Diageo v. Khoday- An alcoholic battle for injunctions

m_id_444346_diageoThe Delhi High Court recently heard a trademark dispute between two alcohol companies, namely,  Diageo Brands B. V. and Khoday Breweries Ltd. Diageo Brands is well known across the world as the owner of global brands such as Johnnie Walker Black Label, Johnnie Walker Red Label, Johnnie Walker Green Label, Captain Morgan, VAT 69, Smirnoff, Guinnes and Baileys among others. Diageo contended that  Khoday had registered as well as applied for trademark registration for many marks which were confusingly and deceptively similar to the Diageo’s trademarks. The examples cited by Diageo were Gudness, Bond Green Label, VAT 999, Captain Walker, Nof among many others.

Diageo broadly sought an injunction for two purposes first, to restrain Khoday from applying for registration, maintaining an application given by Khoday or registering any mark which was confusingly and deceptively similar to Diageo’s trademarks. Secondly, to restrain Khoday from using, attempting to use or asserting any right to use any mark that was confusingly and deceptively similar to Diageo’s trademarks.

The Court dealt with the first issue and stated that an injunction order cannot be passed for these reliefs. Khoday possessed both registered trademarks as well as trademarks pending registration. The Court stated that an injunction order cannot be passed against registration of trademarks that were already registered and that the appropriate remedy was for Diageo to apply for cancellation of those trademarks.

With respect to trademarks pending registration, the Court detailed the procedure for registration and the duration of registration under the Trademarks Act. Ss. 18- 23 deals with the stage from the application for registration to the grant of registration. The Registrar is entitled to register or refuse registration for marks and an appeal thereof is to be preferred to the Appellate Board under S. 91. S.93 bars the jurisdiction of civil courts with respect to matters referred to under S. 91. As S.91 deals only with the registration and the refusal of registration, S. 93 does not explicitly or implicitly bar the jurisdiction of a civil court from passing an injunction with respect to application for registration. However, the Court ruled that as detailed procedures were stipulated in the Act for registration, opposition to registration etc, it would be inappropriate for the Court to injunct a person from applying for registration. Moreover, the Court upheld Khoday’s argument that such an injunction would lead to an absurdity as there would be no one to decide whether the trademark that a person wants to adopt is liable to be registered or not. Therefore, even bonafide trademark applications may be subject to contempt of Court if the Court was to decide that the application was with respect to a trademark that was confusingly and deceptively similar to Diageo’s, despite the fact that the applicant in good faith believed otherwise. Moreover, the Court stated that Diageo’s argument that it cannot be compelled to keep track of and oppose every application of Khoday’s which infringed on its marks was not a sufficient argument to injunct Khoday from applying for registrations.

The second issue was with respect to an injunction restraining Khoday from using, attempting to use or asserting a right to use over the trademarks that were confusingly and deceptively similar to Diageo. Diageo had provided a detailed chart of the opposition proceedings initiated by them against Khoday’s applications. The Court noted that 20 of the marks sought for registration  were prima facie similar to Diageo’s Johnnie Walker trademark. Moreover, there were other marks such as VAT 999, Gudness and Khoday’s Black and White that were confusingly and deceptively similar to Diageo’s trademarks such as VAT 69, Guinnes and Black and White. Khodays had used, attempted to use or applied for registration of these trademarks and therefore, the Court held that there was a prima facie case in favour of Diageo. Moreover, Diageo was suffering irreparable loss in the form of financial and reputational loss. The Court held that balance of convenience was also in favour of Diageo as they were entitled to protection of their trademarks so that they were not diluted by unwarranted use by Khoday or other third parties. Thus, as all the three conditions were fulfilled, an ad interim injunction was granted in favour of Diageo for the second purpose.

Therefore, it is observed that on issues of trademark infringement,  Courts are loath to grant injunction restraining parties from applying for registration and getting possibly infringing marks registered. There has been only one order thus far where such injunction has been granted, namely, Zee Telefilms v. Asia Today Ltd., where the Registrar was restrained from processing pending applications pertaining to registration of trademark ‘Zee’. The reason such injunctions are not granted as they result in placing a pre-application check without any appropriate authority to perform such a check. However, injunction can be obtained restraining parties from committing infringement of trademark through use, attempting to use or by asserting a right to use a trademark.


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