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October 15, 2018

Mere interactive website not enough; intentional and commercially viable targeting of territory required for jurisdiction

In Federal Express Corporation v. Fedex Securities Ltd. & Ors [2017 (71) PTC 155 (Del)], the Delhi High Court (Gauba, J.) has, vide order dated 2017.04.11, returned the plaint-suit for infringement and passing off of the Plaintiff’s trademark FEDEX, allowing the interlocutory application of the Defendants challenging territorial jurisdiction.

Plaintiff invoked the jurisdiction of the Delhi High Court pleading that it has a subordinate office in Delhi and that the Defendants’ website www.fedsec.in is accessible in Delhi at which they offer and advertise their services, that the documents publicly accessible and issued to public at large on the Defendants’ website show that they are acting as the manager/merchant bankers to various entities/companies in Delhi. Defendants, on the other hand, alleged forum shopping asserting that the averments in the plaint simply do not suffice to establish territorial jurisdiction.  

The Court examined whether the phrases “carries on business” and “cause of action, … in part, arises” in Section 20 of the CPC are attracted by the Defendants merely having an interactive website in that territory or instead that there is an additional requirement that the website intentionally target that territory or also that it do so in a commercially viable manner.

This issue has been analyzed thus in the judgement: “…’carries on business’ at a certain place …means having an interest in a business at that place, a voice in what is done, a share in the gain or loss and some control thereover…insignificant or trivial part of the ‘cause of action’…cannot be the decisive factor on the question of jurisdiction…”

Having thus interpreted the scope of the Section, the Court examined the adequacy and sufficiency of the pleadings in the plaint for establishing territorial jurisdiction.

The Court found the pleadings in the plaint as not enough for invoking territorial jurisdiction: “As regards the…averment concerning the advertisement of service on website,…there is no averment that the websites are specifically targeting customers in Delhi or that the website is an interactive one from which it would be or has been possible to conclude commercial transactions. The advertisements published of the offers made by them to the public at large in the capacity of merchant bankers or merchant intermediaries have come with clear declarations of their location in Mumbai, which is the place where they have their registered offices…there is not even a single illustration given of any such commercial transaction having been entered into by the defendants with any user of their website within the territorial jurisdiction of this court…Plaintiff would have to show that the Defendant “purposefully availed” itself of the jurisdiction of the forum court. For this it would have to be prima facie shown 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.”

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