Keller Williams v. Dingle Buildcon: Answering the Non-Use ‘KW’estion
On Friday, the Delhi High Court dismissed Texas-based real estate franchisor Keller Williams Realty’s ambitious motion for trade mark injunction against three local real estate businesses.
The claim was over the use of the acronym ‘KW’ — used by all four entities with added material, including business names — in a variety of ways.
The Claimant was denied ex parte injunction last February, before the preliminary arguments concluded in November. April 17’s opinion by Mr Justice Endlaw is the result.
The defence to Keller Williams’ case is fastened to three hooks, and Mr Justice Endlaw finds in favour of the Defendants on each.
The Prosecution History Defence
First, the Defendants rely on statements made in trade mark prosecution. Keller Williams’ case regarding the distinctiveness of their own trade mark was, in prosecution, pinned on the narrow scope of their business.
The key sticking point, picked up by Mr Justice Endlaw as well, is that Keller Williams’ real estate brokerage trade is a demonstrably different field of business than the Defendants’ business of constructing and developing real estate. Absent common trade channels with other ‘KW’ rivals, Keller Williams had contended that there was no possibility of confusion. However, with the shoe on the other foot in this suit, Keller Williams’ position that the Court return a positive finding of likelihood of confusion against these same businesses becomes immediately untenable.
Mr Justice Endlaw seals this point against Keller Williams by finding that they demonstrated no interest in opposing the Defendants’ trade marks in prosecution.
The Claimant Non-Use Defence
Second, the Defendants express misgivings over the Claimants’ use of the ‘KW’ trade mark in India. They claim that Keller Williams have failed to make good on their intention to use, which they offered to the Trade Marks Registry in 2012.
This is a point of interest because Keller Williams concede that their case on use is not so much that they have business in India as much as their business is known to Indians. The Court splits the difference between these positions. It concludes that Keller Williams has no “business, customers, agents or franchisees in India” and has failed to establish “any real estate brokerage in India.”
However, this conclusion relies heavily on the 2017 Supreme Court ruling in Toyota v. Prius. As I have discussed previously, Toyota is a poor advertisement for the prior use inquiry endorsed by Indian law. In large part, this is because it simultaneously claims ownership over two contradictory positions. It adopts a strong position in favour of the territoriality of trade mark rights but also concedes to the position — popular in India well before Toyota itself — that the reputation and goodwill of a trade mark acquired abroad can spill over into India “in a subtle form.”
Mr Justice Endlaw solves for that contradiction extremely well. He finds, within deliberately narrow parameters, that Keller Williams failed to set up a case for reputation or goodwill in India, after the registration of its Indian trade mark. This overcomes the notoriously brutish requirement that there must be adequate evidence of substantial goodwill within India which the Toyota Supreme Court saddles onto prior use Claimants. (It is perhaps just as well to note here that this opinion also makes passing reference to pre-Toyota Supreme Court precedent such as 2015’s Neon Laboratories and 2004’s Milmet Oftho. Both are fine statements on the subject.)
The Added Matter Defence
Finally, the Defendants suggest that, even de hors Keller Williams’ affirmative case on prior use, the rival trade marks at issue are not similar enough to sustain a finding of passing off. An assessment of the trade marks themselves reveals this to be quite self-evident.
However, the Court’s treatment of this defence is simply to box the case as one of acronyms used in conjunction with corporate names, where the added material is sufficient to distinguish. This ignores that there are deeper issues to be probed from the standpoint of a pure similarity inquiry. A couple of these, in fact, emerge from the Defendants themselves. The Defendants contend, for instance, that their use of ‘KW’ elevates their trade marks into distinctive territory. At face value, this would have the effect of strengthening Keller Williams’ claim for passing off. The Defendants also offer somewhat sketchy etymology stories to support their adoption of ‘KW’ as acronym trade marks.
The latter is the only fact that appears to make an impression on Mr Justice Endlaw, who observes that “the explanation of the Defendants…does not inspire confidence.” Nevertheless, he lets it slide since Keller Williams’ failure to back up even the use of its own trade mark outweighs potentially dishonest adoption by the Defendants.
Disappointingly, the ‘acronyms with sufficient added matter to distinguish’ finding is entered only in passing, though it should, to all rights, constitute a bulwark of the substantive case for similarity. (It is a finding with deep implications too, with the freedom to draw on “added matter” renditions in trade mark similarity cases going as far back as the Supreme Court of the 1960s.)
However, adjusted for context and scale, that is a minor complaint. The message that foreign rightsholders of Indian trade mark registrations need to support their registrations with local use, reputation and goodwill is loud and clear. Hopefully, it is loud and clear enough to deter Keller Williams-style non-use Claimants from moving such claims against Indian rightsholders.
