Kohinoor Seed Fields India Pvt. Ltd. v. Veda Seed Sciences Pvt. Ltd.
Facts of the Case
The plaintiff, Kohinoor Seed Fields India Pvt. Ltd., is a seed-producing company whose registered office is in New Delhi. It created and marketed several hybrids of cotton, namely “TADAAKHA,” “SADANAND,” and “BASANT,” from 2014 to 2015. The defendant, Veda Seed Sciences Pvt. Ltd., which is situated in Guntur, Andhra Pradesh, was co-marketing the hybrids under a non-exclusive marketing agreement that was signed with the plaintiff. This arrangement, entered in Delhi, was renewed from time to time, and the previous arrangement was effective from 1st January 2022 through 31st December 2022. In September 2022, notice of non-renewal was served by the plaintiff to the defendant and distributors stating that it would market its hybrids independently from the 2023 Kharif season. But in October of the year 2022, the plaintiff found that the defendant had begun selling allegedly deceptively similar goods under the designations “VEDA TADAAKHA GOLD BG II,” “VEDA SADANAND GOLD BG II,” and “VEDA BASANT GOLD BG II.” They were offered on e-commerce websites, and booking was being arranged for the next season. Complaining of infringement of registered trademarks and passing off, the plaintiff initiated a business suit before the Delhi High Court, praying for a permanent injunction and damages. The defendant, replying, invoked Order 7 Rule 10 CPC, challenging the territorial jurisdiction of the Delhi High Court.
Issues
- Whether the enforcement of the marketing agreement in Delhi is a part of the cause of action for the filing of the current trademark infringement and passing off suit?
- Whether the online postings of the purportedly infringing products on sites available in Delhi, i.e., IndiaMart and Kalgudi, are adequate to create territorial jurisdiction in Delhi?
- Whether the plaintiff can invoke Section 134(2) of the Trademarks Act to bring the suit in Delhi solely because its registered office is situated there, even if the alleged infringement took place in states where it has also subsidiary offices?
Arguments from Both Parties
The defendant had contended that the Delhi High Court did not have jurisdiction since the alleged infringing activities, such as the sale and marketing of the impugned seeds, were occurring in Andhra Pradesh and Telangana. They emphasized that the plaintiff company itself had offices in those states and that the goods were not being marketed or sold in Delhi. They stressed that the marketing agreement was not within the scope of the claim of infringement, and any conflict resulting from such an agreement needed to be resolved independently. In the case of online listings, the defendant argued that they were done by independent third-party sellers, not by Veda Seed itself, and that there was no targeting of customers in Delhi. The defendant took recourse to the Supreme Court judgment in Sanjay Dalia v. IPRS, and the Delhi High Court judgment in Banyan Tree Holding v. Murali Krishna Reddy, both of which emphasize the maxim that jurisdiction cannot be ground on merely online accessibility, unless it is demonstrated that the defendant purposefully targeted the forum state.
The plaintiff, on the other hand, argued that since the marketing agreement was signed in Delhi, part of the cause of action accrued there. They also urged that under Section 134(2) of the Trademarks Act, they were entitled to institute the suit at their registered office, i.e., Delhi. They argued that the infringing goods were being promoted and offered for sale through mediums like IndiaMart, which were available in Delhi, and thereby brought the case within the territorial jurisdiction of the court. They referred to judgments like Ultra Home Construction v. Purushottam Chaubey, in which listings available on the internet in Delhi were held to be a valid ground for jurisdiction, Shakthi Fashion v. Burberry Ltd., and Marico Ltd. v. Mukesh Kumar, to justify their argument that online presence could equate to a cause of action in Delhi.
Final Judgment
The Delhi High Court, by Justice Amit Bansal, favoured the defendant and sent the plaint under Order 7 Rule 10 CPC for presentation to a court possessing proper territorial jurisdiction. The Court decided that the suit was not founded on the marketing agreement but on claimed trademark infringement and passing off, which are independent causes of action. As the infringing acts were committed in Andhra Pradesh and Telangana, and the plaintiff had offices in both states, it could not avoid local jurisdiction by merely pleading Section 134(2). The Court also pointed out that the marketing agreement was not violated, and its implementation in Delhi did not directly pertain to the claim of infringement. Concerning listings in Delhi, the Court ruled that mere availability in Delhi of infringing material is not enough; it must be established that the listings targeted Delhi consumers specifically or that there was actual business transacted in Delhi, the plaintiff did not prove. There was also no proof that the defendant itself originated or authorized the listings. Relying on Banyan Tree and Sanjay Dalia, the Court reaffirmed that forum shopping and smart drafting cannot replace the cause of action. Hence, the plaint was sent back with liberty to file it in a proper court, probably in Andhra Pradesh or Telangana, where the cause of action had arisen.
Full Judgment- https://www.casemine.com/judgement/in/67ffff77b6d03f47db019782