Delhi High Court’s Views and Judgment on a Case of Solitary Trap Transactions

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Excerpt

The Delhi High Court heard and gave a judgment on an application in the suit filed for seeking an injunction restraining order for trademark infringement. The present case before this Court deals with the lack of territorial jurisdiction. 

 

Issue of the case

Does the lack of territorial jurisdiction of a court have the power to dominate the rejection of a plaint?

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The fact of the case

The plaintiff in this present case has filed the suit. The defendant in this present case is a private limited company and its registered office is situated in Coimbatore, Tamil Nadu while defendant no. 2 is a resident of Chandigarh. The registered office of the plaintiffs is in Maharashtra. Making some trap orders the plaintiffs made a purchase of spared parts from the defendants. The order was made in Coimbatore from Delhi and the goods were delivered to an address of Delhi. The defendant also sent a quotation to Delhi on 23.03.2020 and it delivered the goods on 05.08.2020. And later the plaintiff filed a suit asking for a decree of permanent injunction against the defendant’s company since the products received from defendant no. 1 infringe the plaintiff’s patent. However, the defendant has made an application for returning the plaint in an appropriate court of jurisdiction. It has been stated in the application by defendants that plaintiffs are attempting to harass the defendants filing a case in a court having no territorial jurisdiction. But it is stated under Section 20 CPC vide Section 134 of the Trade Marks Act that the plaintiffs can file a case in any court of the territory where either of the parties performs any business operations. And in this present case, the place of business has been Delhi. Although none of the parties have their registered office in Delhi, their principal place of business, for the particular performance based on which the suit has been filed, is Delhi. 

 

Defendant’s Submissions

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The defendant in the present case is claiming that a solitary trap transaction has been made by the plaintiff for which defendants were-

To prove the solitary trap transaction, the learned counsel relied upon the judgments of this Court being the cases of Banyan Tree Holding (P) Ltd. vs. A. Murali Krishna Reddy & Anr., 2009 SCC OnLine Del. 3780 and Indovax Pvt. Ltd. vs. Merck Animal Health and Ors., 2017 SCC OnLine Del. 9393. The defendant’s counsel makes it very clear that the present case deals with the solitary trap transaction which does not confer territorial jurisdiction on this court. 

 

Plaintiff’s submissions

The plaintiff’s counsel stated that the goods in question are purchased in Delhi and also were delivered in Delhi to defendant no. 2 who is an agent to Defendant no. 1 and who lives in the northern territories of the country including Delhi. Moreover, the counsel urged on the rule of Section 20 of the CPC that the said section applies to the present case based on its facts. Also, the relied judgments mentioned by the Defendants’ side are of online transactions and hence it does not apply to the present case. 

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Court’s observations

According to the legal position of Order 7 Rule 10 of the CPC which deals with returning the plaint, the court only needs to look at the allegations made in the plaint and the documents attached with it. So, this Court will do the same. Referring to the judicial decisions of some cases dealing with trademark infringements, this court has come to a legal position that emerges that in trademark cases the trap transactions are common and used as fair evidence. There are many other relevant factors like the quality of the goods and services offered online, for proving infringement cases. Since the plaintiff has set up the trap transactions the transactions made between the plaintiff and the defendant in this present case cannot be considered as a Solitary trap transaction as that would have to be a real commercial transaction and not a series of a trap set up transactions. The plaintiffs cannot only show the series of trap transactions for proving the infringement rather they must also show that the defendant constitutes the commercial sale of this product. Moreover, the transaction or sale needs to be on a wholesale basis or to a distributor as no cause of action arises out of the sale of goods to an individual customer.

Court also mentioned the Supreme Court judgment in the case of A.B.C. Laminart Pvt. Ltd. & Anr. Vs. A.p. Agencies, Salem, (1989) 2 SCC 163 to clarify the position of Section 20 CPC for making a judgment on the present case.

 

Court’s decision

It is yet to be decided whether the transactions made were bona fide or not which will be decided after further evidence to be produced by the parties. There is no cause of action related to the territorial jurisdiction of this court based on reading the plaint and some accompanying documents. So far there is no merit in the application filed by the defendant and so the same is dismissed.

 

CLICK HERE TO READ THE JUDGMENT. 


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