Trademark

Del HC judgment on SRF Foundation & Anr v. Ram Education Trust


urlThe point of law reiterated in this judgment is no longer res integra. However, from a pragmatic perspective, this judgment is a case-in-point on the implications of ‘delay’ in ‘passing off / trademark’ interim injunction applications (in spite of the existence of a strong case in favour of the plaintiff).The judgment also offers a discussion on the jurisprudential foundation of ‘interim injunctions’.

Background

The Delhi HC decided upon interim applications filed under Order XXXIX, Rule 1 and 2 of CPC filed by plaintiffs seeking interim injunction against the defendant for restraining it from using the mark “SHRI RAM” in respect of running schools. As plaintiffs established their first school in 1988, they claimed themselves to be the “prior user” of the mark. It was contended that “plaintiffs’ schools under the name “SHRI RAM” have carved out a unique space as institutions of excellence and are well known for their value based innovative caring and child-centered approach to educate young children and the institutions are popularly known as “THE SHRI RAM SCHOOLS”.” Trademark application of the plaintiff is pending before the Registrar, Trademarks.

In or around 2011, the defendant opened “SHRI RAM GLOBAL PRE SCHOOL” right next to plaintiffs’ school. In spite of the opposition of the plaintiff, the defendant continued and expanded its activities to various regions. According to the plaintiffs, they “have no objection if the said mark/name SHRI RAM is used by the defendant in relation to any other different activities or services except in relation to the services of school on the reason that as far as running of school bearing the mark SHRI RAM is concerned, they are prior user and have acquire unique goodwill, name and reputation and it would create confusion and deception if allowed to the defendant who was aware about the same on the date of adoption and it is done by the defendant in order to make misrepresentation.”

The defendant argued that the use of the name/mark “SHRI RAM” amounted to bonafide use. Further, “the plaintiffs cannot have the monopoly rights over the mark “SHRI RAM”. It is the name of the grandfather of the founding members of the plaintiffs’ schools and defendant’s trust. The plaintiffs cannot claim the prior user in respect of the educational institution like school if the College under the mark “SHRI RAM” is being run prior to the use of plaintiffs.” Also, “the plaintiffs and the defendant herein have concurrent rights to make use of their family name “SHRI RAM” in relation to their schools.” It was also contended that “the names of the defendant’s schools that is “SHRI RAM GLOBAL SCHOOL”, “SHRI RAM CENTENNIAL SCHOOL” and “SHRI RAM GLOBAL PRE-SCHOOL” are sufficiently distinctive from the name of the plaintiff’s Schools, i.e. “THE SHRI RAM SCHOOL” and “SHRI RAM MILLENNIUM SCHOOL”. The names of the defendant’s schools make use of additional elements as suffix which distinguishes clearly the schools of the defendant from those of the plaintiffs. The defendant also makes use of a particular ‘Shield Device’ in relation to its schools and educational institutions, which is completely different and distinguishable from the mark of the plaintiffs.” The aforesaid contentions were, of course, contested by the plaintiff.

Judgment

“Essential feature”

The HC relied on its earlier judgment in Himalaya Drug Company vs. M/s. S.B.L. Limited, 2013 (53) PTC 1 which held as follows: “20. It is settled law that where the defendant’s mark contains the essential feature of the plaintiff’s mark combined with other matter, the correct approach for the court is to identify an essential feature depending particularly “on the court’s own judgment and burden of the evidence that is placed before the Court”. In order to come to the conclusion whether one mark is deceptively similar to another, the broad and essential features of the two are to be considered. They should not be placed side by side to find out if there are differences, rather overall similarity has to be judged. While judging the question as to whether the defendant has infringed the trade mark or not, the court has to consider the overall impression of the mark in the minds of general public and not by merely comparing the dissimilarities in the two marks.

21. The ascertainment of an essential feature is not to be by ocular test alone but if a word forming part of the mark has come in trade to be used to identify the goods of the owner of the trade mark, it is an infringement of the mark itself to use that word as the mark or part of the mark of another trader for which confusion is likely to result. The likelihood of confusion or deception in such cases is not disproved by placing the two marks side by side and demonstrating how small is the chance of error in any customer who places his order for goods with both the marks clearly before him, for orders are not placed, or are often not placed, under such conditions. It is more useful to observe that in most persons the eye is not an accurate recorder of visual detail and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole.”

Applying the aforesaid principle, “SHRI RAM” was held to be an “essential feature” in their logos. Therefore, they were held to be deceptively similar.

Passing off

In the context of passing off, a person has to satisfy the following requirements:
a) Prior user;
b) Party who is claiming the right must be the proprietor of the mark;
c) Confusion and deception; and
d) Delay, if any.

On the first and second requirements, it was held that plaintiffs are the prior users of the name/mark “SHRI RAM” in relation to the services of schools.

As far as third requirement is concerned, the Court noted that the defendant has schools in the same vicinity as that of the plaintiffs. Further, the defendant adopted the mark after almost 23 years. While holding that the conduct of the defendant caused confusion and deception, the Court inter alia referred to SC judgment in Laxmikant V. Patel vs. Chetanbhat Shah & Anr., (2002) 3 SCC 65: “8. It is common in the trade and business for a trader or a businessman to adopt a name and/or mark under which he would carry on his trade or business. According to Kerly (Law of Trade Marks and Trade Names, Twelfth Edition, para 16.49), the name under which a business trades will almost always be a trade mark (or if the business provides services, a service mark, or both). Independently of questions of trade or service mark, however, the name of a business (a trading business or any other) will normally have attached to it a goodwill that the courts will protect. An action for passing-off will then lie wherever the defendant company’s name, or its intended name, is calculated to deceive, and so to divert business from the plaintiff, or to occasion a confusion between the two businesses. If this is not made out there is no case. The ground is not to be limited to the date of the proceedings; the court will have regard to the way in which the business may be carried on in the future, and to its not being carried on precisely as carried on at the date of the proceedings. Where there is probability of confusion in business, an injunction will be granted even though the defendants adopted the name innocently.

10. A person may sell his goods or deliver his services such as in case of a profession under a trading name or style. With the lapse of time such business or services associated with a person acquire a reputation or goodwill which becomes a property which is protected by courts. A competitor initiating sale of goods or services in the same name or by imitating that name results in injury to the business of one who has the property in that name. The law does not permit any one to carry on his business in such a way as would persuade the customers or clients in believing that the goods or services belonging to someone else are his or are associated therewith. It does not matter whether the latter person does so fraudulently or otherwise. The reasons are two. Firstly, honesty and fair play are, and ought to be, the basic policies in the world of business. Secondly, when a person adopts or intends to adopt a name in connection with his business or services which already belongs to someone else it results in confusion and has propensity of diverting the customers and clients of someone else to himself and thereby resulting in injury.” Relying on various other SC judgments, the Court held that the surnames are protected under the law.

As far as the fourth requirement is concerned, the Court noted ‘delay’ on part of the plaintiffs. The following observations are quite significant in this regard: “The said no objection for the continuous period of 3 years given the proximity of relation between the founding members of the plaintiffs and defendant being real brothers and the admitted knowledge of the plaintiffs in the plaint can be good enough for the prima facie purposes as assent or sitting by or encouragement allowing the defendant to expand/ grow its business without objecting to the misuse of the same all this while leading to prima facie inference of the acquiescence. The said plea of unexplained delay leading of the acquiescence is thus a relevant consideration for the passing off action, the grant of the relief in which rests on the equitable considerations and is affected by the principle of applicability of the acquiescence.”

It may be noted that the delay on part of the plaintiff did swing the balance in favour of the defendant. Accordingly, the Court held as follows: “The injunction being an equitable remedy, the court has to exercise its discretion from various facets which arise in particular set of circumstances in each matter. There may be cases in which grant of an injunction will only meet the ends of justice and an alternative safeguard for the preservation of rights of the challenging party cannot at all be thought of. Thus, balance has to be strike down in the present case in view of peculiar facts of the present case otherwise, great hardship would not only cause to the defendant but also to the students and their family members who have already paid their fees and have taken admission in the school. Their interest and equity is involved. It would be appropriate that the defendant be put to terms and restricted interim orders for future purposes are passed of the defendant instead of issuance of injunction.” Though the trial was expedited, the defendant was allowed to continue their business using the mark “SHRI RAM” with disclaimers.

 H/T: I would like to thank Law Street India (LSI) for bringing this case to our attention.

Mathews P. George

Mathews P. George

Mathews is a graduate of National University of Juridical Sciences, Kolkata. His interest in intellectual property was kindled when he bagged the second position in his second year of Law School (in the prestigious Nani Palkhiwala Essay Competition on Intellectual Property). His stint as a student of Prof. Shamnad Basheer further accentuated his interest in intellectual property. Winner of almost a dozen essay competitions in his Law School days, he was involved in various research and policy initiatives relating to intellectual property. Mathews is, currently, based out of Munich, Germany. He had earlier done his LLM in 'IP and Competition Law' from Munich Intellectual Property Law Centre (jointly run by Max Plank Institute for Innovation and Competition, University of Augsburg, Technical University of Munich and George Washington University, Washington).

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