Trademarks, “Nature” of the Business and Interim Injunctions: Some Thoughts on the Delhi High Court’s Two (Opposing?) Orders

(This post is authored by  SpicyIP Intern Niyati Prabhu, a second-year student pursuing B.A.LL.B. (Hons.) from NUALS, Kochi. See her previous posts here and here.)

Recently Delhi High Court passed contrasting orders in Birla Institute Of Technology and Science, Pilani vs Maa Bhagwati Educational Society and Anr. (“BITS Case”) and the American International School, Chennai vs American International School, Greater Noida and Ors. (“American International School Case”).  On the face of it, the facts of both the cases seem similar, in fact, almost identical, and the court primarily considered the nature of the services provided by the parties to reach the respective conclusions. Nonetheless, the differing conclusions raise some questions worth thinking over. 

Facts in Brief

In the American International School case, the plaintiff is a Chennai-based overseas American-sponsored elementary and secondary school formed in the year 1995 which claimed infringement and passing off against the defendants for using the name “American International School” for a school established in Greater Noida, Uttar Pradesh in 2018. The court passed an interim injunction restraining the Defendants from using the mark till the next day of the hearing (08/05/2023). On the other hand, in the BITS case, the plaintiff, Birla Institute of Technology and Science (BITS Pilani), a reputed educational institute established in Pilani in 1964, filed a suit for trademark infringement against Bhagwati Institute of Technology and Science (BITS Ghaziabad) located in Ghaziabad, Uttar Pradesh for using the acronym BITS and BITS Ghaziabad since 2012. Here, the court refused to pass an ex parte order, stating that they wanted to give the Defendant another opportunity to respond to the application seeking stay. Interestingly, both orders seem to refer to the public interest as the reason but reach opposite outcomes.

Similar Facts, Differing Results

More often than not, courts do not expound all three factors required to pass an interim injunction, namely, i) the observation of a prima facie infringement, ii) whether the balance of convenience rests with the plaintiffs, and iii) the risk of irreparable harm, but summarily conclude their presence. The present two cases have joined the more-often-than-not club.

Although the facts of both cases seem similar, the court read the balance of convenience and irreparable damage in a somewhat contradictory manner. Here’s what both the courts said:

In the American International School case, the court held, (¶ 28) 

a prima facie case of infringement and passing off is made out on behalf of the plaintiff. Balance of convenience is in favour of the plaintiff. Irreparable harm would be caused not only to the plaintiff but also to the public if an ex parte ad interim injunction as sought is not granted in favour of the plaintiff.” 

On the other hand, in the BITS case, the court held, (¶ 17) 

“A prima facie case of infringement appears to exist. However, as the court has also to keep in mind the balance of convenience and irreparable loss before granting an injunction, and as the defendants’ institution has been running since 2012 even as per the assertions in the plaint, and keeping in mind the fact that the defendants’ is an educational institution which involves the welfare of students, I deem it appropriate to give one opportunity to the defendants to respond to the application seeking stay before taking a decision thereon.”

Unfortunately, other than a brief mention along the lines shown above, neither case had any real analysis of the three factors for granting interim injunctions. 

Public Interest, Higher Standards, and other Confusing Terms

In the BITS Pilani case, the judge also mentioned that the educational institution had been running for a considerable period of time, and keeping in mind the welfare of the students, did not injunct the defendants. This raises some speculation as to whether the nature of the services provided by the defendant i.e., education to students, can be considered as a ground relevant to the granting or not granting of interim injunctions. Is this supposed to be a public interest ground, perhaps read into one of the interim injunction factors? It’s unclear. Furthermore, it is unclear how the education of students will be affected by passing or not passing an interim injunction in a trademark infringement suit. Unfortunately, the order does not provide any reasoning for this. 

Speaking of the public interest angle in trademark infringement cases, ideally, there are stricter standards which are applicable for certain medicinal trademark infringement cases with the intent to reduce consumer confusion and ensuing medical mishaps. (Although, as pointed out by Aparajita in this post, the strict approach principle has not been consistently followed by the courts.) Outside of the medicinal field, the Delhi High Court in Sujata Chaudhri v. Swarupa Ghosh has noted that a higher standard of probity is expected from IPR lawyers to ensure no likelihood of confusion and that they are duty bound to not imitate logos of other firms. Here too, the reasoning as to why a higher standard is required is needed. Is it because of who the service providers are (i.e. lawyers), as opposed to because of clients who rely on the firm’s reputation and may get confused when there are so many similar-sounding firms? If so, the higher standard requirement may not carry over to educational institutions, since educational institutes aren’t required to have more knowledge about these matters.

Long story short, even though not clearly categorized, the Courts, perhaps implicitly, have at times considered the “nature” of the business (e.g. law firm services, pharmaceutical goods, and education institutions in the present case) while granting an injunction. The question is if we need to concretize the “nature of a business” as a relevant factor for granting injunctions in trademark cases. Regardless, there must be a greater call for clarity with respect to the legal basis for providing more leeway for Defendants who are involved in certain sectors while, on the other hand, expecting an over-the-top standard of probity from Defendants involved in a few other sectors. This uniformity is also important considering the perspective adopted by the courts in the present two cases. In the American International School case, the court passed an injunction considering that the similarity of marks and services will cause confusion among the public and, thus, looked at public interest from the lens of the ‘likelihood of confusion on the part of the public’ test prescribed under Section 29 of the Trademarks Act Marks Act, 1999. However, in the BITS case, the court read public interest from a seemingly broader view looking at the nature of the business.

A Possible Reason for not Granting the Injunction in the BITS case? 

One possible reason for the contradicting orders could be that although in the BITS case, the parties have the same initials, the names of the institutions are different. Additionally, while BITS Ghaziabad has been using its full name on its website, the plaintiff has been using BITS Pilani everywhere. In juxtaposition to this, in the American International School Case, both parties have the exact same conflicting mark, which resulted in a prima facie case of infringement and passing off. Could this be a reason why the Defendants were not injuncted? The issue here is not whether the outcome was ‘correct’ or not, but for more clarity on the process of reaching these outcomes. 

Concluding Remarks

The nature of the claim surrounding the ‘public interest’ factor can be vastly varying, and there needs to be more clarity on how the ‘public interest’ aspect is factored in and whether the ‘nature of the services’ provided by the parties can be a reason for giving more leeway regarding the granting of ex parte injunctions in trademark infringement orders. The broader scope of the public interest aspect also needs to be explored. Right now, both these orders do not fare well on the above points. 

Additionally, although interim injunctions are supposedly granted by the courts in ‘exceptional circumstances’ and are to be used judiciously, these days, in IP law cases, they are granted quite often. With regards to a higher standard of scrutiny to reduce the arbitrary nature of these ex parte orders, it becomes imperative that courts explain the factors for granting these injunctions in detail – something that the courts don’t often do. So a question arises as to whether the fact that the rising predominance of interim injunctions and the uncertainty regarding how these are granted dilutes their “exceptional” nature.

Thanks to Lokesh Vyas for his input on the piece.

Tags: , , ,

About The Author

Leave a Comment

Scroll to Top