Website review

Delhi High Court reconsiders intentional use test

INTRODUCTION

In a recent judgment1Delhi High Court (“To research”) held that:

An Indian court may exercise jurisdiction over a defendant website located outside India, only if it is shown that the website intentionally targets Indian customers.

FACTS

  • Tata Sons Private Limited (“Applicant“), under its well-known “TATA” brand/trademark, appears to provide a platform for cryptocurrency trading, although the plaintiff itself does not trade cryptocurrency under any brand name or trade mark. trade.

  • Defendant #1, Hakuna Matata $Tata Founders operates the tatabonus.com website and is located in the United Kingdom. Defendant #2 is located in the United States and operates the hakunamatatafinance.com website. Both defendants use their respective websites for the sale and purchase of cryptocurrencies, under the name “TATA Coin/$TATA”. Plaintiff filed a lawsuit, alleging that its “TATA” trademark was infringed by the defendants, and sought an interim injunction against the defendants to restrain them from continuing to use the “TATA” trademark on their websites.

ISSUE BEFORE THE COURT

ARGUMENTS OF THE APPLICANT

  • Plaintiff argued that the Court may exercise extraterritorial jurisdiction over Defendants if there is (i) deliberate recourse by Defendant to the jurisdiction of the court, (ii) arising out of the cause of action, activities of the defendant, falling within the jurisdiction of the court and (iii) a substantial connection between the acts of the defendant or their consequences and the jurisdiction of the court. The plaintiff relied on various precedents, including the judgment in India TV) Independent News Services Pvt. ltd. against India Broadcast Live LLC (“Indian Television »),2 for making this argument.

  • According to the plaintiff, all three elements of the above test were met in this case because the defendant deliberately exercised the jurisdiction of the Court by making its cryptocurrency available for purchase by Indian customers. For this, the plaintiff relied on the following elements:

  1. Defendants’ cryptocurrency could be purchased by users in India using the Websites;

  2. Indian users had posed questions on Defendant #1’s Twitter page asking for details about buying their cryptocurrency in India;

  3. Defendants’ websites received 50 visits from Indian users in one day;

  4. Accused 1’s Telegram group had several Indian members.

  • The plaintiff also argued that the effect of the defendant’s acts of infringement were felt in India, as it resulted in a dilution of the goodwill associated with the plaintiff’s trademarks. Since the negative impact on the business of the plaintiff was felt in India, an Indian court could exercise jurisdiction over the defendant.

JUDGEMENT

The Court rejected Plaintiff’s plea for an interim injunction and held:

  • For the Court to exercise jurisdiction over the defendants, it must be proven by evidence that the defendants intended to target Indian customers through their websites.

  • For an Indian court to exercise jurisdiction over Internet activities, websites with infringing content must not only be accessible within the jurisdiction of the court, but there must be “ deliberate direction of activity to the forum state in a substantial way.” Absent this, an Indian court lacks long arm jurisdiction to act against a non-resident.

  • In this case, there was no deliberate exercise of jurisdiction by the Respondents, for the following reasons:

  1. Although cryptocurrency can be purchased by Indian users on the defendants’ websites, no specific evidence was available to show that the defendants specifically targeted the Indian market.

  2. The mere fact that people from India posted queries on Respondent #1’s Twitter page is not enough to demonstrate that the Respondents deliberately prevailed. There was no evidence that the defendants answered these questions at any time or invited Indian customers to buy its product.

  3. Indian court jurisdiction cannot be invoked solely because a website appears to be attracting traffic from India. The Court noted that 50 users per day is a very small number of visitors to the website.

  4. There was no evidence that the members of the Respondent’s Telegram page were present in India, even though they had Indian names, or that they accessed the websites from India.

  • An Indian court will not have jurisdiction over a non-resident defendant even if it is alleged that the plaintiff’s mark is diluted in India as a result of the defendant’s act of offering services to Indian users, if the users Indians are not specifically targeted.

COMMENTS

When bringing trademark infringement actions against foreign defendants, plaintiffs should ensure that evidence is available to establish that the defendants exercised the jurisdiction of the court in the forum. Some evidence that may be relevant in this regard could be advertisements of websites with infringing content in Indian media, specific statements made by website operators that India is an important market for their products/services, the ability to accept Indian currency on websites etc.

If the issue involves the use of an infringing domain name, an effective solution for trademark owners harmed by infringement of their trademarks through third-party domain names is to pursue dispute resolution through the Uniform Policy of settlement of disputes relating to domain names (“UDRP”) Administrative procedure for generic top-level domains such as .com, .net, etc.3 If the domain name is an “.in” domain, trademark owners may take action under the .IN Domain Name Dispute Resolution Policy (“INDRP”). Both the INDRP and UDRP provide for a time-limited arbitration process for effective resolution.


1 Tata Sons Private Limited v Hakuna Matata Tata Founders & Ors., CS(COMM) 316/2021 & IA8000/2021, Delhi High Court decision of 26 October 2021

2 2007 (35) PTC 177 Delete

3 To see https://www.wipo.int/amc/en/domains/guide/#b

Nishith Desai Associates 2022. All rights reserved.National Law Review, Volume XII, Number 61


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