Intermittent Prior Use Vis-A-Vis The Defence Under Section 34 Of The Trade Marks Act, 1999

The Hon’ble High Court of Delhi in a recent case of Peps Industries Private Limited vs. Kurlon Limited, [1] discussed about the defence under Section 34 of the Trade Marks Act, 1999 along with the concept of descriptive trademark.

PEPS INDUSTRIES PRIVATE LIMITED VS. KURLON LIMITED

Brief Facts:

By way of this suit before the Delhi High Court, the Plaintiff sought a decree of permanent injunction against the defendant from manufacturing, selling, offering for sale, advertising, providing services directly or indirectly dealing in goods and services under the registered mark ‘NO TURN’ or in any manner using the Plaintiffs registered mark ‘No Turn’ or any other trademark which is deceptively similar thereto, amounting to infringement, passing off the defendant’s business as that of the plaintiff or resulting in dilution and tarnishing of plaintiff’s registered trademark. And the defendant in turn took the defence that it was the prior user of the Trademark ‘NO TURN’.

Issues:

(i) Whether the Defendant is a prior user of the Mark ‘NO TURN’ and if yes, whether the Defendant is entitled to protection?

(ii) Secondly, whether on the facts of the case Defendant is using the mark as a descriptive mark, thus, entitled to protection and hence no injunction can be granted in favour of the Plaintiff?

Applicable rules:

Trade Marks Act, 1999

Code of Civil Procedure, 1908

Arguments

Arguments by the Plaintiff:

The plaintiff claimed that besides being the registered owner of the Trade Mark, the plaintiff had adopted and was in continuous use of the same since 15th January 2008 and it was contended that the same was evident from the Trademark registration certificate, the orders and invoices of “NO TURN” labels for a continuous period of 11 years.

Arguments by the Defendant:

The Defendant contended that they have been using the trademark since the year 2007 prior to the filing date of the application of the plaintiff wherein the mark ‘NO TURN’ was proposed to be used, thereby protecting the defendant under the ambit of being a prior user and argued that the rights of the Defendant are protected under Section 34 of the Trade Marks Act, 1999 being the prior user even in the absence of registration of Trademark ‘NO TURN’.

It was further contended by the Defendant that they use the ‘NO TURN’ mark along with its brand KURLON which is a well established and reputed brand in mattresses thereby striking no confusion.

Decision:

The Hon’ble High Court of Delhi deduced the following principles with regard to the rights of the registered trademark of the same or similar trademark or prior user of the same or similar trademark after referring to S. Syed Mohideen vs. P. SulochanaBai [2], which deals with the right of the registered trademark holder vis-à-vis the other registered trademark or a prior user & Kamat Hotels (India) Ltd. Vs. Royal Orchid Hotels Ltd. &Anr. [3] AND Pioneer Nuts and Bolts Pvt. Ltd. vs. M/s. Goodwill Enterprises [4], which deals with the rights of the prior user protected under Section 34 of the Trade Marks Act:

(i) Rights of registered owner of the Trademark though exclusive, are subject to various provisions and thus not absolute.

(ii) The rights of a person alleging passing off the goods of the other party as that of its own, emanate from the common law and not from the provisions of the Trade Marks Act, and thus, independent from the rights conferred by the Act.

(iii) The right of the registered owner of the trademark is not higher in order to right of the person using an identical trademark or resembling thereto in relation to the similar goods and services if the other party has been continuously using the said trademark prior to the user of the trademark by the registered owner. The user by other party has to be continuous, distinct from the user which is separate, isolated or disjointed and requires the commercially continuous use of mark in relation to the same goods or services. A defendant seeking to set up a defence of prior use under Section 34 of the Trade Marks Act has also to prove the volume of sales. Mere issuance of an advertisement would not constitute user of the mark.

The Hon’ble Court thus observed that the three ingredients of passing off are goodwill, misrepresentation and damage which are considered to be classical trinity under the law of passing off. The Court also observed that registration is a mere recognition of the rights pre-existing in common law and in case of conflict between two registered proprietors, the evaluation of the better rights in common law is essential as the same would determine whose rights between the two registered proprietors are better and superior.

Answering the first issue raised in negative, the Hon’ble Court observed that from the invoices placed on record by the defendant, it is evident that though the defendant is using the label ‘NO TURN’ from the year 2007 however, the sales are intermittent in the various years and do not indicate a continuous and voluminous use by the defendant of the mark ‘NO TURN’ and thus, the defendant cannot succeed in the defence under Section 34 of the Trade Marks Act, 1999 and no inference can be drawn that the plaintiff by misrepresenting its goods as that of the defendant is riding on the goodwill of the defendant and thereby causing damage to the defendant.

Answering the second issue, the Hon’ble Court observed that the manner in which ‘NO TURN’ is used on the mattresses and from the brochure of the defendant, it is evident that the mark ‘NO TURN’ is not used as a trademark/brand but to describe the quality of the mattress and thus the mattresses which do not require to be ‘turned around’ are labelled ‘No Turn’. Further observing that the prior user of the defendant of the year 2007 is only of the label and not the trademark of mattress. The Hon’ble Court threw some light on the concept of descriptive trademark and referred to the case of Marcio Limited vs. Agro Tech Food Limited [5].

The Hon’ble Court held that it is evident that that the Plaintiff has a registered trade mark in its favour and the mark ‘NO TURN’ is being used by the plaintiff as a trade mark. The Court further observed that the Defendant is the prior user of the mark since the year 2007, however, since the use of the mark by the defendant is intermittent and not voluminous so as to establish the defence under Section 34 of the Trade Marks Act.

However, the Court held that the plaintiff would still not be entitled to the relief of injunction for the reason the mark ‘NO TURN’ is a descriptive mark and that the plaintiff had not placed any material on record to show that on the date of application or even on the date of registration plaintiff’s trademark had acquired the distinctiveness to achieve the status of a well-known mark.

Relief:

No Interim Injunction was granted in favour of the Plaintiff.

Author: RajatSabu, Senior Associate at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at rajat@khuranaandkhurana.com.

References:

[1] MANU/DE/0832/2020

[2] MANU/SC/0576/2015

[3] MANU/MH/0437/2011

[4] MANU/DE/2305/2009

[5] MANU/DE/3131/2010

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