Lokesh Vyas and Harshit Singh Jadoun
In Bayerische Motoren Werke Ag vs. Om Balajee Automobile, the Delhi High Court drew a prima facie conclusion of the defendant’s dishonest intention merely on the basis of statistical evidence adduced by the plaintiff. It underscored the significance of the reputation carried by a trademark in the infringement suit. The Court evasively settled the issue of trademark dilution and passing off by considering the plaintiff’s averments as to the conclusive evidence. On the interpretational front, the court overlooked the “higher notch” standards required to satisfy an infringement suit under section 29(4)(c).
The issue arose over the marks BMW (“plaintiff”) and DMW(“defendant”). The former is a German manufacturer of motor vehicles whereas the latter is an Indian e-Rickshaw manufacturing company. The plaintiff instituted an infringement suit alleging dilution of its trademark BMW. While the defendant harped on the grounds of dissimilarity of marks and the different trade channels. The Court passed an ad-interim injunction in favour of the plaintiff and restrained the defendant from using the mark DMW owing to the same being deceptively similar to the plaintiff’s mark.
The court adjudicated on the issue of whether the defendant’s mark DMW passes off and dilutes the plaintiff’s mark BMW. The plaintiff challenged the defendant’s use of mark DMW by invoking Section 29(4), Trademark Act, 1999 [“Act”] which requires the following three factors to be satisfied in order to establish infringement :
- is identical with or similar to the registered trademark, and
- is used in relation to goods or services which are not similar to those for which the trademark is registered, and
- the registered trademark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trademark.”
In light of the conjunctive “and” used in the statute, it becomes imperative to establish all the three factors together. The Court in the present matter presumed the existence of the first two parameters without pondering upon the intricacies involved in examining the two marks. The Court surmised the validity of the reputation acquired by the plaintiff’s mark merely on the basis of colossal figures presented by the plaintiff. The Court, without deliberating upon the facts and circumstances, superfluously concluded the intention of the defendant as dishonest.
Further, the Court failed to distinguish a well-known mark [(2(1)(zg)] with “a mark with a reputation” [29(4)(c)], where former is a question of law and the latter is a question of fact. The Court referred BMW as a well-known mark without scrutinizing Section 11(6) which lays down its basic conditions. The instant case disregarded the Supreme Court rulings in Nandhini Deluxe [(2018) 9 SCC 183], and ITC case [ILR (2010) 2 DELHI 455] wherein the Courts elevated the bar of comparing marks in case of different products and sidestepped the debate by differentiating the above precedents on factual grounds.
Erroneous Ascertainment of Defendant’s Intention:– In the case of dilution under Section 29, a plaintiff is required to establish dissimilarity of goods, reputation in India, mark’s use without due cause detrimental to it, or the defendant taking undue advantage (ITC Limited case) [ILR (2010) 2 DELHI 455]. The expression “without due cause” implies the establishment of the intention of the defendant by the plaintiff. In the present case, without delving into the essential variables of similarity namely the degree of similarity between two marks, the proximity of products, actual confusion caused, defendants good faith in adopting its own mark, quality of defendant’s products and sophistication of the buyers Nandhini Deluxe [(2018) 9 SCC 183], the Court evaded its application by stating the facts to be materially different and concluded the intention of the defendant as dishonest. This deviates from the holding of Bloomberg Finance LP v Prafull Saklecha CS (OS) No. 2963 of 2012 which accentuates the requirement of mental association of the offending mark with the plaintiff’s mark. Such evasive interpretation of the Court problematizes the test of an average consumer test which clarifies that while examining two marks (for different goods) for infringement under Section 29(4), the threshold is higher (ITC case).
In Durga Dutt v Navaratna Laboratories (AIR 1965 SC 980), the court adopted a lenient approach towards defendants in passing off if they can show the “added matter” which can differentiate the two marks. Applying the same principle in the present case makes it apparent that both BMW and DMV DMW marks were different on several parameters factors. Relevantly, BMW mark is inscribed in an artistically designed logo with concentric colorful circles whereas DMW is a mere wordmark with no such logo or artistic appearance on it.
The marks also differ in terms of size, colour, and font which constitute a major determinant in recollecting them (N. Ranga Rao And Sons vs Anil Garg And Ors [2006 (32) PTC 15 Del)]. However, in the present case, there exists a reasonable justification behind adopting DMW where ‘D’ stands for the surname of the defendant ‘Deshwar’ and MW signifies motor works which are generic and descriptive words.
The principle of dilution indicates a weakening of the mark when the relevant consumers start relating the mark with a new source (Caterpillar Inc. vs Mehtab Ahmed And Ors. 99 (2002) DLT 678). In the present case, the plaintiff is a luxury brand and largely constitutes wealthy consumers who are very less likely to trade with the defendant which manufactures E-rickshaw. Thus, the question of dilution is unlikely to occur.
The substantial price difference between the products the parties bolsters the relevance of the consumer base which the Court blatantly disregarded. Reliance can be placed on Hamdard National Foundation vs Abdul Jalil [2008 (38) PTC 109 (Del.)] where the Court ruled “where the marks at issue are not identical, the mere fact that consumers mentally associate the junior user’s mark with a famous mark is not sufficient to establish actionable dilution.” Appositely, the mere resemblance of the marks neither establishes the bad faith of the defendant nor does it amount to the dilution of the plaintiff’s mark.
Unanswered Query of ‘Well Known Mark’ vs ‘Mark with reputation’: –The court failed to throw light on the discrepancy embedded in the statute regarding the use of the phrase “well-known trademark” and “mark with a reputation”. The point to mull over is whether the phrase “mark having a reputation in India”, used in Section 29(4), invoked by the plaintiff can be equated with a well-known trademark”. The present case was an apt opportunity to develop jurisprudence regarding the reasoning behind using the phrase well-known trademark for prosecution proceedings under Section 11 but not for enforcement proceeding under Section 29 If it is to be believed that the phrase “having a reputation in India” has been used in the statue to imply a well-known trademark, then it raises questions with respect to the intention of the legislature behind using two different terminologies for indicating a single aspect.
With regard to the precedents, the court in the case of Ford Motor Co. & Anr. v. Mrs. C R Borman & Anr. [2008 (2) CTMR 474 (Delhi) (DB)] equated ‘well-known mark’ with a ‘mark a with reputation’, however, the ruling goes contrary to the Bloomberg Finance LP case (supra) and T.V. Venogopal vs Ushodaya Enterprises Ltd. & Anr. (2001 (2) ALT 42) which especially differentiate the two categories. The discretion exercised by the court under section 29(4) to determine “dilution” becomes the genesis of anomalies in the statute which could have been settled through this case.
Section 29(4) is an exception to the rule of trademark law as it extends protection beyond the registered class of the trademark owner. Therefore, it becomes indispensable to apply it cautiously to prevent impinging upon the right of an innocent user. The court, disregarding the peculiarities of the facts involved, relied on the reputation of the plaintiff’s mark to justify the injunctive relief. The palpable carelessness of appreciating the reputation without delving into proof of the loss to the plaintiff not only impedes the conceptual development of TM law but also tilts it in the plaintiff’s favour.
The judgment sets a precedent for allowing big corporates to escape the legal rigor involved in establishing trademark infringement and can be fatal for small businesses with a separate set of consumers. The judgment would imply that all the marks comprising the word ‘MW’ are synonymous with each other which is an incorrect understanding of the trademark law and would encourage frivolous and vexatious litigations in the future. The court in the present case could have established a robust regime for comparing the marks used for different goods and services.
Lokesh is a student at the Institute of Law, Nirma University, Ahmadabad and Harshit is an associate at Fidus Law Chambers.
Picture Credits: Diego Sideburns
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Categories: Corporate Law, Legislation and Government Policy