The present case involves a complex intellectual property dispute revolving around the infringement of industrial designs, trademarks, and patents in the textile machinery sector. Rieter AG and its group company filed a commercial civil suit before the Delhi High Court against the defendant, a Coimbatore-based supplier, alleging that the defendant infringed their proprietary rights by selling deceptively similar spare parts. The legal issue before the Court primarily focused on the question of territorial jurisdiction and whether the Delhi High Court could entertain the suit when the defendant was operating from Tamil Nadu and the alleged infringing activity was centered outside Delhi.

• Factual Background:
  • Rieter AG and Rieter India Private Limited, subsidiaries of Rieter Holding AG, instituted the suit on the basis of their intellectual property rights.
  • Registered Indian design numbers: 264773, 264774, 264775, 294194, 271521.
  • Registered patent: No. 339930.
  • Trademark ‘SUESSEN’ claimed to be owned by plaintiff no. 2.
  • Defendant displayed infringing products at India ITME (India International Textile Machinery Exhibition), Greater Noida, December 2022.
  • Plaintiffs engaged an investigator who initiated a purchase transaction via Ukandin International Private Limited in April and May 2023.
  • Products were delivered in Delhi based on an invoice dated 17th May 2023, establishing part of the cause of action within the Delhi High Court's jurisdiction.
• Procedural Background:
  • Defendant filed an application under Order VII Rule 10 of the CPC, 1908, seeking return of plaint for lack of territorial jurisdiction.
  • Defendant argued that his business operated solely from Coimbatore, Tamil Nadu, with no business presence in Delhi.
  • Claimed the transaction was a “trap” orchestrated by the plaintiffs to invoke Delhi jurisdiction.
  • Plaintiffs contended the delivery in Delhi formed part of the cause of action, invoking Section 20(c) CPC.
• Issues Involved in the Case:
  • Whether the Delhi High Court had territorial jurisdiction under Section 20(c) CPC considering the defendant’s base in Tamil Nadu.
  • Whether a trap transaction could constitute a valid part of the cause of action for jurisdiction in an IP infringement suit.
• Submissions of the Parties:
  • Defendant's submissions:
    • Claimed entire transaction was orchestrated to confer jurisdiction on the Delhi High Court.
    • Goods were supplied only after investigator's visit to Coimbatore.
    • Delivery to Delhi was a contrived, non-commercial act.
    • Relied on:
      • Banyan Tree Holding (P) Ltd. v. A. Murali Krishna Reddy, 2009 SCC OnLine Del 3780.
      • Indovax Pvt. Ltd. v. Merck Animal Health, 2017 SCC OnLine Del 9393.
  • Plaintiffs' submissions:
    • Participation in India ITME exhibition and subsequent delivery to Delhi invoked Delhi HC jurisdiction.
    • Ukandin International Pvt. Ltd. was Delhi-based; delivery address and invoice were both in Delhi.
    • Relied on:
      • Machinefabrik Rieter AG v. Tex Tech Industries (P) Ltd., 2021 SCC OnLine Del 1825.
• Judgments Cited and Their Context:
  • Machinefabrik Rieter AG v. Tex Tech Industries (P) Ltd., 2021 SCC OnLine Del 1825:
    • Delhi HC upheld jurisdiction based on delivery of goods in Delhi.
    • Distinguished Banyan Tree as it involved online transactions.
  • Banyan Tree Holding (P) Ltd. v. A. Murali Krishna Reddy, 2009 SCC OnLine Del 3780:
    • Jurisdiction requires intentional targeting; mere website accessibility is insufficient.
  • Indovax v. Merck Animal Health, 2017 SCC OnLine Del 9393:
    • Trap transactions without commercial intent cannot confer jurisdiction.

The Court in the present case relied on Machinefabrik Rieter and distinguished Banyan Tree and Indovax on the ground that the current case involved an offline transaction resulting in a delivery of 91 commercial units of the allegedly infringing product to Delhi. The quantity and invoicing supported the inference of commercial intent.

Reasoning and Analysis of the Judge: Court observed that in determining an application under Order VII Rule 10 CPC, the Court must accept the plaint and accompanying documents as true at the preliminary stage. The plaintiffs’ case, based on delivery of goods to Delhi under an invoice, was sufficient to confer jurisdiction under Section 20(c) of CPC.

He noted that the defendant’s participation in a major trade exhibition in Greater Noida, bordering Delhi, further weakened the claim that his business was confined to Tamil Nadu. The assertion of being the “world’s largest manufacturer of Lattice Apron for Compact Systems” suggested an intent to market and supply goods nationwide, including in Delhi.

The judge emphasized that delivery of goods to Delhi, supported by documentary evidence, distinguished the case from Banyan Tree, which was confined to digital interaction and from Indovax, where the transaction lacked commercial scale. Here, the supply of 91 units and provision of product samples indicated commercial intent and possible anticipation of future transactions.

He held that minor factual distinctions in agency structure or the buyer’s nature could not override the fact that goods were physically delivered to Delhi under a commercial invoice, which sufficed to establish part of the cause of action in Delhi.

Final Decision: The Court dismissed the application under Order VII Rule 10 CPC filed by the defendant, holding that the Delhi High Court did have territorial jurisdiction under Section 20(c) of the Code of Civil Procedure. It found that the transaction leading to the delivery of goods in Delhi was not merely a trap but constituted a commercial transaction. The Court further clarified that questions of jurisdiction could be revisited during trial after evidence is led.The defendant’s related application under Order VII Rule 11 CPC was withdrawn, and the suit was scheduled for consideration of interim injunction on a subsequent date.

Law Settled in this Case: This case reinforces the legal position that delivery of infringing goods under a commercial invoice to a location within the territorial jurisdiction of a court constitutes sufficient cause of action under Section 20(c) of the CPC. It clarifies that “trap transactions” will not defeat jurisdiction when the transaction is commercial in nature and supported by documentation. The judgment also affirms that participation in national trade exhibitions may reflect a defendant’s business outreach to broader territories, thereby undermining territorial objections based on place of business alone.Furthermore, the case distinguishes online and offline transactions in the context of jurisdiction, aligning with the reasoning in Machinefabrik Rieter, and limiting the applicability of Banyan Tree to digital commerce.

Case Title: Rieter AG and Anr. Vs. Kavassery Narayanaswamy Venkatasubramanian
Date of Order: 13th May, 2025
Case No.: CS(COMM) 729/2024
Neutral Citation: 2025:DHC:3937
Name of Court: High Court of Delhi
Name of Judge: Hon’ble Mr. Justice Amit Bansal

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