Supreme Court refuses to stay the judgment restraining Hilton from threatening Hilltone

Several newspapers such as the Mint and the ET have recently reported on how the Supreme Court has rejected Hilton’s appeal against an adverse judgment passed by a District Court in Rajasthan last year. We have blogged previously about the judgment over here and here. It is likely though that both newspapers have been slightly inaccurate in their reporting. Both news reports seem to suggest that the order of the Supreme Court upholds the decision of the District Court.

A glance at the order of the Supreme Court referred to in both reports however suggests that the SLP being heard by the SC was against the denial of interim relief by the Rajasthan High Court i.e. Hilton initially approached the Rajasthan High Court to stay the operation of the District Court judgment until such time that the High Court disposed the main appeal after hearing the matter on merits. This was in July, last year. The Rajasthan High Court however denied interim relief at that stage, on the grounds that Hilton’s trademarks were still valid and that it was not going to suffer any irreparable injury. we had blogged about it over here. The Rajasthan High Court was yet to hear this matter on final merits. Hilton however was aggrieved by the denial of interim relief and filed a SLP before the Supreme Court sometime in August last year. The 11th July order passed by the Supreme Court merely disposed this SLP seeking interim relief. The next battle is to be fought before the High Court of Rajasthan. Insiders with information may confirm or deny this chain of events.

Now coming to the orders of the District Court in this matter, it appears that we may have been slightly inaccurate in our earlier reporting of the order and the entire dispute. I’ve listed out some of the clarifications below:

(i) The suit filed before the District Court by Hilltone Pvt. Ltd of Mount Abu was a suit for groundless threats of trademark infringement. The cause of action being the legal notices sent by Hilton International to Hilltone Pvt. Ltd warning them to stop using the Hilltone mark as the same was infringing Hilton’s registered trade mark.

(ii) After being sued for groundless threats by Hilltone Pvt. Ltd., Hilton International filed a trade mark infringement suit against Hilltone Pvt. Ltd. The infringement suit is pending before the District Court. (I’m not quite sure how an infringement suit lies against the user of a registered trademark i.e. the Hilltone mark was registered in 1983.)

(iii) The final judgment of the District Court against Hilton International does not really preclude Hilton from continuing to use its brand in India. I think and I’m not sure about this: The Plaintiff company, Hilltone filed only a suit for groundless threats and in such a scenario the Court can only injunct Hilton from continuing with its threats. The Court cannot restrain Hilton from using its own registered trademarks and in fact the final order did not have anything to this effect. Hilton can continue using its trademarks until such time that they are revoked by the IPAB or the Registrar of the trademarks.

(iv)It also appears that we may have been a little too critical of the judgment passed by the District Court restraining Hilton from threatening Hilltone. For some reason all of us, me included, appeared to have been under the impression that Hilton’s reputation as a world-famous brand was undisputable. A District Judge however is required to assess the evidence and pass an order on the same. In the present case the Plaintiffs i.e. Hilltone were able to prove that they were using the ‘Hilltone’ mark since 1973, while the Defendants, Hilton, were not able to muster any evidence that they were operational in India prior to this date. Given that the right to use a trademark is linked to its actual use, it is reasonable to argue that if Hilton entered India only in 1995, it has no business trying to gag an Indian hotel which has been using a similar mark, not identical, since 1973 i.e. 22 years before Hilton entered the Indian market. At the end of the day, a district judge is required to decide on the evidence before him and I think given the evidence presented before this particular judge, he has done a decent job.

(v) While the Rajasthan High Court is yet to hear the matter, I think it is safe to say that Hilton International has its job cut out in trying to win the appeal.

(vi) Hopefully Hilton will put out a press release clearing up this entire confusion.