Precedentiary Value of Judgments : The Law

Justice Anil Kumar
Delhi High Court

Justice Anil Kumar of the Delhi High Court, while dealing with a writ for reinstatement of services of an employee, in Narender Kumar Gupta vs Union Of India And Others has discussed the precedent value of judgment and how the same are to be interpreted. The Court observed, as under;

The precedents relied on by the petitioner are apparently distinguishable. The ratio of any decision must be understood in the background of the facts of that case. What is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in it. It must be remembered that a decision is only an authority for what it actually decides. It is well settled that a little difference in facts or additional facts may make a lot of difference in the precedential value of a decision. In Bhavnagar University v. Palitana Sugar Mills Pvt Ltd (2003) 2 SCC 111 (vide para 59), the Supreme had observed:- 

" It is well settled that a little difference in facts or additional facts may make a lot of difference in the precedential value of a decision."

The Supreme Court in Bharat Petroleum Corporation Ltd and Anr. v. N.R.Vairamani and Anr. (AIR 2004 SC 778) had also held that a decision cannot be relied on without considering the factual situation. In the same judgment the Supreme Court also observed:- " Court should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are neither to be read as Euclid's theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Judgments of Courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes."

In P.S.Rao Vs State, JT 2002 (3) SC 1, the Supreme Court had held as under:

"There is always a peril in treating the words of judgment as though they are words in a legislative enactment and it is to be remembered that judicial utterances are made in setting of the facts of a particular case. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusion in two cases."

In Rafiq Vs State, 1980 SCC (Crl) 946 it was observed as under: 

"The ratio of one case cannot be mechanically applied to another case without having regard to the fact situation and circumstances obtaining in two cases."

Right to Privacy : Tata moves Supreme Court

Source : The Hindi

Unauthorised publication of his private conversations with business woman Niira Radia recorded by the Directorate-General of Income Tax has infringed his right to privacy, industrialist Ratan Tata asserted in his writ petition filed in the Supreme Court on Monday.

Mr. Tata said that since April-May 2010, there had been reports in the media that the DGIT had authorised the interception and recording of telephone conversations Ms. Radia had with various people. The reports also suggested that these recordings made by the IT department for the purpose of its investigations were thereafter handed over to the CBI.

Mr. Tata made it clear that he was not challenging the right of the statutory authorities to make a recording of private telephone conversations and the power of the CBI to use the transcripts for the purpose of investigations. He was aggrieved by the failure of the authorities to take adequate steps to protect the privacy of those whose conversations were recorded and to act in accordance with the Rules under the Indian Telegraph Act in dealing with these transcripts. Even if the transcripts were illegally obtained by someone, no steps were taken to retrieve them and prevent their dissemination in public.

He said the unauthorised publication of a private conversation between two citizens was protected by the “right to privacy” under Article 21 of the Constitution as the publication of such conversations could seriously damage their reputation. Quoting a series of Supreme Court judgments, he said telephone tapping, unless it was permitted under the procedure established by law, would infract Article 21 of the Constitution and any restriction imposed on making such tapes public would come under the purview of reasonable restrictions under Article 19 (2) of the Constitution.

CONSTITUTIONAL DUTY

Mr. Tata said that Article 21 would extend to the protection of his reputation and that of those similarly situated. There would be a constitutional duty on the part of the Union of India and its agencies to exercise their power under the law to recover the data obtained without authorisation and prevent its further dissemination.

He sought a direction to the authorities to take all steps as might be necessary to retrieve as far as possible all the recordings; a direction to the CBI to conduct a thorough enquiry into the matter; and a direction to ensure that there was no further publication of these recordings — either as audio files through the Internet or as transcripts in any media, print or electronic.

Tata is being represented by Karanjawala & Co. in the Supreme Court.

Solicitor General Gopal Subramanium to Quit Bar Council Post?

Gopal Subramanium

Source : Indian Express


About six months after he was unanimously elected chairman of the Bar Council of India (BCI), the body which regulates legal profession in the country, Solicitor General (SG) Gopal Subramanium may have to put in his papers. When contacted, Subramanium refused to say anything on the issue.

Sources said Union Law Minister M Veerappa Moily recently asked him to resign from his BCI post so that he could concentrate full-time on his job as the Government of India’s second senior-most law officer.

Subramanium has been in the eye of a storm after an affidavit settled by him in the 2G scam case resulted in the name of Prime Minister Manmohan Singh being dragged into the issue. Upset with the wording of the affidavit, the Law Minister ordered the immediate reversion of Department of Telecom’s legal adviser Santokh Singh to the Law Ministry. On Monday, Singh was placed under suspension for making false claims while giving an opinion in the 2G matter.

“The government wants the Solicitor General to resign the BCI post. He is representing the government in a number of important cases. Moreover, with the Law Ministry deciding to reform the legal education system as well as the legal profession, questions could arise on the issue of conflict in the two posts that the Solicitor General is holding. The views of the government and the BCI may not be the same on a number of issues such as the proposed Legal Practitioners (Regulations and Maintenance of Standards in Professions, Protecting the Interest of Clients and Promoting the Rule of Law) Act, 2010,” said a senior Law Ministry functionary privy to the issue.

Asked if there was a deadline by which Subramanium would have to resign, the officer said the government expected him to resign at the earliest. The minister, it is learnt, told Subramanium last week that it would be better if he stepped down from the post of chairman BCI to concentrate on his legal work.

Sources in the Law Ministry said that the judicial and legal education reforms initiated by the ministry could see some opposition from the BCI. The BCI’s move to hold an entry examination for aspiring lawyers has also run into rough weather, with the Law Ministry also not too keen on the exam being held. It has also received a large number of representations against the BCI move to hold the exam.

Jurisdiction of Courts in Passing Off Actions : The Law

Justice Dr. S. Muralidhar
Delhi High Court

Justice Muralidhar of the Delhi High Court has discussed the Law relating to Jurisdiction of Courts while dealing with a Passing Off action involving the use of an universally accessible web site. In the case in hand, the Plaintiff sued to the Defendant for use of its trademark on its website, which was accessible in Delhi. The Plaintiff, inter alia, contended that since the web site was accessible in Delhi hence the Courts at Delhi would have jurisdiction to try and entertain the suit. While dealing with this interesting proposition, the Hon'ble Court held as under;

34. Finally, the decisions of our court. At one end of the spectrum we have decision of the learned single Judge of this Court in Casio India Co. Limited v. Ashita Tele Systems Pvt. Limited 2003 (27) PTC 265 (Del). That was a passing-off action where the Defendant was carrying on business from Bombay. The Defendant had managed to get a registration of domain name www.casioindia.com and Defendant no. 2 was the Registrar with whom the domain name had been registered. The Plaintiff, on the other hand, claimed to be a 100% subsidiary of Casio Computer Ltd., Japan (Casio Japan) which was the registered owner of the trade mark Casio in India used for a large number of electronic and other products. He had also obtained the registration of large number of domain names in India like CasioIndia Company.com, CasioIndia.org, CasioIndia.net as well as Casio India.info, CasioIndia.Biz and CasioIndia Co. Defendant no. 1 had managed to get the registration of the aforementioned domain names during the time when it held a distributorship agreement with the Plaintiff. It was held by the learned single Judge after referring to the decisions in Rediff Communication Ltd. V. Cyber Booth, AIR 2000 Bombay 27 and the High Court of Australia in Dow Jones & Co. Inc. v. Gutnick (supra) that "once access to the impugned domain name website could be had from anywhere else, 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 sufficient 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 "

35. A different approach was adopted in a later judgment by another learned single Judge of this Court in (India TV) Independent News Service Pvt. Limited v. India Broadcast Live Llc And Ors., 2007 (35) PTC 177 (Del.). The facts in brief of that case were that the Plaintiff company ran a Hindi news channel "INDIA TV" which was launched in March 2004. The Plaintiff claimed to have adopted the mark "INDIA TV" since 01.12.2002. The Plaintiff had applied for the registration of the said mark and the said applications were published in the trademarks journal. The Plaintiff was also the owner of the domain name "INDIA TV" which domain name was registered on 18.11.2003. The channel was made available for live viewing on the said website. Defendant nos. 1 and 2 hosted a website "indiatvlive.com" which the Plaintiff came across in January 2007 while carrying out an internet search. The website contained the words "INDIA TV" which were displayed prominently inside the sketch of a television. A passing off action was initiated to injunct the Defendant no. 2 from using the domain name www.indiatvlive.com. While the suit was pending, Defendant no. 1 was proceeding with the action instituted by it in the Arizona District Court in US, where the Defendants were located, against the Plaintiff in respect of "reverse domain name hijacking" seeking a declaration of non-infringement of the Plaintiffs mark by Defendant no. 1. The Plaintiff then applied to this Court stating that the Defendant had suppressed the fact of having filed the aforesaid action in Arizona and prayed for an injunction against Defendant from proceeding with the said action in the Arizona courts particularly since the suit of this court was prior action. In resisting the said application, the Defendant no. 1 took stand that this court was not a court of competent jurisdiction not being the appropriate forum/forum conveniens. Inasmuch as Defendants did not reside or work for gain in India, it was only the District Court Arizona that was the appropriate forum/forum conveniens to decide the dispute.

36. It was argued before the court that in order to attain personal jurisdiction i.e. the jurisdiction over the person of a Defendant in contrast to the jurisdiction of a court over a Defendants property or his interest therein, there should be a long-arm statute on the basis of which the court could exercise jurisdiction over any individual located outside the state. As regards the Internet, it was argued that it was not enough to establish that there was a passive website. The court referred to the purposeful availment test and the three factors highlighted in Cybersell. The learned single Judge then noticed that India did not have a long arm statute which dealt with the jurisdiction as regards non-resident Defendants. Therefore it had to be examined whether the Defendants activities "have a sufficient connection with the forum state (India); whether the cause of action arises out of the Defendants activities within the forum and whether the exercise of jurisdiction would be reasonable." In paras 46 and 47, it was observed as under:

"46. I am in agreement with the proposition that the mere fact that a website is accessible in a particular place may not itself be sufficient for the courts of that place to exercise personal jurisdiction over the owners of the website. However, where the website is not merely 'passive' but is interactive permitting the browsers to not only access the contents thereof but also subscribe to the services provided by the owners/operators, the position would be different. However, as noticed in the judgment in CyberSell Inc. case (supra), even where a website is interactive, the level of interactivity would be relevant and limited interactivity may also not be sufficient for a court to exercise jurisdiction. In Panavision International LP case (supra), it was found that the registration of the Plaintiff's mark as a domain name by the Defendant had the effect of injuring the Plaintiff in California and therefore the court had jurisdiction. In Compuserve case (supra) again it was found that the Defendant had contacted Ohio to sell his computer software's on the Plaintiffs Ohio based systems and sent his goods to Ohio further for their ultimate sale and thus those courts had jurisdiction.

47. In the present case, the website "indiatvlive.com" of Defendant No. 1 is not wholly of a 'passive' character. It has a specific section for subscription to its services and the options (provided on the website itself) for the countries whose residents can subscribe to the services include India. The services provided by Defendant No. 1 can thus be subscribed to and availed of in Delhi (India) i.e. within the jurisdiction of this court."

37. After referring to the articles posted on the net the learned Single Judge concluded in India TV that the "Defendant No. 1 intended to target expatriate Indians as well as Indians within the country." Further the stand taken by Defendant No. 1 in its written statement was that it had a global presence including in India. It claimed to be the first IPTV delivery system of Indian content from India. The website of Defendant No. 1 was launched in India as well as in Los Angeles. It was accordingly held that "Defendant No. 1 company has sufficient connection with India." As regards the effects test, it was held that since the Plaintiff channel was an Indian news channel intended for Indian audiences, any damage alleged to have been caused or alleged to be likely to arise to the goodwill, reputation etc of the Plaintiff would be in India. However, the alleged damage that may have arisen or may be likely to arise to the Plaintiff would be as a consequence of the fact that the impugned website is accessible in India and the services provided can be availed of in India. Consequently, it was held that "the Defendant is carrying on activities within the jurisdiction of this court; has a sufficient contacts with the jurisdiction of the court and the claim of the Plaintiff has arisen as a consequence of the activities of Defendant no. 1 within the jurisdiction of this court".

38. Having surveyed the law as it has developed in different jurisdictions, this Court is of the view that the essential principles developed as part of the common law can be adopted without difficulty by our courts in determining whether the forum court has jurisdiction where the alleged breach is related to an activity on the internet. At the outset, this court does not subscribe to the view that the mere accessibility of the Defendants website in Delhi would enable this Court to exercise jurisdiction. A passive website, with no intention to specifically target audiences outside the State where the host of the website is located, cannot vest the forum court with jurisdiction. This court is therefore unable to agree with the proposition laid down in Casio. The said decision cannot be held to be good law and to that extent is overruled.

39. India TV appears to be somewhat closer to the development of law in this regard since the decision in Casio. In India TV, the learned single Judge impliedly doubted the correctness of the decision in Casio. The learned single Judge in India TV acknowledged that a mere accessibility of website may not be sufficient to attract jurisdiction of the forum court. This, in the considered view of this Court, is the correct position in law.

40. There was no occasion for this court even in India TV to examine the finer aspects of the question of jurisdiction based on the nature of the website, the intention of the host of the website to specifically target viewers outside its jurisdiction, and the effect of hosting such website on audiences outside such state. It appears to this court that for the purposes of a passing off action or an action for infringement where the Plaintiff is not carrying on business within the jurisdiction of the forum court, and where there is no long arm statute, the Plaintiff would have to show that the Defendant purposefully availed itself of the jurisdiction of the forum court. It is not enough merely to show that the website hosted by the Defendant is an interactive one. It would have to be shown that the nature of the activity indulged in by the Defendant by the use of the website was with an intention to conclude a commercial transaction with the website user.

41. This court is not able to accept the submission of the learned counsel for the Plaintiff that the test of "purposeful availment" must be replaced by the test of "purposeful avoidance". While the Defendant may in his defence show how he avoided the forum state, the initial burden is on the Plaintiff to show that the Defendant "purposefully availed" itself of the jurisdiction of the forum court. The issue of incorporating filters to block access to the website by viewers located outside the forum state will have to be considered while deciding if the Defendant had "purposefully avoided" the forum state. However, that question will arise only if the Plaintiff has been able to show that the website of the Defendant is interactive and permits commercial transactions to be concluded by the Defendant with a user of the website.

42. This Court holds that jurisdiction of the forum court does not get attracted merely on the basis of interactivity of the website which is accessible in the forum state. The degree of the interactivity apart, the nature of the activity permissible and whether it results in a commercial transaction has to be examined. For the effects test to apply, the Plaintiff must necessarily plead and show prima facie that the specific targeting of the forum state by the Defendant resulted in an injury or harm to the Plaintiff within the forum state. For the purposes of a passing off or an infringement action (where the plaintiff is not located within the jurisdiction of the court), the injurious effect on the Plaintiffs business, goodwill or reputation within the forum state as a result of the Defendants website being accessed in the forum state would have to be shown. Naturally therefore, this would require the presence of the Plaintiff in the forum state and not merely the possibility of such presence in the future. Secondly, to show that an injurious effect has been felt by the Plaintiff it would have to be shown that viewers in the forum state were specifically targeted. Therefore the effects test would have to be applied in conjunction with the "sliding scale" test to determine if the forum court has jurisdiction to try a suit concerning internet based disputes.

43. The question no. (i) is accordingly answered. Question (ii): In a passing off or infringement action, where the defendant is sought to be sued on the basis that its website is accessible in the forum state, what is the extent of the burden on the Plaintiff to prima facie establish that the forum court has jurisdiction to entertain the suit?

44. This brings us to the question as to the extent of burden of proof on the Plaintiff to prima facie show that the Defendant has purposefully availed of the jurisdiction of this court. In the present case, it is argued that by enabling customers to go on the website and get a copy of its brochure and make enquiries, the Defendant must be held to have purposefully availed of the jurisdiction of this court. The question that arises is for the purposes of Section 20 (c) CPC, in such circumstances, is what is the extent of the burden on the Plaintiff to show prima facie that a part of the cause of action arose within the jurisdiction of the forum court.

45. This court holds that in order to prima facie establish that the Defendant purposefully availed of the jurisdiction of this court, the Plaintiff would have to show that the Defendant engaged in some commercial activity in the forum State by targeting its website specifically at customers within that State. This is consistent with the law laid down in Cybersell and reiterated later in Toys R Us. It is also consistent with the application of the tighter version of the effects test which is targeting. In any action for passing off or infringement, it would have to be shown that the Defendant by using its mark intended to pass off its goods as that of the Plaintiffs. A mere hosting of a website which can be accessible from anyone from within the jurisdiction of the court is not sufficient for this purpose. Also a mere posting of an advertisement by the Defendant depicting its mark on a passive website which does not enable the Defendant to enter into any commercial transaction with the viewer in the forum state cannot satisfy the requirement of giving rise to a cause of action in the forum state. Even an interactive website, which is not shown to be specifically targeted at viewers in the forum state for commercial transactions, will not result in the court of the forum state having jurisdiction. In sum, for the purposes of Section 20 (c) CPC, in order to show that some part of the cause of action has arisen in the forum state by the use of the internet by the Defendant, the Plaintiff will have to show prima facie that the said website, whether euphemistically termed as "passive plus" or "interactive", was specifically targeted at viewers in the forum state for commercial transactions. The Plaintiff would have to plead this and produce material to prima facie show that some commercial transaction using the website was entered into by the Defendant with a user of its website within the forum state and that the specific targeting of the forum state by the Defendant resulted in an injury or harm to the Plaintiff within the forum state. Question no. (ii) is answered accordingly. Question (iii) Is it permissible for the Plaintiff to establish such prima facie case through "trap orders" or "trap transactions"?

46. It may be recalled that the Plaintiff has to show that a part of the cause of action in a suit for passing off or infringement has arisen within the jurisdiction of the forum court. Relevant to this, it would have to be shown by the Plaintiff that the Defendant "availed" of the jurisdiction of the forum court by commercially transacting with a viewer located in the forum state through the internet. The question is whether this transaction can be a trap transaction that is engineered by the Plaintiff itself, particularly when it is not otherwise shown that the Defendant intended to specifically target customers in the forum state.

47. Courts in foreign jurisdictions have underlined the need for fairness and certainty while accepting evidence in the form of trap orders. In California Fig Syrup Company v Taylor's Drug Company Ltd (1897) 14 RPC 564 (Court of Appeal, UK), the Plaintiffs trade name was California Syrup of Figs and the Defendants trade name was American Syrup of Figs. The Plaintiffs sought trap orders for California American Syrup, thereby creating ambiguity as to the name under which the defendant was selling its own syrup of figs product. Carr & Sons v Crisp & Co Ltd (1902) 19 RPC 497 (High Court of Justice, Chancery Division) was another case where there was ambiguity as to what was actually said at the time of the trap purchase, coupled with difficulties of subsequent recall. The Court observed that it would be wise on the part of the person setting the trap to send a written order in order to avoid ambiguity.

48. In Fox's Glacier Mints Ltd v Joblings (1932) 49 RPC 352, (High Court of Justice, Chancery Division), there was a possibility that requests for Glacier mints were misunderstood or not heard, particularly as there was a common use of the word glassy for sweets of that kind in the relevant market (the city of Leicester). In C Stillitz (a Firm) v Jones & Higgins Ltd (1943) 60 RPC 15 (High Court of Justice, Chancery Division), there was a conflict in evidence as to what happened in the making of the trap purchases. In Cellular Clothing Coy Ltd v G White & Coy Ltd (1952) 70 RPC 9 (High Court of Justice, Chancery Division), two trap orders were successfully obtained through purchases in a shop, but no notice was given to the Defendants of what had happened before issuing proceedings. Therefore, there was no certainty as to whether the shop assistants in question were really made aware of what was being asked for. The Court emphasised the need to either support the trap orders by written evidence or atleast bring them to the notice of the person who was trapped. In the view of the court (Harman J), this was exactly the way in which trap orders should not be given and that such fragile evidence with no confirmation and which has been sedulously concealed from the Defendants could not be relied upon to support a claim for injunctive relief.

49. In C C Wakefield & Co Ltd v Purser (1934) 51 RPC 167 (High Court of Justice, Chancery Division), there was evidence of one isolated instance of passing off, but it was still held that this was insufficient for the purposes of an injunction to restrain continuing conduct that was alleged to be occurring, unless it could be shown that there was some kind of intentional conduct involved. In this regard, the following comments of Farwell J underline the fairness considerations involved in evidence of trap purchases, while noting that such orders may often be a necessary means of proof:

"Test orders or, as the Defendant prefers to call them, trap orders are in a case of this kind, it seems to me, quite essential. I fail to see how the Plaintiffs can safeguard themselves or the public without having regard to such methods of testing the matter as is used in the present case; but, trap orders or test orders, whichever they may be called, are scrutinised by the Courts with some jealousy, and rightly so, because, if as the result of a trap order or a test order, a person is to be charged with the very serious offence of fraudulently misrepresenting the goods which he is supplying to the public, to the detriment of the public as well as of the Plaintiffs, the Court must be satisfied that the offence has been proved strictly. Further, if a person is resorting to a test order or a trap order, even in a case of this kind, where the necessity for such a device may be a real one, that person is bound to carry out the proceeding with the utmost fairness to the prospective defendant to the action. It is essential, if the plaintiff is to succeed in the action which he ultimately brings, that he should be able to satisfy the Court that he has acted throughout with the utmost fairness to the defendant and given him every reasonable chance of investigating the matter for himself, so that he may be in a position to put forward in the action, if one follows, any and every defence properly open to him. His Lordships concern was not to grant an injunction unless satisfied that the conduct was likely to continue. On the basis of an isolated instance of passing off, he was not prepared to do so, unless satisfied that the defendant had been intentionally seeking to pass off the plaintiffs product (which he was not)."

50. Showerings Ltd v Fern Vale Brewery Coy Ld. [1958] RPC 484 (High Court of Justice, Chancery Division) was a case involving passing off constituted by several trap purchases (asking for the Plaintiffs Babycham perry at the same public house and being supplied with another perry drink). Danckwerts J rejected criticisms that were made of the Plaintiffs trap orders here, noting that they were not based on one isolated instance and that the Plaintiffs had tested the matter by several visits to see whether there was simply one mistake or a regular practice; it was only after these inquiries, that a letter was written and action subsequently launched. As this was in fact a motion for committal of the defendant for contempt in relation to an earlier order of the court, the court did not order committal because the defendant had acted honestly and the passing off was the fault of his servants who were, in the Courts view, unfortunately persons of extremely low intelligence.

51. Similar judicial remarks about the need for fairness in the use of trap orders, and the giving of notice to defendants so that they can investigate alleged breaches, are to be found in several Australian cases: see, for example, OT Co v Muir (1914) 31 WN (NSW) 87, 88 (Harvey J) and Bryant v Keith Harris & Co Ltd (1908) 33 ALR 437, 450-452 (Lockhart J)

52. In Marie Claire Album SA v Hartstone Hosiery Ltd [1993] FSR 693 (Chancery Divison), a trap order had been made by the Plaintiffs solicitors for hosiery sold under the name Marie Claire (the plaintiffs published a womens magazine under that name). The Defendant challenged the way in which this had been done by the Plaintiffs solicitors (this included arranging the meeting at which the order was given and the making of a tape recording of the discussions), and there had also been a complaint to the Solicitors Complaints Bureau. Chadwick J observed that "if it is the law that a plaintiff is entitled to misrepresent himself as a bona fide customer in the guise of executing a trap order then his solicitor must be entitled, first, to advise him that this is so and secondly, to set up the arrangements which enable the trap order to be executed effectively. It is but a short step from that for the solicitor to be present at the execution of the trap order, if only to ensure that a proper record is made of what occurs."

53. In Hilti AG v. Ucan Development Limited [1963] 7 RPC 160 (High Court of Justice, Chancery Division), the Court, while considering the likelihood of repetition and the danger of further instances of passing off, was concerned with only one transaction, which was a trap order. The Court refused to grant an interlocutory injunction on the basis of an isolated instance. Even in cases where no trap purchase was involved, the Courts have not granted relief where only an isolated instance was shown. [See: Rutter and Co. v. Smith (1901) 18 RPC 49 (High Court of Justice, Chancery Division); John Knight & Sons v. Crisp (1904) 21 RPC 671 (High Court of Justice, Chancery Division); Burberrys v. Watkinson (1906) 23 RPC 141 (High Court of Justice, Chancery Division); Armstrong Oiler Company Ld v. Patent Axlebox and Foundry Company (1910) 27 RPC 362 (High Court of Justice, Chancery Division)]. In any event, to show that the Defendant was availing a jurisdiction, a series of transactions by way of commercial dealings would have to be shown to have taken place within the forum state.

54. Although evidence of trap orders has been accepted by courts in both trade mark infringement and passing off cases, [See Bostitch Inc v McGarry & Cole Ltd[1964] RPC 173; Thomas French & Sons Ltd v John Rhind & Sons Ltd [1958] RPC 82; Pearson Brothers v Valentine & Co (1917) 34 RPC 267; Procea Products Ltd v Evans & Sons Ltd (1951) 68 RPC 210] the nature of business transacted through an internet website and the nature of goods or services offered by the Defendant would be relevant. This would involve two levels of examination. The nature of goods or services offered would be relevant to determine as to their feasibility of being ordered on the internet by the customers. For example, goods like books, DVDs and cosmetic products can be easily ordered by the customers on the Internet. But goods like cars and furniture would be less obvious candidates to be ordered online as the customers, in general, would like to purchase these goods after actually visiting the shops and seeing them. Similarly, services are another instance where online ordering may not be feasible. For example, food services offered by restaurants, etc. However, professional services such as legal or accounting services may be provided online to the clients. (See Sam Ricketson, Trademark Liability Issues Arising out of Internet Advertising, Legal Studies Research Paper No. 207, January 2007, Melbourne Law School available at )

55. In Walt Disney Productions Ltd. v. Gurvitz, [1982] F.S.R. 446 the question was whether an illegal sale of a video which constituted a trap order could be relied upon for the purposes of demonstrating contempt of court. It was held that since the case involved a breach of undertaking given to the Court by the Defendant, he would still be liable.

56. In Ward Group Pty Ltd v. Brodie & Stone Plc, (2005) FCA 471 (22 April 2005), the Federal Court of Australia held that the making of trap purchases would not confer jurisdiction on the court. It was held that: "the use of a trade mark on the Internet, uploaded on a website outside of Australia, without more, is not a use by the website proprietor of the mark in each jurisdiction where the mark is downloaded. However, as explained above, if there is evidence that the use was specifically intended to be made in, or directed or targeted at, a particular jurisdiction then there is likely to be a use in that jurisdiction when the mark is downloaded. Of course, once the website intends to make and makes a specific use of the mark in relation to a particular person or persons in a jurisdiction there will be little difficulty in concluding that the website proprietor used the mark in that jurisdiction when the mark is downloaded."

A reference was made to the Section 9 of the Trade Mark Act of Australia which gave rise to the question whether the Plaintiff had consented to the application of the mark in the sense of the use of its physical manifestation in Australia by the website proprietors. It was sought to be contended by the Plaintiff that trap purchases had never been regarded as consent by the trap purchasers to the infringing use. Rather, they are often a necessary step to establish that use. It was explained by the High Court that "why trap purchases were not generally considered a consent to infringing use is that the infringing conduct is usually already occurring when the goods bearing the infringing mark are advertised or offered for sale to the public in the jurisdiction. In that situation the trap purchase is made to establish that fact, and cannot be seen to be consent to the infringements that are occurring". However, the above situation was distinguished from one where "goods bearing the mark are being offered for sale by an overseas vendor to the world at large and a trap purchase is made by a purchaser in Australia, who not only procures the sale and delivery of the goods in Australia but also procures the sole use of the infringing mark by the overseas vendor in Australia. In that situation, but for the trap purchase, no use of the mark in Australia would have occurred. In those circumstances it was held that it would be difficult for the trap purchaser, whose conduct was the sole cause of the use of the infringing mark in Australia, to contend that it has not consented to that use". It was accordingly held that the trap purchase would not confer jurisdiction on the court.

57. Reverting to the present case, the position that emerges from the above judicial decisions is that while in trade mark and infringement cases, trap orders or trap transactions may be used as evidence, the fairness of such transactions is a relevant factor to be considered. Other relevant factors would be the nature of goods or services offered for purchase on the internet. If they require the customer to further physically verify their quality then the mere purchase of such goods through a trap transaction may not be treated as being sufficient evidence of infringement. The facts of each case will determine whether the trap transaction is a fair one and has resulted in a purchase on the internet of goods or services. A lone trap transaction will not be sufficient evidence of infringement or passing off. For the purposes of establishing that a part of the cause of action arose within the jurisdiction of the court, the Plaintiff would have to show that the Defendant has purposefully availed of the jurisdiction of the forum court by entering into a commercial transaction with an internet user located within the jurisdiction of the forum court. This cannot possibly be a solitary trap transaction since that would not be an instance of "purposeful" availment by the Defendant. It would have to be a real commercial transaction that the Defendant has with someone not set up by the Plaintiff itself. If the only evidence is in the form of a series of trap transactions, they have to be shown to be obtained using fair means. The Plaintiff seeking to establish jurisdiction on the basis of such trap transactions would have to aver unambiguously in the plaint, and also place along with it supporting material, to prima facie show that the trap transactions relied upon satisfy the above test. Question (iii) is answered accordingly.

Summary

58. We summarise our findings on the questions referred for our opinion as under:

Question (i): For the purposes of a passing off action, or an infringement action where the Plaintiff is not carrying on business within the jurisdiction of a court, in what circumstances can it be said that the hosting of a universally accessible website by the Defendants lends jurisdiction to such Court where such suit is filed ("the forum court")?

Answer: For the purposes of a passing off action, or an infringement action where the Plaintiff is not carrying on business within the jurisdiction of a court, and in the absence of a long-arm statute, in order to satisfy the forum court that it has jurisdiction to entertain the suit, the Plaintiff would have to show that the Defendant "purposefully availed" itself of the jurisdiction of the forum court. For this it would have to be prima facie shown that the nature of the activity indulged in by the Defendant by the use of the website was with an intention to conclude a commercial transaction with the website user and that the specific targeting of the forum state by the Defendant resulted in an injury or harm to the Plaintiff within the forum state.

Question (ii): In a passing off or infringement action, where the defendant is sought to be sued on the basis that its website is accessible in the forum state, what is the extent of the burden on the Plaintiff to prima facie establish that the forum court has jurisdiction to entertain the suit?

Answer: For the purposes of Section 20 (c) CPC, in order to show that some part of the cause of action has arisen in the forum state by the use of the internet by the Defendant the Plaintiff will have to show prima facie that the said website, whether euphemistically termed as "passive plus" or "interactive", was specifically targeted at viewers in the forum state for commercial transactions. The Plaintiff would have to plead this and produce material to prima facie show that some commercial transaction using the website was entered into by the Defendant with a user of its website within the forum state resulting in an injury or harm to the Plaintiff within the forum state.

Question (iii): Is it permissible for the Plaintiff to establish such prima facie case through "trap orders" or "trap transactions"?

Answer: The commercial transaction entered into by the Defendant with an internet user located within the jurisdiction of the forum court cannot possibly be a solitary trap transaction since that would not be an instance of "purposeful" availment by the Defendant. It would have to be a real commercial transaction that the Defendant has with someone not set up by the Plaintiff itself. If the only evidence is in the form of a series of trap transactions, they have to be shown as having been obtained using fair means. The Plaintiff seeking to establish jurisdiction on the basis of such trap transactions would have to aver unambiguously in the plaint, and also place along with it supporting material, to prima facie show that the trap transactions relied upon satisfy the above test.

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