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2009 (11) TMI 983 - HC - Companies LawJurisdiction of a forum court in suits involving internet related disputes - Infringement of patent of the appellant/plaintiff - jurisdiction of a court to entertain complaint filed - word mark and the device adopted by the Defendants in relation to their retreat is deceptively similar to that of the plaintiff - The plaintiff claims that it is part of a group of companies involved in the hospitality business. Since 1994 it adopted and used the word mark Banyan Tree and also the banyan tree device. It is claimed that on the account of the extensive and continuous use by the plaintiff of the said mark and device in relation to its business, they have acquired secondary meaning, have become highly distinctive and have come to be associated with the plaintiff and its sister concerns. The plaintiff maintains the websites www.banyantree.com and www.banayantreespa.com since 1996. The said websites are accessible in India. HELD THAT - This Court is not able to accept the submission of the learned Counsel for the plaintiff that the test of purposeful availment must be replaced by the test of purposeful avoidance . While the Defendant may in his defence show how he avoided the forum state, the initial burden is on the plaintiff to show that the Defendant purposefully availed itself of the jurisdiction of the forum court. The issue of incorporating filters to block access to the website by viewers located outside the forum state will have to be considered while deciding if the Defendant had purposefully avoided the forum state. However, that question will arise only if the plaintiff has been able to show that the website of the Defendant is interactive and permits commercial transactions to be concluded by the Defendant with a user of the website. This Court holds that jurisdiction of the forum court does not get attracted merely on the basis of interactivity of the website which is accessible in the forum state. The degree of the interactivity apart, the nature of the activity permissible and whether it results in a commercial transaction has to be examined. For the effects test to apply, the plaintiff must necessarily plead and show prima facie that the specific targeting of the forum state by the Defendant resulted in an injury or harm to the plaintiff within the forum state. For the purposes of a passing off or an infringement action (where the plaintiff is not located within the jurisdiction of the court), the injurious effect on the plaintiffs business, goodwill or reputation within the forum state as a result of the Defendants website being accessed in the forum state would have to be shown. Naturally therefore, this would require the presence of the plaintiff in the forum state and not merely the possibility of such presence in the future. Secondly, to show that an injurious effect has been felt by the plaintiff it would have to be shown that viewers in the forum state were specifically targeted. Therefore the effects test would have to be applied in conjunction with the sliding scale test to determine if the forum court has jurisdiction to try a suit concerning internet based disputes. The question No. (i) is accordingly answered. Extent of burden of proof on the plaintiff to prima facie show that the Defendant has purposefully availed of the jurisdiction of this Court - This Court holds that in order to prima facie establish that the Defendant purposefully availed of the jurisdiction of this Court, the plaintiff would have to show that the Defendant engaged in some commercial activity in the forum State by targeting its website specifically at customers within that State. A mere hosting of a website which can be accessible from anyone from within the jurisdiction of the court is not sufficient for this purpose. Also a mere posting of an advertisement by the Defendant depicting its mark on a passive website which does not enable the Defendant to enter into any commercial transaction with the viewer in the forum state cannot satisfy the requirement of giving rise to a cause of action in the forum state. Even an interactive website, which is not shown to be specifically targeted at viewers in the forum state for commercial transactions, will not result in the court of the forum state having jurisdiction. In sum, 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 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. Question No. (ii) is answered accordingly. Permissibility for the plaintiff to establish such prima facie case through trap orders or trap transactions - A lone trap transaction will not be sufficient evidence of infringement or passing off. For the purposes of establishing that a part of the cause of action arose within the jurisdiction of the court, the plaintiff would have to show that the Defendant has purposefully availed of the jurisdiction of the forum court by entering into a commercial transaction with an internet user located within the jurisdiction of the forum court. This 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 to be 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. Question (iii) is answered accordingly.
Issues Involved:
1. Jurisdiction of the Court based on internet presence. 2. Impact of the Information Technology Act, 2009 on jurisdiction. 3. Standards for entertaining suits based on trademark use on websites. 4. Criteria for using "trap orders" or "trap transactions" in establishing jurisdiction. Issue-wise Detailed Analysis: 1. Jurisdiction of the Court Based on Internet Presence: The Court examined whether hosting a universally accessible website by the defendants lends jurisdiction to the forum court. It was determined that for a passing off or infringement action, the plaintiff must show that the defendant purposefully availed itself of the jurisdiction of the forum court. This involves demonstrating that the defendant's website activity was intended to conclude a commercial transaction with the user and that the specific targeting of the forum state resulted in harm to the plaintiff within that state. The Court emphasized that mere accessibility of a website does not confer jurisdiction; the website must be interactive and targeted at the forum state for commercial transactions. 2. Impact of the Information Technology Act, 2009 on Jurisdiction: The Court discussed whether the absence of a long-arm statute impacts the jurisdiction of the forum court. It concluded that even without a long-arm statute, the plaintiff must show that the defendant purposefully availed itself of the forum state's jurisdiction by engaging in commercial activities targeting that state. The Court referenced the "purposeful availment" test, which requires the defendant to have engaged in significant activities within the forum state or created continuing obligations with residents of the forum state. 3. Standards for Entertaining Suits Based on Trademark Use on Websites: The Court outlined the applicable standards for entertaining suits based on the use of a trademark on a defendant's website. It held that the plaintiff must show that the website was specifically targeted at viewers in the forum state for commercial transactions. The Court applied the "Zippo sliding scale test" and the "effects test" to determine jurisdiction, emphasizing that the nature of the website's interactivity and the commercial intent behind it are crucial factors. 4. Criteria for Using "Trap Orders" or "Trap Transactions" in Establishing Jurisdiction: The Court addressed the permissibility of using "trap orders" or "trap transactions" to establish jurisdiction. It held that a solitary trap transaction does not constitute "purposeful availment" by the defendant. The plaintiff must show that the defendant engaged in real commercial transactions with users in the forum state. If relying on trap transactions, the plaintiff must demonstrate that they were obtained using fair means and provide supporting material to show that these transactions satisfy the test of purposeful availment. Summary: The Court concluded that for a forum court to have jurisdiction in internet-related disputes, the plaintiff must show that the defendant purposefully availed itself of the forum state's jurisdiction through targeted commercial activities. Mere accessibility of a website is insufficient. The plaintiff must provide evidence of real commercial transactions with users in the forum state. The Court overruled the decision in Casio and aligned with the principles in India TV, emphasizing the need for specific targeting and commercial intent. The case was remanded to the learned single Judge to determine jurisdiction based on these principles.
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