Trademark

Essel Propack v. Essel Kitchenware (Bombay HC): Wilful delay in taking action against trademark infringement may amount to acquiescence


equity As the law stands, delay on part of the defendant, attempting to dislodge a suit for infringement, and systemic delays inherent in the judicial system, cannot be used against a plaintiff who is entitled to interim relief. Provisions of the Civil Procedure Code, 1908 such as Section 9A as well as section 124 of the Trade Marks Act, 1999, embody this principle. An interim injunction can therefore be granted despite the existence of an application challenging jurisdiction or an application for staying of a suit pending rectification.

However, if the plaintiff itself has delayed in instituting the suit, such a delay may amount to acquiescence and hence prove to be fatal to the plaintiff’s case for grant of interim injunction and may even prejudice its chances of obtaining a permanent injunction.

(1989) Hindustan pencils case –  Delay in taking action against an infringer does not necessarily amount to acquiescence

A 1989 decision of the Bombay High Court, in Hindustan Pencils v Indian Stationery, had considered the above issue of delay, laches and acquiescence on part of a Plaintiff instituting a trademark infringement suit. In this case, the Plaintiff was aware of the use of its “Nataraj” trademark by the defendants since the year 1982. However, the Plaintiff instituted a infringement and passing off suit more than 6 years later. The defendant, therefore, claimed that the plaintiff was not entitled to interim relief as it had inordinately delayed in filing the suit and had acquiesced to the use of the mark by the defendant.

In considering this issue, the court held that delay by itself was not a sufficient defense to an action of interim injunction. The court also drew a distinction between defendants who adopt/use a mark honestly and those who use a mark dishonestly. In cases where the defendant is a honest user, then delay coupled with prejudice caused to the defendant, if shown, would amount to laches and would be a valid defense. However, in cases where the defendant was dishonestly using/adopting the mark, even if there was inordinate delay on part of the plaintiff in bringing the suit, the relief of injunction will not be denied.

However, the court holds that acquiescence is a different concept which means ‘an encouragement by the plaintiff to the defendant to use the infringing mark. It is as if the plaintiff wants the defendant to be under the belief that the plaintiff does not regard the action of the defendant as being volatile of the plaintiff s rights. Acquiescence cannot be inferred merely by reason of the plaintiff has not taken any action against the infringement of, its rights. Acquiescence means something more than mere silence on the part of the plaintiffs.’ The implications of acquiescence are also grave as this can be used a defense even to permanent injunction – ‘Acquiescence may be a good defense even to the grant of a permanent injunction because the defendant may legitimately contend that the encouragement of the plaintiff to the defendant’s use of the mark in effect amounted to the abandonment by the plaintiff of his right in favor of the defendant and, over a period of time, the general public has accepted the goods of the defendant resulting in increase of its sale.’

Having held the above, the court also found that the defendants’ use of the mark was not honest. In light of the above facts and law, even though the plaintiff delayed by 6 years in bringing the suit, the court granted an interim injunction.

(2016) Essle case – Delay in taking action against an infringer may amount to acquiescence

In a recent case before the Bombay High Court, in Essel Propack v. Essel Kitchenware, the plaintiff is a registered proprietor of the trademark ESSEL in various classes for goods (not including class 21) in relation to packaging material for use by other manufacturers of retail products. The defendant had applied for registration of a similar ESSEL mark in class 21 in relation to cups, drinking glasses, saucers and other domestic utensils.

In 2003, the plaintiff opposed the registration of this mark and also sent a cease and desist notice notifying the defendant that its use and adoption of the mark amounts to infringement and passing off. The defendant replied to this notice clearly stating its intention to continue using the impugned mark and challenging the exclusivity of the plaintiff’s rights over the said trademark in relation to utensils. The defendant also filed a suit against the plaintiff, before the Calcutta High Court for groundless threats of infringement as well as caveats before the Bombay High Court.

In the meantime, the plaintiff took no action and also abandoned its opposition to the defendant’s trademark, which proceeded to get registered. It was only after 7 years from these events that the plaintiff filed a trademark infringement/passing off suit before the Bombay High Court in 2010. Even in its plaint, the Plaintiff suppressed having knowledge of the above facts.

The Plaintiff raised an issue with respect to the fact that though the suit was filed in 2010, it had not been granted interim relief even as late 2015-16.

In dealing with this issue, the court held that even though delay cannot be used against the plaintiff for granting interim relief where sufficient cause is show, in the present case, the plaintiff was itself guilty of not only delay but also acquiescence.

In this regard, and as a contrast to the decision in Hindustan Pencils, the court holds that – ‘acquiescence means assent to an infringement of rights, either express or implied from conduct, by which the right to equitable relief is normally lost. It takes place when a person, with full knowledge of his own rights and of any acts which infringe them, has either at the time of infringement or after infringement, by his conduct led the persons responsible for the infringement to believe that he has waived or abandoned his rights. It literally means silent assent. The equitable doctrine of acquiescence may be taken to be that if a party having a right stands by and sees another dealing with the property in a manner inconsistent with that right and makes no objection while the act is in progress, he cannot afterwards complain. A proprietor of the trade mark who knowingly watches his competitor grow in the market and takes no action can claim no exclusivity in his own trade mark. He is deemed to have affirmed his rival’s use of the mark in question.  Where acquiescence in the infringement amounts to consent, it is a complete defense

Therefore, unlike the decision in Hindustan Pencils, the court holds that even mere inaction and lack of effective steps to stop the defendant from infringing the plaintiff’s mark amounts to ‘encouragement’ and is therefore an acquiescence of the rights of the defendant with respect to the mark ESSEL for goods under class 21. Further, since the plaintiff witnessed the growth of the defendant without taking any action, it was estopped from claiming exclusivity of its trademark against the defendant.

The court also notes that since the plaintiff and defendant have registered trademarks under different classes, neither has exclusivity over the other but each can claim exclusivity against third parties.

With respect to passing off, the court applies the tests laid down by the Supreme Court in Cadila Health Care Ltd v Cadila Pharmaceuticals Ltd. In this regard, since the goods sold by the defendant are completely different from that of the plaintiff, the trade channels, and consumer base of the parties is completely different, the court holds that there is no possibility of confusion.

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Aparajita Lath

Aparajita graduated from the WB National University of Juridical Sciences, Kolkata. She was formerly an editor of the NUJS Law Review. She is a lawyer based in Bangalore. All views expressed by her on the blog are her personal views.

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