Introduction: This case study analyzes the judgment delivered by the Delhi High Court in the matter of Impresario Entertainment & Hospitality Pvt. Ltd. vs. S & D Hospitality (CS(COMM) 111/2017). The dispute centers around alleged trademark infringement, passing off, and the territorial jurisdiction of the court in internet-related disputes involving the use of similar marks ‘SOCIAL’, ‘SOCIAL MONKEY’, and ‘STONE WATER’. The case is significant for its detailed examination of the legal principles governing online activity, jurisdiction, and trademark rights within the Indian legal framework, especially in the context of Trap Orders.
Factual Background: The plaintiff company, Impresario Entertainment & Hospitality Pvt. Ltd., is a prominent operator of cafes and restaurants known for their distinctive ‘SOCIAL’ brand, with several outlets across India, including in Delhi, Mumbai, Gurugram, and Bengaluru. The plaintiff claims to be the registered proprietor of the trademark ‘SOCIAL’ and its variants, dating back to May 2014, and has adopted the ‘STONE WATER GRILL’ mark since 2007, emphasizing its unique style of service. The defendant, S & D Hospitality, was operating restaurants in Hyderabad under the name ‘SOCIAL MONKEY’ and also marketing beverages like ‘HYDERABAD SLING’, which closely resemble the plaintiff’s ‘A GAME OF SLING’. The plaintiff alleged that the defendant’s use of similar marks and branding causes confusion in the marketplace, leading to a dilution of their brand value, and sought injunctive relief. The dispute also involved the question of whether the plaintiff's claims could be pursued in Delhi court since the defendant’s operations were geographically situated in Hyderabad, and whether online activities through Trap Orders such as promotion and reservation systems contributed to establishing jurisdiction.
Procedural Background: Initially, the plaintiff filed a suit seeking an injunction against the defendant’s infringing activities and to restrain them from using the marks ‘SOCIAL’ and ‘STONE WATER’ or any deceptively similar marks. The defendant challenged the territorial jurisdiction of the Delhi High Court through an application under Order VII Rule 10 CPC, arguing that their registered office was in Mumbai, and they did not carry on any business within Delhi, nor did the cause of action arise there. During the proceedings, the court issued notice and considered whether the online promotional activities by the defendant, particularly on platforms like Zomato and Dineout, could establish a sufficient nexus to confer jurisdiction. The court conducted a hearing on the defendant’s application and examined the legal principles surrounding internet-based jurisdiction, referencing various judgments, and ultimately deferred a final decision on the jurisdictional objection until the merits of the infringement and passing off claims were analyzed.
Legal Issue: The core legal issues addressed in this case involved: whether the Delhi High Court had territorial jurisdiction to entertain the suit given that the defendant’s physical operations were in Hyderabad and the plaintiff’s registered office was in Mumbai; whether online activities such as advertising, reservations, and promotion through platforms like Zomato and Dineout , more specially Trap Orders could create a 'cause of action' within Delhi; and what standards must be met to establish purposeful availment of jurisdiction in internet-related trademark disputes? An overarching concern was to delineate the boundaries of jurisdiction in cases where online activities intersect with physical territorial boundaries.
Discussion on Judgments: The court extensively examined prior judgments concerning internet jurisdiction. It referred to the judgment in ‘Casio India Co. Ltd. v. Ashita Sharma, (2018) 3 SCC 778,’ which held that merely hosting a passive website accessible within the jurisdiction does not confer jurisdiction unless the website targets or aims at residents of that jurisdiction. In contrast, the court also referred to ‘India TV Network Pvt. Ltd. v. Yash Raj Films Ltd., AIR 2015 Del 318’, which acknowledged that purposeful targeting through targeted advertising or online activities can establish jurisdiction.
Further, the court analyzed the decision in ‘Yahoo! Inc. v. Akash Arora, (2007) 34 PTC 370’, where it was held that even if the website is accessible everywhere, jurisdiction can be invoked if the defendant purposefully directs activities towards the forum state. The judgment in ‘Ultra Home Construction Pvt. Ltd. v. Sanjay Dalia, AIR 2010 Delhi 377’ was also cited, emphasizing that jurisdiction depends on whether the defendant has ‘purposefully availed’ itself of the jurisdiction. These cases collectively supported the court’s view that online promotion involving targeted advertising, reservation systems, or presentation of the defendant’s contact details in Delhi could establish sufficient grounds for jurisdiction in the present case.The court emphasized that the law must evolve with technological advances but remains rooted in the principle of ‘purposeful availment’ and ‘effect as a cause of action’ in the forum.
Reasoning and Analysis of the Judge: The judge reasoned that the essence of establishing jurisdiction in internet disputes lies in whether the defendant purposefully directed its activities towards the jurisdiction. Mere hosting or accessibility of a website does not automatically confer jurisdiction. The critical factor is whether the online Trap Orders indicates an intention to target consumers in the jurisdiction and whether such activities have a tangible effect within the jurisdiction.
Applying these principles, the court observed that the defendant’s online presence, through advertising on portals like Zomato and Dineout, which are known to operate for Delhi customers, along with publicly displayed contact details and reservation facilities, demonstrated purposeful availment of Delhi’s jurisdiction. The reviews from customers in Delhi and the promotional material explicitly targeting Delhi consumers and Trap Orders were not seen as establishing a ‘cause of action’ within Delhi and Delhi High Court hold not to have the jurisdiction to entertain the suit.
Final Decision: The court ultimately accepted the defendant’s objection to jurisdiction, holding that the online Trap Orders did not met the legal standards for purposeful availment and establishing a cause of action within the jurisdiction. The court clarified that in cases involving internet activity, the test for jurisdiction is not solely based on the physical location of the defendant but also on whether the defendant has deliberately targeted the jurisdiction by online means. Therefore, the court rejected its jurisdiction to entertain the dispute, allowing the suit to be heard on its merits.
Law Settled in This Case: This case affirms that in Indian law, jurisdiction in internet-related disputes can not be established by mere trap orders. Mere accessibility of a website is insufficient; active measures such as targeted advertising, promotional activities, or presenting contact details can suffice to confer jurisdiction.
Case Title: Impresario Entertainment & Hospitality Pvt. Ltd. Vs. S & D Hospitality Case Number: CS(COMM) 111/2017 Date of Order: 3rd January 2018 Court: High Court of Delhi Judge: Hon'ble Ms. Justice Mukta Gupta Neutral Citation: 2018:DHC:14
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
