In this two-part post, Eashan Ghosh analyses the recent judgment of the Delhi High Court in Turning Point Institute v. M/s Turning Point. Part I of the post can be viewed here.
The Turning Point Cases – Part II
The Defendants’ Claim of Honest Concurrent Use
On, then, to the Defendants’ claim that they were entitled to use the ‘TURNING POINT’ trademark on substantive grounds. Their submission to this effect hinged on the honest concurrent use defence.
However, framed as such, this was a bit misleading. This is because, in strict terms, the Indian Trade Marks Act permits honest concurrent use as an exception to trademark infringement, intending to prohibit interference by new statutory rightsholders with use senior to theirs. With the Plaintiffs neglecting to register their trademark, the case against the Defendants here, of course, was one at passing off. (At a guess, the Defendants’ substantive pitch was probably intended to cover both a seniority of use claim as well as a positive case of trademark infringement based on their trademark registration. Having lost the seniority of use issue, honest concurrent use probably isn’t the specific category the defence was intended to proceed under but did so anyway in the course of arguments.)
The judge correctly and concisely rejects the Defendants’ substantive defence, by whatever name called. He points to three reasons for this:
First, the Defendants didn’t just adopt the trademark ‘TURNING POINT’, they adopted the prefix ‘TP’, an acronym for ‘TURNING POINT’ adopted by the Plaintiffs as part of their trademark at least four years previously. A completely independent adoption of this specific arrangement of elements entirely oblivious to the Plaintiffs’ trademark “would be quite a coincidence”, says Mr Justice Sanghi. As if to seal the issue, the Defendants’ trademark application, filed in 2004, was for ‘TURNING POINT’, and not ‘TP TURNING POINT’, which calls into question the honesty of the initial adoption.
Second, there was no attempt made by the Defendants, at any stage, to offer their own etymology story for how ‘TURNING POINT’ came to be their trademark. The Plaintiffs’ etymology story is an admission that they picked up the name from somewhere else. The Defendants don’t have a story at all, and, in a case like this, that’s worse.
Third and finally, the Defendants incorporated their company under the Turning Point name in 2002 and yet took no action against the Plaintiffs despite the subsistence of the Plaintiffs’ company of the same name on the register since at least the previous year. Mr Justice Sanghi indicates that the Defendants would have “most certainly learnt of the existence of the Plaintiffs” at the time of the company registration and “have not explained their said inaction”. (As part of a detailed mala fides claim, the Plaintiffs also alleged that the Defendants were in the habit of registering companies in the names of other popular training institutes. The judge returns no opinion on this allegation.)
However, to these factual weaknesses in the Defendants’ case, the judge staples on a broader and more controversial proposition — that honest concurrent use cannot be defence in a case where the trademarks and products/services in question are identical. The sole authority cited in support is a 1976 Bombay High Court decision in KS Kumar v. TD Rohira [1977 (79) BomLR 61]. This case dismissed a plea for the Registrar to exercise discretionary powers to register a trademark under honest concurrent use under Section 12(3) of the 1958 Act (the standalone Section 12 today).
Section 12(3), like Section 12 today, expressly permitted registering, in appropriate cases, trademarks honestly and concurrently used by a second party even if the second trademark was identical or similar in name or category to an existing trademark, registered or not.
The Rohira Court observed, permissibly, that an identical trademark for identical products didn’t merit registration on the contention that the trademark could’ve been adopted innocently despite the offender being aware of its use by another party. However, still seized of Section 12(3), Rohira then concluded:
“[Honest concurrent use] is possible in cases where the goods are not identical, or the marks are not identical, or a question as to whether one of the traders had abandoned [its trademark] arises. In other words, it is possible in cases in which there is some scope for bona fide thinking on the part of a trader that the other trader is not the proprietor of the trademark, but it is impossible where, as in the present case, the mark is identical and the goods on which it is used are also identical.”
It is the latter part of this observation that has been endorsed by Mr Justice Sanghi in Turning Point. It is an observation that finds little support in established case law elsewhere, and is a dangerous line to propagate, given that it interferes significantly with a reading of Section 12. Once again, the fact that this excursion wasn’t demanded by the facts — a pure passing off action — in Turning Point is jarring.
The Defendants’ Claim of Acquiescence and Delay
The final issue in Turning Point was one of interim relief and of the considerations of equity informing it. To this end, the Defendants’ claim that an interim claim for passing off filed, at the very worst, 16 years after their adoption of the trademark ought to be shut out for acquiescence and delay, was an arguable one.
The judge’s initial line on the question — in separating acquiescence from laches, in that it requires a positive act or conduct by the Plaintiff and implies knowledge on part of the Plaintiffs of the existence of the Defendants, and that no such conduct was forthcoming — is unexceptionable.
However, his second observation flips the question around on the Defendants to say that it was their case that they did not know of the Plaintiffs’ existence despite the Plaintiffs’ business pre-dating theirs. (The Defendants had separately claimed that they only came to know of the Plaintiffs in August 2015.) It is unclear here whether the requirement of knowledge has been applied with equal and opposite effect on both parties and on what basis.
With this doubt regarding the Defendants’ conduct already manifest, an exhaustive elaboration of the Defendants’ prima facie dishonest adoption duly arrives, this time with the consequence of disentitling them from raising acquiescence or delay as a defence. (This is based — with paper-thin permissibility — on the Supreme Court decision in Midas Hygiene and the Delhi High Court decision in Ansul Industries, which recite the proposition that if there is fraud or dishonest adoption, delay-based defences ought not to interfere with the grant of injunctive relief. Critically, it appears as though the Defendants admitted delay but sought to excuse it under Midas Hygiene. Mr Justice Sanghi also summarily dismisses the Defendants’ reliance on Section 33, noting that the provision cannot defend rival use that is not bona fide.)
With the interim injunction finding in favour of the Plaintiffs all but sewn up, the judge nevertheless runs through each of the Defendants’ contentions in its cross-suit for trademark infringement. Once again, it is clear that these needn’t have been discussed once the prior use finding had been arrived at.
The impression advanced from this section of the opinion is that these contentions have been discussed because it is comprehensive to do so. It does, however, sharply affect the readability of what, at the end of the day, are interlocutory applications for interim relief. Given the number of factual and legal findings that are prefaced by the disclaimer that they are all merely prima facie anyway, there is certainly a point to be made about ordering written opinions more concisely.
This is a point further borne out by Mr Justice Sanghi’s sound but extremely lengthy rejection of the Defendants’ reliance on three Delhi cases — ACL Education Centre (on the impermissibility of using generic words in conjunction if they have been previous used in the same manner by a prior user), Alkem Laboratories (on prior use) and Pearl Retail Solutions (on the limits of the third party use defence).
His conclusion includes a parting shot at the Defendants, discounting them from suffering irreparable harm on balance because, in his view, they have uncontroverted evidence of use of another trademark (‘PYRAMID CLASSES’) for their services that is stronger and older than their evidence for ‘TURNING POINT’.
It’s a good abstraction of the opinion itself — raking up unnecessary and counterproductive complications over straightforward questions, but a comfortably defensible decision on merits.