TROPICAL HERBS PVT LTD AND TWO OTHERS v. LINK NATURAL PRODUCTS LTD

022-SLLR-SLLR-2001-V-3-TROPICAL-HERBS-PVT-LTD-AND-TWO-OTHERS-v.-LINK-NATURAL-PRODUCTS-LTD.pdf


TROPICAL HERBS PVT LTD AND TWO OTHERS
v.
LINK NATURAL PRODUCTS LTD(Case No. 1)
COURT OF APPEALUDALAGAMA, J.
NAN AY ANKARA, J.
A.L.A. 151/2001
C. COLOMBO 5859/SPLJULY 17th, 2000
High Court (Special Provisions) Act 10 of 1996 – S. 2(1). S. 2(3) – Code ofIntellectual Property Act 52 of 1979 – S. 142(2), 142(2)(a) -Unfaircompetition – Alternative cause of action – Exclusive Jurisdiction in theHigh Court, Western Province – Jurisdiction of the District Court?
The Plaintiff Respondent sought and obtained an enjoining order preventingthe Defendant Petitioner from using or disclosing directly or indirectly atechnology described as scientifically optimised process protocol whichis said to be used in the manufacture of the Plaintiffs product – “Sam ah an",in producing launching, selling or marketing, offering for sale the productcalled “Suvane” and restraining the Defendant Petitioner from using orstimulating either directly or indirectly get up, design, packaging, marketingand other means which bears similarity or resemblance to that of thePlaintiffs in marketing “Suvane".
On leave being sought the Defendant-Petitioner challenged the jurisdictionof the District Court, Colombo to entertain the Plaintiff's action.
Held :
(1) Section 2(1) of Act No. 10 of 1996 has empowered the Minister tonominate any High Court to exercise exclusive jurisdiction in regardto matters stipulated in the 1st schedule of the Act.
The Minister is also empowered under S. 2(3) to nominate the HighCourt of the Western Province to exercise the jurisdiction in respectof matters referred to in the 2nd schedule to the Act.
The Minister has by gazette notification No. 943/12 dated 01. 10. 96nominated the High Court of the Western Province in terms of thesaid Act to exercise thejurisdicdon in respect of the matters stipulatedin the said schedule.
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(2) The averments in the Plaint show that, the acts of unfair competitiontake place in Colombo, and further that the launching of the Defendantsherbal product takes place in Colombo and the cause of action basedon the Code of Intellectual Property Act relates to the provisions ofS. 142( 1), S. 142(2) and any action based on unfair competition, whichtakes place in Colombo has to be filed in the High Court of Colombo,in view of the provisions of Act 10 of 1996.
APPLICATION for Leave to Appeal from the Order of the District Court
of Colombo.
Gamint Marapana. PC., with Navin Marapana for Defendant Petitioner.
K. Kanag-Iswaran PC., with G. Alagaratnam, P Jayawardena and B.
Illangatllaka for the Plaintiff Respondent.
Cur. adv. uult.
August 23, 2001.
NANAYAKKARA, J.
The plaintiff-respondent (Plaintiff) is a limited liabilitycompany incorporated under the laws of Sri Lanka which isprimarily engaged in the business of manufacturing, selling andexporting of Ayurvedic Pharmaceuticals and other herbalproducts. They instituted action in the District Court of Colomboin respect of one of their herbal products called “Samahan"which is said to be an instantly soluble Ayurvedic drug, againstthe first defendant – company, (first defendant – petitioner) whichis also an incorporated company under the Companies ActNo. 17 of 1982 and the second and the third defendants(petitioners) seeking, inter alia, the following reliefs
(a) An injunctive relief preventing the defendants from usingor disclosing directly or indirectly a technology describedas "scientifically optimised process protocol" which is saidto be used in the manufacture of the plaintiff's productcalled “Samahan", in producing, launching, selling ormarketing offering for the sale produce called "suvane".
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(b) An injunctive relief restraining the defendants from usingor stimulating either directly or indirectly get up design,packaging, marketing and other means which bearssimilarity or resemblance to that of the plaintiff’s inmarketing the produce called “Suvane”, until the finaldetermination of the District Court action.
After the institution of the action, on an ex parte applicationmade to Court, the learned District Judge on 30.04.2001issued an enjoining order against the defendants in terms ofthe prayers (a) and (f) of the plaint, enjoining the defendantsfrom the very acts in respect of which the plaintiff had soughtreliefs by way of interim/ permanent injunctions in their plaint.The defendants filed their objection to the enjoining order byway of petition and affidavit challenging the jurisdiction of thecourt to entertain, hear and determine the plaintiff’s action andpraying for the suspension of the enjoining order issued andalso for the dismissal of the plaintiff’s action.
The learned District Judge who held an inquiry into theobjections raised by the defendants delivered an order on the27‘h April 2001, rejecting the preliminary objections raised bythe defendants against the enjoining order. It is against thisorder of the District Judge that the defendants have preferredthis application for leave to appeal in this court.
When this matter was taken up for support in Court on
learned Counsel vehemently objecting to theextension of the enjoining order issued by the District Judgemade extensive submissions challenging the jurisdiction ofthe Court to entertain the plaintiff's action. Basing hissubmissions on the question of the alleged cause of action, whichis said to have accrued to the plaintiff to institute action in theDistrict Court, Counsel argued that the action should have beendismissed in limine, as the District Court lacked jurisdiction toentertain the plaintiff's action. He submitted that lack ofjurisdiction to entertain the plaintiff's case becomes evident onan examination of the provisions of the Code of Intellectual
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Property Act. under which the plaintiff has filed his action, inconjunction with the provisions of the High Court (SpecialProvisions) Act No. 10 of 1996. It was further contended byCounsel for the defendants that in as much as the plaintiffhad sought to invoke the jurisdiction of Court, under theprovisions of the Intellectual Property Act No. 52 of 1979. thejurisdiction to entertain, hear and determine the alleged causeof action, which is said to have accrued to the plaintiff, is vestedexclusively in the High Court of Colombo of the Western province,under the provisions of the High Court (Special Provisions) ActNo. 10 of 1996, established for that purpose. Developing hisargument further the learned Counsel for the defendantscontended as the action is based on unfair competition asenvisaged by section 142 of the Code of Intellectual PropertyAct, the plaintiff's action should have been instituted in theHigh Court of Colombo, which is vested with exclusive jurisdictionparticularly in situations where unfair competition takes placeas alleged by the plaintiff in his plaint. Making reference to theaverments in the plaint filed in the District Court. Counselargued the averments in the plaint makes it abundantly clearthat the plaintiff attempts to restrain the defendants fromlaunching, marketing and selling their products in Colombo,thereby lending support to his argument, that the unfaircompetition takes place in Colombo.
Responding to submissions advanced by learned Counselfor the defendants. Counsel for the plaintiff submitted that thedefendants had made use of the knowledge they acquired ofthe technology called the scientifically optimised process, usedin the manufacture of herbal product called "Samahan” duringtheir employment under the plaintiff and they had made use ofthat scientific knowledge in the manufacture of the herbalproduct called "Suvene”. after resigning from the plaintiffcompany. Therefore in view of this the plaintiff had to instituteaction in the District Court of Colombo on alternative causes ofaction, one based on the contract of employment entered intoin Colombo by the defendants with the plaintiff and the otherbased on the infraction of the provisions of the Code of
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Intellectual Properly Act and that the plaintiff’s action is notbased on “passing of” as pointed out by the Counsel for thedefendant but on unfair competition as contemplated by theCode of Intellectual Property Act.
At this stage, it is important to examine the validity of theargument advanced by both Counsel who appeared for theplaintiff and the defendants. It is common ground that this isan action on alternative cause of action, one is based on contractof employment while the other is based on Code of intellectualProperty Act. As far as the action, based on the contract ofemployment is concerned it is admitted by both parties thatthe contract of the employment had been entered into inColombo by the defendant with the plaintiff and the plaintiff’sregistered office is also situated in Colombo although there isno specific averment as to where the contract was entered into.As far as the other cause of action is concerned it is also anadmitted fact that it is based on an infraction of certain provisionsof the Intellectual Property Act relating to unfair competition.
To determine the question whether the District Court ofColombo has jurisdiction to entertain, hear and determine theplaintiff's action, it will be necessary to have a close look at theaverments in the plaint which has been filed in the DistrictCourt. A careful examination and analysis of the avermentscontained in the plaint will make it abundantly evident andclear that the acts of unfair competitions complained of bythe plaintiff take place in Colombo. This fact is furtherstrengthened by the averments contained in paragraphs 24 and31 of the plaint when it says that the launching of thedefendants’ herbal product takes place in Colombo and thecause of action based on the Code of Intellectual Property Actrelates to the provisions of section 142(1) & 142(2) (a) of theAct and any action based on unfair competition, which takesplace in Colombo has to be filed in the High Court of Colomboin view of the Provisions of the High Court (Special Provision)Act No. 10 of 1996. Section 2(1) of the High Court (Special
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Provisions) Act No. 10 of 1996 has empowered the Minister tonominate any High Court to exercise exclusive jurisdiction inregard to matters stipulated in the first schedule of the Act. TheMinister is also empowered under section 2(3) to nominate theHigh Court of the Western Province to exercise the jurisdictionin respect of matters referred to in the second schedule of theAct. Accordingly, the Minister has by a Gazette notification dated
10. 96. No. 943/12 nominated the High Court of the WesternProvince in terms of section 2( 1) of the said Act to exercise thejurisdiction in respect of the matters stipulated in the saidschedule of the Act.
Therefore for the reasons stated above. I am of the viewthat the objection taken by the petitioner should succeed, andhis application to reject the plaint on the basis of the lack ofjurisdiction be upheld and the enjoining order issued on30. 04. 2000, be varied. The petitioner is also entitled to costsin a sum of Rs. 10000/-.
UDALAGAMA, J. – I agree.
plaint rejected,application allowed.