Trademark Infringement | Except In "Most Exceptional Cases", No Ex-Parte Injunction If Defendant Has Been In Market For Some Time: Delhi High Court

The Delhi High Court has ruled that in cases where the impugned mark has been used by the defendant for any length of time, the courts must give an opportunity to the defendant to respond to the application for interim injunction filed in a trademark infringement suit before passing any orders.

“Where the impugned mark has been used by the defendant for any length of time, that sole factor would entitle the defendant to an opportunity to respond, inviting, to the prayer for interlocutory injunctive relief, before orders are passed by the Court thereon,” the bench of Justice C. Hari Shankar observed.

The court added, “Though it is true that various Single Benches of this Court – including myself – have, in the past, been granting ad interim injunctive reliefs, often ex parte and on the very first date of hearing, even where the defendant has been using the impugned mark, or where the longevity of user, by the defendant, of the impugned mark, is unknown, that position cannot, in my considered opinion, continue, in view of the afore extracted enunciation of the legal position by the Division Bench in Dabur⁶”.

The Division Bench of the Delhi High Court in Dabur India Ltd vs Emami Ltd (FAO (OS) (COMM) 171/2023), while setting aside the ad interim injunction granted against the defendant in a trade mark suit, had held that since the defendant’s product was introduced in the market before the institution of the suit, that alone entitled the defendant at least a rudimentary opportunity to oppose the application for grant of ad interim injunction.

The court observed that the opinion of the Division Bench was in line with the Supreme Court’s decision in Wander Ltd vs Antox (India) Pvt Ltd, 1990 Supp SCC 727.

The High Court observed that the top court in Wander (1990) has clearly advocated adoption of a different approach while dealing with applications for grant of interim injunction in intellectual property matters with respect to defendants who have been in the market for some time, vis-à-vis those who were yet to enter the market.

The court was dealing with an application for ad interim injunction filed by the plaintiff, Silvermaple Healthcare Services Private Limited, in a suit for trade mark infringement filed against its former employee.

It was the case of the plaintiff that it is engaged in providing DHI treatment, which refers to a technique for facilitating hair growth, known as “Direct Hair Implantation”. It claimed that it holds valid licenses over the “DHI” mark under the Trade Marks Act, 1999.

The plaintiff claimed that the defendant, Dr Ajay Dubey, was engaged as a dermatologist in the former’s clinic. Consequently, after leaving the services of the plaintiff, Dubey set up his own clinic in Gurgaon, carrying out transplantation by a technique titled “Direct Follice Insertion”, abbreviated to “DFI”.

The plaintiff claimed that the use of the acronym “DFI” by the defendant on its website and social media, infringed its registered “DHI” trademarks, as they were deceptively similar, both in appearance as well as phonetically.

The court, at the outset, said that in view of the recent order passed by the Division Bench in Dabur India Ltd, dated 21^st August, 2023, the prayer for interim injunction restraining the defendants from using “DFI” as a trademark, cannot be granted without allowing the defendant an opportunity to file a reply to the application.

Referring to the order passed in Dabur India Ltd, the court said, “If the defendant has been using the impugned mark, before the plaintiff instituted the suit, then, in all but, possibly, the most exceptional cases, the decision in Dabur⁶ would obligate the Court to extend, to the defendant, an opportunity to submit a written response to the prayer for interlocutory relief, before proceeding to pass orders thereon.”

On the issue whether there may be any exceptional case in which this procedure is not required to be followed, the court said that, for the present, it did not want to express any definitive opinion on the same; while adding that the present matter was not an exceptional case.

“Inasmuch as Defendants 1 and 2 had been using the impugned “DFI” mark for some time, following para 8 of the order in Dabur⁶, the defendants would be entitled to file a response, to the prayer for injunction against use of the “DFI” mark, before any orders are passed on the said prayer,” the court concluded.

The bench further dismissed the contention that the declaration contained on the website of defendant, where it claims that it is adept in all types of hair transplant procedures, including repair and density corrections for previous DHI surgeries, was denigrating or disparaging the plaintiffs.

The court further held that the defendant’s use of his past interview clip conducted by NDTV, after deleting the blurb/caption identifying him as working with the plaintiff, did not, prima facie, constitute any actionable wrong.

It was also the case of the plaintiff before the court that some of its former employees had defected to the defendant. The latter was also entering into communications with former clients of the plaintiff to undergo further treatment with the defendant personally at his clinic, it alleged. Additionally, the defendant had set up a competing business within the prohibited period of one year in Delhi, the plaintiff claimed. By doing so, the plaintiff alleged, the defendant had breached the covenants of the Non-Competitional Confidentiality Agreement (NCCA) and the Severance Agreement executed between the two.

Per contra, the counsel for the defendant argued that the NCCA and the Severance Agreement can neither be enforced nor be made the basis of an injunction, in view of Sections 41 and 14 of the Specific Relief Act, read with Section 27 of the Contract Act.

The court remarked that the plea raised by the plaintiff would require arguments and consideration, and the same cannot be the basis of an ad interim order, even before the reply is filed in the application.

With respect to the allegation of breach of NCCA and Severance Agreement, the court said that the proscription against setting up a competing business related only to Delhi, and not to the Delhi-NCR region. “It cannot, therefore, be stated, prima facie, that, in setting up a competing business in Gurgaon, Defendant 1 breached the NCCA or the Severance Agreement,” the court said.

Dealing with the alleged defection of employees, the court said, “There is no document, on record, which would go to show, even prima facie, that the defection took place owing to soliciting of the services by Defendant 1.” The court said that the defendant has to be granted an opportunity to explain the allegation before the court returns any finding against him.

The court thus refused to grant an ex-parte ad-interim injunction restraining the defendants from using the words “DFI” or “DHI” or directing them to remove the same from their website/ any other platform. Issuing notice on the application, the court directed the defendants to file reply to the application within two weeks.

Counsel for the Plaintiff: Mr. J. Sai Deepak, Mr. Tushar Singh, Ms. Akshra Arshi, Mr. R. Abhishek, Mr. Nikhil Sabri and Ms. Pankhuri, Advs.

Counsel for the Defendant: Mr. Akshay Makhija, Sr. Adv. with Mr. Harkirat Singh and Mr. Adarsh Chamola, Advs.

Case Title: SILVERMAPLE HEALTHCARE SERVICES PRIVATE LIMITED AND OTHERS vs DR AJAY DUBEY & ORS

Citation: 2023 LiveLaw (Del) 778