The case of MD IFTEKHAR v. M/s KARIM HOTELS Pvt Ltd. was an appeal to the Delhi High Court decided early this month.This case essentially deals with the issue of the ownership of trademarks The privileged position that the Court accords to registration of trademarks is made apparent in this case, even when there are suggestions that the registration is invalid. It is also a testament to the legal principle that a lower bench’s decision will not be interfered with on appeal except in exceptional circumstances.
Before the Learned Single Judge, the respondent/ plaintiff (hereinafter ‘the plaintiff’) had filed a suit for permanent injunction to restrain the appellant/ defendant (hereinafter ‘the defendant’) from using the trademark ‘KARIM’S’ or any other mark identical with or deceptively similar to the plaintiff’s registered trademarks ‘KARIM’S’ or ‘KARIM’ including ‘KARIM MUGHLAI CUISINE’. The plaintiff had also sought for an interim injunction and an ad interim injunction. The Learned Single Judge had issued an order on 2nd July, 2013 wherein it granted the interim relief to the plaintiff.
The defendant had contended before the Learned Single Judge that the plaintiff was not the owner of the trademark despite the fact of its registration, as the registration had been obtained by suppression of material facts. The defendants argued that the trademark of the brand started by Haji Karim Zahiruddin was bequeathed to Karim’s Moghlai Trust by him vide his Will and that the terms of the bequest gave the right to use the trademark of ‘KARIM’S’ or ‘KARIM’ to any family member who was running a similar business or restaurant provided that they pay royalty to the Trust. The defendant had stated that the plaintiff had been paying royalty to this Trust, thereby acknowledging that they were not the owners of the said trademarks. The defendant had also contended that it was an inheritor of the name and goodwill of ‘KARIM’ and had a right to use the trademark. Moreover, the defendant had contended that it had been tricked by the plaintiff to enter into a Franchise Agreement (which acknowledged that the plaintiff was the owner of the said trademarks) that was valid till 12th March, 2014 and that even under such agreement, it had the right to use the name ‘KARIM MUGHLAI CUISINE’.
The plaintiff, on the other hand had argued that firstly, there were mutual inconsistencies between the Will and the Trust Deed, secondly, that they did not have access to the relevant papers or the Trust Deed and were therefore, unable to file them along with the plaint, thirdly, the non-production of the Trust Deed and the Franchise Agreement made no difference to the instant case and arguendo, it strengthened the plaintiff’s case by evidencing that the defendant acknowledged the plaintiff’s ownership of the said trademarks and finally, that the payment made by the plaintiff to the Trust was in the nature of a voluntary contribution for charity.
The Learned Single Judge had held that while there were inconsistencies between the alleged Will and the Trust Deed, these inconsistencies did not contradict the case of the plaintiff. The Court had also held that the contention of the defendant that the registration of the trademarks by the plaintiff was invalid was to be examined on merits by the concerned fora. Moreover, it had observed inter alia that on 5 February, 2013 an undertaking had been given by the defendant that they would not run their restaurant in the name of ‘KARIM MUGHLAI CUISINE’ or in the name of ‘KARIM’. Thus it granted the interim relief for the plaintiff.
The grounds of challenge of this order of the Learned Single Judge by the defendant at the appellate stage is that the plaintiff has not come before the Court with clean hands (as they had allegedly suppressed the Trust Deed and the Franchise Agreement) and therefore, they were not entitled to any interim relief. Moreover, the defendant contended that the plaintiff had misrepresented the fact of its ownership of the said trademarks since 1913 in the plaint as well. The defendant stated that while stating so, it was incumbent on the plaintiff to disclose about the Trust as well.
The Delhi High Court stated that the plaintiff in its plaint had only claimed ‘association’ with the trademarks since 1913 and had not claimed to be their ‘owner‘ since that period. Owing to the supervening fact that the plaintiff is the registered proprietor of the trademarks, the Court held that the suppression, if any, practiced by the plaintiffs while obtaining registration was of no relevance to this suit. Moreover, the fact that the defendant obtained a license to use the trademarks from the plaintiff and had been paying royalties to the plaintiff were matters that were taken into consideration by the Learned Single Judge as well in granting the interim relief. The Court concluded noting as the Learned Single Judge had done, that restaurants with the name KARIM’S/ KARIM were run after paying royalty to the plaintiff and the Trust was not receiving any royalty from any individual/ business entity/ stores/ traders.
The Delhi High Court noted that as the Learned Single Judge had given cogent reasoning in his order granting interim relief, such an order could not be interfered with in appeal unless if the reasoning given is perverse and not merely because the Appellate Court on an independent assessment may have arrived at a different conclusion. Therefore, the Delhi High Court dismissed the appeal filed by the defendant.