Intellectual Property Decisions by the Delhi High Court: September 2017
What follows is a series of short reviews of some important intellectual property law decisions by the Delhi High Court in the month of September 2017.
Each review is in three parts — a tl;dr, a review of the key findings in the case, and a rating on scale of 1 to 5 (5 being the highest).
The rating scale is mainly for a bit of fun, but is also intended to function as a barometer for the quality and relevance of the cases. In rating cases, I take into account a mix of factors, including clarity and coherence, originality, contribution and significance to the field, application of the law to the facts, the reasoning for and appropriateness of the relief granted. Links to all cases are embedded in the titles.
This is the second in a series of posts I started last month. Here is the review for August 2017.
On to the September 2017 cases.
Aggarwal Tobacco Manufacturing Co v. Santosh Chaurasia (September 8, 2017)
Tl;dr: A Plaintiff wins an interim injunction on the strength of prior use against a Defendant unable to back up its own use claim in respect of a deceptively similar trademark.
Review: A fairly by-the-numbers examination by Mr Justice Garg in this case of the evidence in support of the parties’ use claims regarding the trademarks ‘Rally’ and ‘Raily’. In the event, the conclusion that the Defendant has been unable to back up its use claim of 2010 on its trademark (which would, presumably, have entitled it to continue use on account of the Plaintiff’s formally subsequent use commencing in April 2012) is a fairly straightforward one. This is because the Defendant succeeded only in producing uncontroverted evidence speaking to use from 2016 and beyond.
However, two things are slightly askew. The first is Mr Justice Garg’s reliance on 2016’s Supreme Court opinion in Neon Laboratories for the proposition that prior use overrides a subsequent registration in a pure passing off action. The second is his reference to 2004’s Supreme Court opinion in Sify for the view that a deadlock between rival and independent claims over birthing the same trademark is to be broken in favour of the prior user.
The former is odd because Neon Laboratories is but a minor and slightly strained application of the ‘first in the market’ test that he cites it as authority for. This test goes at least as far back as 1996’s Whirlpool (something the Neon Laboratories Supreme Court itself acknowledges). The latter, of course, isn’t applicable to the facts of the case because the trademarks here aren’t identical but merely deceptive similar.
Throw in Mr Justice Garg’s decision not to offer a bespoke explanation for his interim injunction order itself (“considering the above facts and circumstances,” he says dismissively at para 13, “it is a fit case to grant interim relief”), and that adds up to a rating of no more than 2.5/5.
Icon Health & Fitness v. Sheriff Usman (September 12, 2017)
Tl;dr: Foreign Plaintiff makes jurisdiction in Delhi against ex parte foreign Defendants; Court finds availability of Defendants’ products online sufficient to make jurisdiction.
Review: Ordinarily, I’d stick this case under the ‘Other Decisions’ heading below — it’s an open and shut ex parte award for passing off — but the location of the parties injects Ms Justice Gupta’s decision to find jurisdiction for the Plaintiff here with a fair amount of controversy.
The claim is simple — an American Plaintiff without an Indian place of business sues Defendants registered in the United Arab Emirates in Delhi for passing off their app and products under the ‘iFit’ banner. The duplication is conclusive, and the substantive finding for the Plaintiff is irresistible. (Ms Justice Gupta also wanders into the law on protecting coined words and cross-border reputation in aid of the Plaintiff, just to make sure.)
All that remains, therefore, is jurisdiction. The Plaintiff’s claim is based on the Defendants carrying on business in Delhi. Though the Defendants do not reside in Delhi, says Ms Justice Gupta, their apps and products are available on international app platforms (App Store, Google Play) and e-commerce websites (Amazon). Of the tethers for jurisdiction available to the Plaintiff, this factual can set up jurisdiction at the Defendant’s place of business [Section 20(a) of the CPC] or from the cause of action, in part or whole [Section 20(c) of the CPC].
The suggestion is of the former, but the support for it is to be found in just a single sentence in para 15 — that the app platforms and the e-commerce websites in question “can be accessed and operated from all over the country, including Delhi”. Ms Justice Gupta’s reliance on the Delhi appeals court decision in 2014’s WWE to support her conclusion speaks to her intent of resurrecting the extreme position on jurisdiction in such cases that several Delhi judges in the last three years have attempted to avoid.
At the risk of telling an oft-told story, there are at least three fundamental objections to this type of finding. (See also: things I wrote on this subject in 2015.)
First, “can be accessed and operated” here is a complete and utter hypothetical, as, indeed, it was in WWE. It places all the responsibilities and triggers in the hands of the purchaser, not the Defendants. At best, you can say the Defendants were selling to purchasers in Delhi, with proof of such use or sales. That it is possible for there to be use or sales, without evidence of such use or sales, and that the Defendants are carrying on business in a jurisdiction on this basis alone, is a non-starter of a proposition.
Second, flowing from the first, under this reading, there is no exclusivity at all to Delhi’s jurisdiction. Literally anywhere with an internet connection will do. This is an acceptable outcome only on the condition that Indian civil procedure envisages asking (foreign) Defendants to defend actions in India at any and all places in India where the internet is accessible. This, again, is a patently unsustainable conclusion.
Finally, the reliance on WWE is internally incongruent. This is because WWE used this e-commerce line to support jurisdiction for the Plaintiff under the Plaintiff-option jurisdiction offered by Section 134(2) of the Trade Marks Act, not the Defendant under Section 20(a), as is the case here. Of course, it could be argued that the WWE reference is apposite to the extent that both provisions use the same language and therefore those words must be given the same meaning that they are given elsewhere. (This certainly appears to have been the rationale, at least in part, of another Delhi appeals court in January 2016’s Ultra Home Construction.) But all that really does is expose the hollowness of this standard — if your catch-all internet jurisdiction can swap over from Plaintiffs to Defendants and across countries with absolutely no loss of effect, perhaps it’s time to re-think that standard.
As such, I find myself in the wholly uncomfortable position of disowning a perfectly unexceptionable finding on merits because one flippant paragraph on jurisdiction has soured the whole thing. I’m rating this 1.5/5.
Epsilon Publishing House v. Union of India (September 18, 2017)
Tl;dr: “What Happens When a Trademark Renewal Isn’t Processed Properly & Other Short Stories”
Review: This case poses a curious question — what happens if you file an incomplete trademark renewal application and the Trade Marks Registry doesn’t renew it in time but also doesn’t inform you that it has?
The provisos to Section 25(3) and Rule 65 of the Trade Marks Act and (2002) Rules operate to keep a lapsed trademark registration suspended for the benefit of its proprietor, who can pay its way to renewal inside a six month window. Failing the payment of the renewal fee plus a surcharge, Rule 66 orders the trademark to be removed, and its removal advertised. [There is a further six months stapled onto this timeline by Section 25(4) but this is, formally speaking, after the removal, and entirely at the Registrar’s discretion.]
It is at this point that things turn distinctly Indian. The Trade Marks Registry is seemingly in the habit of issuing deficiency notices on all incoming requests and payments for renewal. It didn’t do so within time in this case as against the renewing proprietor’s renewal request which had been filed minus the surcharge. This had the effect of prejudicing the renewing proprietor (the Respondent in this case), and formally costing this proprietor its hold over its registration.
The Petitioner, a later registrant of a trademark containing identical words, climbed all over the lapse, confirming that the Respondent’s registration hadn’t been renewed, asking for its cancellation, and suing the Respondent for trademark infringement based on its later (but subsisting) trademark registration. The Registrar’s decision to renew the Respondent’s registration pushed the Petitioner to bring this appeal.
Mr Justice Bakhru’s decision to dismiss the petition is an excellent one for two reasons.
First, his reading of Sections 25(3) and (4) in paragraphs 23 to 25 is clear, observant and entirely accurate. He sets out the timelines in operation, the rights that accrue, the procedure to be followed, and the discretion permitted in a manner that permits no disagreement whatsoever.
Second, his point on the prejudice likely to the Respondent as a consequence of the Registry’s failure to follow this deficiency notification procedure is a good one. It is also reassuring to see him conclude that renewal is exclusive to the trademark prosecution process between the Registry and the renewing proprietor, and that all third parties are outsiders. It is doubtless the correct outcome, given what the Respondent stood to lose, and given that its bona fides was above board.
A few questions remain, though. Is the payment of surcharge effectively a non-essential condition? Does this cast an obligation on the Registrar going forward to issue deficiency notices in all cases, even though the roots of such notices can’t be traced back to the statute? Finally — and not inconsiderably — what is the effect of conflating, as Mr Justice Bakhru does, the renewing proprietor’s “right to know the fate of its [renewal] application” (para 26) with its entitlement to the renewal itself? Weigh it all up, and it’s good for a rating of 3/5.
Other Decisions
September’s ex parte decree awardees in trademark and copyright infringement suits included Tata Sons (September 4), Bata India (September 11), Aakash Educational Services (September 14), DRS Logistics (September 15), Kent (September 19), Ahuja Radios (September 25), SAP (September 26), Xegent Consultants (September 27), and proprietorships Shree Sant Kripa (September 11) and Ishar Dass Amir Chand (September 26).
These decrees were accompanied by flat awards for costs of the proceedings — actual costs, court fees, legal fees, and court officer fees, where applicable — in Aakash Educational Services, Bata India, SAP, Shree Sant Kripa, and Ishar Dass Amir Chand, while the ex parte decree in favour of Icon Health brought the Plaintiffs a defined Rs. 120,000 in court fees and legal fees. The award in Tata Sons applied this formula, which is fast becoming Mr Justice Manmohan’s default, to presumed losses to the Plaintiffs based on infringing material recovered from the Defendants’ premises (Rs. 27,750 in actual damages, plus legal fees and court officer fees was the result).
Mr Justice Khanna continued on his damages award spree that I made note of last month with identical Rs. 300,000 payouts, plus 12% interest and costs of the suit to the benefit of the DRS Logistics, Kent and Ahuja Radios Plaintiffs. However, with no shift in reasoning out the quantum (though clearly influenced by the Microsoft cases he cited with approval), he escalated the payout to Rs. 500,000 plus costs of the suit in favour of the Xegent Consultants Plaintiffs.
Finally, a note on an appeal against a 2008 order of the Copyright Board dismissed in favour of the Respondents in UC Jindal v. Galgotia Publications (September 15). Copyright claims arose here in the crosshairs of an arbitration clause between the Appellant author of textbooks and the case brought by him against the Respondent publishers after an assignment arrangement between them ran into disputes. Mr Justice Teji’s decision to compel the Appellant into arbitration appears to be justified on facts.
Since October 2017 is just a 15-day month at the Delhi High Court owing to regional holidays, I’ll combine the reviews of the October and November cases into a single post. Expect that to be up in early December.
I’m happy to hear feedback either in the comments below or on email.
