Prior Use In One Jurisdiction Would Not In Itself Entitle User To Exclusive Rights In Other Dominion: Delhi HC Clarifies Law On Spill Over of Reputation [Read Order]

While holding that there's no prima facie case to pass injunction against the defendants, the Single Bench of Justice Endlaw noted that mere ownership or even registration of a mark does not lead to any presumption of the mark having a reputation and goodwill, even in the territories where the mark is being used.

The present suit was instituted by the plaintiff for permanent injunction to restrain the three defendants namely (a) Dingle Buildcons Pvt. Ltd., (b) KW Homes Private Limited and (c) KW Security and Services Private Limited, from infringing the trade mark of the plaintiff and passing off their services as that of the plaintiff, and for ancillary reliefs.

Plaintiff had submitted that it has been using the mark 'KW' since 1994 and thus, is aggrieved from adoption by the defendants of identical and/or deceptively similar marks in respect of identical and/or similar services.

After highlighting that the defendants are recently incorporated entities and do not enjoy domestic and international reputation associated with the plaintiff, it was argued that by using the mark 'KW' the defendants not only infringe the plaintiff's mark but also convey the services of the defendants to be originating from the plaintiff.

Senior Advocate Akhil Sibal, who appeared for the the defendants, argued that the plaintiff, in its response to the objection raised by the Registrar of Trade Marks with respect to the prior pending applications of the defendants, took a stand that there was no likelihood of confusion because the mark of the plaintiff was used for services relating to franchising, namely, offering technical assistance in the establishment and/or operation of real estate brokerages while the defendants were engaged in advertising, business management, etc.

It was further argued by Mr Sibal that the present suit is not maintainable as the plaintiff has failed to establish not only prior user but also continuous extensive user and tremendous goodwill and reputation.

It was also pointed out by the defendants that neither the plaintiff has used the mark 'KW' in India, nor does it have any intention to do so.

In a rejoinder filed by the plaintiff, it was highlighted that while the plaintiff has not started operations in India, it has been considering Indian market for further operations.

The plaintiff also drew court's attention to the emails received by the plaintiff from Indians in India wanting to become franchisee / agent of the plaintiff and has contended that the same shows that people in India know of the plaintiff. Number of visits on the plaintiff's website from India was submitted to substantiate the point.

In order to deny the interim relief to the plaintiff, the court relied upon the following facts and positions of law:

1. Plaintiff could not prove spill over of the reputation and goodwill of its brand from abroad to India prior to the commencement of the use of the disputed mark by the defendants
2. Prior use of the trade mark in one jurisdiction would not ipso facto entitle its owner or user to claim exclusive rights to the said mark in another dominion
3. Till date has no business, customers, agents or franchisees in India and has not been instrumental in establishment and/or operation of any real estate brokerage in India
4. The nature of business carried out by the defendants is very different from that carried out by the plaintiff. The plaintiff does not claim to be in business of or having reputation and goodwill in the construction and development of real estate. Rather the plaintiff does not even claim to be carrying on business of real estate brokerage.
5. When the plaintiff chose to use bare alphabets „KW‟ as its mark, the possibility of another using the same alphabets, is inherent, as the plaintiff also conceded in its reply
6. Plaintiff is also guilty of delay and latches. The plaintiff, in the plaint admits knowledge in March, 2013 of the claim of the defendants of use of the mark since 2006 and the application filed by the defendants prior to the plaintiff for registration of the said mark. However the plaintiff, instead of opposing the said application of the defendants or immediately suing the defendants in 2013 itself to restrain the defendants from using the said mark, was content with obtaining registration in its own favour.

In light of these observations the court refused to grant interim relief to the plaintiffs and went on to note that:

'Since the plaintiff till date has no business in India, the question of the plaintiff suffering any irreparable loss and injury does not arise and the balance of convenience is also in favour of the defendants. The consumers of the projects of the defendants under the KW brand,who use the same as their address, would also be affected by any injunction granted and all of which cannot be reversed in the event of the plaintiff ultimately failing in the suit.'

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