Nominative Fair Use Permissible If It Does Not Depict Sponsorship By Trademark Owner & Use Is "Reasonably Necessary": Delhi High Court

The Delhi High Court has observed that the nominative fair use is permissible in so far as the use is such that it does not depict sponsorship by the trademark owner and the use is "reasonably necessary".

Normative use refers to use of another's trademark to identify one's own goods or services. This defence has following three requirements: First, the product or services in question must be one not readily identifiable without use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.

Justice Pratibha M Singh was dealing with a suit filed by Government E Marketplace (GeM), a National Public Procurement portal and end to end online marketplace from where both Central and State Government Ministries or Departments, CPSUs and SPSUs effect the procurement of goods and services. The mark used by the Plaintiff is 'GeM' along with the logo.

It was the case of the Plaintiff that there were several parties, either registering 'GeM' in respect of procurement of goods and services as a domain name or using the term 'GeM' as a URL extension of their usual websites.

It was added that some of the parties were providing services to enable businesses to register on the 'GeM' portal. Therefore, the Plaintiff was aggrieved by the fact that the Defendants seemed to be claiming to the public at large, that they were associated with the Plaintiff, thereby misrepresenting their status qua the Plaintiff and also adversely impacting the Plaintiff's brand equity and goodwill.

In the suit, various persons who were using the objectionable domain names or URL extensions were impleaded as Defendant Nos.1 to 11. Defendant Nos.12 to 14 were registered by John Does, whose whereabouts were not known. Defendant No.15 was the Ministry of Electronics and Information Technology whereas Defendant Nos.16 to 18 were the Registrars of various domain names or URLs. Defendant No.19 was a company where Defendant No.2 was a shareholder and director.

The Court was of the view that `GeM' was the name of the portal which was used by the government for its procurement activities and that no person would be entitled to use the said mark or logo thereof in any manner as to represent themselves as being connected with or affiliated to or sponsored by the Plaintiff.

Noting that some of the Defendants were persons, who seemed to be providing services and helping third party businesses to set up their GeM accounts, the Court said thus:

"This Court is clearly of the opinion that such provision of services would not be contrary to law but showing an affiliation, sponsorship or connection with the Plaintiff would be contrary to law. A number of Defendants, as set out above, have suffered a decree in this matter. The remaining Defendants are Defendant Nos.4, 5, 7 & 8."

"The use of such names or URLs is bound to give the impression to an unknown person, as though the Defendant-persons/entities are connected with the Plaintiff's GeM Portal. Thus, such persons cannot be allowed to use the domain name 'gemgov.in' or the URL extensions with their existing domain names, as specified above. However, if they wish to use the term 'GeM' for the purposes of mere information, or in order to describe the Plaintiff's services/portal, they would be entitled to do so, without causing any misrepresentation, as the same would be in consonance with Section 30 of the Trademarks Act, 1999."

"…it is the settled position that nominative fair use is permissible in so far as the use is such that it does not depict sponsorship by the trademark owner and the use is "reasonably necessary".

Accordingly, the Court decreed the suit to the effect that a permanent injunction shall operate against Defendant Nos.4, 5, 7 & 8, that they would not use the mark 'GeM' or the 'GeM' logo, either as part of a domain name or extension on their URL or as a mark or name in a manner so as to create confusion/deception in the mind of the public that they are affiliated with, sponsored by or connected to the Plaintiff.

"This would, however, not prevent the said Defendants from using the term 'GeM' to refer to the Plaintiff and to refer to the services the Defendants are providing with respect to the Plaintiff's GeM portal, as a means of information to the general public in a descriptive manner. The decree shall be drawn up in the above terms qua Defendant Nos.4, 5, 7 & 8," the Court said.

The Court directed that the Registrars of Domain Names concerned to suspend or lock the domain names, which contain the term 'GeM' 'e-GeM' or if the term 'GeM' is in the domain name itself.

The Court also directed that the URLs be locked, to the extent that any URL extension uses 'e-GeM', 'government e-marketplace' and such other references which are objectionable.

The Court also directed the following:

- This Court notes that on previous occasions also it has been submitted that the Registrar cannot block or delete the URL and only the party can do the same itself. Therefore, in so far as Defendant Nos.4,5,7 & 8 are concerned, the Registrars shall suspend/lock the domain names of Defendant Nos.4, 5, 7 & 8.

- However, if the said Defendants are willing to delete the said extensions, the suspension shall be revoked and the said Defendants would be permitted to delete the said objectionable URLs. Upon the objectionable URLs being removed or deleted, Defendant Nos.4, 5, 7 & 8 are permitted to use their own domain names, which are in no way connected to the Plaintiff.

- Insofar as Defendant Nos.12 to 14 are concerned, they are John Does and they are using 'gem-registration.org', 'apkpure.com' & 'gems-portal-registration.ezzus.com'. Accordingly, the said extensions/domain names shall be suspended/locked on the same terms as set out in point (ii) above.

- Insofar as Defendant No.13 is concerned, a perusal of the website's screenshot shows that the said Defendant is also using the logo 'GeM government e Marketplace' and 'GeM Seller' on the website 'apkpure.com', as also the extension 'in.gov.gem'.

- Accordingly, in respect of Defendants 12-14, decree in terms of the order at point (i) and (ii) above is passed.

- All the Registrars of Domain Names are directed to give effect to this order within two weeks. Decree sheet be drawn up in the above terms.

Case Title: GOVERNMENT E MARKETPLACE v. UNILEX CONSULTANTS & ORS.

Citation: 2022 LiveLaw (Del) 365

Click Here To Read Order