IP Connect

ZARA to be held Well-Known in India

Recently, the Delhi High Court in the case of Industria De Diseno Textile Sa v. Oriental Cuisines Pvt. Ltd. And Ors., once again recognized the extraordinary protection accorded to well-known trademarks in India and protected the International clothing brand ZARA against the Defendant’s use of ZARA TAPAS BAR in respect of hotel and hospitality services.

Brief Facts

Plaintiff, an internationally reputed company engaged in the manufacture, design, sale and distribution of fashion and related lifestyle products in various classes of International Classification of Goods and Services. The Plaintiff secured trademark registration for ZARA in class 25 and opened its first store in India in 2010;
The Defendant was founded in the year 1994 and claims to be a pioneer in hotel and hospitality services in India. The Defendant uses the name ZARA TAPAS BAR for its restaurant located in Chennai;
In 2005, the Plaintiff came across Defendant’s trademark applications for ZARA TAPAS BAR and filed opposition against the same which is pending before the Trade Mark Registry. At the end of 2012 and beginning of 2013, the Plaintiff came across other trademark applications as well filed by Defendant for registration of ZARA TAPAS BAR. In view thereof, the Plaintiff had filed opposition against all the trademark applications comprising the expression ZARA filed by Defendant;
That in February, 2011, the Plaintiff received a letter from Defendant, proposing settlement and co-existence of the marks ZARA and ZARA TAPAS BAR, which was refused by the Plaintiff as its terms were deemed to be unacceptable;
It may be relevant to state here that by an ex-parte ad interim order dated July 29, 2013, the Defendants were restrained from using the mark ZARA as a trademark, trade name, corporate name, domain name or in any other manner whatsoever. However, subsequently, on an application by the Defendants, the injunction order was modified and the Defendants were permitted to use the composite trademark ZARA TAPAS BAR only till further orders.

Contentions forwarded by the Plaintiff

That they coined, conceived and adopted ZARA as its trademark in 1975 and that the domain name zara.com was registered by the Plaintiff on May 29, 1997 and the same has since been in continuous use by the Plaintiff;
That its mark ZARA is one of the top 50 brands among 100 most valued trademarks in the world with brand value exceeding $9.4 billion and therefore ZARA can be classified as a “well known trademark” under section 2(1)(zg) of the Trade Marks Act, 1999;
That by usage of “ZARA” since 1986-87 and opening of commercial outlets in 2010, it has acquired tremendous reputation in India;
That the Defendant is using the trademark ZARA with generic extensions TAPAS BAR with the aim to take advantage of the goodwill acquired by the Plaintiff internationally;
That such actions of Defendant can be deemed as tarnishing Plaintiff’s mark, and constitutes infringement and passing off or in any manner which would be detrimental to the mark’s online presence and distinctive character and repute;
That Defendant’s use of the mark ZARA in advertising is deceptively similar to the Plaintiff’s mark;
That the adoption of the mark by the Defendant is dishonest and fraudulent, and has been carried out by the Defendant to infringe the Plaintiff’s registered mark and to make people believe that the goods and services offered by the Defendant somehow have connections with the Plaintiff.

Contentions forwarded by the Defendant

That they are not using the Plaintiff’s mark per se, and are merely using the mark “ZARA TAPAS BAR” or “ZARA, the Tapas Bar and Restaurant” in relation to goods and services different from those of the Plaintiff, hence no similarity between the marks can be claimed;
That their adoption of the mark ZARA was honest and not fraudulent as the said mark is an Italian, Portuguese and Spanish variation of the English, French and German name Sarah and that ZARA is a commonly used dictionary word in various languages especially Arabic, Urdu, Hebrew and Hindi to name a few;
That the mark ZARA has been used by many entities and has, therefore, become publici juris;
That the Plaintiff chose to wait for 8½ years to file the instant suit. On account of long delay, there is acquiescence on the part of the Plaintiff and shall be disentitled to the relief of ad interim injunction;
That since the Defendants have prima facie established opening of Tapas Bar and Restaurant with the name of ZARA TAPAS BAR in the year 2003, Plaintiff’s ZARA’s reputation and goodwill on the date of filing of the suit is irrelevant and its trans-border reputation as on the date of adoption of the name ZARA TAPAS BAR by the Defendants in the year 2003 will be required to be proved by Plaintiff;

Observations and Judgment of the Court

That Defendants have used the terms TAPAS BAR or TAPAS BAR AND RESTAURANT or TAPAS, the Bar and Restaurant alongwith the impugned term ZARA and the word ZARA is almost ten times bigger than the other words used in the advertisement/screenshots as displayed. In several Defendant’s advertisements, the words BAR and RESTAURANT have not at all been used with the word ZARA and the word ZARA per se has been used. Thus, there is no manner of doubt that there is deceptive similarity between the mark ZARA of the Plaintiff and the mark ZARA TAPAS BAR, coupled with the way it is being used by the Defendants;
That the word ZARA is neither generic nor descriptive nor a dictionary word (as far as Spanish is concerned). The Defendants have not given any plausible explanation for adoption of the mark ZARA. Thus, in all probability, the mark ZARA TAPAS BAR was adopted by the Defendants from the mark ZARA of the Plaintiff. Moreover, Plaintiff’s stores by this name were already opened in over 44 countries. Thus, it cannot be said to be an honest adoption entitling Defendant to its concurrent user. The Court further observed that if the Defendants did not want to ride on the Plaintiff’s reputation, they would have not used the word ZARA prominently in the words ZARA TAPAS BAR or ZARA, the Bar and Restaurant;
That the Defendants have failed to show that the mark ZARA is used by a large number of persons, yet even if it is used by any other person, it will not disentitle the Plaintiff to seek relief against the Defendants;
That both the parties were in correspondence for amicable resolution of the dispute with regard to use of the name ZARA since at least February, 2011. In the past the Court had held once the Plaintiff had filed opposition to the Defendants’s application for registration, this delay of three years will neither amount to acquiescence nor this delay will disentitle the Plaintiff to the relief of ad interim injunction if it is able to make out a case on merits.
The Court observed that a party seeking ex- parte ad interim injunction is expected to make full disclosure but when the matter is heard on merits, both the parties are before the Court and the mis-statement of some facts unless it is mala fide will not disentitle the Plaintiff to the relief of injunction and that the Plaintiff’s statement that it came to know about the Defendants’s activities sometime in the year 2011 cannot be said to be a statement to non-suit the Plaintiff;
With regards to trans-border reputation of the Plaintiff, the Court relied on the record of documents submitted by Plaintiff evidencing ZARA’s reputation and trans-border reputation. The Court while assessing the Plaintiff’s mark made reference to the case of N.R. Dongre & Ors. v. Whirlpool Corp. & Anr., AIR 1995 Delhi 300, wherein the Court held that that awareness of a trademark in respect of goods of a trader is not necessarily restricted only to the people of the country where such goods are freely available but the knowledge and awareness reaches even shores of those countries where the goods are not available. In view of the said obiter dicta, the Court opined that although there was no ZARA store in India prior to 2010 but the mark ZARA was registered in Class 25 since 1993 and the Plaintiff has placed on record a number of documents to show that it was getting the fabrication done from various exporters in India;

In view of the aforesaid facts and circumstances, the Court was satisfied that the Plaintiff would suffer irreparable loss and injury if the Defendants were permitted to carry on their business under the name ZARA TAPAS BAR or ZARA, the Tapas Bar and Restaurant even in relation to the hotel and hospitality business.

Conclusion

The case at hand, brings in light several issues relating to protection of well-known trademark in India. The Court in the present case has protected the Plaintiff’s trademark ZARA in respect of clothing against the Defendant’s usage of the mark ZARA in respect of hotel and restaurant services.

Moreover, the Court while examining the trans-border reputation of the Plaintiff’s mark confined itself to the examination documents (evidencing Plaintiff’s reputation) which were dated prior to the year 2003 i.e. the year in which the Defendant started using the impugned mark in India. However, irrespective of having any physical store in India in 2003, the Plaintiff’s mark in view of trans-border reputation was accorded extraordinary protection.

Friday, 3 July 2015

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