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Delhi High Court Recognises tort of unfair competition


In a landmark judgment, the Delhi High Court on March 13th recognised a separate tort of unfair competition and unjust enrichment and barred the defendants (Cricbuzz, Idea Cellular and On Mobile Global) from sending short message service (SMS) alerts updating cricket scores on real time basis.



The judgment was delivered by Justice M.L. Mehta in an appeal filed by Star India Pvt Ltd (plaintiff) against the decision of a single judge of the Delhi High Court who had dismissed Star India's claim. Star India had appealed to a Division Bench of the Delhi High Court which had remanded the case to the single judge (M.L. Mehta), as reported by SpicyIP.



Star India had moved the Court against the defendants opposing their SMS alert services which were based on the real time scores. Star India contended that it had obtained all rights with respect to cricket matches in India by virtue of an agreement with the Board of Control for Cricket in India (BCCI).



Star India’s primary contention was that the dissemination of match information through match updates and score alerts via SMS by the defendants constituted the tort of “unfair competition” and “commercial misappropriation/unjust commercial enrichment”. Star primarily relied upon the legal principle enunciated in the landmark decision of the United States Supreme Court in the case of International News Service v. Associated Press i.e. “he who has fairly paid the price should have the beneficial use of the property”.



The Court held that “the plaintiff has made out a prima facie case”. It held that “by free-riding upon the efforts of the plaintiff, the defendants are eating into the revenue which the plaintiff would have made, thereby causing the plaintiff irreparable injury”. The Court observed that “applying the test of unjust enrichment as observed in the Mahabir Kishore case, it is amply clear that the defendants are enriching themselves at the cost of the plaintiff”.



However, the Court sought to strike a balance between the rights of Star India with that of defendants and of the public at large. Hence, it permitted third parties to disseminate scores after a time gap of 15 minutes from the moment such score update/match alert is telecasted/broadcasted by Star.



Explaining the rationale behind the time period of 15 minutes the Court said, “It is ensured that the defendants are not providing ball-by-ball or minute-by-minute score updates/match alerts contemporaneously with respect to the live telecast/broadcast of match. Considering the time-sensitive nature of the information, after a span of 15 minutes, there is no longer a direct competition between the parties to provide contemporaneous match information to the customers who demand it”.

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