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Exxon Mobil Corporation v. P.K. Sen
Factual and Procedural Background
The plaintiffs, Exxon Mobil Corporation (a corporation under the laws of New Jersey, USA and the registered proprietor of the trademark "EXXON") and Exxonmobil Lubricants Private Limited (an Indian subsidiary and permitted user of the trademark), instituted a suit for permanent injunction against the defendant, P.K. Sen, alleging infringement of the registered trademark "EXXON". The defendant, carrying on business in Kolkata, challenged the territorial jurisdiction of the Delhi High Court, contending that the plaintiffs' pleadings did not disclose that this Court had jurisdiction to try the suit. The defendant sought rejection of the plaint or, alternatively, its return for filing in the appropriate territorial jurisdiction. The plaintiffs relied on Section 134(2) of the Trade Marks Act, 1999 to invoke the jurisdiction of this Court. The matter proceeded with pleadings and arguments on the defendant’s application under Order 7 Rules 10 and 11 of the Code of Civil Procedure (CPC).
Legal Issues Presented
- Whether the plaintiff no.1, as the registered proprietor instituting the suit for infringement, can be said to actually and voluntarily reside or carry on business or personally work for gain within the territorial jurisdiction of this Court by virtue of its subsidiary and permitted user plaintiff no.2 having its registered office and carrying on business within this jurisdiction, within the meaning of Section 134(2) of the Trade Marks Act.
- Whether plaintiff no.2, a permitted user distinct from a registered user and not entitled under Section 53 of the Trade Marks Act to institute proceedings for infringement, can be joined as plaintiff no.2 in the suit instituted by plaintiff no.1, and whether plaintiff no.2’s presence within the jurisdiction also vests jurisdiction in this Court under Section 134(2).
- The effect, if any, of the inclusive definition of "person" in the explanation to Section 134(2) of the Trade Marks Act.
Arguments of the Parties
Defendant's Arguments
- The plaint does not disclose territorial jurisdiction of this Court as the defendant carries on business only in Kolkata and not in New Delhi or Northern India.
- The plaintiffs invoked jurisdiction relying on Section 134(2) of the Trade Marks Act, but the permitted user (plaintiff no.2) has no right to institute infringement proceedings under Section 53, thus cannot invoke Section 134(2).
- Plaintiff no.1, the registered proprietor, has no place of business in India.
Plaintiffs' Arguments
- At the stage of Order 7 Rules 10 & 11 CPC, only the averments in the plaint are to be considered, which show this Court has territorial jurisdiction.
- Section 53 must be read with Section 52, which allows a registered user to institute infringement proceedings with the registered proprietor impleaded as defendant; thus, plaintiff no.2’s position as permitted user is not fatal to jurisdiction.
- Joining plaintiff no.2, even if not entitled to sue, is at most a misjoinder, not a ground for return of plaint.
- Plaintiff no.2 is a subsidiary and permitted user of the trademark in India, based in New Delhi, and plaintiff no.1 does business in India through plaintiff no.2.
- Section 48(2) deems permitted use by plaintiff no.2 as use by plaintiff no.1 for infringement purposes.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Exphar Sa Vs. Eupharma Laboratories Ltd. (2004) 3 SCC 688 | Interpretation of Section 62(2) of the Copyright Act regarding jurisdiction and the concept of "person instituting the suit". | Applied analogously to Section 134(2) of the Trade Marks Act to hold that a permitted user carrying on business within jurisdiction can confer territorial jurisdiction on the Court. |
| Dhodha House Vs. S.K. Maingi (2006) 9 SCC 41 | Definition of "carrying on business" includes business through agents or subsidiaries without physical presence. | Applied to hold that plaintiff no.2 carrying on business in name and style of plaintiff no.1 satisfies conditions for territorial jurisdiction. |
| Ultratech Cement Limited Vs. Dalmia Cement Bharat Limited, 2014 SCC OnLine Bom 1179 | Similar jurisdictional issue involving permitted users and trademark infringement suits. | Noted as a precedent where the High Court of Bombay dismissed a similar application for rejection of plaint, supporting plaintiffs' position. |
| Heinz Italia S.R.I. Vs. D. Koteswara Rao, MANU/DE/2560/2008 | Clarification that "carries on business" does not require physical presence but can be through agents or subsidiaries. | Relied upon to support the understanding of territorial jurisdiction under Section 134(2). |
| Indian Performing Rights Society Ltd. Vs. Sanjay Dalia (2015) 10 SCC 161 | General principles on jurisdiction in intellectual property matters. | Distinguished by the Court as not relevant to the present controversy. |
| WWF International Vs. Mahavir Spinning Mills Ltd., 56 (1994) DLT 271 | Referenced in context of trademark infringement jurisdiction. | Referred to by plaintiffs' counsel in support of their position on territorial jurisdiction. |
| Caprihans (India) Private Ltd. Vs. Registrar of Trade Marks, 1973 SCC OnLine Cal 134 | Trademark law principles relevant to jurisdiction and infringement. | Referred to by plaintiffs' counsel to support arguments on permitted user rights and jurisdiction. |
Court's Reasoning and Analysis
The Court examined the statutory framework under the Trade Marks Act, particularly Sections 48, 52, 53, and 134(2), to determine the territorial jurisdiction issue. It noted that Section 134(2) extends jurisdiction to the Court within whose limits the person instituting the suit resides or carries on business, where "person" includes both the registered proprietor and the registered user.
The Court distinguished between a "registered user" and a "permitted user," observing that while Section 53 bars a permitted user from instituting infringement proceedings, the presence of a permitted user carrying on business within the jurisdiction can confer jurisdiction on the Court under Section 134(2) when the registered proprietor institutes the suit.
Relying primarily on the Supreme Court’s decision in Exphar Sa Vs. Eupharma Laboratories Ltd., which interpreted a similar provision in the Copyright Act, the Court held that the presence of plaintiff no.2 (the permitted user subsidiary) carrying on business within Delhi suffices to confer jurisdiction on this Court for the suit instituted by plaintiff no.1 (the registered proprietor).
The Court further reasoned that "carrying on business" does not necessitate physical presence but can be through agents or subsidiaries, citing Dhodha House Vs. S.K. Maingi and Heinz Italia S.R.I. Vs. D. Koteswara Rao. The Court rejected the defendant’s contention that plaintiff no.2’s status as a permitted user precluded jurisdiction, emphasizing the inclusive definition of "person" in the explanation to Section 134(2).
The Court declined to follow the defendant’s reliance on Indian Performing Rights Society Ltd. Vs. Sanjay Dalia, distinguishing its facts and holding it irrelevant to the present case.
Overall, the Court found no merit in the defendant’s application to reject or return the plaint for lack of territorial jurisdiction.
Holding and Implications
The defendant’s application for rejection of the plaint was dismissed.
The Court held that the presence and business activities of the permitted user subsidiary (plaintiff no.2) within the territorial jurisdiction of the Delhi High Court sufficed to vest jurisdiction under Section 134(2) of the Trade Marks Act in a suit instituted by the registered proprietor (plaintiff no.1). This decision affirms the expanded scope of territorial jurisdiction in trademark infringement suits involving permitted users and proprietors, without requiring the proprietor’s physical presence within the jurisdiction.
No new precedent was set beyond the application of existing principles, and the decision directly affects the parties by allowing the suit to proceed in this Court.
*IN THE HIGH COURT OF DELHI AT NEW DELHI
%ndDate of decision: 22 July, 2016
+ CS(OS) No.2375/2015 & IA No.16263/2015 (u/O 39 R-1&2 CPC). EXXON MOBIL CORPORATION & ANR ..... Plaintiffs
Through: Ms. Anuradha Salhotra, Mr. Sumit Wadhwa and Mr. Yatin Grover,
Advs.
Versus
P.K. SEN ..... Defendant
Through: Mr. S. Chakraborty and Ms. Sonia Dutt, Advs.
CORAM:-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW IA No.20626/2015 (of the defendant under Order 7 Rules 10 & 11 of the
CPC).
1. The defendant seeks rejection of the plaint on the ground of the averments in the plaint not disclosing this Court to be having territorial jurisdiction to try the suit and in the alternative return of the plaint to the plaintiffs for filing in the Court of appropriate territorial jurisdiction.
2. Pleadings in the application were completed and the counsels have been heard on 20thJuly, 2016 and today.
3. It is the contention of the counsel for the defendant/applicant (i) that the two plaintiffs Exxon Mobil Corporation, United States of America (USA) and Exxonmobil Lubricants Private Limited have instituted this suit
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for permanent injunction to restrain the defendant from infringing the registered trademark 'EXXON' of the plaintiffs and for ancillary reliefs; (ii) that as per the averments in the plaint the plaintiff no.1 Exxon Mobil Corporation is a Corporation existing under the laws of the State of New Jersey, USA and is the proprietor of the trademark of which infringement is alleged and the plaintiff no.2 Exxonmobil Lubricants Private Limited is the permitted user of the said trademark; (iii) the defendant carries on business at Kolkata and has never and does not carry on any business in New Delhi or for that matter in Northern part of India and it is not the plea of the plaintiffs also; (iv) that the plaintiffs have invoked the jurisdiction of this Court by invoking Section 134(2) of the Trade Marks Act, 1999; (iv) in view of Section 53 of the Trade Marks Act, a permitted user has no right to institute any proceedings for infringement and thus the plaintiff no.2 cannot avail of Section 134(2) supra; and, (v) the plaintiff no.1 who is claimed to be the registered proprietor of the trademark does not have any place of business in India.
4. The plaintiffs in their reply to the application have pleaded (i) that at the stage of Order 7 Rules 10 & 11 of the Code of Civil Procedure, 1908 (CPC) only the averments in the plaint are to be seen and as per which this
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Court has territorial jurisdiction; (ii) that Section 53 has to be read in continuation of Section 52 of the Trade Marks Act which allows a registered user of trademark to institute a suit for infringement without making the registered proprietor a plaintiff though in such a suit the registered proprietor has to be impleaded as a defendant; (iii) even if the plaintiff no.2 has no right to file a suit for infringement, the joining of the plaintiff no.2 can at best be a case of misjoinder of the parties and not a case for return of the plaint; (iv) that though the first plaintiff being the registered proprietor of the trademark is based in USA but the second plaintiff is a subsidiary as well as the permitted user of the trademark in India and is based in New Delhi and the first plaintiff is doing business in India through the second plaintiff; (v) as per Section 48(2) of the Trade Marks Act, the permitted use of a trademark is deemed to be used by the proprietor - thus all use of the trademark 'EXXON' by the second plaintiff is deemed to be use of the same by the first plaintiff for the purposes of infringement of the trademark under the Act.
5. The defendant in its rejoinder (i) has denied that the plaintiff no.2 is the subsidiary of the plaintiff no.1 or is carrying on business in India or the plaintiff no.1 is carrying on business through the plaintiff no.2; and, (ii) has
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pleaded that Section 48(2) of the Trade Marks Act has no relevance to the question.
6. I may in the aforesaid context notice that the plaintiffs in the plaint have pleaded (i) that the second plaintiff is an Indian subsidiary of the first plaintiff and is a licensee/permitted user of the first plaintiff's trademark in India; (ii) that the word 'EXXON' is registered as a trademark in at least 160 jurisdictions of the world and in India there are over 39 registrations of the word 'EXXON' for a wide variety of goods with the earliest registration for 'EXXON' trademark in India dating back to 28thOctober, 1967; (iii) that the first plaintiff owns and maintains the website www.exxonmobil.com, accessible from India; (iv) that the defendant has a website www.exonengineering.com; and, (v) this Court has jurisdiction to entertain and try the suit as the second plaintiff which is a subsidiary of the first plaintiff and permitted user of the mark has its office in New Delhi and by virtue of Section 134(2) of the Trade Marks Act.
7. Section 134(2) of the Trade Marks Act vests the Court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding for infringement of a registered trademark or relating to any right in a registered trademark, the person instituting the suit or proceeding, or,
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where there are more than one such persons, any of them actually and voluntarily resides or carries on business or personally works for gain. The explanation thereto provides that for the purposes of Sub Section (2),
"person" includes the registered proprietor and the registered user.
8. Section 48(1) of the Act provides for registration of a person other than the registered proprietor of the trademark as a registered user thereof in respect of any or all of the goods or services in respect of which the trademark is registered. Sub Section (2) thereof provides that the permitted use of a trademark shall be deemed to be use by the proprietor thereof.
9. Section 48 uses the expression "registered user" and "permitted use"
in Sub Sections (1) and (2) thereof respectively. Thus the Act envisages permitted use of the trademark without the person to whom such permission has been given being a registered user of the trademark. The distinction becomes further evident from Section 2(1)(r) of the Act which while defining permitted use, in Clause (i) thereof provides for permitted use by a registered user and in Clause (ii) thereof provides for permitted use by a person other than registered proprietor and registered user. Such permitted use can be by a person with whom the registered proprietor or the registered user is connected in the course of trade in respect of which the trademark
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remains registered and by consent of the registered proprietor contained in a written agreement and which person complies with any conditions or limitations to such use or registration of the mark is subject.
10. The plaintiff no.2 thus, as per the averments in the plaint, is a permitted user of the trademark for infringement of which the suit has been filed and of which the plaintiff no.1 is the registered proprietor.
11. Section 52 of the Act entitles a registered user of the trademark to in his name institute proceedings for infringement of the trademark on the condition that the registered proprietor shall be impleaded as defendant to such suit. Section 53 provides that a permitted user within the meaning of Section 2(1)(r)(ii) shall have no right to institute any proceedings for any infringement.
12. The questions which arise for consideration in the aforesaid legal scenario are (i) whether the plaintiff no.1 as the registered proprietor of the trademark instituting this suit for infringement of registered trademark can be said to actually and voluntarily reside or carry on business or personally work for gain within the local limits of jurisdiction of this Court within the meaning of Section 134(2) by the reason of its subsidiary and permitted user
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plaintiff no.2 having its registered office and carrying on business within the territorial jurisdiction of this Court; (ii) whether the plaintiff no.2, a permitted user a distinct from registered user and though not entitled by virtue of Section 53 to institute any proceeding for infringement can be added as plaintiff no.2 to a proceeding for infringement by the plaintiff no.1 and whether the factum of the plaintiff no.2 having its registered office within the local limits of jurisdiction of this Court also vests jurisdiction in this Court within the meaning of Section 134(2) of the Act; and, (iii) what is the effect if any of the definition of 'person' in the explanation to Section 134(2) of the Act being an inclusive one.
13. The counsel for the plaintiffs relied upon Venkateswaran on Trade Marks & Passing Off, Sixth Edition to contend that permitted use is use by the proprietor of the trademark. No text book or authority is required for the said purpose as it is so expressly provided by Section 48(2) also. However the question as aforesaid is, whether permitted use of the trademark within the jurisdiction of the Court amounts to the registered proprietor of the trademark carrying on business or personally working for gain within that jurisdiction.
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14. The counsel for the plaintiffs also referred to (i) WWF International Vs. Mahavir Spinning Mills Ltd. 56 (1994) DLT 271; (ii) Caprihans (India) Private Ltd. Vs. Registrar of Trade Marks 1973 SCC OnLine Cal 134; (iii) Heinz Italia S.R.I. Vs. D. Koteswara Rao MANU/DE/2560/2008; and, (iv) Ultratech Cement Limited Vs. Dalmia Cement Bharat Limited
2014 SCC OnLine Bom 1179.
15. The counsel for the defendant referred to Indian Performing Rights Society Ltd. Vs. Sanjay Dalia (2015) 10 SCC 161.
16. In my view the question is no longer res integra and is fully covered by Exphar Sa Vs. Eupharma Laboratories Ltd. (2004) 3 SCC 688 though in the context of Section 62(2) of the Copyright Act, 1957, which is pari materia to Section 134(2) supra. There, the suit for infringement of copyright was filed by the owner of the copyright and the person with whom the owner of the copyright had entered into a agency/manufacturing agreement to restrain the defendant situated beyond the territorial jurisdiction of the Court from infringing the copyright. The Division Bench of this Court held that this Court had no territorial jurisdiction to entertain the suit and ordered the plaint to be returned. Setting aside the judgment of the Division Bench, the Supreme Court held (i) that the object and reason for
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introduction of Section 62(2) was not to restrict the owners of copyright to exercise their rights but to remove any impediment from their doing so; (ii) Section 62(2) cannot be read as limiting the jurisdiction of the Court only to cases where the person instituting the suit or other proceedings or where there are more than one such persons, any of them actually and voluntarily resides or carries on business; (iii) Section 62(2) prescribes an additional ground for attracting the jurisdiction of a Court over and above the 'normal' grounds as laid down in Section 20 of the CPC; (iv) that the person with whom the owner of the copyright had an agency/manufacturing agreement carried out business within the jurisdiction of the Delhi High Court and the said person was certainly "a person instituting the suit" within the meaning of Section 62(2) of the Copyright Act; the Division Bench went beyond the express words of the Statute and negatived the jurisdiction of the Court because it found that such person had not claimed ownership of the copyright of the trademark infringement of which was claimed in the suit; and, (v) such person may not be entitled to the relief claimed in the suit but that is no reason for holding that it was not a person who had instituted the suit, within the meaning of Section 62(2) of the Copyright Act.
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17. Section 134(2) of the Trade Marks Act also, just like Section 62(2) of the Copyright Act, uses the words "person instituting the suit or proceeding, or, where there are more than one such persons any of them". What has been held by the Supreme Court in Exphar Sa supra relating to Section 62(2) of the Copyright Act would apply to Section 134(2) of the Trade Marks Act also and it has to be held that irrespective of the fact whether the plaintiff no.2 being neither the registered proprietor nor the registered user of the trademark, for infringement whereof the present suit has been instituted, the plaintiff no.2 is the person instituting the suit and it is not in dispute that the plaintiff no.2 carries on business within the jurisdiction of this Court.
18. I may notice that a Single Judge of the High Court of Bombay in
Ultratech Cement Limited supra, dealing with an identical situation as subject matter of this adjudication also dismissed the application for rejection of the plaint.
19. I may with respect add that the position in this respect under Section 134(2) is better than that under Section 62(2). The explanation to Section 134 as noted above is not to be found in Section 62. As per the said explanation, for the purposes of Sub Section (2) "person" includes the registered proprietor and the registered user. The use of the word "includes"
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in the explanation is indicative of the "person" instituting the suit or other proceeding referred to in Section 134(2) being not necessarily the registered proprietor or registered user of the trademark. If it were to be held that since a suit for infringement of trademark or relating to any rights in a registered trademark can be filed only by a registered proprietor or a registered user, none else can be a plaintiff in such suit, the explanation to Section 134 instead of using the word "includes" would have used the word "means".
20. I may further, with respect, add that in today's day and time when boundaries are disappearing and trade barriers are evaporating and the arrangements as between the plaintiffs herein are becoming the norm of business, to deny the benefit of Section 134(2) on the ground of the registered proprietor not having office at the place where the permitted user is carrying on business would tantamount to negating expansion of the scope of Section 20 of the CPC intended by Section 134 (2). Even otherwise, as already observed above, once permitted use of the trademark is deemed to be the use by the proprietor of the trademark, axiomatically the proprietor would be deemed to be carrying on business where the trademark is being used and on this basis also the plaintiff no.1 would be entitled to invoke the territorial jurisdiction of this Court.
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21. A Single Judge of this Court also, in Heinz Italia S.R.I. supra held that the expression "carries on business" does not mean that the person has to be personally present within the jurisdiction of the Court and a business can be carried on at place without even the presence of the Company at that place and through an agent or subsidiary and it is not necessary for the owner of the business to reside or have office within the jurisdiction of the Court.
22. Supreme Court, in Dhodha House Vs. S.K. Maingi (2006) 9 SCC 41 also held that for the purpose of carrying on business, presence of a man at a place is not necessary; such business may be carried on through an agent or a manager or through a servant—the owner may not even visit that place; the phrase "carrying on business" at a certain place would mean having an interest in a business at that place, a voice in what is done, a share in the gain or loss and some control thereover. Three conditions were required to be satisfied. Firstly, that the agent must be a special agent who attends exclusively to the business of principal and carries it on in the name of principal and not as a general agent. Secondly, the person acting as agent must be an agent in the strict sense of the term and lastly, the essential part of the business must take place in that place.
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23. The plaintiff No.2 here, carrying on business in the name and style of plaintiff No.1 satisfies all the three conditions.
24. I may in this regard also note that Section 134(2) of the Trade Marks Act as also Section 62(2) of the Copyright Act use the words "carries on business" and not the words "has a place of business".
25. The recent judgment of the Supreme Court in Sanjay Dalia supra referred to by the counsel for the defendant is not found to be of any relevance to the controversy in hand. The dicta of the Supreme Court in
Exphar Sa supra was noticed in para 38 thereof and it was observed that the question for adjudication in Exphar Sa was different from what was for adjudication in Sanjay Dalia.
26. There is thus no merit in the application which is dismissed.
CS(OS) No.2375/2015 and IA No.16263/2015 (of the plaintiffs under Order 39 Rules 1&2 CPC).
27. List for framing of issues if any and for hearing of the application on 24th, August, 2016.
RAJIV SAHAI ENDLAW, J.
JULY 22, 2016/'pp'..
th (Corrected and released on 19 August, 2016)
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