Anti-Suit Injunctions: Making Sense in the context of Trademarks

Anti-Suit Injunctions: Making Sense in the context of Trademarks

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Whereas the law in relation to injunctions is well evolved and the concept of injunction finds place in the Code of Civil Procedure 1908 (hereinafter CPC), the concept of anti-suit injunction is not defined in the CPC and has been developed by judicial pronouncements. For the uninitiated, when a court restrains a party to a suit/proceeding before it from instituting or prosecuting a case in another court including a foreign court, this is referred to as an anti-suit injunction.

The principles of law in relation to the grant of an anti-suit injunction by a court of natural jurisdiction against a party to a suit before it, restraining the said party from instituting and/or prosecuting the suit, between the same parties, if instituted, in a foreign court of choice of the parties was settled by the Hon’ble Supreme Court of India in Modi Entertainment Network & Anr. v. W.S.G.Cricket Pte. Ltd. reported as AIR 2003 SC 1177; (2003) 4 SCC 341.

The following principles emerged:

(1) In exercising discretion to grant an anti-suit injunction the court must be satisfied of the following aspects : –

(a) the defendant, against whom injunction is sought, is amenable to the personal jurisdiction of the court;

(b) if the injunction is declined the ends of justice will be defeated and injustice will be perpetuated; and

(c) the principle of comity – respect for the court in which the commencement or continuance of action/proceeding is sought to be restrained – must be borne in mind;

(2) in a case where more forums than one are available, the Court in exercise of its discretion to grant anti-suit injunction will examine as to which is the appropriate forum (forum conveniens) having regard to the convenience of the parties and may grant an anti-suit injunction in regard to proceedings which are oppressive or vexatious or in a forum non-conveniens;

(3) Where jurisdiction of a court is invoked on the basis of a jurisdictional clause in a contract, the recitals therein in regard to exclusive or non-exclusive jurisdiction of the court of choice of the parties are not determinative but are relevant factors and when a question arises as to the nature of jurisdiction agreed to between the parties the court has to decide the same on a true interpretation of the contract on the facts and in the circumstances of each case;

(4) a court of natural jurisdiction will not normally grant anti-suit injunction against a defendant before it where parties have agreed to submit to the exclusive jurisdiction of a court including a foreign court, a forum of their choice in regard to the commencement or continuance of proceedings in the court of choice, save in an exceptional case for good and sufficient reasons, with a view to prevent injustice in circumstances such as which permit a contracting party to be relieved of the burden of the contract; or since the date of the contract the circumstances or subsequent events have made it impossible for the party seeking injunction to prosecute the case in the court of choice because the essence of the jurisdiction of the court does not exist or because of a vis major or force majeure and the like;

(5) where parties have agreed, under a non- exclusive jurisdiction clause, to approach a neutral foreign forum and be governed by the law applicable to it for the resolution of their disputes arising under the contract, ordinarily no anti- suit injunction will be granted in regard to proceedings in such a forum conveniens and favoured forum as it shall be presumed that the parties have thought over their convenience and all other relevant factors before submitting to non-exclusive jurisdiction of the court of their choice which cannot be treated just as an alternative forum;

(6) a party to the contract containing jurisdiction clause cannot normally be prevented from approaching the court of choice of the parties as it would amount to aiding breach of the contract; yet when one of the parties to the jurisdiction clause approaches the court of choice in which exclusive or non- exclusive jurisdiction is created, the proceedings in that court cannot per se be treated as vexatious or oppressive nor can the court be said to be forum non-conveniens; and

(7) the burden of establishing that the forum of choice is a forum non-conveniens or the proceedings therein are oppressive or vexatious would be on the party so contending to aver and prove the same.

It was espoused in this case that courts in India, like the courts in England, are courts of both law and equity and the principles governing the grant of injunction, which is an equitable relief, will also cover the grant of an anti-suit injunction, which is but a species of injunction. It was also observed in the case that a court in India had the power to issue an anti-suit injunction against a party over whom it had personal jurisdiction; however, having regard to the rule of comity, such power ought to be exercised sparingly since such an injunction, though directed against a person, causeswhen the  interference in the exercise of jurisdiction by another court.

This case also can be interpreted to hold that it is not in every case true that once the parties have agreed to submit to the jurisdiction of a foreign court, the proceedings brought either in the court of natural jurisdiction or in the court of choice will per se be oppressive or vexatious.

The Hon’ble Delhi High Court relied on the aforesaid case in the case titled as Jaininder Jain and Ors. v. Arihant Jain reported as MIPR 2007 (1) 215 where the dispute related to the use of a trademark. In this case the members of the same family were engaged in a dispute over the use of trademark “KANGARO”. The ld. District Court had passed an order maintain status quo.

When the status quo order was in operation, the petitioners exported a consignment of their goods under the trademark “KANGARO” to Dubai which was, on a complaint by the respondents stating the same to be counterfeit goods, seized by the Customs Authorities at Dubai.

Consequent upon such seizure, the respondents were directed vide court attachment petition to furnish a bank guarantee in the Dubai Court where the matter was pending Apart from seizure of the petitioners’ goods at Dubai, on a similar complaint by the respondents, their another consignment exported to Sri Lanka has also been seized.

The petitioners complained that the respondents got their consignments seized at Dubai and Sri Lanka by misrepresenting, in concealment of and contrary to the dictate of the status quo order, that the same constituted counterfeit goods knowing it fully well that under the status quo order, they were entitled to use the trademark “KANGARO” in relation to goods so exported.

The petitioners thus filed a petition under Order XXXIX Rule 2A CPC read with Section 151 CPC and Section 2(a) & (b) read with Section 11 and 12 of the Contempt of Courts Act, 1971 wherein instant application seeking an interim order restraining the respondents from pursuing the matter further before the Dubai Court was also made.

The  Court held that there as thus no substance in the argument that no interim order restraining the respondents from proceeding with the matter before the Dubai Court could have been passed in the case in view of Section 41(h) of the Specific Relief Act or in exercise of contempt jurisdiction. The application was allowed and the order restraining the respondents from prosecuting their action before the Dubai Court concerning infringement action in respect of trademark “KANGARO” was confirmed and made absolute pending disposal of contempt petition. Thus, the Court passes an anti –suit injunction order in the relation to a case of infringement of trademark.

Recently, once again, the hon’ble Delhi High Court relied on the Modi case to grant an anti-suit injunction to the Plaintiffs /HT Media Limited in HT Media Limited & Anr v. Brainlink International, INC. & Anr. numbered as CS (COMM) 119/2020 vide Order dated 28.04.2020.

This is a suit which was filed by the Plaintiffs seeking permanent injunction restraining the Defendants from in any manner using directly or indirectly the Domain name www.hindustan.com or any other mark identical/deceptively similar to the Plaintiffs‟ Trademarks “Hindustan” and “Hindustan Times” which are owned by the Plaintiffs.

As the Defendants had already  filed a Declaratory Suit for non-infringement against the Plaintiffs in the United States District Court for the Eastern District of New York, after both the parties could not agree on the sales price  of the Domain name www.hindustan.com to the Plaintiffs, a relief in the form of a Permanent injunction was also sought whereby the Defendants were  sought to be  restrained the from proceeding with the Suit titled Brainlink International, Inc. v. HT Media Ltd. & Anr. (Civil Action No.1 20-cv-01279) before the United States District Court for the Eastern District of New York or from instituting or filing any other suit/applications/proceedings in any Court of Law in relation to the impugned Domain name or any issue which forms the subject matter of the present Suit.

For the principles for grant of anti-suit injunction the hon’ble Court relied on the principles espoused in the Modi case. It also examined the issue of jurisdiction in the context of grant of relief of injunction against the infringement of the Trademarks of the Plaintiffs as well as for grant of anti-suit injunction, as the Defendants had foreign addresses.

While the Court opined that the Plaintiffs had rightly relied upon Section 134(2) of the Trademarks Act as the said provision clearly provides that in cases of infringement of Trademark, the Plaintiff can institute a Suit within the jurisdiction of the Court where it “carries on business”. Plaintiffs have a Registered Office in Delhi and they carry on business in Delhi, it was also required to examine:

  1. Whether the Defendants are amenable to its personal jurisdiction?
  2. Whether injustice would be caused to the Plaintiffs if the injunction was refused? and
  3. Which would be the Forum Conveniens, in case there were more than one Forum available to the Plaintiffs?

The Court further relied on India TV, Independent News Service Pvt. Ltd. v. India Broadcast Live LLC & Ors., reported as 2007 SCC OnLine Del 960, wherein it was held that insofar as the position in India is concerned, there is no long arm’ statute as such which deals with jurisdiction as regards non-resident defendants. Thus, it would have to be seen whether the defendant’s activities have a sufficient connection with the forum state (India); whether the cause of action arises out of the defendant’s activities within the forum and whether the exercise of jurisdiction would be reasonable.

The Court further observed that if the Plaintiffs are able to demonstrate close connection of the Defendants‟ activities” in India and if cause of action has arisen here, coupled with it being reasonable to exercise jurisdiction, Court would exercise jurisdiction over the Defendants. Under Section 20(c) CPC, a suit can be filed within the local limits of the Courts where the cause of action arises, wholly or in part.

The Court observed that at the time of adoption of the Domain name, Defendants were targeting the viewers in India, including Delhi. Defendants have not actively used the Website since 2000 and had negotiated with the Plaintiffs for sale of domain name. The Court further observed that a cease and desist notice and the ensuing correspondence precedes the Suit in New York and is hence merely a counter-blast to the Plaintiffs‟ legitimate exercise of their rights and availment of remedies. Thus, it held that a substantial and integral part of the cause of action under Section 20 (c) CPC for the Plaintiffs to file the present Suit, has arisen within its jurisdiction. The Court was of prima facie opinion that the Court has personal jurisdiction over the Defendants.

The Court also held that the suit in New York is vexatious and oppressive, as the Plaintiffs had not asserted trademark rights in the US. Further the Plaintiffs’ trademarks were registered in India and its goodwill spilled over internationally. Plaintiffs also did not do any business there.  The Court also examined as to how the passive website of the Defendants would confuse the consumers in India and damage the reputation of the Plaintiffs. The Court granted interim injunction and anti-suit injunction in favour of the Plaintiffs.

When one analyses the Order dated 28.04.2020, one is bound to ponder upon the following aspects:

  1. The Court granted interim injunction and anti-suit injunction in favour of the Plaintiffs in an ex-parte proceeding and in the absence of the defence of the Defendants, the view formed was solely based on the averments of the Plaintiffs.
  2. The Defendants are based in the United States and are not present in India and neither reside nor work for gain in India. They could plead that this takes them out of the jurisdiction of the Delhi High Court. Merely because the Defendant No. 2 who owner of Defendant No. 1 is of Indian origin, Defendant No.2 may not be amenable to the jurisdiction of the Delhi High Court.
  3. Personal jurisdiction as defined in Black‘s law dictionary is the power of a court over the person of a defendant in contrast to the jurisdiction of a court over a defendant’s property or his interest therein; the burden to prove personal jurisdiction will lie on the Plaintiffs.
  4. It is an accepted proposition that the mere fact that a website is accessible in a particular place may not itself be sufficient for the courts of that place to exercise personal jurisdiction over the owners of the website. Further, even where a website is interactive, the level of interactivity would be relevant and limited interactivity may also not be sufficient for a court to exercise jurisdiction.

It is a fact that issues of personal jurisdiction with respect to internet are fairly complex and Courts across the globe have struggled with jurisdiction in issues arising from the global connectivity through the use of internet. As the jurisprudence with respect to amenability to personal jurisdiction, universal accessibility to websites from all over the world and the grant of anti- suit injunction in cases of trademarks and domain names develops in India, one can say that all these issues remain open in the case at hand. It would have to be seen how the Court finally decides them.

With inputs from
– Sparsh Juneja, Intern

 

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