Territorial jurisdiction in the new interconnected world
The interesting issue in this case was whether the Plaintiff can invoke territorial jurisdiction of Delhi High court considering the Defendants were based in United Arab Emirates offering for sale their goods and services through App Store, Google Play Store and e-commerce portals such as www.amazon.in. The case concerns use of the mark ifit/IFIT on fitness band and an App under the same name. The Defendant did not enter appearance on being served and the case was decided ex-parte
The Plaintiff, Icon Health and Fitness Inc (ICON) had brought passing off action contending that:
- They are a US company and one of the world’s largest developers, manufacturers and marketers of fitness equipment including wearables, treadmills, elliptical trainers, stationary bicycles, etc
- Their products and services are available in more than 86 countries in the world including India. They are operating under the name ICON Health & Fitness, Inc. since the year 1994.
- Their major brands include IFIT, ProForm, Weslo, Weider, Altra, HealthRider, NordicTrack, FreeMotion and Image.
- The trademark ifit/IFIT was adopted in the year 1999 which they use for fitness devices such as wearable and software applications for fitness devices. The trademark IFIT is a coined mark and highly distinctive and exclusively associated with ICON.
- They have spent millions of dollars on the promotion of its products including IFIT branded devices and software including setting up website www.ifit.com.
- IFIT apps are available on mobile stores such as the App Store and Google Play and software under the trademark IFIT was made available in India at least as far back as 18th October, 2011.
- They have obtained registration for the trademark IFIT in many countries and its application is pending in India.
- In August, 2015, ICON became aware of the Defendants’ use of an identical mark IFIT in relation to identical products and they are selling the infringing products through App Store, Google Play Store and e-commerce portals.
- Being in the same trade the Defendants are bound to be aware of ICON’s IFIT mark, thus, adoption of an identical mark is clearly in bad faith with an intention to mislead the public into believing that a connection exists between the parties.
The Plaintiff claimed jurisdiction of the court on the basis of Defendants offering their products through App Store, Google Play Store and e-commerce portals such as www.amazon.in. The court observed “The issue which arises for consideration is whether this Court has territorial jurisdiction to try the suit since the defendants are residing in United Arab Emirates and whether there is material to establish that the defendants are carrying on business from Delhi. Though the defendants are not residing in Delhi, however, the defendants are offering their fitness apps and bands through App Store, Google Play Store and e-commerce portals like www.amazon.in which can be accessed and operated from all over the country, including from Delhi. Thus, it can be said that the defendants are carrying on business or working for gain at Delhi and this Court has territorial jurisdiction to try and decide the present suit. The court in its conclusion relied upon the earlier decision of the division bench of the Delhi High Court World Wrestling Entertainment, Inc. v. M/s. Reshma Collection & Ors applying the proposition laid out in the case that “…the availability of transactions through the website at a particular place is virtually the same thing as a seller having shops in that place in the physical world.”
As more and more businesses are distributing and offering goods for sale through e-commerce portals and creating Apps that can be downloaded from anywhere, the new business reality has been noted by the court and well applied in this case. The ratio of this decision will help the IP owners to take swift action against counterfeiters and infringers who exploit anonymity of internet to hide their identity while offering their goods through popular shopping portals.
The court’s observation on trans-border reputation is also interesting “in the post-internet era the law of trans-border reputation expanded as the internet has broke down the domestic walls in areas of trade and business. Through search engines one can access information put on the website, be it by the manufacturer of the goods or in e-journals and e-magazine which makes it easier to prove such spill-over reputation”.