INDIA: Court Rules on Passing Off: Denies Injunction Due to “Delay” and “Acquiescence”
In a recent judgment dated May 11, 2015, the Delhi High Court decided upon an interim application filed on July 8, 2012, by plaintiffs SRF Foundation & another, seeking interim injunction against the defendant, Ram Education Trust, for restraining it from using the mark SHRI RAM with respect to operating schools.
Around the year 2011, the defendant opened “SHRI RAM GLOBAL PRE SCHOOL” right next to the plaintiffs’ school, which was being run under the name THE SHRI RAM SCHOOL since 1988 and later on continued and expanded its activities to various regions. The plaintiffs claimed that they were the prior user of the mark and had acquired unique goodwill, name and reputation and that use of the mark/name SHRI RAM by the defendant would create confusion and deception.
However, the defendant argued that the use of the name/mark SHRI RAM amounted to bonafide use and that the plaintiffs and the defendant have concurrent rights to make use of their family name “Shri Ram” in relation to their respective schools.
It was also contended that apart from the usage of a “Shield device” in relation to its schools and educational institutions, the names of the defendant’s schools, i.e., SHRI RAM GLOBAL SCHOOL, SHRI RAM CENTENNIAL SCHOOL and SHRI RAM GLOBAL PRE-SCHOOL, were sufficiently distinctive from the name of the plaintiffs’ schools, i.e., THE SHRI RAM SCHOOL and SHRI RAM MILLENNIUM SCHOOL, due to the presence of additional elements.
The High Court relied on its earlier judgment in Himalaya Drug Company v. M/s. S.B.L. Limited, 2013 (53) PTC 1, in which it had clearly laid down the principle of ascertaining the “essential feature” of the mark and held that SHRI RAM was an “essential feature” in the logos in question and, therefore, the marks of the defendant were held to be deceptively similar to the plaintiffs’ marks.
Further, the Court observed that “in order to succeed in an action for passing off, four main primary requirements have to be satisfied by a party who intends to seek the relief of injunction: (1) prior user; (2) the party who is claiming the right must be the proprietor of the mark; (3) confusion and deception; and (4) delay, if any.”
On the first and second requirements, it was held that the plaintiffs were the prior users of the name/mark SHRI RAM in relation to the services of schools. Regarding the third requirement, the Court noted that the defendant has schools in the same vicinity as that of the plaintiffs and that the defendant adopted the mark after almost 23 years. Thus, the Court, referencing the Supreme Court judgment in Laxmikant V. Patel v. Chetanbhat Shah & Anr. (2002) 3 SCC 65, held that the conduct of the defendant caused confusion and deception.
However, given that the founding members of the plaintiffs and defendant were brothers, that the plaintiffs raised no objection for the continuous period of three years and due to the admitted knowledge of the plaintiffs in the complaint, the court concluded that this amounted to prima facie assent, "sitting by" or encouragement. The plaintiffs' delay allowed the defendant to expand and grow his business with no objection to the misuse of the mark during that time period, leading to prima facie inference of acquiescence.
Thus, the Court noted "delay" on the part of the plaintiffs, which shifted the balance in favor of the defendant and the defendant was allowed to continue his business using the mark SHRI RAM with disclaimers.
This decision comes as a reminder for brand owners to avoid any delay or acquiescence in enforcement of their trademark rights.
"This article first appeared here in the INTA Bulletin and was reprinted with permission from the International Trademark Association (INTA)."