Caterpillar Inc. vs. Kailash Nichani And Ors. [2002 (24) PTC 405 (Del.)]

Introduction-

In this instant case, Delhi high court interpreted section 62 of The Copyright Act 1957 which deals with the provision regarding jurisdiction. The question of territorial jurisdiction of the court in the matters related to copyright infringement was there and Court held in favor of the plaintiff who was a foreign company.

Facts-

Brief Facts of the case are:
• That the plaintiff company Caterpillar Inc. is a foreign company which is incorporated under the laws of the State of Delaware, U.S.A. Principal place of business of the plaintiff is at Illinois, U.S.A.

• That the plaintiff has the proprietary right over the trademark CATERPILLAR and CAT.

• There was the merger of two companies, i.e., Holt and Best after which Caterpillar Tractor Co. was incorporated in the U.S.A. in the year 1925 later it changed its name to Caterpillar Inc. since after the incorporation the trademark CATERPILLAR is worldwide known as the brand name in machinery manufacturing industry for the heavy machinery of construction, mining, road building and agricultural.

• That for the last several years machines manufactured by plaintiff were imported in India for various purposes as plaintiff had a reputation for manufacturing quality machines in India as well.

• That plaintiff sells shoes and a large variety of garments with the name of the same trademark in many countries and India as well even though it did not have the license for selling shoes and garments in India.

• However, plaintiffs contend that their claims regarding shoes and garments were protected on the basis that they used a seal in which “A Licensed Product of Caterpillar Inc.” is written. The plaintiff is the owner of the logo of the trademark CATERPILLAR and CAT.

• That in this present case the plaintiff alleged the infringement of its right by Defendant no.1 (Mr. Kailash Nichani) who was the proprietor of the defendant no. 2 and no.3.

• That the plaintiff alleged that defendants are using the trademark CATERPILLAR and CAT for purpose of selling jeans and defendants are engaged in export business. The area of operations of the defendant is Delhi, Mumbai and outside country as well.

• That the plaintiff filed an application under Order XXXIX, Rules 1 and 2 for grant of ex-parte ad interim injunction Order.

• That the defendant filed the interim application stating that the court has no territorial jurisdiction to pass any order concerning copyright infringement on the plaint of plaintiff. Contentions made by defendants were that plaintiff is a foreign country incorporated outside India.

• Plaintiff does not have any license with this trademark relating to the shoes and garments. Neither plaintiff nor defendant resides in Delhi nor works for gain and plaintiff has failed to give any prima facie evidence related to the same. Thus Delhi High court does not have the jurisdiction on this matter.

• That the arguments were made by the counsel of defendant that in case of Wiley Eastern Ltd. v. Indian Institute of Management, this court held that plaintiff can claim jurisdiction in Delhi as their registered office is here in New Delhi.

• That the counsel of plaintiff referred the case Brooke Bond India Ltd. v. Balaji Tea India Pvt. Ltd. it was held that the departure from the normal law that a case can be instituted where plaintiff resides or carries business for gain is given under sub section (2) of Section 62 of the Copyright Act.

Issues involved-

1) The issue involved in this case was whether Delhi High Court has the territorial jurisdiction for infringement of rights under section 62 of The Copyright Act 1957?

Decision and Judgment-

• The court dismissed the interim applications of the defendant and an interim order was passed in favor of the plaintiff and against the defendant.

• The court observed that it is stated in the plaint itself that the defendants are selling the infringed goods in Delhi and, therefore, this Court has jurisdiction to try this suit.

• Though it is a fact that there is no document which has been filed in support of this submission that defendants are selling goods in Delhi but this fact will be dealt at the time of trial of the suit.

• Court held that the suit cannot be dismissed for want of territorial jurisdiction at this stage.

• The court did not consider the cases referred by the defendant as they are different cases than the present matter.

• The court agreed with the arguments of the counsel of plaintiff in respect to the section 62 of Copyright Act. Court relied upon the case of Smithkline Beecham Plc and Anr. vs. Sunil Singhi and Anr.

• In that case it was observed that the choice of jurisdiction should primarily be governed by the convenience of the defendant. Section 62 of the Copyright Act makes a departure from the norm.

• It was held by the court that though plaintiff is registered in U.S.A as per the law of State of Delaware but it has given distribution rights to Larsen and Turbo, Tractor India Ltd, General Marketing and Manufacturing Company Ltd. Plaintiff company is in collaboration with Hindustan Motors Ltd. which manufactures and sells engines.

• It was also said that company used to import various equipments and heavy machinery in India through the collaborated companies which carry their business in Delhi also. Hence the court is not lacking the jurisdiction over the matter under section 62 of Copyright Act.