Concurrent Registration Of Same Or Similar Trademark By Two Or More Persons Not Per Se Barred: Delhi High Court

The Delhi High Court has observed that if two Trade Marks are validly registered, both the registered proprietors can use the Trade Marks to the exclusivity of third parties, but cannot assert their rights against each other.

Justice Asha Menon was of the view that concurrent registration of the same or similar Trade Mark by two or more persons is not per se barred under the Trademark Act, 1999.

"When a challenge is raised to the registration, ordinarily till the Register is rectified and such registration is cancelled, both the proprietors would be entitled to claim a right to its use," the Court said.

Analyzing various provisions of the Trademark Act, the Court summed up the following legal principles:

- Two persons may have the same Trade Mark registered in their name: (i) for identical or (ii) similar or (iii) different goods.

- Ordinarily if the two Trade Marks are validly registered, both the registered proprietors can use the Trade Marks to the exclusivity of third parties, but cannot assert their rights against each other.

- However in certain situations, registration of the later Trade Mark may be refused registration or cancelled. These situations are: (i) when deception or confusion results, (ii) there is dishonest user, (iii) subsequent use without due cause, (iv) there is bad faith, or (v) dilution of the distinctiveness of a prior registered Trade Mark may occur.

- Therefore, these factors would be relevant to decide whether the subsequent user/registered proprietor should be restrained from using his Trade Mark, even if it was registered.

- Certain other aspects would also aid this determination, for example, (i) whether user is only to indicate origin of the goods, (ii) the reputation of the Trade Mark, (iii) whether it is "well- known", (iv) whether the prior user has established acquisition of distinctiveness, or (v) whether he had acquiesced in the latter‟s user of the same Trade Mark and if so, to what effect.

The Court was dealing with an application filed under Order XXXIX Rules 1 & 2 of Code of Civil Procedure, 1908 filed by the plaintiff along with the suit for permanent injunction, restraining infringement of trade mark, passing off, dilution and unfair competition.

The plaintiff was a company claiming to be a leading manufacturer of consumer electronic items, such as, smartphones, mobile phones, personal digital assistant (PDA) devices, virtual reality head-mounted displays, etc. The plaintiff was initially incorporated in the year 1997 as "High Tech Computer Corporation" but gained popularity quickly as "HTC" and was known as such since 1998. The plaintiff had registration in more than 90 jurisdictions across the world.

The defendant No.1, L V Degao was a Chinese individual and owner of the defendants No.2 to 4 Companies, which were manufacturers of electric hair trimmers, hair clippers and hair dryers bearing identical infringing Trade Mark HTC in China and supplying the same to the other defendants in India. The defendants were also selling their products not only through the defendants No.5 to 9, but also through Amazon India website.

The Court noted that before the filing of the suit, an application for rectification or cancellation was already filed by the plaintiff on 16th March, 2020, which was pending. Therefore, the Court considered as to whether the plaintiff had disclosed a case for an interlocutory order, namely, an injunction against the defendants restraining them from the use of the Trade Mark HTC.

The Court noted that since both the Trade Marks were registered in the matter, all facts would have to be considered holistically to determine whether or not the plaintiff was entitled to interim protection.

"Before considering the cited case law, it may be useful to refer to the provisions of law. The rights conferred under Section 28 of the T.M. Act to the registered proprietor of a Trade Mark upon its registration, namely, the exclusive right to use it in relation to the goods and services in respect of which the Trade Mark is registered, is limited where there are two or more such registered proprietors, as they cannot claim exclusive use against each other, but have those rights against other persons," the Court said.

The Court was of the opinion that since sec. 124 of the Act deals with a situation where the validity of the registration of the trade mark is being questioned and sec. 124(5) empowers the court to pass interim injunction orders, even when there are two registered Trade Marks involved and the plaintiff seeks protection against the user of a similar or identical trade mark, the court can consider not just the question of passing off, but also of infringement.

"That is why, where no rectification application has been filed, the civil court can determine the tenability of the plea of invalid registration. In other words, the court can consider the existence of a prima facie case on the same basis, to decide whether or not to grant interim orders of injunction, etc..," the Court added.

On the facts of the case, the Court said that for a consumer of average intelligence and observation, it may not be difficult to believe that the hair grooming products of the defendants with the Trade Mark HTC and link to the website of the plaintiff, were actually being produced and marketed by the plaintiff.

"This being an act of deception and creation of confusion, is against even public interest," the Court said.

It added that the unfair and dishonest use of the identical trade mark by the defendants for their products clearly riding on the reputation of the plaintiff with clear intent to take unfair advantage of the reputation, cannot, but lead to, a detrimental effect on the distinctive character of the trade mark of the plaintiff.

"Therefore, the plaintiff has disclosed a prima facie case not only for infringement of the Trade Mark (drawing assistance from the parameters provided under Section 29(4) of the T.M. Act), but also for passing off. The damage caused to the plaintiff would be irreparable as the continued use of the registered Trade Mark of the defendant No.1 would ultimately result in dilution of the Trade Mark and that too, on account of „dishonest use‟," the Court said.

Allowing the application, the Court restrained the defendants No.1 to 4 from manufacturing, selling, supplying, offering for sale, including through online platforms, of hair trimmers, hair clippers, hair dryers or any other goods bearing the impugned Trade Marks amounting to infringement of the registered trademark, dilution and passing off, till the decision in the rectification or cancellation proceedings is rendered.

"The suit [CS(COMM) 263/2020] is stayed, to be revived by either party after the disposal of the rectification/cancellation proceedings. Needless to state that the view taken is on a prima facie basis and will not reflect on the merits of the suit or the rectification proceedings," the Court ordered.

Case Title: HTC CORPORATION v. MR. LV DEGAO & ORS.

Citation: 2022 LiveLaw (Del) 299

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