January 13, 2018
Case name: News Nation Networks Private Limited v. News Nation Gujrat & Ors.
Date of Judgment: December 22, 2017
The present judgment pronounced by the Court in the case is an essential one in view of rapid technological advancement and substantial presence of products and services on social media including Facebook and Twitter. It determines the issue in trademark passing off and infringement cases whether a universal website which can be viewed all over the world confers jurisdiction in the state where it is viewed.
Brief Facts: The above captioned suit was filed by the plaintiff seeking a decree of permanent injunction restraining passing off, damages against the defendant as the Defendant was allegedly using a mark similar to that of the Plaintiff. In the case, the Defendants’ newspaper was published on the Facebook page – which is an interactive site inasmuch as, users, can place their comments on the Facebook page as well. Second, that the plaintiff had received queries from one M/s Prime Time Communications expressing its intention to advertise in the newspaper published by the defendants.
The Defendant instituted a suit with the Delhi High Court praying that the suit shall be dismissed for not disclosing the real cause of action. The applicant in the case sought that the plaint be returned as the Court in Delhi had no jurisdiction to entertain the suit.
The seminal issue in the case was whether a universal website which can be viewed all over the world confers jurisdiction in the state where it is viewed?
The Delhi High Court in the case has made some noteworthy observations in view of contemporary issues emerging in view of technological advancement and advancement of social media. The Court has also made reference to the effects doctrine to hold that merely hosting a web page on Facebook would not be sufficient to confer jurisdiction on a Court where the defendant does not carry on business.
The observations made by the Court in the case are as follows:
- That Maintenance of the Facebook page on a social media site can at best be representative of the defendants issuing an advertisement of their product i.e. newspaper. Although, it is stated that www.facebook.com is an interactive site, there is no allegation that any commercial transaction is carried out between users and the defendants through www.facebook.com. The allegation is merely that the users of facebook.com can read an article or news published and can post their comments.
- In context of the issue, the Court also made reference to the case of Pfizer Products Inc. v. Rajesh Chopra and Ors., wherein the ratio laid was that an advertisement by itself in a Trade Mark Journal would not confer jurisdiction upon a court within whose territorial limits the advertisement is published or is seen.
- The Delhi High Court also made reference to the celebrated case of Cyber sell Inc, an Arizona Corporation v. Cyber sell Inc. a Florida Corporation wherein the Court adopted a three pronged test to determine whether a district court may exercise specific jurisdiction over a non-resident defendant:
- The non-resident defendant must do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections;
- The claim must be one which arises out of the results from the defendants forum-related activities; and
- exercise of jurisdiction must be reasonable
- Advertisement on a Passive website insufficient to attract jurisdiction of Foreign State- That advertisement on a passive website was held to be insufficient to attract the jurisdiction of the foreign state. As regards the exercise of personal jurisdiction in cases involving Internet activities, the position appears to be that mere ‘passive’ posting of a website does not give jurisdiction to the court within whose jurisdiction, the complainant company is present. Thus, personal jurisdiction cannot be exercised over non-residents merely because their website is accessible within the jurisdiction of the court. There has to be something more to indicate purposeful direction of activity to the forum state in a substantial way.
- Jurisdiction of Forum Court does not get attracted merely on basis of interactivity of the website– That where the website was not merely passive but interactive and permitted the browsers to not only access the content but also subscribe to the services provided by the owners/operators, the position would be different.
- That the extent of an interactive site was also important and held that it is not enough merely to show that the website hosted by the Defendant is an interactive one. It would have to be shown that the nature of the activity indulged in by the defendant by the use of the website was with an intention to conclude a commercial transaction with the website user.
- That jurisdiction of the Forum Court does not get attracted merely on the basis of interactivity of the website which is accessible in the forum state. The degree of the interactivity apart, the nature of the activity permissible and whether it results in a commercial transaction has to be examined.
- Injurious Effect on Plaintiff’s business in a passing off or infringement action- That for the purposes of a passing off or an infringement action (where the plaintiff is not located within the jurisdiction of the court), the injurious effect on the plaintiffs business or goodwill the forum state as a result of the Defendants website being accessed in the forum state would have to be shown. Naturally therefore, this would require the presence of the plaintiff in the forum state and not merely the possibility of such presence in the future. Secondly, to show that an injurious effect has been felt by the plaintiff it would have to be shown that viewers in the forum state were specifically targeted.
- That in order to prima facie establish that the Defendant purposefully availed of the jurisdiction of this Court, the plaintiff would have to show that the Defendant engaged in some commercial activity in the Forum State by targeting its website specifically at customers within that State.
- Even an interactive website, which is not shown to be specifically targeted at viewers in the forum state for commercial transactions, will not result in the court of the forum state having jurisdiction. In sum, for the purposes of Section 20(c) CPC, in order to show that some part of the cause of action has arisen in the forum state by the use of the internet by the Defendant, the plaintiff will have to show prima facie that the said website, whether euphemistically termed as “passive Plus” or “interactive”, was specifically targeted at viewers in the forum state for commercial transactions.
- The plaintiff would have to plead this and produce material to prima facie show that some commercial transaction using the website was entered into by the Defendant with a user of its website within the forum state and that the specific targeting of the forum state by the Defendant resulted in an injury or harm to the plaintiff within the forum state.
- If the facts of the present case are examined in the light of the principles as indicated above, it is clear that merely hosting a web page on Facebook would not be sufficient to confer jurisdiction on a Court where the defendant does not carry on business. Merely because Facebook is an interactive site and permits the users to offer comments or indicate whether they “like what they see” on the site, would not be sufficient to provide a cause of action for passing off in a jurisdiction where the defendant does not enter into any commercial transaction.
- In a passing off action, it would be necessary for the plaintiff to plead and establish that there has been a commercial transaction within the jurisdiction of this Court, which amounts to passing off the commercial transaction. The mere fact that the plaintiff has received queries for advertisement would be wholly insufficient to attract the jurisdiction of this Court.
- Effects Doctrine– The Delhi High Court in the case made substantial reference to the effect doctrine which was also considered by the Court in Banyan Tree Holding case, wherein the Court opined that For the “effects” test to apply, the plaintiff must necessarily plead and show prima facie that the specific targeting of the forum state by the Defendant resulted in an injury or harm to the plaintiff within the forum state by the Defendant resulted in an injury or harm to the plaintiff within the forum state.
- Further observation made by the Court in the case was that for the purposes of a passing off or an infringement action (where the plaintiff is not located within the jurisdiction of the court), the injurious effect on the plaintiffs business, goodwill or reputation within the forum state as a result of the Defendants website being accessed in the forum state would have to be shown.
- With reference to the instant case, the Court stated that the plaintiff sought to invoke the effect doctrine as it contended that the defendant’s activity under the name “News Nation Gujarat” had the material effect within the jurisdiction of Delhi Court. The Court however observed that in a passing off action, it would be necessary for the plaintiff to plead and establish that there has been a commercial transaction within the jurisdiction of this Court, which amounted to passing off the commercial transaction. However, in the present case, there was no allegation that any commercial transaction has been consummated within the jurisdiction of Delhi High Court and the mere fact that the plaintiff had received queries for advertisement would be wholly insufficient to attract the jurisdiction of Delhi High Court.
The case can be accessed here.
 127 (2006) DLT 783
 130 F.3d 414 (1997)
 Banyan Tree Holding (P) Limited v. A Murali Krishna Reddy and Anr. : 2010 (42) PTC 361 (Del)
 The effects doctrine is premised on the concept that whether a foreign activity impacts/effects competition in the domestic market.