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February 1, 2019 Vol. 74 No. 2 Back to Bulletin Main Page

INDIA: Franchise Expansion Raises Jurisdictional Dilemma

The High Court of Delhi in Burger King Corporation v. Techchand Shewakramani CS (COMM) 919/2016 & CC (COMM) 122/2017, issued its decision on August 27, 2018, on alleged infringement and passing off respect to the trademarks BURGER KING and HUNGRY JACK’s. The defendant used both as trademarks and as part of corporate names.

First, and most importantly for trademark practitioners, the court determined whether the Delhi courts had jurisdiction. The defendant’s business was based entirely in Mumbai, but the defendant had been evaluating franchisee queries in Delhi. At issue was whether the threat of expansion to Delhi permitted the matter to be heard by the Delhi courts.

The Delhi courts asserted jurisdiction and proceeded to hear the matter. In doing so, the court interpreted trademark use broadly, consequently expanding the approach previously taken in India.

The court confirmed that it is not necessary for a party to have physical use of the mark in the particular state. Instead, all that is required would be a commercial transaction with customers in the particular state for the court to have jurisdiction to hear a passing off/infringement action.

The court further observed that “use of a mark” could include a party taking any of the following actions:
  • promoting its objective to expand throughout India through various means and modes;
  • advertising its business under the mark in a territory;
  • promoting its business under the mark in a territory, including inviting franchisee inquiries;
  • sourcing goods from a territory;
  • manufacturing goods in a territory;
  • assembling goods in a territory; or
  • exporting goods from a territory.
In view of the above, it was held that the Delhi courts had the jurisdiction to try the suit, and the averments made with respect to lack of jurisdiction were bereft of any merit. The defendant’s application was therefore dismissed, and the suit was allowed to proceed accordingly.

Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest. Law & Practice updates are published without comment from INTA except where it has taken an official position.

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