Forum shopping is defined as ‘the practice of choosing a specific court among other courts that could properly exercise jurisdiction based on a determination of which court is likely to provide a more favorable outcome.”[1]
The concept of forum shopping has not been exclusively defined anywhere in any of the Indian statutes but based on the Judiciary’s observations and Obiter Dicta, the concept has been streamlined in the Indian Legal System. The Indian judiciary has strongly condemned the practice of forum shopping by litigants and termed it as an abuse of the process of law.
An infringement suit is generally filed at the forum which has the territorial jurisdiction to try the case in accordance to the Trademark act or the Copyright act or as per the Civil Procedure Code, 1908 (hereinafter CPC). However, Section 20 of CPC provides for the general rule of jurisdiction for institution of suits. The clauses (a) and (b) of Section 20, CPC[2] provides that a suit may be instituted where the defendant(s) actually and voluntarily reside, carry on business or personally works for gain. And the clause (c) provides that the suit can be instituted where the cause of action wholly or in part arises. Thus, Section 20 of CPC states that a suit can be instituted at any place where the corporation has its principal office or if the cause of action has arisen at any other place where it has a subordinate office, then at such place.[3]
However, the provisions incorporated in the Trademark and Copyright acts, act as an exception to this general rule laid down in the code. Section 134(2) of the Trade Marks Act, 1999 and Section 62 of the Copyright Act in contradiction to the Section 20 of CPC provide an option to the plaintiff to institute a suit in the jurisdiction where the plaintiff resides, or personally works for gain irrespective of the defendants place or where the cause of action arose. Furthermore, these provisions include a ‘non-obstante’ wording- ‘notwithstanding anything contained in the code or any other law at the time being in force’ which gave these provisions an overriding effect on section 20 of CPC till the decision of Supreme Court on this matter in the case of Indian Performing rights society Ltd. v. Sanjay Dalia.
INDIAN PERFORMING RIGHTS SOCIETY LTD. v. SANJAY DALIA.[4]
FACTS
The original plaintiff Indian Performing Rights Society (IPRS) filed a suit against the defendant Sanjay Dalia for Copyright infringement in the Delhi High Court relying on the provisions of the Copyright act and trademark act. However, as per the facts of the case, the cause of action had fully arose in Mumbai where IPRS had its head office and the defendant too was based in Mumbai. The defendant raised an objection before the Delhi High court stating that it did not have the jurisdiction, the HC upheld the objection and held that the suit should have been instituted in the court of Mumbai where the plaintiff had its head office and where the cause of action had arose.
Following this, the plaintiff filed an appeal before the Supreme Court against such orders of the Delhi High Court. Relying on the provisions of the Copyrights act and the Trademark act. This case highlighted the need to interpret the provisions of the trademark and copyrights act with the provisions of the Civil Procedure Code, 1908.
ISSUE
The main issue before the Supreme Court in this case was that when the cause of action has arose in a place where the plaintiff has an office, can they taking advantage of the provisions of the Copyright act and Trademarks act, sue in any other jurisdiction merely on the basis that they have a office there as well, so as to exclude the jurisdiction requirement mandated under section 20 of CPC?
RATIO
The two judge bench of the Supreme Court comprising of Justice J.S. Keher and Justice Arun Mishra thoroughly dealt with the issues and after a detailed consideration of the provisions under Section 20 CPC, Section 62 of Copyright act and Section 134 of trademark act, read along with the object and parliamentary debates on the Copyright act, held that if the cause of action has arisen at the place where the plaintiff is having his ordinary place of residence or principal place of business or works for gain then the plaintiff has to file the suit at that place only and not in any other jurisdiction.
ANALYSIS OF THE DECISION
The Supreme Court thoroughly decided the case in favor of the defendant as stated above after thorough interpretation of Section 20 of CPC with Section 62 of Copyright act and 134 of Trademark act for ascertaining the jurisdiction. The court concluded that the intendment of section 62 of Copyright and section 134 of Trademark act was not to operate in the field where the plaintiff in spite of having a place of residence or principal office or place of work for personal gain and existence of a cause of action, deliberately chooses a distant place for institution of suit. The Supreme Court reasoned that such interpretation would cause great damage and be harmful to the intention behind the enactment of such provisions.[5]
The court observed that the purpose behind the insertion of these provisions under the Trademarks and Copyrights act was to create an additional forum in the form of district court or to enable the plaintiff to institute a suit at his place of residence or where he carries on business or personally works for gain or has branch offices and not to empower the plaintiff to file suits at far off places and harass the defendant.
The bench while interpreting the interplay between the provisions under Copyright and Trademark act with the Section 20 of CPC ruled that the non obstante expression ‘notwithstanding anything contained in the Code’ in section 62 of copyright and section 134 of the Trademarks act cannot be interpreted so as to oust the applicability of the provisions of section 20, CPC. The provisions of 62/134 have to be interpreted in a purposive manner which means that a suit can be filed at any place where the plaintiff resides, carries on business or personally works for gain but if the plaintiff is residing or carrying out business at a place where the cause of action has fully or partly arose then the plaintiff under the provisions of CPC, has to file a suit at that place only. The plaintiff cannot take the advantage of these tangled procedural laws to harass the defendants and file the suit at a farther place.
The court referred to the use of principle as explained in Heydon’s case[6] which lays down that where the interpretation between provisions is not clear, it should be interpreted in a way so as to prevent mischief while deciding the case. In context of the present case where two interpretations were possible, if the interpretation of the plaintiff had been accepted then any far away branch office of the company could also be used for bringing the jurisdiction just to harass the defendant and therefore the avoidance of counter mischief to defendant was necessary while deciding the case.
The Bench stated that Section 20 of CPC deterred the plaintiff’s from filing suits from distant places and to deal with this defect, Section 62 was incorporated to aid the plaintiff for institution of a suit from his place of residence or business. Further, the court clarified that such additional scope of jurisdiction was not to have an overriding effect in a situation where the plaintiff institutes the suit at a completely different place under the guise of subordinate or branch office, in spite of having cause of action at the place where he ordinarily resides or carries on business or personally works for gain.
CONCLUSION
The Supreme Court in reaching the conclusion that a suit will not be entertained if the plaintiff has filed it in any jurisdiction other than the one where the plaintiff has his principal place of business and the cause of action also arose at that place, introduced the notion of ‘cause of action’ in Sections 62 and 134. It based its reliance on the rule of convenience of parties embodied in Section 20 of CPC.
The Judgement could be summarized as:
- If the cause of action does not occur at the principal/registered office/branch office of the company, a lawsuit can be initiated under Section 62 of the Copyright Act and Section 134 of the Trademark Act at any of these locations.
- In the specific situation where the cause of action arises solely within the principal/registered office of the company, the jurisdiction of all branch/subordinate offices where the cause of action does not occur would be excluded.
- This was the precise scenario examined in the current judgment. If the cause of action arises both at the principal place of business and one or more branch offices, the plaintiff has the freedom to select either of these locations as the forum for filing the lawsuit. In such cases, the jurisdiction of all other branch offices where the cause of action does not occur would be excluded.
- If the cause of action only pertains to a specific branch office or offices, the jurisdiction of other branch offices where the cause of action does not occur would be excluded. However, when determining the relevant branch offices, the interpretation can be guided by the Dhoda House judgment of the Honorable Supreme Court. According to this judgment, there should be a connection between the branch office and the essential part of the business. In other words, the branch office where the cause of action arises must have a correlation to the cause of action, and not every branch office should be considered relevant for this purpose.
According to the ruling of the SC in this case, if cause of action does not arise at a place where the plaintiff’s branch office is located, it cannot be deemed as a place of business for the purpose of sections 62 and 134. This interpretation is of essence as in absence of such an observation, the plaintiff could file suits at far off places based on the location of their branch offices and harass the defendants. The court, through this judgement struck a balance so that the expansive interpretation of sections 62 and 134 would not undermine the convenience of the defendants by using the notion of ‘cause of action.’
The Supreme Court has narrowed down the scope of the special provisions of Copyright act and Trademark act by linking it with the notion of ‘cause of action.’ And by creating this limitation of choices for the plaintiff for the place of institution of suit, the Supreme Court has ensured that the rights and convenience of both the parties is safeguarded and the defendant is not subject to unreasonable harassment by the plaintiff. The decision will also encourage the decentralization of filing of IP suits, which as per practice are mostly filed in the Delhi and Bombay High Courts and enable other Courts and legal professionals to gain valuable expertise.
[1] “Forum shopping,” Merriam-Webster.com Legal Dictionary (Merriam-Webster), https://www.merriam-webster.com/legal/forum%20shopping (last visited Jun. 24, 2023)
[2] Code of Civil Procedure, § 20 (1908).
[3] Manisha Singh and Zoya Nafis, “Keeping an eye on forum shopping,” Managing Intellectual Property (2015), https://www.managingip.com/article/2a5bwlc1rrwpecdw3ksg0/keeping-an-eye-on-forum-shopping.
[4] Indian Performing Rights Society Ltd. v. Sanjay Dalia, (2015) 10 SCC 161, para. 27.
[5] Anya Darakhshan Kishwar, “Case Summary: IPRS v. Sanjay Dalia and Anr.” LexQuest Foundation Blog (July 27, 2015), https://www.lexquest.in/case-summary-iprs-v-sanjay-dalia-and-anr/.
[6] Para 27
Author: Uttara Gupta
Juris Centre 