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Business News/ Politics / Policy/  Courts in buyer’s city have jurisdiction over e-commerce disputes
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Courts in buyer’s city have jurisdiction over e-commerce disputes

A company would be deemed to have carried on business in a place where people make the online purchase

The Delhi high court on Wednesday said jurisdiction over trademark and copyright cases would vest with the courts in city where the buyer in an online transaction lives. Photo: Hindustan TimesPremium
The Delhi high court on Wednesday said jurisdiction over trademark and copyright cases would vest with the courts in city where the buyer in an online transaction lives. Photo: Hindustan Times

New Delhi: The Delhi high court on Wednesday said jurisdiction over trademark and copyright cases would vest with the courts in city where the buyer in an online transaction lives.

In what could be a step towards defining the contours of e-commerce, two-judge bench of the high court held that a company would be deemed to have carried on business in a place where people purchase the merchandise off a website.

“When the shop in the physical sense is replaced by the virtual shop because of the advancement of technology, in our view, it cannot be said that the appellant/plaintiff would not carry on business in Delhi," the judges said in the order.

The case was first instituted before a single judge of the Delhi high court by Delaware-based World Wrestling Entertainment Inc. (WWE), claiming infringement of a host of intellectual property rights by a Mumbai-based entity called Reshma Collection. The judge had asked the case to be taken to a “court of competent jurisdiction", as he held that WWE did not conduct business in Delhi.

The phrase “carries on business" gains significance in the context of jurisdiction of a court to decide on a trademark and copyright infringement suit under Section 134(2) of the Trademarks Act, 1999 and Section 62(2) of the Copyright Act,1957. The section states that a person who sues another for trademark infringement should file the suit in a court where she “carries on business".

WWE appealed before a bench of justices B.D. Ahmed and Vibhu Bakhru, which in its 27-page judgement discusses what would constitute carrying on business. Referring to two Supreme Court precedents, the order identifies that an essential part of the business will be deemed to have concluded in the city where buyer accesses merchandise via a web portal and monetary transaction takes place.

“It interprets the meaning of carrying on business on a limited extent in case of trademarks and copyrights, so it won’t apply to passing off or other suits for damages. But, an important effect is that e-commerce retailers will now have a choice of forum in case of trademark or copyright infringement suits," said Apar Gupta, a lawyer who works with e-commerce companies.

“It is, however, too early to say that it does something for e-commerce as the effect is limited. But it does bring clarity by recognizing a very important sphere of online transactions and defining the jurisdictional rule to that effect."

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Published: 15 Oct 2014, 11:55 PM IST
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