INTERNATIONAL TRADE LAW

Banyan Tree Holdings Ltd. v. M. Murali Krishna Reddy & Anr

SUBMITTED TO : SUBMITTED BY:

PROF. AMITA VERMA PAREEN JINDAL
UILS ROLL NO. 268/19
PANJAB UNIVERSITY SECTION E

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CONTENTS

SR. NO. TOPIC PAGE NO.

1. ACKNOWLEDGEMENT 3

2. INTRODUCTION 4-5

3. CASE ANALYSIS 6-7

4. JUDGHEMENT 8-10

5. CURRENT SCENARIO: 11-12

IMPLICATIONS OF THE JUDGEMENT

6. CONCLUSION 13

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Acknowledgement:

I would like to convey my heartfelt regards to my teacher who always gave me valuable
suggestions and guidance during the completion of this project. She has been a source of
inspiration to me during the completion of my project. She helped me understand and remember
important details of the project that I would otherwise forget. My project has been a success only
because of her guidance.

Pareen jindal

268/19

B.Com. LLB (Hons)

10th semester

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Introduction
E-Commerce has made the world a global village today. Some years ago when a business used to
open, it had to largely rely on its local customers for its sustenance. However, with the inception
of the internet everything changed, a business now has its audience all around the world. The
conduct of business has been revolutionized by the internet wherein it has enabled the businesses
to connect with their customers more rapidly and effectively and speed up their services as well.

Judicial Approach to Trademark Jurisdiction in Online Transactions

With the increasing number of businesses moving online where everything can now be
purchased on the World Wide Web, there is an all-time increase in the number of legal disputes
in the e-commerce sector. These disputes have a novel character to them unlike their counterparts
where business places in case of traditional business were permanent within a defined
geographical location, whereas the e-commerce business has a virtual existence, thus raising an
important question of jurisdiction in the plethora of cases related to cybercrime, infringement of
trademarks and domain name that come up everyday.

The determination of the jurisdiction of the Court in cases of Trademark Infringement poses a
great difficulty. Jurisdiction is the first step involved in deciding any dispute and in order to
effectively decide a dispute, it is very important to determine whether a court is competent to
decide on a particular matter or not. In civil cases the questions related to jurisdiction are
governed by Section 20, Code of Civil Procedure 1908, the test is the place where the defendant
resides or cause of action arises.

Recently Delhi High Court can be seen as the pivot for all disputes related to IP Laws. It has
passed various judgments interpreting the provisions related to the determination of jurisdiction
where either one or both the parties have an online presence.

Banyan Tree Holding (P) Limited vs A. Murali Krishna Reddy & Anr1

1
2003 (27) PTC 265 (Del) [2] 2007 (35) PTC 177 (Del.) [3] CS (OS) No. 894/2008 [4] CS (COMM) 111/2019

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The Delhi High Court, in this case, decided the question of jurisdiction of the Court under
Section 20(c) of Code of Civil Procedure, 1908. The Division Bench, in a well thought out
judgment, laid down that in cases of passing off or infringement, where the plaintiff is not
carrying on his business within the jurisdiction of the court and there is no long-arm statute, the
question whether this court has the jurisdiction to entertain the suit would be decided if the
plaintiff shows that the defendant has ‘Purposefully Availed’ the jurisdiction of the forum court
to himself. Further, in order to prove this, the plaintiff will have to show real commercial
transactions entered into by the Defendant with an internet user residing within the jurisdiction of
the forum court. In addition to Section 20(c) CPC, the plaintiff also has an option of approaching
the Court under Sections 62(2) and 134(2) of Copyright Act, 1957 and the Trademark Act, 2002
respectively.

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Banyan Tree Holdings Ltd. v. M. Murali Krishna Reddy & Anr
(2008) 38 PTC 288
In the High Court of Delhi
CS (OS) 894/2008
Before Justice S. Ravindra Bhat
Decided on August 11, 2008

Relevancy of the Case: Does the accessibility of a website at a particular location invite the local
court’s jurisdiction in a passing-off claim?

Statutes and Provisions Involved

• The Code of Civil Procedure, 1908 (Section 20)

• The Trade Marks Act, 1999 (Section 134(2))

• The Copyright Act, 1957 (Section 62(2))

• The Information Technology Act, 2000 (Section 2(1)(j), 2 (1)(k), 11, 12, 13, 75)

Relevant Facts of the Case

• The plaintiff had adopted and used the word mark ‘Banyan Tree’ in 1994, which had
acquired a secondary meaning due to its extensive usage.

• The plaintiff’s website has been accessible in India since 1991 and has advertised its
products and services in the country.

• In collaboration with The Oberoi Group, the plaintiff operates 5 spas across India.
Despite being a registered proprietor for the mark in different countries, it does not hold
any registration in India but has sought them.

• In October 2006, the defendants, who reside in Andhra Pradesh, initiated a work named
Banyan Tree Retreat.

• The name resembles the plaintiff’s mark and belongs to the same trade/industry. It is
deceptive in nature. Therefore, the plaintiff sought an ex-parte interim injunction to
restrain the defendants from using the mark.

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Prominent Arguments by the Advocates

• The plaintiff’s counsel argued that the court has territorial jurisdiction on the grounds of
Section 20 of the Code of Civil Procedure, 1908. The defendant’s brochure depicts the
business to be in Delhi. Their website is interactive in nature and not passive. The
plaintiff also relied on the doctrine of passing off.

• The plaintiff’s counsel also highlighted Section 62(2) of the Copyright Act, 1957, to sue
the defendant in a court within whose jurisdiction the plaintiff resides or works for gain.

Opinion of the Bench

• The mere fact that a website is accessible to a specific place will not invite the court’s
jurisdiction to a passing-off action. Factors like the level of interactivity and undertaking
of commercial activity will also play an imperative role.

• The bench analysed the position in the US with the help of Zippo Manufacturing Co. v.
Zippo Dot Com, Inc. Drawing inspiration from the UK, it referred to the case of 1-800
Flowers Inc v. Phonenames.

• The bench believed a division bench should decide this case and settle the issue with
authority.

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JUDGEMENT
Two cases preceded the landmark Banyan tree judgement and they posed two completely
different views about when a court has jurisdiction over online conflicts. In the case of Casio
India Co. Limited v. Ashita Tele Systems Fvt. Limited2 The Delhi High Court granted Casio an
injunction against Ashita Tele Films from using Casio's name in their website as it was too
similar to the Company’s official brand name and had a certain deceptive quality to it. The
justification the court gave for invoking territorial jurisdiction was that the website could be
accessed from Delhi. Secondly, in the case of Independent News Service Pvt. Limited v. India
Broadcast Live Llc And Ors3 the single judge bench held that there must be a level of
interactiveness that a website must offer to a large base of consumers for it to fall under the
jurisdiction of the court. These opposing views were clarified in the Banyan tree judgement.

The case of Banyan Tree Holding (P) Limited v. A. Murali Krishna Reddy and Anr[3] was a suit
for passing off filed by the Plaintiff who was using the word mark 'Banyan Tree' since 1994
against the use of the word 'Banyan Tree Retreat' and advertisement of the same on the website
www.makprojects.com/banyantree of the defendants. This website was accessible to the public
residing in Delhi, hence the Delhi High Court was approached. The most striking peculiarity of
the case was that neither of the parties were located within the territorial Jurisdiction of the
Court. Since there was past jurisprudence on the matter put forth a conflicting view, the matter
was referred to a division bench to settle it one and for all.

The court held that merely accessing a website in Delhi would not satisfy the exercise of
jurisdiction by the Delhi court. Rather, it has to be shown that the defendant "purposefully
availed" itself of such jurisdiction, by demonstrating that the use of the website was with intent to

2
2003 (27) FTC 265 (Del)
3
ILR (2007) 2 Del 1231

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conclude a commercial transaction with the site user, and such use resulted in injury or harm to
the plaintiff. Therefore, for the court to have jurisdiction over such matters, the applicant has to
prove that the defendant expected a commercial transaction to take place on the website and this
transaction was harmful to the plaintiff.

“Mere accessibility of the Defendants’ website in Delhi would not enable a court to exercise
jurisdiction. A passive website, with no intention to specifically target audiences outside the State
where the host of the website is located, cannot vest the forum court with jurisdiction. To such
extent, the court has overruled the proposition in Casio India Co. Limited v. Ashita Tele Systems
Pvt. Limited4 .

Jurisdiction In IP Matters In Light Of The Banyan Tree Judgment

Jurisdiction is an aspect of state sovereignty and refers to judicial, administrative and legislative
competence. The term Jurisdiction in common legal parlance would mean the right to administer
justice. It may be defined as the power or authority to hear and determine a cause to adjudicate
and exercise any judicial power in relation to it. However, in the current era of digitalization,
there exists an area where the concept of jurisdiction gets a bit tricky- the World Wide Web.

When an applicant approaches a court to institute a suit for trademark infringement or passing
off, Indian law recognizes and gives three forms of jurisdiction to the courts; territorial,
pecuniary and subject-matter jurisdiction. Now to determine which form of jurisdiction will be
invoked, the “cause of action” is the basis of the decision. The cause of action of the particular

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2003 (27) PTC 265 (Del).”

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suit determines whether a certain court has jurisdiction over a matter or not. The Code of Civil
Procedure, 1908 provides the procedure for the filing of suits in competent courts. Furthermore,
the procedure for filing suits on the matter of trademark infringement has also been given in the
Trade marks Act 1999. Section 134(2) of the Trade Marks Act, 1999 provides for “additional
forum” to the proprietor of a registered trade mark to institute a suit for infringement of in whose
jurisdiction, the said proprietor actually and voluntarily resides or carries on business or works
for gain, at the time of institution of suit.

The law surrounding jurisdiction has always been kept and interpreted in a straight-forward and
clear manner; however, the law gets complicated when it comes to infringements done online.
Due to these conflicts, the judiciary has shown high levels of dynamism in their approach and
has widened the meaning for “the cause of action” by taking into consideration the growing
relevance of e-commerce and including the use of the internet for valid and active business
transactions as the situation of jurisdiction.

Final Decision

• The bench passed an order to transfer the case to a division bench.

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CURRENT SCENARIO: IMPLICATIONS OF THE JUDGEMENT

Undoubtedly the decision of Banyan Tree Holding (P) Limited v. A. Murali Krishna Reddy and
Anr have added a new chapter on the protection of trademarks in India. With development, e-
commerce is gaining high amounts of relevance. Various start-ups in today’s day and age have
just an online presence and carry out their operations and transactions on the web. The
amplification of the ambit of the principle of 'cause of action' in decision of the Banyan Tree
Holding Pvt Ltd would indisputably tighten the screw on the infringement of trade mark and
passing off goods or services through the active use of internet in spite of not having a physical
presence before the judicial forums.

The decision provided in the Banyan tree judgement has been upheld in various cases post 2009
and remains the current position of the Indian courts with regard to jurisdiction in online
infringement matters. The opinion of the court, however, is still evolving and changing to include
a wider interpretation to the judgement laid down in Banyan tree. In the very recent case of
Exxon Mobil Corporation vs Exon Corp Pvt Ltd5. the court granted an injunction to the Plaintiff
and restricted the Defendant from using the mark “EXON” which was very similar to the mark
used by the Plaintiff. It was submitted that the mark ‘EXXON’ is a registered trademark in over
160 jurisdictions, including in India since 1967 by the Plaintiffs. The defendants claimed, among
other arguments, that the court had no territorial jurisdiction to hear the matter.

While dealing with jurisdiction issues, the court noted that the Defendant’s website and links on
social media platforms showed the Defendant’s claim of carrying on business throughout India.
It was shown that the Defendant’s website provided for online payment to be made and contained
banking terms, and an IFSC code for receiving payments. The court, while relying on the Banyan
Tree judgement when it came to the “commercial transaction” aspect, further added that if a

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CS (COMM) 111/2019

11
producer has intentionally made his business available in a particular country or geographical
area, that court will have jurisdiction over the matter. The court held that since the Defendant has
made services available by the use of various social media platforms with the Indian public as a
consumer base, the Indian court would have territorial jurisdiction over the matter.

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Conclusion

Online transactions are a rather new concept for our Country right now and consequently, there is
a lot of discussion and confusion surrounding it. The Judicial Precedents till now have been time
and again criticized the ground that selling products/services online gives an option to the
plaintiff of Forum Shopping i.e. the choice of Forum based on his convenience without paying
any regard to the difficulty which the defendant might have to face. What is needed is a uniform
approach to be followed in all cases of jurisdiction with respect to Online Transactions with
respect to Trademarks. Therefore there is a need for a Long Arm Statute or a Specific Law which
deals with the question of Jurisdiction so as to enable a fair and speedy trial.

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