% growth. India, on the other hand did not feature in the top 10 sources of PCT applications. China based telecom companies Huawei Technologies and ZTE Corporation are the top two PCT applicants.

Utility Models

Utility model is a type of patent with lower patent-ability requirements and a shorter period of protection. China also covers 95.8% of global utility model applications, followed by Germany and Russia. The report finds marked growth in utility model filings in middle income countries of Philippines (22.8%) and Kazakhstan (16.3%) from 2016 to 2017. Indian Patent Act, 1970 does not recognize utility models.

Trademarks

Total trademark filing in 2017 was 12.3 million with only five offices covering 60% filings. These are China (46.3%), United States (5%), Japan (4.5%), European Union Intellectual Property Office (3%) and Iran (2.9%).² India ranks seventh in trademark filings globally with 283, 575 applications. Notably, there has been a drop of 9.5% in trademark filings in India between 2016-17. Comparatively, China witnessed growth of 55.2% and Iran’s filing grew by 87.9% for the same period.

There was growth in use of Madrid System as well. It allows getting trademark protection in more than one country using a single international application. While United States and Germany rank at top of Madrid international applications, there has been significant growth in its use in China (57.8%) and Russia (23.9%). L’Oreal (France) was top user of Madrid System.

Industrial Designs

WIPO follows design count to measure industrial designs filings. Under this system, besides counting number of applications, number of designs in an application is also counted. In 2017, 945,100 industrial design applications were filed which contained 1.24 million designs. Almost 85% of global design filings took place in top ten offices including China (50.6%) and European Union Intellectual Property Office (8.9%). India did not feature in top ten list of industrial design filings. Industrial design filings in India stood at 11,117 designs with 4.2% growth between 2016-17.

Germany and Switzerland were top users of Hague System wherein applicants can obtain protection for industrial designs in multiple jurisdictions by filing single application at International Bureau of WIPO. Electronic giants Samsung and LG of South Korea were top Hague applicants.

Filings in India

Based on the report, in India there were 46,582 patent applications, 283,575 trademark applications and 11,117 industrial designs filed in 2017.

International applications originating from India were as follows: 1,582 PCT Applications (patents), 233 applications under Madrid System (trademarks) and 4 applications under Hague System (industrial designs).

Statistical Resources:

IP Statistics Data Centre (WIPO)

IP Statistical Country Profiles (WIPO)

1. ‘IP Facts and Figures Report, 2018’ is available at 

https://www.wipo.int/publications/en/details.jsp?id=4382&plang=EN

2. WIPO Statistics Database, September 2018