A service provider cannot claim exclusive goodwill in a mark conceptualized and funded by the principal owner.

The Appellants (ITC) and Respondent (AGH) entered into an Operating Service Agreement (OSA) in 1985 for the "Park Sheraton" hotel in Chennai

In 1989, a South Indian restaurant named "Dakshin" with a distinctive logo began operations under the OSA

The OSA expired in 2015, after which ITC withdrew, and AGH continued running the restaurant as "Crowne Plaza" and later as a standalone entity using the "Dakshin" mark

ITC filed a suit for infringement and passing off in the Delhi High Court, seeking an injunction against AGH

The Single Judge dismissed the injunction application, finding no territorial jurisdiction and no prima facie case on merits

ITC appealed this dismissal

1. Whether the High Court of Delhi has territorial jurisdiction to entertain the suit despite the Defendant's restaurant being located only in Chennai

2. Whether ITC is the exclusive owner of the "Dakshin" mark and goodwill under the covenants of the OSA

3. Whether AGH's use of the mark constitutes passing off and copyright infringement

4. Whether ITC is barred from seeking relief due to acquiescence under Section 33 of the Trade Marks Act

The Court applied Section 20 of the CPC regarding territorial jurisdiction, noting that Section 134 of the Trade Marks Act does not apply to pure passing off actions

It relied on World Wrestling Entertainment v. Reshma Collection and Tata Sons v. Hakunamatata to establish the "interactive website" and "targeting" tests for jurisdiction

Regarding passing off, it applied the "Triple Test" (Goodwill, Misrepresentation, Damage) from Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries

Section 33(1) of the Trade Marks Act was applied for the principle of acquiescence

For copyright, Section 17(c) (work made in course of employment) and Section 19 (assignment in writing) of the Copyright Act were analyzed

On jurisdiction, the Court disagreed with the Single Judge, holding that AGH’s use of e-commerce platforms like Zomato to "Order Online" and book tables constituted "carrying on business" in Delhi

It also found a portion of the "cause of action" arose in Delhi where ITC’s reputation might be injured

On merits, however, the Court found that the OSA designated ITC as a "service provider" for a fee, while AGH bore all financial risks and expenses

Since the "Dakshin" mark was conceived four years after the OSA began and used only at AGH's premises, ITC had no pre-existing goodwill

The Court found no evidence of misrepresentation by AGH

Furthermore, ITC's silence from 2015 to 2023, while AGH openly used the mark, amounted to acquiescence under Section 33(1)

Regarding copyright, since the author was an employee of a third-party agency (HTA) and no written assignment to ITC was produced, ITC failed to prove ownership

(i) ITC was a service provider, not a principal owner of the brand's local goodwill; (ii) There was no passing off as AGH was a concurrent user from the mark's inception in 1989; (iii) The suit was barred by acquiescence due to ITC’s 8-year delay in objecting; and (iv) No copyright infringement was proved due to lack of an assignment deed

The Court dismissed the appeal and upheld the refusal of the injunction