Use under the Trade Marks Act, per Sections 2(2)(c), 28, 29, and 56, encompasses non-physical activities like online promotions
Introduction: In the vibrant arena of trademark litigation, where brand identity clashes with territorial boundaries, the case of Burger King Corporation vs. Techchand Shewakramani & Ors., decided by the Delhi High Court on August 27, 2018, emerges as a landmark exploration of jurisdictional competence in intellectual property disputes.
The plaintiff, Burger King Corporation, a U.S.-based fast-food giant, sought to protect its iconic trademarks “Burger King” and “Hungry Jack’s” against alleged infringement by a group of Mumbai-based defendants operating under the same “Burger King” mark.
The defendants challenged the Delhi High Court’s jurisdiction, arguing a lack of cause of action and territorial nexus. The court meticulously dissected the interplay of the Trade Marks Act, 1999, and the Code of Civil Procedure, 1908, dismissing the defendants’ applications to reject or return the plaint. This case study delves into the factual matrix, procedural intricacies, legal issues, parties’ arguments, judicial precedents, the court’s reasoning, and the broader implications, painting a vivid picture of a jurisdictional chess game in India’s trademark landscape.
Detailed Factual Background:Burger King Corporation, a renowned U.S.-based fast-food chain, holds global trademark registrations for “Burger King” and “Hungry Jack’s,” used for its restaurants and corporate identity. Planning to launch franchise outlets in New Delhi, the plaintiff had entered into agreements, sought regulatory approvals, and established a business presence in the city.
The defendants, all based in Mumbai, included individuals and companies allegedly infringing the plaintiff’s trademarks. Defendant No. 5, Burger King Restaurant Pvt. Ltd., and Defendant No. 6, Hungry Jacks Fast Food Pvt. Ltd., were companies operating at 99/C, Rosewood Chambers, Tulsiwadi, Tardeo, Mumbai. Defendant No. 7, Ras Resorts and Apart Hotels Pvt. Ltd., shared the same address and was promoted by the same individuals. Defendant No. 1 was a director of Defendants No. 5 and 7; Defendant No. 2 was an executive director of Defendant No. 7 and a director of Defendants No. 5 and 6; Defendant No. 3 was the managing director of Defendant No. 7 and a director of Defendants No. 5 and 6; and Defendant No. 4 was a director of Defendant No. 6. The plaintiff alleged that the defendants were using “Burger King” for restaurants and carts in locations like Silvassa, Daman, and Pune, and were actively promoting the mark through a website, theburgerking.in, registered by Defendant No. 3 on July 9, 2014.
This website, linked to Ras Resorts, offered franchise opportunities and listed the administrative office as Ras Group of Hotels, suggesting a nexus with Defendant No. 7. The plaintiff apprehended that the defendants planned to expand into Delhi, citing franchise queries from Delhi areas like Madangiri, Okhla, and Dwarka, and a Business Digest article dated July 30, 2014, quoting Defendant No. 3 on nationwide expansion plans. The defendants’ Memorandum of Association further declared intentions to establish branches across India, reinforcing the plaintiff’s concerns.
Detailed Procedural Background:The dispute crystallized in CS(COMM) 919/2016, filed by Burger King Corporation before the Delhi High Court, seeking a permanent injunction to restrain trademark infringement and passing off, along with damages. The suit was accompanied by a counterclaim, CC(COMM) 122/2017, by the defendants. The defendants filed three applications: I.A. 23496/2014 by Defendant No. 7 under Order VII Rule 11 CPC, seeking rejection of the plaint for lack of cause of action and territorial jurisdiction; I.A. 17220/2015 by Defendants No. 1, 2, 3, and 5 under Order VII Rule 10 CPC, seeking return of the plaint for lack of jurisdiction; and I.A. 17221/2015 by Defendant No. 6 under Order VII Rule 11 CPC, mirroring the jurisdictional objections.
Issues Involved in the Case:The case presented several critical legal questions at the intersection of trademark law and civil procedure:Whether the Delhi High Court had territorial jurisdiction under Section 20 of the CPC, given the defendants’ Mumbai-based operations and the plaintiff’s claim of imminent infringement in Delhi?Whether the plaintiff’s invocation of Section 134(2) of the Trade Marks Act, based on its business activities in Delhi, conferred jurisdiction, or if it was barred by precedents limiting such claims.Whether the defendants’ promotion of the “Burger King” mark through websites, franchise queries, and public statements constituted “use” under the Trade Marks Act, creating a cause of action in Delhi?Whether the plaintiff’s apprehension of the defendants’ expansion into Delhi was credible and sufficient to establish a cause of action under Section 20(c) of the CPC?Whether subsequent events, such as franchise queries post-filing, could be considered to determine jurisdiction, or if jurisdiction was fixed at the date of filing?
Detailed Submission of Parties:The plaintiff argued that the Delhi High Court had jurisdiction under both Section 134(2) of the Trade Marks Act and Section 20 of the CPC. Under Section 134(2), the plaintiff claimed to carry on business in Delhi through agreements, contracts, and regulatory approvals for its imminent Burger King franchise launch. Under Section 20(c), the plaintiff asserted a credible apprehension of the defendants expanding into Delhi, evidenced by franchise queries from Delhi, the interactive website theburgerking.in, and Defendant No. 3’s public statements on nationwide expansion.
The defendants argued that the Delhi High Court lacked jurisdiction, as all defendants resided and operated in Mumbai, with no infringing activities in Delhi. They cited Indian Performing Rights Society Ltd. vs. Sanjay Dalia (2015) and Ultra Home Construction Pvt. Ltd. vs. Purshottam Kumar Chaubey (2016) to argue that Section 134(2) did not apply, as the plaintiff’s Delhi presence was insufficient without a cause of action arising there. Under Section 20, they contended that the plaintiff’s apprehension was speculative, lacking evidence of actual sales or operations in Delhi. Defendant No. 7 emphasized its distinct business (Ras Resorts) and lack of connection to the “Burger King” mark, arguing that its website (rasresorts.com) was unrelated to the infringement. The defendants asserted that the cause of action, if any, was quia timet and arose in Mumbai, where their operations were based. They further argued that subsequent events, like post-filing franchise queries, could not confer jurisdiction, and the issue was purely legal, not requiring factual inquiry.
Detailed Discussion on Judgments Cited by Parties:The court’s analysis was informed by a rich array of precedents, each providing context to jurisdictional principles in trademark disputes. The key judgments, their complete citations, and their relevance are as follows:
Indian Performing Rights Society Ltd. vs. Sanjay Dalia, (2015) 63 PTC 1 (SC): The Supreme Court clarified that Section 134 of the Trade Marks Act and Section 62 of the Copyright Act provide additional forums where the plaintiff resides or carries on business, but do not oust Section 20 of the CPC. The defendants relied on this to argue that the plaintiff’s Delhi branch office did not confer jurisdiction without a cause of action, but the court distinguished it, noting that Section 20(c) independently applied due to the defendants’ use of the mark in Delhi.
Ultra Home Construction Pvt. Ltd. vs. Purshottam Kumar Chaubey, 227 (2016) DLT 320 (DB) (Delhi High Court): The Division Bench outlined scenarios for jurisdiction under Section 134(2) and Section 62(2), emphasizing that a plaintiff with a principal office cannot sue at a subordinate office unless the cause of action arises there. The defendants cited this to challenge the plaintiff’s Section 134(2) claim, but the court held that Section 20(c) jurisdiction was established, rendering Section 134 analysis secondary.
Laxmikant V. Patel vs. Chetanbhat Shah, AIR 2002 SC 275: The Supreme Court held that passing off actions consider future business harm, not just existing facts, and likelihood of damage suffices for injunctions. The plaintiff relied on this to justify jurisdiction based on the defendants’ expansion plans, and the court applied it to find that the defendants’ promotional activities in Delhi created a credible cause of action.
Federal Express Corporation vs. Fedex Securities Ltd., 2018 (74) PTC 205 (Del) (DB): The Division Bench ruled on jurisdiction under Section 134, not Section 20. The defendants cited it to argue lack of jurisdiction, but the court found it inapplicable, as the plaintiff’s case rested on Section 20(c) due to the defendants’ activities in Delhi.
HSIL Ltd. vs. Marvel Ceramics, 2018 (73) PTC 77 (Del) (DB): The Division Bench found no cause of action in Delhi under Section 134. The defendants relied on this, but the court distinguished it, noting that the defendants’ franchise solicitations and promotions in Delhi established a cause of action under Section 20(c).
Additionally, the court referenced Kerly’s Law of Trade Marks and Trade Names (13th Edn., 2001) to define “use” under Section 2(2)(c) of the Trade Marks Act, encompassing advertising, promotion, and franchise solicitations, which supported the plaintiff’s jurisdictional claim.
Detailed Reasoning and Analysis of Judge: The court first addressed the defendants’ interconnectedness, noting that Defendants No. 1, 2, and 3 were common directors across Defendants No. 5, 6, and 7, all sharing the same Mumbai address. The website theburgerking.in, registered by Defendant No. 3, listed Ras Resorts as its administrative office and offered franchise forms, linking Defendant No. 7 to the infringing mark. This nexus undermined the defendants’ claim of independence, justifying their joinder in the suit.
On jurisdiction, the court held that Section 20(c) of the CPC was satisfied, as the defendants’ actions constituted “use” of the “Burger King” mark in Delhi, creating a cause of action. The court expansively interpreted “use” under Section 2(2)(c) and Sections 28, 29, and 56 of the Trade Marks Act, per Kerly’s Law, to include promotion, advertising, and franchise solicitations. The defendants’ website, franchise queries from Delhi (e.g., Madangiri, Okhla), and Defendant No. 3’s public statements on nationwide expansion, corroborated by a Business Digest article and the Memorandum of Association, evidenced active promotion in Delhi. The court emphasized the modern context of e-commerce, noting that online franchise solicitations targeting Delhi customers conferred jurisdiction, reflecting the dynamic nature of trademark use.
The court distinguished IPRS vs. Sanjay Dalia and Ultra Home, clarifying that while these cases limited Section 134(2) jurisdiction, they did not dilute Section 20(c)’s applicability. The plaintiff’s agreements and approvals in Delhi supported Section 134(2), but the court found Section 20(c) independently sufficient, as the cause of action arose from the defendants’ Delhi-directed activities. The court rejected the defendants’ argument that jurisdiction was fixed at the filing date, citing Laxmikant V. Patel to hold that passing off considers future harm, and each instance of mark use creates a fresh cause of action. The defendants’ own documents, including franchise requests and a counterclaim asserting Delhi jurisdiction, further undermined their objections.
The court also addressed procedural fairness, criticizing indiscriminate document denials under the Commercial Courts Act. It directed fresh admission/denial affidavits to focus on genuine disputes, warning against delays through unjustified denials, aligning with the Act’s efficiency goals. The defendants’ lack of cause of action argument was dismissed, as their promotional activities and expansion plans established a credible threat of infringement in Delhi.
Final Decision:On August 27, 2018, the Delhi High Court dismissed I.A. 17221/2015, I.A. 17220/2015, and I.A. 23496/2014, upholding its jurisdiction to entertain the suit.
Law Settled in this Case:The judgment clarified several principles governing jurisdiction in trademark disputes: Section 20(c) of the CPC confers jurisdiction where a cause of action arises, including through trademark “use” such as promotion, advertising, or franchise solicitations in the forum’s territory.“Use” under the Trade Marks Act, per Sections 2(2)(c), 28, 29, and 56, encompasses non-physical activities like online promotions and franchise queries, reflecting e-commerce realities.Passing off and infringement actions consider future business harm, and jurisdiction is not fixed at the filing date, as each mark use creates a fresh cause of action .Section 134(2) of the Trade Marks Act supplements, but does not exclude, Section 20 of the CPC, allowing jurisdiction based on the plaintiff’s business activities or cause of action (IPRS vs. Sanjay Dalia).Interconnected defendants, sharing directors or addresses, can be joined in a suit if linked to the infringing mark, preventing jurisdictional evasion.In commercial suits, indiscriminate document denials violate the Commercial Courts Act’s efficiency goals, and courts may impose sanctions for unjustified delays.A credible apprehension of trademark infringement, supported by promotional activities or expansion plans, suffices to establish a cause of action in quia timet actions.
Case Title: Burger King Corporation Vs. Techchand Shewakramani
Date of Order: August 27, 2018
Case No.: CS(COMM) 919/2016
Name of Court: High Court of Delhi
Name of Hon'ble Judge: Justice Prathiba M. Singh
Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
