End Of IP Court Shopping?': Delhi High Court Refers Conflict On Territorial Jurisdiction To Larger Bench

"The principles of law in relation to territorial jurisdiction of courts cannot be so diluted or be made so vague that a corporation could sue in just about any location within the country... That would throw the very concept of territorial jurisdiction of courts to the winds." Delhi High Court, in a significant order dated August 25, 2026, has referred a set of complex questions regarding the territorial jurisdiction in Intellectual Property (IP) suits to a Larger Bench.

Dealing with a trademark and disparagement suit filed by Hindustan Unilever Limited, Justice A.J. Bhambhani observed that the current judicial landscape, shaped by conflicting precedents on the digital reach of cause of action and the rights of corporate plaintiffs, has created a state of uncertainty that necessitates authoritative clarification.

Hindustan Unilever Limited instituted a suit against Kwick Living (I) Private Limited, alleging that the latter’s "War on What’s Hidden" campaign disparaged its products, 'Vim' and 'Surf Excel'. The defendant raised a preliminary objection, contending that the Delhi High Court lacked territorial jurisdiction as both parties have their registered offices in Mumbai and no specific cause of action had demonstrably arisen in Delhi. The plaintiff, however, argued that digital dissemination and the online availability of the defendant's products in Delhi established the court's jurisdiction.

The court was called upon to determine whether IP suits are governed exclusively by Section 20 of the CPC or if the special provisions of Section 134 of the Trade Marks Act and Section 62 of the Copyright Act operate as independent gateways. The court also examined the conflict between the Supreme Court’s restrictive reading in Indian Performing Rights Society Ltd. v. Sanjay Dalia and the expansive interpretations of "cause of action" and "carrying on business" in the digital era.

Restrictive vs. Expansive Interpretation

Justice Bhambhani highlighted that Sanjay Dalia established a purposive restriction to prevent forum-shopping, suggesting that a corporation must sue at its principal office if a part of the cause of action arises there. Conversely, decisions like Burger King Corpn. v. Techchand Shewakramani have adopted a more flexible approach, treating every location where a trademark is "used" (including advertising) as a place where the cause of action arises.

"The Supreme Court holds that where a corporation has its principal office at a place and a part of the cause of action also arises there, the corporation must sue there and cannot invoke a distant place merely because it also has a subordinate office."

The Digital Jurisdiction Dilemma

The court noted a direct conflict between the precedent in Banyan Tree Holding—which mandates a "purposeful targeting" and "effects test"—and more recent observations in cases like Nilesh Girkar, which imply that mere nation-wide digital availability of content could suffice to establish a cause of action under Section 20(c) of the CPC.

"Banyan Tree adopts a stringent test for internet-based jurisdiction under section 20(c). It holds that mere accessibility of a web-site in Delhi, even if interactive, does not suffice."

The Need for Judicial Consistency

The court observed that the interplay between physical presence and virtual "marketplace" status has left litigants and courts without a clear, uniform rule. The ruling underscores that unless these conflicts are resolved, the foundational concept of territorial jurisdiction risks becoming illusory in an era of ubiquitous e-commerce and digital advertising.

"Whether the restrictive position laid down in Sanjay Dalia would still confine the plaintiff to the principal-office location... or whether the broader interpretation would open-up the statutory options... appears to be an unresolved issue."

In its conclusion, the Court directed the Registry to place the matter before the Hon’ble Chief Justice to constitute a Larger Bench. The referral seeks to resolve whether a corporate plaintiff must sue only at its registered office when part of the cause of action arises there, and what specific jurisdictional threshold should govern online transactions in IP disputes to prevent the "court shopping" menace.

Date of Decision: 25 August 2026