Before which court(s) can a foreign entity file a copyright infringement suit in India?

Jurisdiction – India

A copyright lawsuit can only be filed in India when the work involved in the suit enjoys copyright protection in India. This is because the Copyright Act, 1957 applies only to the whole of India and not outside its territory.[1]

Jurisdiction under Indian Law

There are two statutes which govern jurisdiction for copyright disputes in India – the Civil Procedure Code, 1908 (‘CPC’) and the Copyright Act. While the CPC governs jurisdiction for all kinds of disputes (including copyright disputes), the Copyright Act applies specifically to copyright disputes.

Section 20 of the CPC states that every suit must be instituted in a court within the local limits of whose jurisdiction –

(a) the defendant actually and voluntarily resides, or carries on business, or personally works for gain.

What this means is that if a defendant resides, carries on business or personally works for gain in Mumbai, a suit against the defendant must be instituted in an appropriate court in Mumbai. If there are multiple defendants then the suit can be filed where any one of the defendants resides, carries on business or personally works for gain.

The section also states that a suit can be filed in a court within whose territorial jurisdiction the cause of action arises.[2] Thus if the copyright infringement occurs in Bangalore and the defendant resides or carries on business in Mumbai, then a suit can be instituted before the appropriate court in either Bangalore or Mumbai.

Jurisdiction for copyright disputes is also governed by section 62 of the Copyright Act. This section states that copyright suits must be filed before a district court within the local limits of whose jurisdiction the plaintiff resides, carries on business or personally works for gain. This section creates an additional forum to the ones already prescribed under section 20 of the CPC for filing copyright suits. This can be understood as follows –

  • Plaintiff resides, carries on business or personally works for gain in – Delhi
  • Defendant resides, carries on business or personally works for gain in – Mumbai
  • Copyright infringement (cause of action) occurs in – Bangalore
  • Courts where the suit can be instituted – Delhi (as per Copyright Act), Mumbai or Bangalore (as per CPC).

Meaning of ‘Carries on Business’

There can be no ambiguity in where a party resides or personally works for gain. However, the meaning of the phrase ‘carries on business’ used both in section 20 and section 62 is unclear. Several judgments of various High Courts and the Supreme Court have attempted to explain what constitutes ‘carries on business.’ The meaning of this phrase is especially relevant for foreign entities that sell products through websites or have subsidiary offices in India.

In Dhodha House v. S. K. Maingi, the Supreme Court held that the expressions ‘carries on business’ and ‘personally works for gain’ have different meanings. For carrying on business, the presence of the person at the place is not required. ‘Carries on business’ means having an interest in a business at the place, control over what is being done and a share in the profit of loss. The essential part of the business must happen at the place.

For instance, a person residing in Germany or a company incorporated Singapore can file a suit before a court in Mumbai if the plaintiff is carrying on business in Mumbai through a subsidiary office, website sales or any other means as long as the essential part of the business takes place in Mumbai.

A similar situation arose in WWE v. Reshma Collections. The plaintiff was a company incorporated in Delaware, USA. The defendant was illegally selling merchandise bearing reproductions of the plaintiff’s copyrighted characters such as t-shirts and caps with pictures of WWE wrestlers. WWE argued that the court in Delhi had jurisdiction to decide the matter because it was carrying on business by selling merchandise to consumers in Delhi through its website.

The Delhi High Court held that since the offers to buy the merchandise, sale of merchandise and transfer of money all took place in Delhi, the plaintiff was carrying on business in Delhi. Transactions through websites are analogous to transactions through brick-and-mortar shops. Therefore WWE, a foreign entity, could file a copyright suit before courts in Delhi.

Legislative Intent

Before the introduction of section 62, plaintiffs were inconvenienced while filing copyright suits. This is because travelling to faraway places where the defendant resided or carried on business or where the cause of action arose was difficult. Section 62 sought to dispel this hardship and enabled plaintiffs to file suits where they resided, carried on business or personally worked for gain. Courts have interpreted the section broadly by keeping this legislative intent in mind.

However, a broad interpretation has given rise to problems for defendants. Plaintiffs often file suits in distant places where they have a subsidiary office. For instance, if a company incorporated in the US has a subsidiary office in Jaipur and the defendant resides/carries on business in Bangalore, then the plaintiff is likely to file the suit in Jaipur to make it difficult for the defendant to contest the case. The plaintiff would do so to inconvenience the defendant even when it has another office at Bangalore and could file the suit at Bangalore.

The issue was resolved in IPRS v. Sanjay Dalia which is explained below.

IPRS v. Sanjay Dalia

Taking note of the predicament arising from interpreting section 62 broadly, the Supreme Court limited its applicability in IPRS v. Sanjay Dalia. As has been explained above, section 20(c) of the CPC states that a suit can be filed before a court within whose territorial limits the cause of action arises. This case deals with a situation where section 20(c) of the CPC and section 62 of the Copyright Act overlap.

When the plaintiff has a head office at one place and a subsidiary office at another place, and the cause of action arises where the head office is situated, the plaintiff must file the suit where it has its head office and the cause of action has arisen. It cannot file the suit where its subsidiary office is located.

For instance, ABC is a movie production company incorporated in Sydney. In India, it has a head office at Delhi and subsidiary offices at Mumbai and Kolkata. Pirated copies of movies produced by ABC are being sold in Delhi. As per IPRS v. Sanjay Dalia, ABC would have to file a suit before a court in Delhi because its head office is located there and the cause of action also arises in Delhi. ABC is precluded from filing a suit in Mumbai or Kolkata despite carrying on business in those cities.

Conclusion

Foreign entities can file a copyright suit against an Indian party before an India court if –

  1. The work in question is protected by copyright in India; and
  2. The plaintiff resides, carries on business or personally works for gain at the place in India where it wants to file the suit.

Featured image from here.



[1] Section 1(2), Copyright Act, 1957.

[2] Cause of action is the act of the defendant that gives rise to the suit.

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