In an interesting ruling, the Delhi High Court expanded the scope of the expression ‘carries on business’ and thus held that a person can be regarded as carrying on business in Delhi if the goods are shipped on the basis of the orders received from the customers based in the capital city.
Going through a plethora of Supreme and High Courts precedents, the Court said, “the Delhi High court would, on a demurrer, have jurisdiction to entertain the suit inasmuch as the appellant/ plaintiff would be regarded as carrying on business in Delhi within the meaning of the expression under Section 134(2) of the Trademarks Act, 1999 and Section 62(2) of the Copyright Act, 1957.”
World Wrestling Entertainment (plaintiff) sued a Mumbai based company for trademark and copyright infringement in Delhi High Court claiming jurisdiction as the company is selling goods to customers based in Delhi through its website, and thus carrying on business there.
“The rule that applies to contracts concluded over the telephone would apply with equal vigour to contracts concluded over the internet. In other words, contracts would be completed at the place where the acceptance is communicated”, the Court said.
The Court explained, “The offers are made by customers at Delhi. The offers are subject to confirmation/ acceptance of the appellant/ plaintiff through its website. The money would emanate or be paid from Delhi. Can it not then be considered that the appellant/ plaintiff is, to a certain extent, carrying on business at Delhi? In our view, it would be so. Because of the advancements in technology and the rapid growth of new models of conducting business over the internet, it is possible for an entity to have a virtual presence in a place which is located at a distance from the place where it has a physical presence. The availability of transactions through the website at a particular place is virtually the same thing as a seller having shops in that place in the physical world.
The Court concluded that the introduction and spread of e-commerce and business over the internet did impact the meaning of the expression ‘carries on business’ at a certain place.