In a recent matter before the Bombay HC – Pidilite Industries Ltd. And Anr vs Vilas Nemichand Jain And Anr – the Court considered the question of whether, in an action for passing off in relation to a descriptive mark, upon establishment that the plaintiff was a prior user and that the mark had obtained reputation and goodwill, this will ipso facto entitle the plaintiff to an injunction against passing off.
The suit was ultimately dismissed by the Court on account of the plaintiffs’ failure to make a prima facie case of passing off.
On 29th April, 1999, Hardcastle & Waud (Plaintiff 2), made an application for registration of “LEAKGUARD” along with “HOLDTITE” as a labelmark, to be used in relation to industrial chemicals (the application has since proceeded to registration). Starting 2001, they specifically started using “LEAKGUARD” in connection with solvent cement for joining pipes like PVC, CPVC, etc. However, on 21st February, 2008 Plaintiff 2 assigned all its rights and titles in the labelmark “LEAKGUARD” to Pidilite Industries (Plaintiff 1) Industries.
On 16th February, 2008 the defendants applied for registration of LEAKGUARD in relation to solvent cements as well (the application has since been withdrawn). Plaintiff 2 also applied for registration of a labelmark that included the LEAKGUARD expression, on 16th December, 2008.
On 17th September, 2009, Plaintiff 1 sent the defendant a cease and desist notice against using their registered trademark – the defendants refused to quit using the mark. On 26 July, 2010, the plaintiffs filed a suit for passing off.
The Defendants contended that they began using the LEAKGUARD mark in April 2005. Further, they contended that although Plaintiff 2 claimed prior user since 1999, the evidence produced seemed insufficient to establish prior user from 2001-2008.
The Court noted that it was necessary to establish not only that the plaintiffs’ were prior users, but also that they were prior users continuously and consistently. Agreeing with the defendant’s contention that there was little evidence to support the claim that Plaintiff 2 had been the prior user since 1999, the Court also noted the lack of consistency in the use of the mark – while on some occasions it had been used with “HOLDTITE”, on several others the expression “LEAKGUARD” had been used as two separate words, or simply referred to as “LG”. The Court stated that the registration of “LEAKGUARD” has offered protection only to the use of the expression as one word, and not otherwise. Since the transfer of rights from Plaintiff 2 to Plaintiff 1, the Court acknowledged that the latter has been using the expression as a single word, while the defendants have been using it only as a single expression, right from the beginning.
DISTINCTIVENESS AND SECONDARY MEANING
In direct contrast to the defendants’ contention on this issue, the plaintiffs asserted that the attainment of secondary meaning in addition to distinctiveness was not a necessary precondition even with regard to descriptive marks in a passing off action. They said that it is only essential for prior user to be established – where one of the parties is a prior user even by a day, and can establish distinctiveness through the public’s association of the mark with the plaintiff’s goods, then injunction must follow. Asserting that it is not distinctiveness in law so much as distinctiveness in fact that matters, they went on to explain this through an example – they stated that the BEST (Brihanmumbai Electric Supply and Transport) mark, made popular in Mumbai by the BEST buses, would never make it through the test laid down in Section 9 with regard to distinctiveness in law – and yet, in Mumbai, the mark has acquired a unique distinctiveness, so much so that few would mistake it for anything else but the public road transport service.
The Court, however, agreeing with the defendants’ submission, stated that establishing that the descriptive mark had acquired secondary meaning was necessary in a passing off action – such that the mark itself should bring to mind the plaintiff’s product to the exclusion of all others. It further asserted that if it were sufficient only for distinctiveness to be established without showing that the descriptive mark had acquired secondary meaning, then parties with the necessary financial resources could practically destroy other competitors by showing distinctiveness without the secondary meaning.
It was also observed that it is not essential that in order to establish the public’s exclusive identification of the mark with the applicant’s goods, members of the public must know the name of the manufacturer of the goods – it is enough that they associate goods marked with the applicant’s trademark to be coming from a specific trade source. Where a mark is prima facie descriptive, the opinions of merely those persons in a special position to have knowledge with regard to the source of the goods – and not those of the general members of the public – may not be sufficient in establishing such exclusivity.
The Court held that the evidence supplied by the plaintiffs with regard to financial statements and invoices concerning sale, etc. may very well show increased usage, but fall short of establishing distinctiveness of the mark – effectively having also failed to establish any secondary meaning attached to it by virtue of the Plaintiffs use in relation to its goods.
PROOF OF CONSUMER DECEPTION
On the question of deception, the Court asserted that even if the plaintiffs’ assertion that establishing secondary meaning in relation to a descriptive mark is not always necessary and that a slightly lower threshold of “mere distinctiveness” alone will suffice, was legitimate – in the absence of sufficient evidence of deception of the public, the passing off action cannot stand. He insisted that it is essential for the plaintiffs to establish that the defendant’s goods are being mistakenly associated with the “LEAKGUARD” mark, resulting in deception of unwary customers – whether or not such deception is caused by the defendants with malafide intention.
Further, the Court held that the plaintiffs’ contention that proof of deception is necessary only where marks are similar and not where the marks are identical because there confusion must be assumed, is flawed. It stated that it is entirely possible that two parties using identical trademarks are competitors in the same field, both having sufficient evidence to establish use, expense and market share – suggesting that the competitors could very well co-exist mutually exclusive of each other, in fact as well as public perception. It was noted that there was sufficient evidence to show not only the plaintiffs’, but also the defendant’s widespread use, promotion and advertisement of its goods bearing the trademark under question, with the latter making no attempt to suggest any link between its products and those of the plaintiffs’.
THE PLAINTIFFS’ ACQUIESCENCE
Lastly, the Court considered whether there was any merit to the defendants’ plea of acquiescence. Given the fact that the defendants’ began using the mark in 2005 – considering the defendants’ open and explicit use of the mark in association with their goods, along with the fact that both the parties essentially use the same trade channels, the Court found it difficult to believe the plaintiffs’ contention that they learned of the defendant’s usage only in 2009. On this issue, it was held that it cannot be said prima facie that there is no case for acquiescence by the plaintiff
This judgement made for a rather fascinating read – with Justice Patel articulately considering each issue that an action for passing of in relation to a descriptive mark, throws up. Since we’re on the subject of descriptive marks, it’s worthwhile to mention a case covered by the blog back in 2010 – where the Delhi HC made very clear its disdain towards the monopolization of descriptive marks on account of its very nature to only bear reference to the nature/kind of the product, and essentially lacking prima facie uniqueness. With “LEAKGUARD” doing precisely that, I imagine that the Delhi HC would have perhaps reserved some of its choicest comments for the Plaintiffs had the matter been up for consideration before it. That said, while descriptive marks may very well be allowed registration, the instant case once again brings to light the fact that in an action for passing off, the owners of such marks are going to have it pretty tough in Court so far as establishing the mark’s acquired ‘secondary meaning’ is concerned.