E-disputes and Disputed Jurisdiction

  1. Introduction

Cyberspace is a virtual space made of electronic signals, which has challenged a range of concepts associated with nation states- the concepts of territorial integrity, sovereignty and physical boundaries. It has made us rethink traditional ways to understanding legal and judicial authority and their power of exercising jurisdiction and authority over persons and spaces. Its fluid and all pervasive nature poses challenges relating to its regulation. The endeavour, at all levels- national as well as international, have been to find a balance between over-regulation or under-regulation. With cyber space there are dangers of overregulation, since easy and widespread accessibility of internet content makes a person, usually defendant, susceptible to all possible jurisdictions/authorities where the content can be accessed. The dangers of under-regulation, arise with impossibility of locating a cyber-activity to one specific physical location, which may leave a person, usually a plaintiff, with no possibility to bring a claim or seek a remedy.  While how to regulate and what to regulate remain important issues in cyber space regulation, another important and preliminary question that needs resolution is who is the most appropriate authority to regulate activities in cyber space. In other words, which State and its legal and judicial system has jurisdiction to regulate, prevent and punish- activities in cyber space in any given situation. The entire problem with the Cyberspace jurisdiction is the presence of multiple parties spread across the globe who are having only virtual nexus with each other. Here, question arises if ‘X’ wants to sue ‘Y’, where ‘Y’ can be sued?

Efforts across the globe to find answers to above questions have resulted into a range of approaches from the United States, Europe, and also from other common law jurisdictions. There are being lots of conferences and seminar held over the world but there is no conclusiveness. At the international forum there could be some help from Hague Conference on the Private International Law, but that is also not specific to Cyberspace jurisdiction. While Indian legislature promulgated a specific legislation, the Information Technology Act, 2000, to deal with problems arising from use of internet and information technology, determination of jurisdiction is governed by common law principles and are heavily influenced by international approaches, mainly by the approaches from the United States. This article aims to undertake critical analysis of Indian approach that has developed over the years to deal with issues relating to jurisdiction of Indian courts in regulating the cyber-space. It shows that while one can trace significant influence of United States on Indian jurisprudence, especially in dealing with matters relating to contracts and e-commerce, the courts in India have recently adopted a different approach in dealing with matters relating to cyber defamation.

This article is divided into three sections. The first section explains the concept of personal jurisdiction and the challenges posed to it with emergence of cyber space. The second section then deals with the prominent international approaches, with a special focus on the United States, which have emerged to address the issues of jurisdiction in cyber space. The third section looks into recent Indian approaches in dealing with jurisdictional issues including matters relating to cyber defamation.

  1. Cyberspace Jurisdiction: Challenging the Traditional Concept of Personal Jurisdiction

Jurisdiction, as is well known, is the power conferred by the law on the Courts to adjudicate a dispute relating to person or property. Theory of jurisdiction is an essential component of State sovereignty, as all sovereign independent States possess jurisdiction over all persons and things within its territorial limits and all causes, civil and criminal, arising within these limits. While principles of jurisdiction relating to events and persons within territorial limits of a country are well defined, there have been differences in legal systems across the world when it comes to jurisdiction principles over cross-border disputes. In other words, it has always been a matter of debate when can national courts can exercise jurisdiction over a person who is not a domiciliary, resident or national of a courts concerned. Principles of exorbitant jurisdiction, long arm statutes have been the mechanisms available with different legal systems to deal with cross border matters. Nationality, residence, domicile, consent/voluntary submissions, cause of action are some of the commonly used connecting factors which enable a court to assume jurisdiction. However, in issues relating to cyberspace the problem arises since often it may be difficult to link a defendant to a legal system through any of the above connecting factors.

In Cyberspace, both the place where the defendant resides and the place where the cause of action arises are difficult to ascertain. Even a simple process over internet may augment a question of jurisdiction on the Net, which will be very hard to comprehend. To illustrate, say A, in Japan, chooses to access a paid website, which is based in a server in Italy and hence pays the amount required through net banking. Now after the payment when he tries to access the website he is not able to view the pages. He then wishes to take legal action against the vendor of the site, who is in Canada. A challenging question herein would be which Court can be called court of the competent jurisdiction for the said transaction? A would like to sue vendor in his jurisdiction, however, vendor would like to be sued in his own jurisdiction.

Questions of this class not only added absolute perplexity but also led to lots of incongruity that infect judiciary, when it comes to jurisdiction in cyberspace. Bearing in mind the need of substantial borders on the Cyberspace, is it feasible for a Court to reach out of its territorial limits to tow a defendant into its court for demeanour in cyberspace?

2.1. Attempts to Draw Principles for Cyberspace Jurisdiction

The problem of jurisdiction that is being experienced in cyberspace currently already existed in US legal system as in the US legal system States have got enormous power to legislate their internal affairs barring national security, foreign affairs and natural resources. With this backdrop, it is important to discuss the judgement in the case of Cybersell, Inc. v. Cybersell, Inc[1] which deals with a factual scenario relating to conflict over the cyberspace jurisdiction. This case dealt with a dispute relating to the use of service mark between two online service providers first at Florida (Cybersell-FL) and second at Arizona (Cybersell-AZ). In this case, Court was faced with the question, if the mere accessibility of a website should be the ground to find jurisdiction by a Court in Florida. The Court held that appellant’s motion is dismissed due to lack of subject matter jurisdiction. The Court relied on traditional analysis advocated by the Supreme Court of US relating to due process aspects of personal jurisdiction:

“It is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.”[2]

The Court rejected the argument advanced by the plaintiff that mere advertising on the web, without ‘something more’, a website owner was not amenable to the courts of plaintiff’s State. The Plaintiff relied on the ‘effects test’ principle which was rejected by the Court on the ground that ‘effects test’ varies in its application and it does not apply to a corporation with the same force as it does to an individual “because a corporation does not suffer harm in a particular geographic location in the same sense that an individual does.”

In Smith v. Hobby Lobby Stores Inc. v. Boto Co. Ltd[3] a related observation was made by the Court wherein the Court opined that forum state lacked substantial connection to assert personal jurisdiction over a non-resident defendant. This corporation did had no actual connection with the forum State through the website that could be downloaded from the State. Nevertheless, these kinds of decisions do not offer any solution to problems relating to cyberspace jurisdiction. On account of the conflicting decisions and complex factual matrix more confusion is created as the whole approach lacks consistency.

For instance, in Edias Software International, L.L.C. v. Basis International Ltd[4], the contract between an Arizonian LLC  and a New Mexico corporation provided that that contractual relationship would be administered by the law of New Mexico State, however, in this case defendant’s use of the internet was considered as a basis to justify jurisdiction in Arizona notwithstanding what was contained in the contract between two corporations. Another example is that of United States v. Thomas[5].In this case a couple from the State of California operated a BBS[6] which offered to sell different images and videotapes which were sexually explicit. A Postal Inspector from Tennessee while browsing the web found a website offering to sell sexually explicit content online. He subscribed the BBS sitting in his office in Tennessee. He posted request for images and videotapes and was provided with the password to download the content in Tennessee. The couple was arrested for delivering sexually explicit content via BBS in violation of federal obscenity laws and were prosecuted in the Western District of Tennessee. What would amount to ‘obscenity’ was to be judged, among other things by applying the “contemporary community standards.” It was argued by the prosecution that “contemporary community standards” of Tennessee should be applied by the Court where the said sexually explicit materials were downloaded by the Postal Inspector. On the other hand, defence argued that the case should be decided by the application of Californian “contemporary community standards” as the website emanated from the state of California. And if the Californian “contemporary community standards” cannot be made applicable failing then it should be judged by the standards of cyberspace itself.

The court ruled that “juries are properly instructed to apply the community standards of the geographic area where the materials are sent,” and that the community standards of Tennessee should therefore apply. The defendants argued that they did not cause the images to be transported to Tennessee. They merely made the images available online for members of the bulletin board; it was the postal inspector who caused the images to enter Tennessee by downloading them.

Discarding above argument, the court ruled that if defendants had so decided to limit subscriber’s reach in jurisdictions with more stringent laws dealing with obscenity than those in the state of California. They could have employed technological controls to prevent the access to the obscene content in other jurisdictions.

As it is evident from facts of the case defendants knew that they had a subscriber in Memphis, Tennessee and they could be subjected to the “contemporary community standards” Tennessee. Further, it is clear from the facts defendants entered into a subscriber agreement with a member in Memphis, Tennessee they could be subjected and judged by reference to those standards. Thus, it is seen that fact situations like this raise many questions that are difficult to answer by applying contemporary principles of law. The question also arises, to what extent traditional law and analogies should be pressed upon this new medium being used to do business? Some answers to the abovementioned daunting question emerged in the celebrated case of Zippo Manufacturing Co. v. Zippo Dot Com, Inc.[7], which gave the concept of passive and interactive sites  and a specific test famously known as Zippo test as a basis for establishing jurisdiction.

The Zippo Case: Passive & Interactive Sites and the Zippo Sliding Scale Test:

ZippoCase- provides a touchstone for courts that have been searching for direction in dealing with this new medium and the test laid down by this. For the purposes of cyberspace jurisdiction, web sites are categorised as passive and interactive. Passive websites are information oriented and make information available in a “read only” format. Interactive websites provides an opportunity to the surfers to interact with website owner or any chatbots. Courts across the jurisdictions are more inclined to see that a websites owner who collects information about the out of State residents purposefully avails itself of the  benefitsand protection of the forum State than a websites which simply provides information relating to its products and services.

However, if one looks specifically in the Zippo case the facts of the case were: Zippo Dot Com (‘Dot Com’), a Californian company, operated a website and Internet news services and laid claim to domain names “zippo.com,” “zippo.net,” and “zipponews.com.” Zippo Manufacturing, a Pennsylvania company that manufactured the well-known Zippo brand of lighters, sued Dot Com in the United States District Court for the District of Western Pennsylvania, alleging trademark infringement.[8] Dot Com moved the court to dismiss the suit for lack of personal jurisdiction, and the Zippo court denied this motion.

(2) Ruling by the Court:- The Zippo court began its jurisdictional analysis by discussing the traditional framework of International Shoe, noting  that “…defendants who . . . create continuing relationships and obligations with the citizens of another state are subject to regulation and sanctions in the other State for consequences of their actions.” The court then turned to the Internet and jurisdiction. It began by noting that, the need for the expansion of jurisdiction has increased as technology has expanded the range of commercial activities.[9] In a survey of the scant body of Internet case law existing at that time, the Zippo court opined  that “the likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet”.[10]

(3) Examination by the Zippo Court:- While examining the facts of its case, the Zippo Court found that Dot Com’s Web site was an active site, and that the defendant had engaged in repeated commercial transactions with Pennsylvania residents via its Web site.[11]. Dot Com’s Web site allowed users to subscribe to its news service by completing an application that included such information as the user’s name and address. Customers could pay for this service ‘over the Internet or by telephone. Dot Com did not have any employee, agent or office in the State of Pennsylvania

but did have approximately 3,000 subscribers  located in the state. Dot Com also contracted with seven Internet service providers in Pennsylvania, allowing their customers to access Dot Com’s news services. The court found that these intentional contacts with Pennsylvania were numerous enough to support an assertion of jurisdiction.

The court rejected the defendant’s contention that exercising jurisdiction would be unreasonable. It stated its concern to protect non-resident defendants from being compelled to be accountable in relation to commercial activities being carried over in a foreign jurisdiction on the basis of “random fortuitous or attenuated” contacts. Although, the Court recognized that defending a suit in Pennsylvania would impose a burden that defendant has to bear, the forum State’s concerns and the plaintiff’s choice of forum outweighed this burden. Noting that the defendant chose to do business in Pennsylvania, the court observed that “the Due Process Clause is not a territorial shield to interstate obligations that have been voluntarily assumed.”

Nevertheless, as more courts began to grapple with this new arena of jurisdictional questions, the Zippo decision became a touchstone for courts seeking to understand the Internet.

Jurisdictional Analysis in Zippo Case:

The court in Zippo began its jurisdictional analysis by noting that “defendants who … create continuing relationships and obligations with the citizens of another state are subject to regulation and sanctions in the other State for consequences of their actions.” The court then began by noting that the need for the expansion of jurisdiction has increased as technology has expanded the range of commercial activities The Court rationalized that “jurisdiction is proper, where contacts proximately result from actions by the defendant himself that create a ‘substantial connection’ with the forum State.[12]” It then relied on the Supreme Court’s pronouncement in Burger King Corp. v. Rudzewicz,[13] that “jurisdiction in these circumstances may not be avoided merely because the defendant did not physically enter the forum State.” The Zippo court reviewed the following cases in which personal jurisdiction over the Internet was at issue before constructing what has become known as the Zippo Sliding Scale.

In CompuServe, Inc. v. Patterson,[14] the defendant had entered into contract with the residents of a foreign jurisdiction that involved knowingly and repeatedly transmitting  computer files on the website. In this case personal jurisdiction was deemed to be proper because the defendant was determined by the court to have been conducting commercial activities through the website in Ohio. The Zippo court found this case exemplary of the category of websites in which the defendant obviously conducts business over the Internet.

A case in which the opposite was true was Bensusan Restaurant Corp. v. King[15] In Bensusan, a corporation based in New York and creator of a jazz club  known as ‘The Blue Note’ in New York City, had  the trademark rights in federally registered trade mark ‘The Blue Note.’ The defendant King was an individual who lived in Columbia, Missouri. He owned and operated a ‘small club’ in that city also called The Blue Note. The defendant created a website with a logo that was identical to the logo used and owned by Bensusan. Bensusan filed an action for trademark infringement, trademark dilution and unfair competition against the defendant King. The court characterized the interactivity over the Internet as passive and thus denied personal jurisdiction because the website did little more than make information available to those who are interested in it. The Zippo court found this case exemplary of the category of websites in which the defendant’s interactivity is passive. These websites are those that may be accessed by Internet browsers, but do not allow interaction between the host of the website and a visitor to the site.

In the middle ground between these two extremes, the Zippo court found what it called “interactive websites.”[16] Interactive sites are those in which users, can but do not necessarily conduct business through the exchange of information. For these sites, the court reasoned, “the exercise of jurisdiction is determined by examining the level of interactivity and commercial nature of the exchange of information that occurs on the Web site.” After having reviewed the case law on the subject available at the time, the court decided “that the likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet”[17].

Tests propounded by Zippo Case:

The cases decided by the Courts in US mainly deals with rules on specific jurisdiction in inter-state cases. However, these principles evolved would apply in the disputes involving parties from different countries as well. In cases where out of State defendant is not present in the forum State a three-pronged test as evolved by the Courts would apply to determine if the exercise of personal jurisdiction by a Court over an out of state defendant is proper:

(1) the out of State defendant must maintain substantial connection with the forum state in the     form of “minimum contacts”.

(2) the claim asserted against the out of State defendant must arise out of those contacts only which are relevant to the claim and

(3) the exercise of jurisdiction by the Court of forum state must not violate the ‘due process’ clause of the US Constitution.

Significance of the Zippo Case

The sliding scale developed in Zippo case does not do anything to discover real connections of the defendant via a website with forum Sate. The sliding scale test tries to discover the reach of the website of the defendant in a particular manner.  At times the nature of the website may be said to be dispositive of the defendants intended actions because the nature of the website cannot be separated from a particular type of use. It is in these cases in which the test is most useful. But the problem of determining purposeful availment over the Internet continues to exist in a majority of cases involving Internet contacts. The sliding scale approach must be supported in order to be more useful in the analysis of real, anticipated contacts with the specific forum that results from the use of a website by the defendant. The analysis must ultimately distinguish the contacts the defendant has had with the specific forum now attempting to assert jurisdiction over him, from the manifold of contacts the defendant has had with all of the state forums within which the website may have offered interactive contact. In other words, the analysis should determine the intensification of the Internet purposefully caused by the defendant that caused the effect of the website upon that particular state to be distinguishable beyond the effect the website had on the rest of the states. The question becomes how to go about measuring such effects?

Decision and Ratio decidendi of the Case

In its discussion of Internet cases, the Court described the sliding scale method espoused in Zippo. Here, the Court correctly stated that a passive web site should not be the basis for jurisdiction, Perhaps, the Court purposely failed to mention Inset and reject its analysis for passive web sites, although they are best forgotten[18].  Hopefully, based on the emerging case law, better understanding of the Internet, and a proper analysis of both, the Courts will continue to follow Bensusan, Jolly and the like and disregard the improper analogies made by Inset and its progeny when looking at passive web site contacts.

Applying the sliding scale approach, the Court in Zippo case had just held that in this case the non-resident defendant was “doing business over the Internet” as it allowed online business transactions with subscribers who were resident of Pennsylvania. It processed the applications received from Pennsylvania residents with full knowledge. Thus, defendant purposely availed itself of benefits and protections under the laws of Pennsylvania, thereby making itself amenable to the courts in that State.

Moreover, it was further observed by the court that if the defendant were not willing to be amenable to the courts in the State of Pennsylvania, the defendant would have simply avoided not to make their services available to the residents of Pennsylvania. Hence, the Court opined that exercise of personal jurisdiction was proper and the defendant was amenable to the courts of Pennsylvania.

The Zippo court did not intend to pre-empt the traditional framework of law. The court produced a rational opinion after reviewing various decided case law that was in consonance with well-established legal principles of personal jurisdiction. Its misapplication by several courts, however, has exposed its weakness. It appears that in Zippo Court created an effective and more modern test for cyberspace personal jurisdiction. Further, on account of the global nature of the of the websites, it would be unreasonable to compel a website owner to be called in the courts of  state wherein their website might be available. Owing to this complicated nature of the internet sliding scale test propounded in relation to personal jurisdiction, warrants further analysis.

  1. Indian Courts and Approaches towards Issues of Personal Jurisdiction

Commercial and IP Matters

In India an indigenous law to deal with cyber jurisdiction has gradually emerged from the case law, where the courts have predominantly pursued the development of common law in the USA, the UK and some other Common law countries. One of the earliest cases which deal with cyber jurisdiction is Banyan Tree Holding[19] case. In this case, the High Court of Delhi dealt with an inter-state dispute wherein the plaintiff which was a foreign company, had invoked the jurisdiction of an Indian court to seek an injunction against the alleged infringement of its trademark.

In Casio India Co. Restricted v. Ashita Tele Frameworks Pvt. Limited [20] was a case of passing off action. Defendant was doing his business from Bombay and had got www.casioindia.com registered as a domain name and the second defendant was Registrar of domain names who was providing services of domain names. The plaintiff in the instant case claimed to be a subsidiary of Casio Computer Ltd., Japan (Casio Japan), which was the registered proprietor for the trademark ‘Casio’ in India. It used ‘Casio’ for many electronic and other items.

It had registered domain names like ‘CasioIndia Company.com’, ‘CasioIndia.org’, ‘CasioIndia.net’, etc. in India. First defendant had obtained the abovementioned domain names amid the time when it held a distributorship understanding with the plaintiff. It was observed by the learned single Judge after alluding to the decisions in Rediff Communication Ltd. v. Cyber Booth and Dow Jones & Co. Inc. v. Gutnick that “once the impugned domain name website could be had from anywhere else,the jurisdiction in such matters cannot be confined to the territorial limits of the residence of the defendant ”. According to the learned single Judge, since a mere likelihood of deception, whereby an average person is likely to be deceived or confused was adequate to entertain an action for passing off, it was not at all required to be proved that  “any actual deception took place at Delhi. Accordingly, the fact that the website of Defendant No.1 can be accessed from Delhi is sufficient to invoke the territorial jurisdiction of this Court[21].

In the case pertaining to India TV Independent News Service Pvt. Limited v. India Broadcast Live Llc & Ors[22]., Court chosen to adopt a different way. The complainant hosting a Hindi news channel ‘INDIA TV’ launched in March,2004. However, the plaintiff’s claim was to have the ‘INDIA TV’ as a trademark since December, 2002. The plaintiff had filed application for registration of the ‘INDIA TV’ mark and the relevant applications were published in the trademarks journal. The plaintiff who also owned domain name ‘indiatv.com’ registered on 18th November, 2003 and this channel was accessible for live streaming on the said website. Defendant Nos. 1 & 2 also hosted website having domain name ‘www.indiatvlive.com’ which the plaintiff came to know in January,2007. Website contained the phrases ‘INDIA TV’ appearing prominently inside the sketch of a television.

A motion was initiated in Delhi High Court to preclude Defendant No. 2 from using such domain name ‘www.indiatvlive.com.’ Whereas suit was pending for consideration before Court, Defendant No. 1 moved with declaratory suit in the District Court of Arizona in USA, where defendants were present, against plaintiff looking for a declaration from Court of non-infringement of the plaintiff’s trade mark by Defendant No. 1.

At this juncture, plaintiff moved to the Delhi High Court for a clarification that defendant had not disclosed fact that defendant had already moved with a declaratory suit in Arizona and pleaded an injunction order against defendant from proceeding with said action in the district court of Arizona at the time when suit filed in the Delhi High Court was a prior action. While resisting the said application, Defendant No. 1 took the defence that the Delhi High Court lacked the jurisdiction as it was not the proper forum/forum conveniens. As defendants did not work for gain or reside in India, it was only District Court in Arizona  as a proper forum / forum conveniens to decide dispute.

It was under consideration court to find personal jurisdiction, jurisdiction over the persona of a defendant in contrast to the jurisdiction of a Court over property of a defendant or his interest within the forum. It was further in argument that concept of long arm statute should be translated into reality and on the basis on which the Courts to exercise jurisdiction over any out of the state defendant. Related to websites the argument was that it was not sufficient to establish the fact of a passive website existence.

The Court considered criterion of purposeful availment test and related three factors were highlighted in Cybersell case. The Judge observed that India does not have a long arm statute to find jurisdiction in context with non-resident defendants. Therefore, it had to be seen whether the defendant’s actions has a sufficient relevance with forum state (India) whether said cause of action arisen out of  defendant’s actions within forum and also whether jurisdiction would be reasonable.

The Single-judge bench observed in India TV case that “Defendant No. 1 planned to target expatriate Indians and also within country. In addition, Defendant No. 1 in a written statement claimed to have global footprint including India also being first IPTV for India.

Aforesaid Defendant No. 1 commenced website in India and in Los Angeles. It was in argument that “Defendant No. 1 company has adequate linking with India considering effects test and Court opined since plaintiff’s channel was Indian news channel, proposed to provide contents to Indian viewers. Any harm so-called to have been triggered or assumed to cause reputation, goodwill etc.  of the plaintiff would be in India.

However, the so-called damage that may have been caused or may be likely to be a cause to plaintiff to be as a consequence of fact that website in question available for access in India and services provided can be availed of in India. So it was considered that Defendant is continuing activity in jurisdiction of this court with sufficient contacts with the jurisdiction of the court and the claim of the Plaintiff arise as a consequence of activities of Defendant No. 1 within jurisdiction of this court.

At this stage Both Casio and India TV were judgements of the Single-judge bench required proper analysis. In Banyan Tree Holding (P) Limited v. A. Murali Krishna Reddy[23] this opportunity was presented to the Court.

The plaintiff located in Singapore claimed being part of a group of companies in the field of hospitality business using of the word mark ‘Banyan Tree’ and banyan tree device since 1994. Since 1996 the plaintiff operated with two websites ‘www.banyantree.com’ and ‘www.banyantreespa.com’ and these two websites were accessible in India. It also applied for the registration of the mark as well as device which was under consideration for trademark registry. In October,2007 the plaintiff came to know that defendants located in Hyderabad started to work on a project under the name ‘Banyan Tree Retreat’, being unreliably same to that of plaintiff’s mark.

The plaintiff ‘Banyan Tree Holding’ appealed in the Delhi High Court that website ‘www.makprojects.com/banyan tree’ of the defendants publicized products and services was accessible in Delhi. Precise assessment of mark of plaintiff and defendant surprisingly similar and likely confuse public at large. Therefore, injunction order was pursued and Division Bench of the Delhi High Court responding referral order learned Single Judge affirmed the ruling in India TV and overruled Casio.

There was discourse that only existence of a presence of a website not sufficient for the Court to find jurisdiction over a defendant in a forum Court. Keeping in consideration the forum targetting principle it was held that plaintiff is required to clarify  aim of defendant to do commercial transaction with website users. In context with trap orders were also discussed in this case. The point that was deliberated on the basis whether single trap transaction was enough for defendant who had purposefully projected himself in jurisdiction of the forum Court.

In argument that a single trap transaction will not be sufficient to establish matter of fact that basis of action partly stood d up within jurisdiction of the court. The plaintiff required to establish that defendant had purposefully brought in himself within the jurisdiction of the forum court by doing business transactions via online user within jurisdiction of the forum court which possibly cannot result from a solitary trap transaction considering it would not be an occurrence of intentional availment by the defendant. These commercial transactions should be realistic in nature that defendant had online user and not a commercial transaction set up by the plaintiff itself.

In absence of no any other relevant evidence that only evidence is result of a sequence of trap transactions in that case these needs to be retrieved using fair means. The plaintiff looking for jurisdiction having consideration of such trap transactions could have prerogative explicitly and also along with it’s backup substance that prima facie establishes fact that trap transactions were dependent to satisfy aforesaid mentioned test.

Section 62 of the Copyright Act, 1957 and section 134 of the Trade Marks Act, 1999 incorporates the concept of long arm statutes in itself and enables the plaintiff to file suit for infringement of copyright and trademarks at the place where plaintiff resides irrespective of the fact where the cause of action arises. Thus, it makes a clear departure from the provisions of Code of Civil Procedure,1908. A plaintiff will not be able to take benefit of these provisions enshrined under the the Copyright Act and Trade Marks Act unless it could be established that the defendant targeted its commercial activities through its interactive website towards the online user in the forum state for the purposes of commercial transactions and clientele. Moreover, a single trap transaction may not determine that the defendant ‘purposefully’ targeted the customer/s of the forum State.

The principles laid down in Banyan Tree Holdings have been followed in recent judgements of the Delhi High Court in cases of World Wrestling Entertainment Inc. v Reshma Collection[24] and in Millenium and Copthrone International Limited v. Aryans Plaza Services Pvt. Ltd.[25]

While principles relating to jurisdiction in intellectual property and commercial matters in more recent times an interesting and somewhat controversial case is Baba Ramdev and Anr. v. Facebook Inc.[26] The allegation here was that a book based on the plaintiff was being circulated on a global basis by social media platforms, such as Facebook. The basic issue here was whether a global takedown order could even be passed by the Court. The Court essentially held that:

  1. If the content was uploaded in India, or from IP addresses in India, the content had to be taken down, blocked/ restricted on a global basis
  2. However, if uploaded from outside India, the Court cannot exercise its jurisdiction.

The Court had discussed the issue of jurisdiction previously in YouTube v. Geeta Shroff,[27] wherein the Court held that any exercise of jurisdiction must be done assuming that the internet transaction is one akin to a real-life transaction, thereby ensuring that the Court cannot assume extra-territorial jurisdiction on the matter.

In Baba Ramdev case referring to Section 79 of the Information Technology Act,2000 the court observed that the disabling and blocking of access shall be required to be done from the computer resource. Computer resource[28] as defined under the Information and Technology Act includes the whole computer network and not limited to any geographical area. It held:

“When disabling is done by the Platforms on their own, in terms of their policies, the same is global. So, there is no reason as to why court orders ought not to be global. All offending material which has therefore, been uploaded from within India on to the Defendants‟ computer resource or computer network would have to be disabled and blocked on a global basis. Since the unlawful act in case of content uploaded from India is committed from within India, a global injunction shall operate in respect of such content. In case of uploads which take place from outside India, the unlawful act would be the dissemination of such content in India, and thus in those cases the platforms may resort to geo-blocking.”

The Court also observed that if any piece of information or data was uploaded from India on to a ‘computer resource’ which resulted in storing of the information or data on the network and global circulation of the said information or data. Then such online platform service providers are under obligation to remove or restrict access to the said information and they are also required to remove or restrict access to such data from that particular computer resource. Because of the technological glitch the removal of the content or disabling of the link cannot be confined to a part of that resource, which is in reality serving a particular geographical area, it said.

The Court granted following reliefs:

  • The Defendants are directed to block, disable access or take down list of weblinks/URLs which  were submitted by the plaintiff in the form of annexure and which were uploaded in the global network from the IP address originated from India.
  • The Defendants are directed to block access and disable such weblinks/URLs which were uploaded from outside India and are listed in the annexure enclosed to the plaint, from being accessed from Indian soil to make it sure users from India would not have access to those weblinks.
  • Upon being notified from the Plaintiff about any new weblink which contains defamatory or offensive content as discussed in the present order relating to the plaintiff,online platform service providera shall take down/block access to the said weblinks/URLs either on a global basis or for the Indian territory as the case may be.
  • If, upon being notified by the plaintiff, defendant/s and platform service providers are of the opinion the content is not defamatory or voilative of law they shall inform the Plaintiff and the Plaintiff would seek their recourse in law.

Conclusion:

While laws in the US seem quite fluid on the point of personal jurisdiction and can be used to adapt to multiple scenarios, tests in India have seemingly been fact-specific and not one test that can cover the entirety of actions that take place on the internet. Thus, courts may exercise jurisdiction either very broadly or very narrowly. However, despite that it can be said that India has moved towards developing a minimum standard following Zippo Test.


This Article is written by Dr. Atul Kumar Pandey working as an Assistant Professor at National Law Institute University Bhopal.


References:

[1] 1997 US. App Lexis 33871 ( 9th Cir., December 2, 1997)

[2] Ibid

[3] 968 F. Supp. 1356 (W.D. Ark. 1997), cited from Paul C. Weiler, Entertainmemt Media & the Law: American Casebook Series (2nd Edn., West Group, St. Paul, U.S.A.), p.323

[4] 947 F. Supp. 413 (D. Ariz. 1996), cited from Paul C. Weiler, Entertainmemt Media & the Law: American Casebook Series (2nd Edn., West Group, St. Paul, U.S.A.), p.323

[5] 74 F. 3d 701 (6th Cir. 1996), cited from http://www.nysscpa.org/cpajournal.htm

[6] Bulletin Board Service.

[7] 952 F.Supp 1119 (W.D.Pa,1997)

[8] After having learnt of the defendant’s home page, the plaintiff sued the non-resident defendant in state of Pennsylvania for the infringement of trademark. It was argued by the defendant that only contact that he had with the forum state was through the website hence Pennsylvanian Court lacked personal jurisdiction. According to the defendant: “only two percent (2%) of its customers were in Pennsylvania. The defendant had, however, contracted with several Internet access providers in Pennsylvania to promote the news service”.

[9] It also noted the Supreme Court’s pronouncement that “jurisdiction in these circumstances may not be avoided merely because the defendant did not physically enter the forum State.”

[10] The Court again referred to the traditional framework of jurisdictional analysis, observing that “traditionally, when an entity intentionally reaches beyond its boundaries to conduct business with foreign residents, the exercise of specific jurisdiction is proper. Different results should not be reached simply because business is conducted over the Internet.” Citing McGee and International Shoe, the Court noted that even one contact may be sufficient to establish a substantial connection with the forum state, and the jurisdictional test requires that Courts focus on the nature and quality of the contacts, not just their quantity. ; Inset Systems, Inc. v. Instruction Set, 937 F.Supp. 161 (D.Conn.1996) sets the external boundary of the assertion of   personal jurisdiction based on the accessibility of the website .This case involved a dispute wherein trademark of a Connecticut corporation was allegedly being used as domain name by  Massachusetts corporation. A suit for trademark infringement was instituted by the Connecticut corporation

[11] With its analysis, the Zippo Court did not intend to pre-empt the traditional framework, stating that “this sliding scale is consistent with well developed personal jurisdiction principles.” The Court went on to discuss the nature of different Web sites, noting that some sites are used to conduct business and enter into contracts. The Court concluded that for these sites, if the defendant enters into contracts and knowingly and repeatedly transmits information to residents of another state, assertion of jurisdiction by that state is proper because the defendant has purposefully availed itself of the privilege of conducting business in that state. Such sites are commonly referred to as ‘active’ Web sites, although the Zippo Court never used this terminology.

At the other end of the spectrum are sites that simply post information on the Web that is accessible in another state. The Court recognized that the mere availability of these “passive” sites in a foreign state will not support a finding of jurisdiction. In the middle ground, the Court found what it called ‘interactive Web sites.’ Such sites do not allow users to actually conduct business, but do support the exchange of information. For these sites, the Court reasoned, the authority of jurisdiction is ascertained by way of analysing the level of  between the website and the users from the forum Satate, nature quality of commercial transaction that occurs on the website”.

[12] 952 F.Supp 1119 (W.D.Pa,1997)

[13] 471 U.S. 476

[14] 89 F.3d 1257 (6th Cir. 1996).

[15] 937 F.Supp. 295 (S.D.N.Y. 1996).

[16] In Maritiz v Cyber Gold, 947 F. Supp. 1328 (E.D. Mo. 1996)-It held that “while modern technology has made nationwide commercial transactions simpler and more feasible . . . it must broaden correspondingly the permissible scope of jurisdiction exercisable by the Courts.”

[17] https://cyber.harvard.edu/property00/jurisdiction/zipposum.html, accessed on May,15,2020.

[18] Joga Rao, Computer Contracts & Information Technology Law (1st Edn., 2003), p.17.

[19] 2015 (61) PTC 354

[20] 106 (2003) DLT 554

[21] https://indiankanoon.org/docfragment/151685239/?formInput=casio, accessed on May15,2020.

[22] ILR (2007) 2 Del 1231

[23] 2010 (42) PTC 361 (Del)

[24] 2014 SCC Online Del 2031

[25] 2018 SCC Online Del 8260

[26] Swami Ramdev v Facebook, 2019 SCC Online Del 10701

[27] 2018 SCC Online Del 9439

[28] Section 2(1) (k) of the Information Technology Act,2000.

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