Territorial Jurisdiction in Online Trademark Disputes
Introduction: The case of Suman Devi and Another v. Rakesh Kumar Sharma, adjudicated by the High Court of Delhi, represents a significant judicial examination of trademark infringement and passing off in the context of commercial disputes involving scientific and laboratory instruments. Heard under First Appeal from Order (FAO) (Commercial) 189/2025, this case involves an appeal against an interlocutory order issued by the Commercial Court, which granted injunction restraining the appellants from using a mark deceptively similar to the respondent’s registered trademark “LABTRONICS.” The case delves into issues of trademark similarity, territorial jurisdiction, and the scope of appellate interference in interlocutory orders.
Factual Background:Rakesh Kumar Sharma, the respondent, instituted a suit (CS (Comm) 410/2025) before the Commercial Court, alleging that Suman Devi and another (the appellants) were infringing his registered trademark “LABTRONICS” and passing off their goods as his. The respondent claimed to have coined and adopted the “LABTRONICS” mark in 2001 for scientific and laboratory instruments, including spectrophotometers, digital flame photometers, titrimeters, polarimeters, and microscopes. He held a valid and subsisting registration for the word mark “LABTRONICS” in Class 9, effective from 5 March 2010, though a device mark registration for “LABTRONICS” had expired due to non-renewal. The appellants, one of whom was a former employee of the respondent, were using the mark “LABTRON INSTRUMENTS” for identical goods, prompting allegations of deliberate infringement and passing off. The respondent argued that the appellants’ mark was deceptively similar, likely to confuse consumers, and capitalized on his established goodwill. The appellants contended that there was no phonetic or visual similarity between the marks and challenged the territorial jurisdiction of the Commercial Court, asserting that the respondent’s business activities did not extend to Delhi.
Procedural Background: The dispute originated in CS (Comm) 410/2025, where the respondent sought an injunction under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure (CPC) to restrain the appellants from using the mark “LABTRON INSTRUMENTS” or any deceptively similar mark. On 2 June 2025, the Commercial Court granted an ex-parte ad-interim injunction, finding a prima facie case of trademark infringement and passing off, and appointed local commissioners to seize and inventory goods bearing the infringing mark at the appellants’ premises. Aggrieved, the appellants filed an appeal under Section 13 of the Commercial Courts Act read with Order XLIII of the CPC before the High Court of Delhi, challenging the injunction on grounds of lack of deceptive similarity and improper territorial jurisdiction. The appeal was heard by a Division Bench comprising Justice C. Hari Shankar and Justice Om Prakash Shukla, with Ms. Ishtha Singh representing the appellants and Mr. Amit Tiwari representing the respondent. The court delivered its oral judgment on 25 July 2025, affirming the Commercial Court’s order.
Core Dispute: The primary issues in this appeal were twofold: whether the appellants’ mark “LABTRON INSTRUMENTS” was deceptively similar to the respondent’s registered trademark “LABTRONICS,” constituting infringement under Section 29 of the Trade Marks Act, 1999, and passing off; and whether the Commercial Court in Delhi had territorial jurisdiction to entertain the suit. The appellants argued that the marks were distinct, with “LABTRON INSTRUMENTS” differing significantly due to the additional word “INSTRUMENTS” and the absence of the suffix “ICS.” They further contended that the respondent’s business activities did not extend to Delhi, rendering the suit jurisdictionally defective. The respondent countered that the marks were phonetically and visually similar, especially given the appellants’ prior association with his business, and that his online sales and distribution network in Delhi established jurisdiction. The court was tasked with assessing the prima facie case for injunction and the propriety of the Commercial Court’s exercise of discretion, while also considering the scope of appellate interference in interlocutory orders.
Discussion on Judgments:The High Court relied on several key precedents to address the issues of trademark infringement and territorial jurisdiction. In Banyan Tree Holdings (P) Ltd. v. A. Murali Krishna Reddy, 2009 SCC OnLine Del 3690, a Division Bench of the Delhi High Court initially set a stringent test for jurisdiction in online transactions, requiring purposeful availment of the jurisdiction through targeted website activity. This was cited by the appellants to challenge jurisdiction, arguing that the respondent’s online presence did not specifically target Delhi. However, the court noted that this test was modified by subsequent decisions. In World Wrestling Entertainment v. Reshma Collection, (2014) 6 SCC 429, the Supreme Court held that an interactive website accessible in a jurisdiction, where transactions are confirmed and payments made, establishes a cause of action, as the plaintiff’s offer is accepted within that jurisdiction. Similarly, Tata Sons Pvt. Ltd. v. Hakunamatata, 2016 SCC OnLine Del 3750, affirmed that a website’s accessibility and the plaintiff’s business activities, such as sales through distributors, suffice to confer jurisdiction, even without specific targeting. These cases were referenced to uphold the Commercial Court’s jurisdiction, given the respondent’s averments of selling goods through interactive websites and distributors in Delhi.
For trademark infringement, the court cited Midas Hygiene Industries v. Sudhir Bhatia, (2004) 3 SCC 90, where the Supreme Court held that a finding of trademark infringement mandates an injunction, even on the first day of hearing, and delay is not a bar to such relief. In Laxmikant V. Patel v. Chetanbhai Shah, (2002) 3 SCC 65, the Supreme Court emphasized that in passing-off cases, courts must grant injunctions promptly to prevent consumer confusion and protect the plaintiff’s goodwill. These judgments were invoked to support the Commercial Court’s decision to issue an ex-parte injunction, as the prima facie case of infringement and passing off was established. Additionally, Wander Ltd. v. Antox India Pvt. Ltd., 1990 Supp SCC 727, was cited to delineate the scope of appellate interference, clarifying that an appellate court should not disturb a trial court’s discretionary order unless it is arbitrary, capricious, or contrary to settled legal principles. The appellants’ reliance on Section 34 of the Trade Marks Act, which protects prior continuous use, was not addressed in detail, as no evidence of such use was presented at the interlocutory stage.
Reasoning and Analysis of the Judge:Justice C. Hari Shankar, delivering the judgment for the Division Bench, meticulously analyzed the issues of deceptive similarity and territorial jurisdiction. On the question of trademark infringement, the court found that “LABTRONICS” and “LABTRON INSTRUMENTS” were deceptively similar, differing only in the suffix “ICS” and the descriptive word “INSTRUMENTS.” The court reasoned that “LABTRONICS” was a coined, inventive word, not a common English term, entitling it to heightened protection. The phonetic and visual similarity, coupled with the appellants’ use of the mark for identical goods, satisfied the criteria for infringement under Section 29(2)(b) of the Trade Marks Act, which covers marks similar to a registered trademark used for identical goods, likely to cause confusion or association. The court emphasized that the prior employment of Appellant 2 with the respondent suggested a conscious adoption of a similar mark to exploit the respondent’s goodwill, reinforcing the prima facie case of infringement and passing off. The Commercial Court’s findings were upheld, as they were based on a comparative analysis of the marks and supporting documents, including photographs, trademark certificates, and social media advertisements.
On territorial jurisdiction, the court rejected the appellants’ challenge, relying on the respondent’s averments that he conducted business in Delhi through distributors and interactive websites accessible within the jurisdiction. The court noted that World Wrestling Entertainment and Tata Sons had relaxed the Banyan Tree test, holding that a plaintiff’s online sales and distribution activities in a jurisdiction suffice to establish a cause of action under Section 20 of the CPC and Section 134 of the Trade Marks Act. The respondent’s business operations in Delhi, including sales through dealers and online platforms, justified the Commercial Court’s jurisdiction. The court further clarified that Section 134 provides an additional forum for trademark suits where the plaintiff resides or carries on business, alleviating the rigors of Section 20 CPC, as elucidated in Indian Performing Rights Society Ltd. v. Sanjay Dalia, (2015) 10 SCC 161.
Regarding appellate interference, the court applied the principles from Wander Ltd., finding that the Commercial Court’s order was neither arbitrary nor perverse. The prima facie case, balance of convenience, and potential for irreparable harm favored the respondent, justifying the injunction. The court also addressed the appointment of local commissioners, finding it a reasonable measure to protect the respondent’s rights pending trial. However, it clarified that its observations were prima facie and would not bind the Commercial Court during the final adjudication.
Final Decision:On 25 July 2025, the High Court of Delhi dismissed the appeal in FAO (COMM) 189/2025, upholding the Commercial Court’s order dated 2 June 2025. The court affirmed the interim injunction restraining the appellants from using the mark “LABTRON” or any deceptively similar mark for scientific and laboratory instruments, as well as the appointment of local commissioners to seize infringing goods. The court found no grounds to interfere with the Commercial Court’s exercise of discretion, as it was based on a sound prima facie assessment of trademark infringement and passing off, supported by the respondent’s valid trademark registration and business activities in Delhi.
Law Settled in This Case:This case reaffirms several key principles in trademark law and civil procedure. It clarifies that a coined, inventive trademark like “LABTRONICS” enjoys heightened protection, and marks differing only in minor elements (e.g., suffixes or descriptive words) may be deemed deceptively similar under Section 29(2)(b) of the Trade Marks Act, particularly when used for identical goods. The judgment underscores that prior employment relationships can support inferences of intentional infringement, strengthening claims of passing off. On territorial jurisdiction, the case confirms that a plaintiff’s business activities through distributors and interactive websites accessible in a jurisdiction establish a cause of action under Section 20 CPC and Section 134 of the Trade Marks Act, aligning with the liberalized tests in World Wrestling Entertainment and Tata Sons. The decision also reiterates that appellate courts should exercise restraint in interfering with interlocutory injunctions unless the trial court’s discretion is arbitrary or contrary to law, as per Wander Ltd. Finally, it affirms that injunctions are mandatory in cases of clear trademark infringement, as per Midas Hygiene, and prompt relief is warranted in passing-off cases to prevent consumer confusion, as held in Laxmikant Patel.
Case Title: Suman Devi and Another Vs. Rakesh Kumar Sharma
Date of Order: 25 July 2025
Case Number: FAO (COMM) 189/2025
Neutral Citation: 2025:DHC:6149-DB
Name of Court: High Court of Delhi
Name of Judges: Hon’ble Mr. Justice C. Hari Shankar and Hon’ble Mr. Justice Om Prakash Shukla
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Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
