In the intricate world of trademark litigation, the case of LG Corporation and Anr. Vs. Intermarket Electroplasters (P) Ltd. stands as a testament to the complexities of territorial jurisdiction in India. Decided on February 13, 2006, by the Delhi High Court, this dispute pits a global electronics giant against an Indian company, revolving around the pivotal question of where a legal battle over trademark infringement should be fought. With allegations of passing off and a skirmish over the court's right to hear the case, this judgment illuminates the interplay between statutory provisions, judicial precedents, and the practical realities of commerce, offering a nuanced exploration of jurisdiction in civil suits.

Detailed Factual Background:
LG Corporation, a renowned South Korean multinational, along with its co-plaintiff, initiated a lawsuit against Intermarket Electroplasters (P) Ltd., an Indian company, and other defendants. The crux of LG's grievance was that Intermarket was allegedly passing off its goods as those of LG by using a deceptively similar trademark. 

LG asserted that this infringement violated its intellectual property rights, prompting a suit for relief in the Delhi High Court.LG's plaint rested on three jurisdictional anchors: The filing and advertisement of its trademark registration application at the Trade Mark Registry in Delhi, The applicability of Section 134 of the Trade Marks Act, 1999, and the sale of Intermarket's allegedly infringing goods within Delhi.

Specifically, LG pointed to invoices evidencing sales of these goods to parties in Delhi, asserting that this commercial activity within the city triggered a cause of action sufficient to vest jurisdiction in the Delhi High Court. Intermarket, a company incorporated under the Indian Companies Act with no branch office or agent in Delhi, contested the court's jurisdiction. It argued that its operations were not based in Delhi, and thus, it neither resided nor carried on business there, challenging LG's claim to anchor the suit in the capital.

• Detailed Procedural Background:
  • The legal proceedings commenced when LG filed its suit in the Delhi High Court, invoking the court's jurisdiction based on the aforementioned grounds.
  • Intermarket responded by filing an application (IA No. 258/06) under Order 7, Rule 11 of the Code of Civil Procedure (CPC), seeking the return or rejection of the plaint under Order 7, Rule 10, arguing that the court lacked territorial jurisdiction.
  • This application also invoked the court's inherent powers under Section 151 CPC, setting the stage for a preliminary skirmish over venue.
• Issues Involved in the Case:
  • The central issue was whether the Delhi High Court possessed territorial jurisdiction to entertain LG's suit.
  • This hinged on interpreting Section 20 of the CPC, specifically whether the sale of allegedly infringing goods in Delhi constituted a part of the cause of action under Section 20(c), given Intermarket's lack of physical presence in the city.
• Detailed Submission of Parties:
  • LG's Counsel:
    • Argued that jurisdiction was secured by the sale of Intermarket's infringing goods in Delhi, as stated in paragraph 30 of the plaint: "the impugned goods of the defendants are also selling in Delhi, though without issuance of supporting invoices."
    • Relied on Intermarket's own documents (invoices showing sales to Delhi parties) to assert that this commercial activity gave rise to a cause of action in Delhi.
    • Emphasized that jurisdiction under Section 20(c) CPC includes any place where part of the cause of action arises, and that these sales satisfied that criterion.
  • Intermarket's Counsel:
    • Argued that the company neither resided nor carried on business in Delhi, as required under Section 20(a) CPC, due to lack of a branch or agent.
    • Relied on the Supreme Court's ruling in Kusum Ingots & Alloys Ltd. vs. Union of India to argue that mere sales do not equate to "carrying on business."
    • Asserted that even if a cause of action arose, the court could decline jurisdiction under the doctrine of forum conveniens.
• Detailed Discussion on Judgments Cited by Parties and Their Context:
  • Dhodha House vs. S.K. Maingi, (2006) 9 SCC 41:
    • Cited by both parties. LG acknowledged it negated jurisdiction based on the location of the Trade Mark Registry and Section 134(2) of the Trade Marks Act, 1999.
    • Intermarket argued that jurisdiction must be explicitly conferred, reinforcing the argument that Delhi lacked jurisdiction in absence of business presence.
    • The court held that Section 20 CPC governs such cases unless overridden by specific provisions, prompting a cause-of-action analysis.
  • Kusum Ingots & Alloys Ltd. vs. Union of India, (2004) 6 SCC 254:
    • Relied on by Intermarket. The Supreme Court held that a small part of the cause of action in a court's territory does not mandate jurisdiction.
    • Suggested courts can decline jurisdiction under forum conveniens, a principle Intermarket applied to suits.
  • Morgan Stanley Mutual Fund vs. Kartick Das, (1994) 4 SCC 225:
    • Established that a corporation's residence is its registered office.
    • Supported Intermarket's position that it was not a resident of Delhi.
  • Pfizer Products, Inc. vs. Rajesh Chopra and Ors., CS (OS) No. 311/2005 (Delhi High Court):
    • Relied on by LG. The ruling diverged from Dhodha House, suggesting a trademark application in Delhi could confer jurisdiction.
    • Though not decisive, it highlighted evolving judicial interpretation of jurisdiction.

Detailed Reasoning and Analysis of Judge:
The court affirmed that Section 20 CPC governs territorial jurisdiction in trademark suits, absent overriding statutory provisions. Under Section 20(a), the agreed with Intermarket that it neither resided nor carried on business in Delhi, as it lacked a local office or agent, aligning with Morgan Stanley and Dhodha House. The explanation to Section 20 deems a corporation's business location as its principal or subordinate office, neither of which Intermarket had in Delhi.

Turning to Section 20(c), the court focused on whether part of the cause of action arose in Delhi due to the sale of infringing goods. The court upheld LG's averment in the plaint, supported by invoices, as sufficient at the preliminary stage, noting that jurisdiction hinges on pleadings, not their truth, per established law. The sale, he reasoned, was not incidental but central to the passing-off claim, giving LG a legal right to sue in Delhi. This nexus distinguished the case from mere peripheral activity, grounding jurisdiction firmly in the city.

Addressing Intermarket's reliance on Kusum Ingots, the court distinguished writ jurisdiction's discretionary nature under Article 226 from a suit's mandatory adjudication under CPC. In suits, he held, jurisdiction is not discretionary once a cause of action is established—there's no room for forum conveniens to override a plaintiff's choice of a competent court. The court dismissed the discretionary refusal argument as inapplicable, reinforcing that sales in Delhi sufficed. The court also acknowledged the Pfizer ruling but sidestepped it, given LG's concession on registry-based jurisdiction, focusing solely on the sales ground. 

Final Decision:
The Delhi High Court rejected Intermarket's application under Order 7, Rule 11 CPC, affirming its territorial jurisdiction to hear the suit.

Law Settled in This Case:
The judgment clarified that: (1) Under Section 20(c) CPC, the sale of allegedly infringing goods within a court's territory constitutes a part of the cause of action, conferring jurisdiction in trademark passing-off suits, irrespective of the defendant's residence or business presence; (2) Unlike writ jurisdiction, courts in civil suits cannot discretionarily refuse jurisdiction based on forum conveniens when a cause of action is established; (3) Post-Dhodha House, trademark registry location or Section 134(2) does not automatically grant jurisdiction unless the plaintiff resides or works there.

Case Title: LG Corporation Vs Intermarket Electroplasters (P) Ltd.
Date of Order: February 13, 2006
Case No.:CS (OS) 1359 of 2004
Name of Court: Delhi High Court
Name of Judge: Hon'ble Justice Shri A.K. Sikri

Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: [email protected], Ph no: 9990389539