Delhi High Court Grants Injunction To 'INFOSYS' Against 'Southern Infosys Ltd', Says Phonetic & Conceptual Similarity May Confuse Consumers

The Delhi High Court has recently clarified that minor procedural missteps that are adequately explained should not overshadow the merits of the case, particularly if there exists clear evidence of trademark infringement. Court said that visual or phonetic similarities may lead to consumer confusion.

A single bench of Justice Sanjeev Narula observed that “the combination of visual, phonetic, and conceptual similarities between the marks, on a prima facie assessment significantly raises the likelihood of consumer confusion, suggesting that 'Southern Infosys Limited' might be mistakenly associated with the Plaintiff.”

“In trademark jurisprudence, delay or laches can mitigate the remedies available to a trademark owner but does not necessarily negate the right to object to and seek protection against infringement, especially when such infringement poses a continued threat to the brand's identity and market position”, added the Bench. 

Explaining constructive notice of well-known trademarks, the High Court pointed out that entities must undertake thorough due diligence before adopting a corporate or trade name, especially when entering fields populated by established trademarks.

The High Court held that the defendant's failure to perform due diligence suggests a lack of good faith, and the adoption of a name 'Southern Infosys Limited' so closely resembling 'INFOSYS', a term which was established and recognized within the industry for 17 years prior to defendant's adoption, appears to be a deliberate attempt to capitalize on the goodwill and reputation that the Plaintiff has developed over 17 years of continuous use.

Such actions are indicative of bad faith and a clear intention to benefit from the established market presence and consumer recognition of the Plaintiff's trademark, added the Court.

Section 29(5) of the Trademark Act, 1999 stipulates that trademark infringement occurs only when the registered trademark is used by the Defendant as part of their trade name and the Defendant engages in commerce concerning the goods or services for which the trademark is registered.

Facts of the case:

The plaintiff is a global leader in information technology and consulting services, and it had coined & adopted the trademark 'INFOSYS' in 1981.

It was stated that the term 'INFOSYS' has become exclusively associated with the Plaintiff, particularly recognized as a hallmark in the technology sector. Since 1987, the Plaintiff's trademark portfolio has grown substantially, featuring nearly 30 registrations of 'INFOSYS' formative marks across various classes in India.

It was submitted that the Plaintiff was aggrieved by the Defendant's adoption of the mark 'INFOSYS' as part of its corporate name 'Southern Infosys Limited', and pleaded that this use of the Plaintiff's registered and well-known trademark 'INFOSYS', constitutes infringement u/s 29(5) of the Trademark Act. Accordingly, the Plaintiff, upon discovering the unauthorized use of their trademark, promptly issued a cease-and-desist notice, which wasn't responded to by the Defendant.

Hence, the plaintiff filed a lawsuit u/s 29(5) of the Trademarks Act, 1999, to prohibit the Defendant from using the said trademark as part of its trade/corporate name 'Southern Infosys Limited'. They seek to protect their intellectual property rights and contend that by adopting the 'INFOSYS' mark within its corporate identity, the Defendant risks misleading consumers and eroding the unique brand equity that Infosys has meticulously built over the years.

Observations of the High Court:

The Bench highlighted the legal principle that an injunction must ordinarily follow in cases of established trademark infringement.

While comparing the Defendant's goods with the goods for which the Plaintiff's 'INFOSYS' marks are registered, the Bench found that the overlap is not only glaring but also incontrovertibly evident.

The breadth of the Defendant's business activities significantly intersects with the technological areas protected under the 'INFOSYS' trademark, presenting a clear case of trademark infringement of the plaintiff, added the Bench.

Despite the Defendant's claim of service-only operations, the Bench found that the objectives specified in their Memorandum of Association clearly indicate involvement in activities that overlap with the goods and services for which the Plaintiff's 'INFOSYS' trademarks are registered, which includes engagement in areas directly related to computer systems and software, which are integral to the Plaintiff's business under Class 9.

Thus, the Bench observed that the Defendant's use of 'INFOSYS' within their corporate name, amidst these overlapping areas of operation, necessitates the consideration of an injunction.

Such legal action is imperative to safeguard the Plaintiff's established trademark rights against potential infringement and consumer confusion, as stipulated u/s 29(5) of the Act, added the Bench.

The Bench went on to observe that although the prefix 'Southern' might suggest some differentiation, the term 'INFOSYS' remains the dominant element of the name, closely mirroring the Plaintiff's standalone trademark.

On a prima facie assessment, the Bench stated that the visual similarity could lead consumers to perceive a connection between the two entities, as the marks are phonetically identical, and may potentially lead consumers to believe that 'Southern Infosys Limited' is a regional branch or an associated entity of the Plaintiff.

The Bench further observed that the procedural lapse in delayed filing of suit by Plaintiff until 2024, despite the Defendant's use of the Impugned tradename since 1998, does not significantly impact the validity of the Defendant's objections or diminish the Plaintiff's substantial claims of infringement.

The High Court therefore allowed the application in favour of the Plaintiff and restrained the Defendant from using the mark 'INFOSYS' as part of their corporate/ trade name 'Southern Infosys Limited' or in any other manner amounting to infringement of the Plaintiff's trademarks.

Counsel for Plaintiff: Peeyoosh Kalra, C.A. Brijesh, V. Mohini and Ishith Arora

Counsel for Defendant: Piyush Kaushik

Case Title: Infosys Ltd vs. Southern Infosys Ltd

Citation: 2024 LiveLaw (Del) 727

Case Number: CS(COMM) 257/2024 & I.A. 6821/2024

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