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Delhi High Court grants Anti-suit Injunction to HT Media against a Declaratory Suit filed by a New York-based Corporation before a US District Court

May 6, 2020

By Vikrant Rana and Tulip De

On April 28, 2020, the Hon’ble Delhi High Court comprising of HMJ Jyoti Singh, granted an anti-suit injunction order to HT Media Limited in HT Media Limited & Anr V. Brainlink International, INC. & Anr.[1]

The case of the Plaintiff is that it is one of the foremost media houses in India with its leading English publication “Hindustan Times”. Plaintiff is also stated to be the registered proprietor of the trade marks ‘Hindustan’ and ‘Hindustan Times’ in India and that it enjoys both statutory rights under the Trade Marks Act, 1999 as well as common law rights with respect to the marks.

It is alleged that the Defendant is a New York-based Corporation which is engaged in the business of providing IT related support services to its customers, and is also the registrant/owner of the Domain name www.hindustan.com. The said website was purportedly launched in 1996 to provide ‘daily news content relating to Indian-American interests, stock-market reports from India and America and interactive polls daily on Indian-American issues’ but has remained largely unused since 2000. It is alleged by the Plaintiff that the Defendant is infringing and cybersquatting with respect to the Plaintiff’s registered trade marks ‘Hindustan’ and ‘Hindustan Times’.

Also read Reverse Domain Hijacking: Care-Full Who you Pick!

The Plaintiff claims that it had, in the given circumstances, sent a cease and desist notice to the Defendants in December, 2019. However, in response, the Defendants quoted an exorbitant amount of USD 3 million in February, 2020. When the Plaintiff sent its counter-offer in March, 2020, the Defendant surreptitiously filed a Declaratory Suit for non-infringement against the Plaintiffs in the United States District Court for the Eastern District of New York[2].

Submissions by the Plaintiff for grant of Anti-suit Injunction

While arguing that it was a fit case to restrain the proceedings of a Foreign Court and grant an anti-suit injunction order, the Plaintiff gave the following reasons: –

  • That the Defendant was amenable to the personal jurisdiction of the High Court as the website of the Defendant could be accessed by viewers within Delhi;
  • Further, the Defendants are willing to sell the Domain name to the Plaintiffs, who are also within the jurisdiction of the Delhi High Court;
  • Section 134(2) of the Trade Marks Act provides that for infringement of a trade mark, a Plaintiff can institute a Suit within the jurisdiction of the Court, where it carries on business. Therefore, the Delhi High Court would have jurisdiction to decide the present Suit for infringement of the trade marks as they are registered in Delhi and the Registered Office of Plaintiff No.1 is also in Delhi, and Plaintiff No.2 maintains its Books of Accounts at Delhi office.
  • If the anti-suit injunction is declined, irreparable harm and loss would be caused to the Plaintiffs. Plaintiffs will be constrained to defend themselves before the EDNY Court, which has no jurisdiction over the Plaintiffs or the subject matter of the dispute. Plaintiffs neither have an office in New York nor any other city in USA, except for one employee who is based in Potomac. Cause of action i.e. violation of trade mark rights of the Plaintiffs has arisen within India and the trial to prove the trade mark rights would thus, have to be held in India. The Suit before New York Court is vexatious and oppressive as the Plaintiffs have not asserted trade mark rights in USA.

While deciding if the Court had jurisdiction, the Judge noted that the Defendants are stated to have foreign addresses. The exact details of the actual Registrant are not yet traceable. It is, however, clear that the owner of the Defendant no.1 Company is of Indian origin.

The Court accepted the arguments of the Plaintiff and held that a substantial and integral part of the cause of action in terms of Section 20(c) CPC had arisen within the jurisdiction of the High Court and looking at the case as set out by the Plaintiff, it prima facie also had personal jurisdiction over the Defendants.

The Court also noted that the Domain name registration of the Defendants is in Bad Faith, as defined under Clause 4 of the Uniform Dispute Resolution Policy, as the Defendants are neither using the Domain name for any legitimate activity and also appear to have registered the same with the intention of earning monetary benefit. The same was also a violation of the trade marks rights of the Plaintiff.

As regards the grant of the anti-suit injunction, the Court relied upon Modi Entertainment Network & Another v. W.S.G. Cricket Pte. Ltd. (2003) 4 SCC 341, wherein the Supreme Court had clearly laid down the principles for grant of the same.

The principles for grant of anti-suit injunction that were laid down are as under:-

(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 anti-suit injunction in regard to proceedings which are oppressive or vexatious or in a forum non-conveniens.

…………

(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.

The Court further observed that usually there are three tests which are repeatedly employed by the Courts to make the determination and which are:-

(a) defendant purposefully availed himself of acting in the Forum State or causing a consequence in the Forum State;

(b) cause of action must arise from the defendants activities there;

(c) the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum to make exercise of jurisdiction over the defendant reasonable.

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 used the above guiding principles and concluded that the Suit before the Eastern District of New York, is vexatious and oppressive, as the Plaintiffs have not asserted Trademark rights in USA. The Trademarks of the Plaintiffs are registered in India and the Plaintiffs “goodwill” spills over Internationally. But the Plaintiffs do not carry on any business in USA. Defendants had offered to sell the Domain name to the Plaintiffs at a price of US $ 3 Million but once unsuccessful, in the attempt to profiteer, they filed a suit for Declaration in order to further their intention to frustrate the Plaintiffs from availing of their remedies. The Court further opined that the filing of the suit in New York is also an attempt by the Defendants herein to legitimise the alleged infringement action of the registered Trademarks of the Plaintiffs. The Court thus held that the Plaintiffs have made out a prima facie case for grant of an anti-suit injunction, and restrained the Defendants from proceeding further with their suit before the United States District Court or to institute/file any other proceedings in any Court of Law or Authority, in relation to the impugned Domain name or any issue forming the subject matter of the present Suit, till the next date of hearing.

The above ruling, although at an interim stage, brings forth legal questions as to the personal amenability of the American Defendants before the Delhi High Court.

What amounts to personal amenability of a party before a Court?

The main Defendant in the suit is a company formed and existing in the United States having no Indian presence. Even the registrar of the Enom LLC which is the authority which has to ultimately enforce any court order in respect of the impugned domain name appears to be based in USA. Therefore, a likely line of defense would be that all the defendants in the present case are American entities not amenable to the personal jurisdiction of the court, they do not reside or work for gain in India. Merely because the owner of the Defendant no. 1 Company is of Indian origin may not automatically confer jurisdiction upon the Indian court, if the said defendant is not otherwise personally amenable to the said Court.

‘Personal jurisdiction’ is the power which a court has over a person as opposed to jurisdiction over property etc.[3]

How does internet activity affect personal jurisdiction of parties?

It has been noted that courts are still working out how this applies to law suits regarding Internet activity and business though some courts appear to be in agreement that the passive posting of a website is not enough to establish widespread jurisdiction wherever someone wants to sue the web author over its contents. The ‘purposeful availment test’ has been used whether a company can be sued in a specific jurisdiction in the case of Internet companies. Courts specifically look at three factors- (1) availment of a company to another jurisdiction (2) whether the act was done in another jurisdiction and (3) whether the jurisdiction is reasonable for the defendant to be expected to defend himself there.

The tests usually applied by American Courts for the exercise of personal jurisdiction over non-resident defendants are: (1) 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; (2) the claim must be one which arises out of or results from the defendants forum-related activities; and (3) exercise of jurisdiction must be reasonable.

American courts have held and Indian courts have agreed that personal jurisdiction over non-resident defendants cannot be based solely on the ability of resident consumers/ public to access the defendants’ websites as this would not by itself show any persistent course of conduct by the defendants for causing tortuous injury in the territory. It was observed that the plaintiff must show sufficient minimum contacts between the defendant and the forum establishing that the maintenance of the suit does not offend the notions of fair play and justice.

An Internet advertisement alone would normally not be sufficient to subject the advertiser to jurisdiction in the plaintiff’s home state. If it is found that a Defendant conducted no commercial activity over the Internet in a territory and did nothing to encourage people in that territory to access its site, or that the interactivity of the web page is limited to receiving the browser’s name, then it may be said that the defendant has no contacts via the Internet or otherwise in that territory, and it lacked sufficient minimum contacts for personal jurisdiction to be asserted over it over there. It has also been observed by American courts that the likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet.

In Panavision International LP v. Dennis Toppen, Network Solutions Inc.[4] it was observed that simply registering someone else’s trademark as a domain name and posting a website on the Internet is not sufficient to subject a party domiciled in one state to jurisdiction in another. There has to be something more to indicate purposeful direction of activity to the forum state in a substantial way. However, where the website is not merely ‘passive’ but is interactive permitting the browsers to not only access the contents thereof but also subscribe to the services provided by the owners/operators, the position would be different. 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. For instance, if the Defendant’s website has a specific section for subscription to its services and the options (provided on the website itself) for the countries whose residents can subscribe to the services include India, it would thus mean that the services provided by defendant can be subscribed to and availed of in India i.e. within the jurisdiction of the appropriate Indian court.

Where the personal jurisdiction of the court is challenged by the defendant, the burden lies on the plaintiff to come forward with sufficient facts to establish that the jurisdiction is proper.

How does Forum Non Conveniens work?

Insofar as granting of stay on the ground of forum non conveniens is concerned, broadly, the principles are as under:

  • The basic principle is that a stay will be granted on the ground of forum non conveniens where the court is satisfied that there is some other available forum having competent jurisdiction where the case may be tried more suitably for the interest of all the parties and the ends of justice.
  • The burden of proof in general rests on the defendant to persuade the court to grant a stay and once the court is satisfied that there is another available forum, which is prima facie the appropriate forum for the trial of the action the burden will then shift to the plaintiff to show special circumstances by reason of which justice requires that the trial should nevertheless take place in the forum state.
  • The court must also look at connecting factors, such as those affecting convenience or expense as also factors such as the law governing the relevant transactions.
  • If the court concludes that there is no other available forum (for example recovery of the domain name through the UDRP procedure) which is clearly more appropriate for grant of stay, it will ordinarily refuse the stay.

If, however, the Court concludes that there is some other forum, which prima facie is more appropriate for the trial of the action ordinarily a stay will be granted unless there are circumstances by reason of which justice requires that a stay should nevertheless not be granted.

[1] CS (COMM) 119/2020 and IAs 3767-3771/2020

[2] (Civil Action No.1 20-cv-01279)

[3] Black’s Law Dictionary (6th Ed.), page 790, 1144

[4] D.C. Case No. CV-96-03284-DDP. Appeal No. 97-55467

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