Jurisdictional issue over cause of action and accessibility

Lex Orbis
Manisha Singh Nair
[email protected]

The universal nature of the Internet has spurred jurisdictional issues time and again. The very nature of technology results in complex situations wherein recourse is taken under the existing law of jurisdiction held by Section 20 of the Civil Procedure Code.

Section 20 reads as: “…every suit shall be instituted in Court within the local limits of whose jurisdiction- (a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or (b) any of the defendants, where there are more than one, at the time of the commencement of the suit actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or(c) the cause of action, wholly or in part, arises...”.

The essential ingredient of this section is “cause of action” and where it arises. In internet disputes, cause of action could arise anywhere in the world.

In India, courts are attempting to evolve a separate jurisprudence for addressing such situations. In India TV, Independent News Service Pvt. Ltd Case v. India Broadcast Live LLC & Ors., it was held that the mere accessibility of the website of owners in a certain place does not in itself attract jurisdiction of the court. Instead, it should be coupled with “sufficient connection” between the defendants' activities in that place.

In Lilly Icos LLC v. Richie Laboratories Ltd 2009 (41) PTC 297, the Delhi High Court had to contend with trademark infringement by passing off. In the case, the plaintiff tried to attract jurisdiction of the Delhi High Court by arguing that the defendants had been operating an interactive website in Delhi wherein customers could subscribe to their products and services. However, after discussing the facts, the court found that jurisdiction couldn't be attracted as the “level of interactivity” between the operators and the consumers did not amount to “sufficient connection”.

The cause of action arose when Richie Laboratories launched a drug named TADARICH, which was identical to the shape and size of CIALIS, which also contained the TADAFIL drug and was the outcome of research conducted by Lilly Icos. Lilly Icos is a corporation registered and existing in the US that has a technical association with Eli Lilly & Co and owns trademarks in India and elsewhere. Lilly Icos formed the company for the purposes of developing, manufacturing, promoting and selling a pharmaceutical drug for the treatment of male erectile dysfunction, naming it CIALIS. An application for registration was filed in the US and was also advertised in Trademark Journal for registration in India. Lilly Icos averred that the trademark CIALIS was given a unique shape and colour, and as a result was distinct to the consumer and public at large.

Lilly Icos later came across an advertisement on the Richie Laboratories website www.richielabs.com: a tablet under the brand name of TADARICH that had identical getup and shape to that of the CIALIS tablet trade dress. Certain other similarities were observed such as the display of the numeral '20'. This was written instead of Lilly's 'C-20' and so Richie Laboratories' brand name was alleged to be both deceivingly and confusingly similar to Lilly Icos's mark. Aggreived by this, relief was sought by initiating a passing off action and a grant of permanent injunction restraining the defendants from using a confusingly similar mark and trade dress.

The choice of name 'Richie Laboratories', similar to TADARICH, has caused irreparable harm and damage to Lilly Icos as it dilutes the exclusivity of its drug containing Tadalafil and also threatens to further erode the distinct nature of the trademark. The offending trademarks are being advertised on the Richie Laboratories website, and can be accessed in Delhi and sold all over the world. This was the reason for invoking the jurisdiction of the Delhi High Court.

Richie Laboratories counter-challenged the jurisdiction of the court by stating that the mere accessibility of a website in a particular place may not itself be sufficient for the courts to exercise jurisdiction. The court delved into the nature of the website, such as whether it was an active one or a passive one. Thus, for cause of action to arise under Section 20 of CPC, determination of the level of interactivity is crucial.

The Court concluded that Richie Laboratories' website www.expresspharmapulse.com, which contained information on the Richie Laboratories company and also the drug TADARICH, is passive in nature with no section relating to subscription to its services. The product TARADICH was discontinued and instead the drug containing Tadafil, under the name of TADASIP, is being marketed and is in no way similar to the Lilly Icos mark. Moreover, there was no evidence of the sale of its products in Delhi. Therefore, the Court concluded that there was no trademark infringement.