Date of Judgement:
06th April 2022
Coram/judge:
The Hon’ble Justice Ms.Asha Menon
Parties to the Case:
Plaintiff–HTC Corporation
Defendants-Mr. LV Degao & Ors.
Legal Provisions
- Order XXXIX Rules 1 & 2 Code of Civil Procedure, 1908 – Order XXXIX deals with the provisions for temporary injunctions and interlocutory orders. Rule-1 lays down cases in which temporary injunction may be granted. Rule-2 lays down provision for injunction to restrain repetition or continuance of breach.
- Section 124 of Trade Mark Act, 1999- lays down provision for stay of proceedings where the validity of registration of the trade mark is questioned, etc
- Section 29 of Trade Mark Act, 1999- lays down conditions which leads to infringement of registered trade marks
Overview
- The plaintiff company was incorporated under the laws of Taiwan in the year 1997 and claimed to be a leading manufacturer of consumer electronic items. The plaintiff was initially registered as “High Tech Computer Corporation‟, but gained popularity among consumers as “HTC” and had been known as “HTC” since 1998.
- The plaintiff got its Trade Mark registered in India on 12th May, 2006, which was valid till 12th May, 2026. On 24th November, 2011, the plaintiff applied for and was granted registration of its Trade Mark ‘HTC ONE’ in India. On 7th March, 2014, the plaintiff obtained international registration for the Trade Mark ‘HTC’ in China.
- The defendant was a Chinese individual and owner of the companies being defendants No.2 to 4. The defendants No.2 to 4 were manufacturers of electronic products bearing identical infringing Trade Mark [HTC] in China and exporting the same to India. These defendants were also selling their products through Amazon India website.
- The defendant No.1 had applied for registration of the Trade Mark in Class 8, for grant of protection in India on 15th November, 2013 and it escaped the notice of the plaintiff, consequently the protection sought for, was actually granted. Various other applications were lying under objection in the Trade Marks Registry.
- In the present circumstances, the defendants had continued to infringe the Trade Mark. The suit had been filed and the interim relief claimed by the petitioner for an injunction restraining the defendants from manufacturing, selling and offering for sale including through online platforms, exporting, importing, directly or indirectly dealing any goods bearing the impugned Trade Marks.
Arguments Advanced by The Petitioner
- Learned Counsel for the plaintiff submitted that this was a clear case of copying with a deliberate attempt being made to associate the goods of the defendants with those of the plaintiff.
- Learned Counsel contended that through Amazon, while displaying the goods of the defendants, links had been given, which upon clicking would take the person to the site of the plaintiff. It was submitted that if the intentions of the defendants were honest, there would have be no need to provide such a link.
- A “Cease and Desist Notice‟ was sent to the defendants and when they did not stop selling their products on the E-commerce platforms of Amazon, the plaintiff had sent a Legal Notice to Amazon, who then, took the products down. However, later on Legal Notices were sent by the defendants No. 2 & 3 claiming that the Trade Mark had been registered by the defendant No.1, who had authorized the defendants No.2 & 3 to produce the goods with the said Trade Mark. In these circumstances Court’s direction was required. Hence, the suit was filed, while also applying for cancellation of the registration.
- The plaintiff had a worldwide social-media following.It reflected tremendous goodwill, popularity and reputation enjoyed by the plaintiff company and the trade markin India as well as internationally.
- Learned Counsel submitted that when there was dishonest use, then commonality of the product was not essential, and the plaintiff was entitled to an injunction even though the goods of the defendants No.1 to 4 were different from those of the plaintiff.
Arguments Advanced by The Defendant
- Learned Counsel for the defendants submitted that the products of the plaintiff and the defendants were very different, while the registration of the Trade Mark of the plaintiff was in Class 9 that of the defendant No.1 was in Class 8. The plaintiff manufactured computer and computing products whereas, the defendant was manufacturing only hair grooming products.
- It was submitted that there was no substitutability of the products even if they were to be sold in the same market, as the customers would clearly differentiate between the products. There was nothing in the product range that would confuse the customers.
- It was further submitted that in any case, these provisions of the Trade Mark Act would be attracted only when the alleged infringer was himself holding no registered Trade Mark.But in the present case, the defendant No.1 was the registered proprietor of the mark.
- It was submitted that during the past six years, the plaintiff took no efforts to question the validity of the Trade Mark of the defendants and had filed a Cancellation Petition just before filing of the present suit. Since that matter was still pending, as on date, both, the plaintiff as well as defendant No.1, had registered Trade Marks in their favour and therefore, against each other, even in respect of identical or similar marks or products, they were at par.
- Learned Counsel submitted that Section 29 Trade Mark Act was not attracted as the goods were not comparable, allied or cognate. Since the defendant No.1 was registered proprietor of his Trade Mark, his use of the same could not be described as ‘without due cause’.
- The plaintiff had no “goodwill” in respect of grooming products and the plaintiff had no sales whatsoever in hair trimmers and grooming products.Hence, it could claim to have built any “goodwill” in that area. The plaintiff had to also show that the name was synonymous to its goods. Thus, there was no pleading to establish passing off. The Learned Counsel submitted that the defendants would give an assurance that they would not be producing any goods in Class 9 or using the mark for their products, but they would use their registered Trade Mark.
Issue
Whether in the present circumstances the plaintiff can be granted injunction against the use of similar trademark by the defendants until the result of cancellation application would be out?
Judgement Analysis
- It was observed that before the filing of the suit, an application for cancellation of trade-mark had already been filed by the plaintiff, which was pending. Under Section 124 of the T.M. Act, the present suit would be stayed pending final disposal of such cancellation proceedings.
- As pointed out by Learned Counsel for the plaintiff and rightly acknowledged by the Learned Counsel for the defendants, under Section 124of the T.M. Act, the court was not precluded from making any interlocutory order, including any order granting an injunction during the period of the stay of the suit. Hence, The Court proceeded to consider whether the plaintiff made out a case for an interlocutory order i.e., an injunction against the defendants restraining them from the use of the Trade Mark.
- In the present case, both Trade Marks had been registered. This was unlike in the several of the cases cited by both sides, where a registered proprietor was seeking relief against the defendants, who were yet to obtain registration or had applied for the same or other situations where, having once been granted, the registration was cancelled at the time the suit was filed.
- Section 28 of the T.M. Act confers some rights to the registered proprietor of a Trade Mark upon its registration. The exclusive right to use it in relation to the goods and services in respect of which the Trade Mark was registered, was limited where there were two or more such registered proprietors, as they could not claim exclusive use against each other, but had those rights against other persons. Concurrent registration of the same or similar Trade Mark by two or more persons was not per se barred under the Act. When a challenge would be raised to the registration, ordinarily till the Register was rectified, both the proprietors would be entitled to claim a right to its use.
- On a plain reading, Section 29 of the T.M. Act, on the basis of which the Learned Counsel for the plaintiff had sought the interim injunction dealt with infringement of a registered Trade Mark by a person, who was not a proprietor of the registered Trade Mark or a permitted user of the registered Trade Mark.
- The court when faced with a situation as prevailing in the present case, would be helpless and would it also mean that the plaintiff could seek only protection against passing off. The Court was of the opinion that as Section 124 dealt with a situation where the validity of the registration of the trade mark is being questioned and Section 124(5) empowers the court to pass interim injunction orders.It would be logical that even when there were two registered Trade Marks involved and the plaintiff wanted protection against the user of a similar or identical trade mark, The Court could consider not just the question of passing off, but also of infringement since Section 124 of the T.M. Act was in relation to a trade mark and not to mere passing off.
- Where no rectification application had been filed, the Civil Court could determine the tenability of the plea of invalid registration. The Court could consider the existence of a prima facie case on the same basis, to decide whether or not to grant interim orders of injunction, etc.
- By providing a link to the plaintiff’s site from that of the defendant’s, the intent to blur the source and origin of the goods was established. Thus, no protection under Section 30 of the T.M. Act would be available to the defendants for use of their registered Trade Mark. The explanation offered for the adoption of the random alphabets “HTC” and copying of the exact trade mark of the plaintiff, disclosed dishonest use and bad faith.
- For a consumer of average intelligence and observation, it might not be difficult to believe that the hair grooming products of the defendants with the Trade Mark and link to the website of the plaintiff, were actually being produced and marketed by the plaintiff. This being an act of deception and creation of confusion, was even against public interest.
- It would therefore be of no significance that the plaintiff was not producing any hair trimmers or clippers, as unquestionably they had an excellent reputation in India in respect of the goods that they actually produce and market.
- The unfair and dishonest use of the identical trade mark by the defendants for their products clearly hampered the reputation of the plaintiff. There was a clear intent to take unfair advantage of the reputation, it could lead to a detrimental effect on the distinctive character of the trade mark of the plaintiff. The trademark of the plaintiff company was initially drawn from their corporate name and subsequently, itself became their corporate name.
- The application was accordingly allowed and till the decision in the cancellation proceedings was rendered.
Conclusion
The Honourable Court in light of a series of case laws, decided to pass an interlocutory order thereby granting temporary injunction to the plaintiff against the use similar trademark which was simultaneously registered by both the parties. Such an order was to remain effective until the application filed by the plaintiff to cancel the registration of trade mark of the defendant would be finally adjudicated and decision pronounced.
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