Dec 31, 2021Trademark Infringement Suits: Principles of Extra-Territoriality and Purposeful Availment Expounded
The Delhi High Court (‘Delhi HC’) in Tata Sons Private Limited v. Hakuna Matata Tata Founders & Ors.,[1] revisited the ‘purposeful availment’ test to establish the criteria for Indian Courts to extend jurisdiction to and grant interim reliefs against foreign-seated defendants in a trademark infringement suit.
In the instant matter, the defendants, situated in the UK and United States, were operating the websites – www.tatabonus.com and www.hakunamatata.finance for sale and purchase of crypto currencies under the name ‘TATA coin’ and ‘$TATA’. The plaintiff claimed that it provided a platform for trading crypto currency under its well-known trademark ‘TATA’, thus seeking an interim as well as permanent injunction against the use of the trademark ‘TATA’ as part of the defendants’ crypto currency offering and/or domain names. The specific issue before the Delhi HC was whether and under what circumstance the plaintiff can seek injunction against the defendants, who are located outside the sovereign borders of India.
The plaintiff argued that (i) there was ‘purposeful availment’ on the part of the defendants because their cryptocurrency was available for purchase to customers in India and specifically, Delhi; (ii) that this resulted in an adverse impact on the plaintiff’s business as well as potential dilution of the plaintiff’s registered ‘TATA’ marks in India; and (iii) the defendants in the ‘White Paper’ published by them had admitted that they were involved in financial activities relating to India, and that the defendant websites received significant internet traffic from Indian visitors.
However, the Delhi HC denied the grant of interim injunction and held that mere accessibility of the website of the overseas defendants is not sufficient to empower a Court to exercise jurisdiction over the defendants. The Delhi HC observed that at the very least the website has to be interactive and coupled with interactivity of the website, and there has to be an overt intent on the part of the defendants to target consumers in India. The Delhi HC clarified that the mere fact that there was some amount of traffic on the defendants’ websites from Indian users would not be enough to satisfy the ‘purposeful availment’ test.
[1] CS(COMM) 316/2021 & I.A.8000/2021.