I write to discuss the Delhi HC J. Indermeet Kaur’s judgment involving the mark “PARAMOUNT”. The mark under discussion is relevant strictly in the context of businesses indulging in sale of hospital beds and to the best of my knowledge, is not related to the Paramount film studio.
The ruling is unique because the court did not pass an interlocutory injunction in favour of the plaintiff, despite said plaintiff having a valid registration in the relevant class. Though the question turned around the plaintiff’s dishonesty, the defendant was also able to prima facie dislodge the ownership claim of the plaintiff (again, despite registration) at the interlocutory stage itself.
But first, what are equitable claims?
Certain reliefs can be granted by the court on the basis of equity (court’s discretion). These are considered to be equitable remedies. Specifically, for our purposes, we need to note that interim injunctions fall under the larger set of equitable remedies. C.K. Takwani on Civil Procedure notes that the same was established in the case of Gujarat Bottling Co. Ltd v. Coca Cola Co.
Now that we are done with the introduction, let us quickly get acquainted with the facts.
We need only be concerned with the existence of two companies.
One Indian (Plaintiff) and the other Japanese (Defendant).
The Japanese company, without dispute, sells hospital beds.
The Japanese company uses the mark “PARAMOUNT”.
The Indian company registered “PARAMOUNT”, under a class that authorizes them to use the mark for selling hospital beds.
The Indian company claimed TM infringement and sought an interim order.
Order was passed in favour of the Japanese company.
The defendant’s (Japanese company) defenses were as follows:
- Plaintiff’s misrepresentations in plaint strips them of their right to any equitable reliefs.
- Defendant has greater claim over mark than Plaintiff, despite registration.
Let us look at each of these defenses.
Plaintiff’s misrepresentations in plaint strips them of their right to any equitable reliefs
The plaintiff, in its plaint, claimed that the defendant’s use of the mark came to its knowledge only in 2017. The court deemed said claim to be factually incorrect as the defendant showed proof of having filed an opposition to the plaintiff’s registered mark back in 2009 itself. Furthermore, the defendant also showed evidence of both parties having exchanged e-mails, negotiating regarding the mark, ever since the filing of the said opposition. Hence, the court found the plaintiff to have misrepresented facts in the plaint.
The court then, relying on the precedents of Columbia Sportswear Company v. Harish Footwear and Warner Bros. Entertainment Inc. v. Harinder Kohli (155 (2008) DLT 56), held that dishonesty (such as, suppression or misrepresentation of facts) was fatal to a claim for equitable relief. Furthermore, it held that even when a party registered a mark, dishonesty on its part would result in its right to claim equitable relief being rendered nugatory.
The plaintiff attempted to counter the above argument by contending that “Delay and acquiesce” could not be the sole grounds for refusing grant of interim injunction. Though the court accepted that “Delay and acquiesce” could by themselves not be valid grounds for refusing relief, it ruled that this was a case of more than mere “Delay and acquiesce”, as the plaintiff was additionally dishonest too.
Furthermore, the plaintiff adduced documentary evidence of a rather suspicious nature. For instance, to prove that it did actually involve itself in the business of selling hospital beds, the plaintiff adduced a sale document wherein VAT was taxed instead of Central Sales Tax, despite the sale having occurred across state boundaries. Also, the plaintiff’s website showed “Hospital Beds” as an item for purchase only after it was questioned, in a prior proceeding, regarding the absence of “Hospital Beds” from its website inventory list.
With the courts having ruled that dishonesty was apparent in the plaintiff’s dealing, the plaintiff’s claim for equitable relief was effectively rejected. Nevertheless, the court chose to delve into the question of the validity of plaintiff’s registration as well.
Defendant has greater claim over mark than Plaintiff, despite registration
The Plaintiff wasn’t even able to sufficiently prove that it was involved in the business of selling hospital beds. As discussed earlier, the documents it adduced seemed to be unreliable.
At the same time, the documents provided by the defendant convinced the court of its trans-border reputation and active participation in the sale of hospital beds in India. The defendants provided documents showing prior use and considerable expense in promotion of the mark in India.
The defendant relied on the cases of Milment Oftho Industries v. Allergen Inc. and Intex Technologies (India) Ltd. v. AZ Tech (India) to contend that even when the plaintiff had a registered mark, interlocutory injunction could be refused when the defendant has a growing and substantial business.
The court’s holding, regarding the validity of the mark, was finally decided on the basis of the strength of the evidence adduced. We need not delve too deeply into the strength of the evidence, as such an exercise wouldn’t yield much legal insight.
Lastly, the plaintiff attempted to counter the above line of argumentation by contending that the validity of a registered mark could not be delved into at the interlocutory stage. The court set this contention aside by referring to Marico Limited v. Agro Tech Foods Limited, which stated that the court could consider the validity of the mark, at the interlocutory stage, in the event that the same issue was raised in the written statement. Since, the validity of the registered mark, as an issue, was raised by the defendant in the written statement, the requisite condition was fulfilled in the current case.
Finally, relying on Wander Ltd. v. Antox India P. Ltd, the court held that the plaintiff could not make a sufficient case (prima facie case, irreparable injury and balance of convenience) for granting interim injunction.
The most significant takeaway is that a registered mark doesn’t ensure one of an interim injunction in her favour. The other party can dislodge the presumption in favour of a registered TM owner by first, raising the issue in their written submission, and second, by producing sufficient substantiating evidence. But this judgment doesn’t tell us much about the threshold or degree of evidence required, because in this case, the documents produced by the plaintiff were quite weak.
Lastly, we also need to note that dishonesty is fatal to a claim for equitable relief.
The Judgment, C.K. Takwani on Civil Procedure
Cover Image by Prateek Surisetti.