Indian Performing Rights Society Ltd. v. Sanjay Dalia (2015): Supreme Court Clarifies Territorial Jurisdiction in Copyright & Trademark Infringement Suits

A detailed analysis of the landmark Supreme Court judgment restricting forum shopping and interpreting Section 62 of the Copyright Act, Section 134 of the Trade Marks Act, and Section 20 CPC in intellectual property disputes.

Introduction

The question of where athe Tradentiff can sue for infringement of copyright or trademark has always carried immense practical significance for litigants across India. Parliament, recognising the hardship faced by authors and trademark owners who had to travel long distances to vindicate their rights, inserted special provisions in the Copyright Act and the Trade Marks Act allowing suits to be filed at the place where the plaintiff resides or carries on business. However, this beneficial provision came to be misused by large corporations who, despite having their principal place of business and the cause of action arising at one location, chose to file suits at distant places merely because they maintained a branch office there. This judgement of the Supreme Court addresses this precise mischief and lays down an important interpretative principle balancing the convenience of the plaintiff with the need to avoid undue hardship to the defendant.

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Factual and Procedural Background

The case arose out of a batch of appeals dealing with a common question of law relating to the interpretation of Section 62 of the Copyright Act, 1957 and Section 134 of the Trade Marks Act, 1999, particularly with regard to the place where a suit for infringement can be instituted.

In the lead matter, the plaintiff had filed a suit seeking to restrain the defendant from infringing its rights without obtaining a licence. The defendant owned cinema halls in Maharashtra and Mumbai, and the entire cause of action, as pleaded, had arisen in Mumbai. Despite this, the suit was filed in the High Court of Delhi on the ground that the plaintiff had a branch office in Delhi and carried on business there. It was not disputed that the plaintiff’s head office was situated in Mumbai. The defendant objected to the territorial jurisdiction of the Delhi court, and this objection was upheld both by the single judge and later by the division bench of the Delhi High Court, which held that the suit ought to have been filed at Mumbai. This order was challenged before the Supreme Court.

In a connected matter, a suit had been filed concerning infringement of a trademark relating to a well-known magazine. The registered office of the concerned entity was in Mumbai, where the magazine was also processed and published. The plaintiff sought to invoke the jurisdiction of the Delhi court on the ground that it had a branch office in Delhi and later sought amendment of the plaint to strengthen this plea. The amendment application was rejected by the Single Judge, but the Division Bench allowed the amendment, giving rise to a further appeal before the Supreme Court.

Given the recurring nature of this jurisdictional controversy and the divergent approaches taken by different High Courts over the years, the Supreme Court took up the appeals together to settle the correct interpretation of the relevant statutory provisions.

Dispute Before the Court

The core question before the Court was whether Section 62(2) of the Copyright Act and Section 134(2) of the Trade Marks Act, both of which permit a plaintiff to file a suit at the place where he resides or carries on business, could be read to allow a plaintiff to choose a distant forum such as a branch office location, even when the cause of action had wholly or partly arisen at the plaintiff’s principal place of business or ordinary residence.

The appellants argued that these provisions, being non obstante clauses beginning with the words notwithstanding anything contained in the Code of Civil Procedure, created an unqualified additional right in favour of the plaintiff to sue at any place where it resided or carried on business, regardless of where the cause of action arose. According to this view, the restrictions found in Section 20 of the Civil Procedure Code, 1908, had no application once the special provisions of the Copyright Act and Trade Marks Act were invoked.

The respondents, on the other hand, contended that such an interpretation would open the door to abuse, particularly by large corporations and multinational entities having offices in multiple cities, who could drag defendants to inconvenient and unconnected places merely by citing a branch office, even though neither the cause of action nor the principal business had any connection with that place. They argued that the provisions were intended to remove hardship for the plaintiff, not to create a tool for harassing defendants.

In simple terms, the dispute was about whether a company having its head office and the entire cause of action in one city could nevertheless drag the defendant to litigate in a completely different city merely because it maintained a subordinate office there.