Vistara airlines recently sued Vistara Home Appliances (defendant/respondent) for trademark infringement and passing off before the Delhi High Court. A Division Bench of the Delhi High Court passed an order which will adversely impact businesses (especially small ones) going forward.
Background
Vistara is a Sanskrit word which means ‘limitless possibilities’ and is also the name of a now well-known airline service in India. Vistara airlines is a joint venture between TATA Sons Private Limited and Singapore Airlines Limited and operates flights domestically and internationally.
The Vistara trademark is primarily used for airlines services, travel and hospitality services. Until 2019, Vistara was not a well-known trademark (declared well-known by the Delhi High Court in Tata Sia Airlines Limited vs M/S Pilot18 Aviation Book Store in 2019). In fact, the ‘well-known’ status of this mark is still disputed since Vistara has not filed the requisite form and paid the requisite fees for inclusion of this trademark in the TMR’s list of well-known marks (Tata Sia Airlines Limited vs Union of India).
The defendant adopted and started using its Vistara trademark in 2016 shortly after the plaintiff’s adoption/use in 2014 and before the plaintiff’s mark became ‘well-known’. It appears that the defendant was aware of the plaintiff’s mark but modified its mark to avoid confusion. The marks as they appear in the marketplace, taken as a whole, look quite different (see images).
Further, the plaintiff uses its Vistara mark for airlines and hospitality services whereas the defendant uses its mark for unrelated goods such as – mixers, juicers, ACs and other home applications.
Holding
While the trial court held in favour of the defendant and found no infringement, the Division Bench reversed.
The Division Bench held that the defendant’s use was in bad faith and would cause confusion in the market. The court reached this conclusion mainly on three grounds:
(a) strength: the plaintiff’s mark is an arbitrary mark making it conceptually strong;
(b) similarity: the defendant’s mark is ‘phonetically identical’ to the plaintiff’s mark (Vistara and Vistara); and
(c) bad faith: the plaintiff is the prior user, the defendant had knowledge of the plaintiff’s mark and the plaintiff’s mark is well-known making the defendant’s adoption dishonest.
Confusion?
Even though the Division Bench relied heavily on the ‘well-known’ status of the plaintiff’s mark, the decision is on confusion and not dilution.
The decision of the Division Bench is concerning for several reasons. The court ignores several other factors that go into assessing confusion as such:
(a) relatedness of the goods: here, the defendant’s trademark is used on home appliances – goods that are unrelated to airline and travel services. Though Tata is in the FMCG business and may have had plans to expand into the market for home appliances under the Vistara brand, it did not obtain registration for Vistara in classes that cover home appliances. This coupled with an absence of plans for expansion shows a lack of intention for expansion into this new market. This argument was probably the most relevant but barely considered by the court;
(b) fame: at the time of the defendant’s adoption/use, the plaintiff’s mark was not well-known. Further, mere knowledge of the plaintiff’s mark does not lead to a finding of bad faith. In this case, the defendant even tried to distinguish its mark to avoid confusion;
(c) similarity: the marks, taken as a whole, as they appear in the market, are different;
(d) channels of trade: Vistara is a high-end airline and consumers buying Vistara home appliances may not be Vistara flyers;
(e) third party similar marks: there was evidence of (i) third parties using similar trademarks and (ii) admissions of distinctiveness based on differences in goods / services made by Vistara during prosecution. These arguments were not given much weight (see our post on prosecution history estoppel).
These factors weigh against a finding of confusion but many of them were neither argued nor considered by the court.
Flying a new feeling?
Even if there is confusion, the question remains as to what harm Vistara airlines would suffer from such confusion? Would a bad experience with Vistara home appliances result in consumers choosing not to fly Vistara (probably not)? Since businesses are trying to expand their trademark rights, materiality is a balancing factor which Indian courts should start considering. This is a significant question which has been raised and considered by scholars in the US e.g. here and here.
Additionally, this decision requires businesses to ensure that their trademarks are not phonetically identical to ANY trademark in ANY class on the trademark register. This is not in line with trademark law and practice. Usually, trademark clearance searches are conducted only in ‘core classes’ i.e. classes that are relevant to the goods / services for which the trademark will be used. For example, it is not standard to conduct a trademark search for tea in a class that deals with paints. This decision will only increase time and costs for businesses. Worse, businesses may choose not to conduct searches at all (since mere knowledge of a prior mark may lead to a finding of bad faith) which may increase confusion and increase time and cost spent on litigation.
Further, the court’s (over)emphasis on phonetic similarity over ‘over-all’ similarity means that phonetic searches may need to be given priority. Phonetic searches are particularly complicated to conduct and assess on the Indian TMR website. So good luck to trademark lawyers!
Lastly, is it possible that this case opens a Pandora’s box – can all well-known trademark holders go back in time (when their marks were not well-known) to stop legitimate businesses?
