Delhi High Court issues notice to Government of India on FDI in E- Commerce

India's brick-and-mortar retailers have approached the Delhi High Court once again after failing to get a response from the government in their quest for parity in Foreign Direct Investment (FDI) norms with e-commerce players, which have attracted billions of dollars in overseas funding using the marketplace model.

The All India Footwear Manufacturers and Retailers Association (AIFMRA), have filed a writ petition in the Delhi High Court seeking clarity on FDI in e-commerce. The grievance of the Petitioners claiming to be retailers is that though FDI is prohibited in retail but the entities retailing goods through the internet are not being restrained from accepting foreign investment. According to news reports, AIFMRA claims that the various e-commerce websites have been continuously dodging the question of FDI violations by camouflaging their business as a “marketplace” and not a “seller”, when in reality a sale through online forums is akin in character to a sale made by a physical retailer. Thereby causing prejudice to the Petitioners as the marketplaces are in alleged violation of the existing norms that forbid FDI in retail.

The Petitioners argued that the entities selling goods through the medium of the internet qualify as “retailers” and further informed that the Union of India (UOI) and the other State Governments have been treating such sales as sales by retailers and have raised tax on them which are already challenged under different forums/ Courts.

Alleged violation of FDI policy by e-commerce entities: 

The Delhi High Court after noting the FDI policy and hearing the arguments advanced by the Petitioners observed vide order dated September 23, 2015 that prima facie it appears that the UOI / State Governments cannot, on the one hand, for the purpose of tax, treat sales by the entities selling goods through the medium of the internet as retail and on the other hand, for the purposes of investment, not treat the same as retail sale. The Delhi High Court further issued notice to the Central Government on the alleged violation of FDI policy by e-commerce entities and has directed the government to file the reply within two weeks, the matter is scheduled to be listed next on October 14, 2015.

Madras High Court Lights the Torch over Olympic Fight

The High Court of Madras, on September 11, 2015, granted an interim injunction in favour of Mr. Noor Mohamed, proprietor, Olympia Paper & Stationary Stores and Olympic Cards Ltd. represented by its Managing Director, Mr. Noor Mohamed (the Plaintiffs) and against Olympic Prints, Olympic Traders and Olympic Xerox (the Defendants) in respect of the trademarks OLYMPIC (label), OLYMPIC (word mark) and DEVICE OF A TORCH in Noor Mohamed & Ors. v. Olympic Prints & Ors. (CS(OS) 299/2014).

Brief facts of the case

• The Plaintiff No. 1 is stated to be carrying on business as the sole proprietor under the name and style of Olympia Paper & Stationary Stores. The Plaintiff No. 2, Olympic Cards Ltd., is a public limited company and licensee of the Plaintiff No. 1, who is the chairman and Managing Director of the Plaintiff No. 2.
• The Plaintiffs are engaged in the manufacture and marketing of various stationary products including wedding cards, visiting cards, invitation cards, greeting cards, inland letters, envelopes, paper and paper articles, cardboard and cardboard articles, books, diaries etc.
• The father of the Plaintiff No. 1 is stated to have adopted and used the aforesaid trademarks in 1962, and his proprietary concern was subsequently taken over as a partnership firm by his two sons including the Plaintiff No. 1. After the death of the other son, the partnership firm was dissolved and in 2005, the Plaintiff No. 1 became the sole proprietor of the concern under the name and style of OLYMPIA PAPER AND STATIONARY STORES.
• The Plaintiff No. 1 has obtained statutory protection by registering the said marks under the Trade Marks Act, 1999, which are valid till 2025.
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• The Plaintiffs are stated to have become aware of the Defendant No. 1’s operation under the name OLYMPIC PRINTS and using identical trademarks as the Plaintiffs in respect of digital and print media, through advertisements made in the magazine named ‘Print Week’ in the issue dated March 10, 2014. The Plaintiffs carried out a search in respect of the trademark OLYMPIC and came across a website of the Defendant No. 1 calling themselves to be a part of the OLYMPIC GROUPS wherein the DEVICE OF THE TORCH as registered by the Plaintiffs has been used by the Defendant No. 1 and its group which amounts to infringement of the Plaintiffs’ marks.
• The Plaintiffs came to know that the Defendants have only applied for the registration of the mark OLYMPIC PRINTS in classes 16 and 35 in 2012 and 2013 respectively.

Contentions of the Plaintiff

• The essential feature of the Plaintiffs’ mark OLYMPIC DEVICE is the word OLYMPIC with a device of a torch in the said label. The Defendants have infringed the registered trade mark OLYMPIC of the Plaintiffs as well as the registered DEVICE OF THE TORCH.
• The Plaintiffs are the prior user of the said marks since 1962 and the Defendants have filed the above applications only in 2012 and 2013 respectively claiming user rights also only from 2009 and 2010 respectively.
• The Plaintiffs intend to oppose the registration of the above mark once it is advertised in the Trade Marks Journal.
• The Defendant No. 1 has dishonestly and fraudulently adopted the impugned mark OLYMPIC PRINTS knowingly and being fully aware of the Plaintiffs’ existence.
• The Plaintiffs claim that there has been a steadily increasing demand for the product of the Plaintiffs in the domestic market and the sales turnover of the goods under the said trademarks for the year 2013-2014 are stated to be INR 523,860,612/-.
• The Plaintiffs have acquired the status of a well-known trademark under the provisions of the Trade Marks Act, 1999 and the Defendants’ mark OLYMPIC PRINTS is identical to the well-known and registered trade mark of the Plaintiffs.

Contentions of the Defendants

• The Defendants contended that the trademark OLYMPIC PRINTS was bonafidely conceived and adopted by the Defendant No. 1 in the year 2010.
• The mark OLYMPIC PRINTS is represented in a distinctive lettering style and artwork capable of distinguishing the services rendered by the Defendant No. 1. The Defendants’ trademark has no reference whatsoever to the kind, quality or the intended purpose of services and does not consist of marks or indication in the trade which is capable of distinguishing the services of the Defendant No. 1 from those of others.
• The Defendants are engaged in making plates for the printing shops, and produce and supply around 20,000 to 25,000 printed tags per day for textile customers. The mark OLYMPIC PRINTS of the Defendants has become very popular.
• The Plaintiffs, except for making a bald allegation against the bonafide adoption of the said marks by the Defendants, have not substantiated the same with any documentary proof. Further, the Plaintiffs’ very claim of adoption as early as in the year 1962 is false.
• Both the marks are not visually, phonetically and structurally or deceptively similar. There are several added features in the Defendants’ mark and there is no chance of deception and confusion in the minds of the trade and public. The Plaintiffs have not made out a prima facie case or established balance of convenience in their favour.
• The goods which are manufactured by the Defendants are different and not one and the same as that of the Plaintiffs. The goods manufactured by the Defendants are not for selling to the common man, on the other hand, it is meant for selling to the class of customers, namely, Printers. Therefore, there is no possibility for any confusion in the minds of the public. The Plaintiffs have knowledge from 2009 about the usage of the trademark by these Defendants therefore the case is hit by delay and laches. The Defendants are not doing business in Chennai.
• The mark OLYMPIC cannot be claimed exclusively by the Plaintiffs.

Order of the Court and its Implications

The Hon’ble Court held that the Plaintiffs have made out a prima facie case for grant of interim relief as sought for in the interim applications. For this purpose, the Court observed that it is to be seen in the present case under the above stated facts and circumstances as to whether the Plaintiffs have come before this Court immediately on knowing the infringement of their trademark and the impugned passing off action by the Defendants. In this regard, the Hon’ble Court considered the Plaintiffs’ contention that they became aware of the infringement by the Defendants only on March 10, 2014, and this contention was not specifically denied by the Defendants and on the other hand, except making a vague statement as though the Plaintiffs were aware of the trademarks of the Defendants from 2009, the Defendants have not filed any material proof in support of such contention.

The Hon’ble Court further held that the word OLYMPIC is a registered trademark of the Plaintiffs therefore, cannot be used by any other person and if there is any such use, certainly, it would amount to infringement of the said registered word mark.

The Court held that the Plaintiffs have established a strong prima facie case in their favour by showing that they are in the trade using the trade mark for more than 50 years and are doing good business running to several crores every year. The court further held that if no injunction is granted, it would certainly cause irreparable injury to the Plaintiffs as their registered trademarks are being used by the Defendants which would be construed as though the Defendants’ trademark is that of the Plaintiffs’.

Concluding Remarks

The aforesaid ruling calls for a debate whether exclusive trademarks rights over Olympic marks such as OLYMPIC, DEVICE OF TORCH etc. can be granted to traders in India.

Interestingly, Olympic trademarks enjoy a privileged status as they are protected by a statute over and above ordinary trademark protection. According to Rule 7 of the Olympic Charter, the International Olympic Committee (IOC) is granted ownership of the Olympic rings as well as the Olympic flag, motto, anthem, identifiers, designations, emblems, the Olympic flame and torches (the “Olympic properties”). All rights to any and all of the Olympic properties belong exclusively to the IOC, including rights to their use such as in relation to profit-making, commercial or advertising purposes.

It is further interesting to note that many countries have adopted permanent national legislation for protecting the Olympic properties, such as China’s legislation titled “Regulations on the Protection of Olympic Symbols of the People’s Republic of China” and the United States of America’s legislation titled the “Olympic and Amateur Sports Act” giving special protection to Olympic marks. The Olympic and Amateur Sports Act basically says that without the consent of the United States Olympic Committee (USOC) or IOC, any person who uses, for the purpose of trade to induce the sale of any goods or services or promote any theatrical exhibition, athletic performance or competition, using either the symbol of the IOC (which is the 5 interlocking rings) or any trademark, trade name, etc. that represents association with or authorization by the IOC or the USOC is subject to a civil suit.

Some countries are also signatories to the Nairobi Treaty on the Protection of the Olympic Symbol (1981) which is administered by the World Intellectual Property Organization (WIPO) and is open to any state that is a member of that organization, the United Nations or any of its specialized agencies, or the Paris Convention. According to WIPO, 51 countries are contracting members. States that have signed the Treaty are obliged to refuse or invalidate the registration as a mark and to prohibit the use for commercial purposes of any sign consisting of or containing the mark, except with the IOC’s authorization. India signed the Nairobi Treaty on June 30, 1983 and ratified the same on September 19, 1983.

Pertinently, Item 21 of the Schedule of The Emblems and Names (Prevention of Improper Use) Act, 1950 in India, as amended on August 18, 1978, prohibits the use of the name and emblem of the International Olympic Committee consisting of five inter-laced rings for professional and commercial purposes such as in a trademark.

The aforesaid Order dated September 11, 2015 can be accessed here.

Madras High Court on Territorial Jurisdiction Under Section 134 of Trade Marks Act, 1999

In a recent decision dated September 15, 2015, the Division Bench of the Hon’ble Madras High Court in the appeal titled as “M/s. Micro Labs Limited vs. M/s. Eric Life Sciences Pvt. Ltd.”, while dealing with the issue of territorial jurisdiction in case of trade mark infringement & passing off suits, held that Section 134 of the Trade Marks Act, 1999 does not oust the applicability of Section 20 of the Code of Civil Procedure, 1908, which is to be decided on a bundle of facts. In fact, Section 134 provides for an additional remedy to the Plaintiff.

Facts of the Case:

• The Plaintiff is a company engaged in the manufacture of medicinal and pharmaceutical products.
• That in May, 2011 the marketing agents of the Plaintiff found that the Defendant was also selling their goods being the same pharmaceutical preparations under the trade mark ‘OLMIN’, thereby causing confusion in the market.
• The Plaintiff Company in 2011, filed a suit for decree of permanent injunction for infringement and passing off against the Defendant for use of deceptively similar trade mark/name ‘OLMIN’ to that of the Plaintiff’s registered trade mark ‘OLAMIN’.
• The Plaintiff contended that the Defendant Company’s business was in the same field and that the Defendant had copied and is thereby infringing the Plaintiff’s registered trade mark ‘OLAMIN’.

Defendants’ Contentions:

1. Pursuant to the filing of aforesaid suit by Plaintiff, the Defendant filed an application to reject the Plaintiff’s aforesaid plaint on the ground that there was no cause of action for filing the suit within the territorial jurisdiction of Hon’ble Madras High Court.
2. That since the Plaintiff does not have its office in Chennai, the suit was not maintainable.
3. That the sale of the product bearing the impugned trade mark within the jurisdiction of the Madras High Court, was not a sufficient cause to file the suit for infringement of trade mark in this Court. 

Plaintiff’s Reply to Application:

1. The Plaintiff resisted the application by contending that for the present suit to be maintainable it was sufficient if the trade mark was registered within the jurisdiction of the said Court.  That the products bearing the infringing mark were being sold extensively within the jurisdiction of the Hon’ble Madras High Court and therefore the Plaintiff had cause of action to file the suit before the said Court. 

Decision of Single Judge:

The Learned Single Judge after taking note of the facts and Section 134 of the Trademark Act, 1999, held that to entertain the suit, the Plaintiff should have business activity within the territorial jurisdiction of the said Court, failing which the provisions of Section 134 will not come into force. Thus, the suit of the Plaintiff was rejected on grounds of lack of jurisdiction.

The Plaintiff aggrieved by the aforesaid order filed the present appeal.

Plaintiff’s Ground For Appeal:

1. That Section 134(2) of the Act, 1999 provides an inclusive definition for “District Court” and further provides for an additional forum of suing for the Plaintiff in cases of infringement, to the jurisdiction available under Section 20 of the CPC and not in derogation thereof.
2. The Plaintiff further contended that in the present suit, the infringement took place within the territorial jurisdiction of the Madras High Court, and the Plaintiff had produced a purchase bill to prove the same.
3. Further, the finding of the Learned Single Judge that the Plaintiff should carry on business within the territorial jurisdiction of the Court where the suit is filed is against the law and misinterpretation of the law.

Defendant’s Reply To Appeal:

1. That in the absence of substantial cause of action and in view of the fact that neither the Plaintiff nor the Defendant were carrying on business in the jurisdiction of the Court, the suit is not maintainable.
2. The Counsel for the Defendant in support of its contention also relied on the recent decision of the  Supreme Court in the case of Indian Performing Rights Society Ltd., vs. Sanjay Dalia & Anr., (CDJ 2015 SC 522).

Issue For Consideration

Whether the suit for infringement and passing off filed by the Plaintiff is maintainable before the Madras High Court in the light of Section 134 of the Trade Marks Act, 1999?

Decision of the Division Bench:

The Division Bench of the Madras High Court discussed the aforesaid recent judgment of the Hon’ble Supreme Court in Indian Performing Rights Society Ltd. (supra). However, the Division Bench was of the view that the decision did not support the contentions of the Defendant, on the facts of the present case. In fact that decision held that the very language of Section 62 of the Copyright Act and Section 134 of the Trade Marks Act, provides for an additional forum by including a District Court within whose limits the plaintiff actually and voluntarily resides or carries on business or personally works for gain and  that the object of the provisions was to enable the plaintiff to institute a suit at a place where he or they resided or carried on business, not to enable them to drag defendant further away from such a place. Further it was pointed out that the same does not oust the applicability of Section 20 of Code of Civil Procedure as Section 20 enables the Plaintiff to file a suit where the defendant resides, carries on business or where the cause of action wholly or partly arises.

The Court further held that the interpretation of the Single Judge in the instant case that no suit for infringement of a registered trade mark could be filed in the Court within whose Jurisdiction the Plaintiff does not carry on business, was incorrect.

The Division Bench was of view that if the aforesaid decision of the Hon’ble Supreme Court is applied to the facts of the present case, the irresistible conclusion would be that the suit is maintainable before this Court.

The Division Bench in the light of the above, decision allowed the appeal of the Plaintiff, the impugned order of the Single Judge was set aside and the suit of the Plaintiff was restored.

Conclusion:

The decision of the Division Bench of the Hon’ble Madras High Court in following the Hon’ble Supreme Court’s decision in Indian Performing Rights Society Ltd. (supra) has accepted that the Plaintiff has the jurisdiction to sue the Defendant for infringement of its registered trade mark in the Court within whose jurisdiction the Defendant is selling the infringing goods, in addition to the right to sue in the Court within whose jurisdiction the Plaintiff works for gain or resides.

IPR Policies in India – Lookout for US, Germany

Since the forming of the government, PM Narendra Modi’s policies and approach towards International concerns have been in news and the regime for enforcement and protection of Intellectual Property Rights in India has been one of the most sought after concern among the developed nations. This time again Mr. Modi’s visit to the US to meet business leaders in New York and Silicon Valley is expected to be marked by India’s stance on Intellectual Property rights.

Indian Daily, Economic Times reports some of the concerns that are expected to be raised by US Officials during the meet, like a predictable IPR regime for its innovators, gaps in the Indian Copyright Act to combat online piracy and illegal recording of motion pictures and issue of compulsory licenses only in extreme situations. Similar concerns have been raised by the US earlier as well and some were also detailed in USTR’s 2015 Special 301 Report.

Predictable IPR Regime in India- The US has urged India for a transparent and predictable IPR regime which enables innovations at all stages of innovation lifecycle by nurturing and incentivizing innovation.

Copyright and Piracy- With respect to the Indian Copyright Act, the US has sought changes in for ensuring better protection to US right holders in the Indian market. Like enactment of anti-camcording legislation, model statutory license provisions relating to copyrighted works on the standards of the Berne Convention for the Protection of Literary and Artistic Works (Berne Convention), ensuring that collecting societies are licensed promptly and able to operate effectively and provide additional protections against signal theft, circumvention of technological protection measures and online copyright piracy.

Issue of Compulsory License- The US has sought clarification on India’s application of its compulsory licensing of pharmaceuticals as the same substantially affects the US stakeholders. It has urged India to issue compulsory license only in extreme situations.

Meanwhile, apart from the US even Germany has emphasized on the protection of IPR as a key to long term engagement with India. Indian Daily, Business Standards in this regard reports that German Ambassador Martin Ney has stated that India’s potential was enormous but the legal protection of IPR was an important element for investors to engage for a long term in India.

With a huge youth population and tremendous opportunities of economic growth, India has emerged as one of the most sought after nations for investments and innovations worldwide. However, developed nations for conducive business environment and growth of their IP-intensive organizations expect a strengthened IPR regime which would ensure effective and predictable enforcement and protection of their IPR in India. The Indian Government in the past few months has initiated several efforts towards strengthening of IPR regime in India and setting up of Think tank to Draft National IPR Policy which seeks to address the issues which are expected to promote an innovative environment in India. 

Competition Commission of India to conduct study of Pharma and Healthcare Sector

The Indian Daily, Economic Times has recently reported that the Competition Commission of India (CCI) has set the ball rolling for a detailed study of the Pharma and Healthcare services sector. CCI has come across various instances in the pharmaceutical sector where competition norms seem to have been violated over the past few years. Against this backdrop, the CCI will soon carry out a study about the pharmaceutical sector and healthcare delivery systems/services in Delhi and NCR (National Capital Region).

As per the reports, the CCI noted that the baseline study would look at the issues in the sectors from the competition law perspective to understand whether there are anti-competitive practices in this sector as part of larger efforts to clamp down on unfair business practices.

As reported in the Daily, the Commission said it has come across various issues in the pharmaceutical sector and healthcare delivery systems over the past few years. Public and private hospitals, insurance companies, pharmaceutical firms and their associations, doctors and their associations, among others, would be covered under the study.

These include non-availability of essential medicines, increasing price of drugs, nexus between pharmaceutical companies and pharmacists, nexus between pharmacists and doctors, nexus between doctors and pathological laboratories, nexus between doctors and pharmaceutical companies, and nexus between hospitals and insurance companies etc.

On the IP front, as reported in an Indian daily, the multinationals companies are clamoring for inclusion of two key provisions in the Indian Patents Act – data exclusivity and patent linkages. A group of Indian drug makers, Indian Pharmaceutical Alliance has urged the government not to give in to the mounting pressure from a section of US senators for tighter intellectual property (IP) laws in India as the same would hurt the domestic industry and impede consumers’ access to affordable healthcare.

Source: Details can be accessed at here

Delhi High Court: “LNT” “ELENTE” is deceptively similar to “L&T”

In a recent order dated August 31, the Delhi High Court has decreed a suit in favour of Larsen & Turbo (L&T), (hereinafter the Plaintiff) against Lachmi Narain Trades And Ors., (hereinafter the Defendants), for the use of the trademark "LNT"/"ELENTE" which the Court found to be deceptively similar to the Plaintiff’s well-known mark, L&T.

The case titled as “Larsen and Toubro Ltd. (L&T) vs. Lachmi Narain Trades and Ors” was decided in favour of the Plaintiff with costs. The order can be accessed here.

Facts of the Case: 

1. The Plaintiff company and has been carrying on business of engineering, construction contractors, manufacturers of switch gears, etc. since 1938, originally a partnership firm between two Danish Nationals, Henning Holk-Larsen and Soren Kristian Toubro. The name of the Plaintiff comprises of the initials of surnames of the said two partners i.e. Larsen and Toubro.
2. Since incorporation, the Plaintiff has been carrying on business in India and over the years its business activities have spread in other parts of the world. The word "Larsen" and/or the word "Toubro" have been associated by the traders and members of the public exclusively with the Plaintiff. The Plaintiff is also known by its short name viz. "L & T".
3. Over the years, the Plaintiff formed subsidiary companies. The letters "L&T" or the words "Larsen" and "Toubro" are found in the names of such subsidiaries.
4. The Defendants were the authorized stockist of the Plaintiff since 1991. However, due to some circumstances the Plaintiff was compelled to discontinue renewal of the said agreement with effect from April, 2002.
5. The Plaintiff discovered that the Defendant No.2 had applied for registration of the trademark "LNT" and the same is pending before the Trade Marks Registry and the status of the said application is shown as "New Application”. However, the application at present stands refused under the Act.
6. Aggrieved by the aforesaid Defendant’s use of a deceptively similar trademark, the Plaintiff sent a cease and desist notice to the Defendants.

 Plaintiff’s Contentions: 

1. The Plaintiff had applied for registering the marks "Larsen and Toubro" and "L&T" which has since been registered under various classes.
2. That the words "Larsen" and "Toubro" have acquired such distinctiveness that any use by any person or Company or party of the word "Larsen" or "Toubro" or the abbreviation "L&T" is bound to cause confusion amongst the traders and members of the public.
3. That Plaintiff enjoys a high market capitalization and the Plaintiff's shares command substantial respect on the various stock exchanges.
4. That the goods and services of the Plaintiff have been advertised extensively in both print and visual media.
5. That the Plaintiff’s impugned registered trademarks have been appearing for a substantial period of time in both the print and visual media. That the word/abbreviation "L & T" has acquired a secondary meaning and is associated exclusively with the Plaintiff.
6. That Defendants with the intention of misleading innocent members of public have chosen brand names LNT/ELENENT to pass of their goods/products /business /services as that of the Plaintiff.

Defendants’ Contentions:

1.  That they have been carrying on business under the trade name Lachmi Narain Trades since April, 2001. Lachmi Narain is the family business name and way back in 1952 the first concern by the name Lachmi Narain Stores was started in Ooty and got registered with Sales Tax Authorities since 1956. Lachmi Narain Trades was set up in the year 1998 in Coimbatore and trade mark registration was applied for Lachmi Narain Trades on 17th April, 2001.
2. That since commencement Defendant has only used the abbreviated form of its firm name LNT for its brand name along with extensive advertisement.
3. That Plaintiff has acquiesced in the Defendant’s use of  brand name LNT as Plaintiff was aware of the said use since April, 2001 which is evident from the following fact:-
1. The authorized distributors/dealers of Defendant  have their shops at the same place and are selling the Defendants' products under the brand name "LNT/ELENTE". Since the Plaintiff’s and Defendant’s dealers/ distributors are working from the same place, hence Plaintiff is bound to have been aware.
2. The Defendant has been selling its products under the brand name LNT/ELENTE in various cities through their authorized electrical shops since the year 2001.
3. That Plaintiff should have been aware that the Defendants have been using the brand name LNT/ELENTE as both the Plaintiff and the Defendant have issued advertisements in the same publication since January, 2003.
4. That Delhi Electrical Traders Association has been issuing circulars containing the advertisements of Defendants and Defendants' brand name to its members which include the authorized dealers and distributors of the Plaintiff.
5. That Delhi Electrical Traders Association had also published a diary in the year 2003 which included the Defendant's advertisement along with its brand name.
4. That the brand name LNT/ELENTE is not similar to the trade mark L&T used by the Plaintiff and hence there is neither any similarity nor any deception. The Defendant is using brand name LNT and the letter 'N' is in bold face. The said name LNT cannot be said to be similar to the brand name of the Plaintiff i.e. L&T.
5. That Defendants deal only in four products namely miniature circuit breakers, rotary switch, PVC insulating tape and lastly electrical choke and the Plaintiff does not deal in any of the aforesaid goods.
6. That the Defendants' product boldly states that the product "LNT" is marked by Lachmi Narain Trades. Therefore, there can be absolutely no confusion in the minds of the purchasers that Defendants' product originated and/or are connected with the products of the Plaintiff.

 Court’s Observation & Decision

1. That if it is shown that a business of a trader has acquired a distinctive character, the law will restrain a competitor from using the same and prohibition order can be passed by Courts for unlawful activities. One cannot make use of the plaintiff's expensive labour and effort. One cannot deliberately reap where one has not sown and cannot be allowed to filch a rival trades. Passing off is thus a remedy for injury to goodwill.
2. The Court while comparing the two rival marks in the case made reference to several precedents like B.K. Engineering Co. v. Ubhi Enterprises & Anr. (AIR 1985 Del 210) wherein the Court remarked that a fair and honest trader will not give misleading name to his product to the continuing detriment of a plaintiff who has built up his goodwill in the business after years of hard work for example, 13 or 14 years, as in this case. It is this intangible right to property which the law seeks to protect. While analyzing the precedents, the Court held that in the present case the chances of confusion and deception among the two rival marks are apparent and the mark used by the Defendants is deceptively similar to the Plaintiff’s mark.
3. In view of the aforesaid facts, circumstances, evidence and observations, the Court decreed the suit in favour of the Plaintiff and restrained the Defendants from using the name/words/abbreviation "LNT/""ELENTE" or any other deceptively similar marks/name/ words/abbreviated letters in relation to any of their goods.

Conclusion

Many a times Courts are confronted with issues pertaining to unauthorized use of similar/ deceptively similar trademarks. In the present case, the Plaintiff is a well- established company using the mark “L&T” which through extensive use in India has acquired distinctiveness. Hence, use of a deceptively similar mark “LNT” by a third party is bound to cause confusion in public and trade alike. The Court in the case has rightly passed an order in favour of the Plaintiff which would have been subjected to irreparable harm and loss in view of the alleged unauthorized use of deceptively similar trademark by the Defendant.

Delhi High Court rejected Patent Infringement claim against Bata on the basis of Groundless Threats

                                         

Image source: Patent No. 223184

IN THIS ISSUE 

Vitaflex Mauch GMBH (herein referred to as the ‘Defendant’) issued a Legal notice on April 03, 2006, to Bata India Limited (herein referred to as the ‘Plaintiff’) claiming that the shoes being manufactured by the Plaintiff are infringing upon the Defendant’s trade mark and patent rights.

The Plaintiff filed a suit against the Defendant seeking declaration that the threats made by the Defendant with respect to patent infringement are groundless, unjustifiable and wrongful.

The Delhi High Court, on August 24, 2015, restrained the Defendant from issuing any such threat to the Plaintiff on the ground that the Defendant had not been able to show that the patent pertaining to the shoe was granted in India.

Facts of the Case

1. The Defendant filed Indian patent application No. 1521/CHENP/2003 on September 26, 2003 entitled “An inner sole for shoes”. The said patent application was granted on September 05, 2008 (Patent No. 223184). 

Defendant’s Contentions 

1. The Defendant issued a Legal Notice to the Plaintiff on April 03, 2006, inter alia alleging that:
• The insole of the shoes is characterized by a 5 points design;
• The defendant has a pending trade mark application in India under no. 1264384 for “5 POINTS (fig.)”;
• The Defendant has a pending patent application in India (Application No. 1521/CHENP/2003; Patent No. IN 223184;
• The Plaintiff is making “copies” of the Defendant’s products with respect to appearance and functionality;
• The general impression of the shoe is similar in Plaintiff and the Defendant’s shoe whereas the differences were:

-          Plaintiff’s shoe has 6 points instead of 5 points in the Defendant’s product;

-          Plaintiff’s shoe is of “low quality” as compared to Defendant’s shoe.

• The Plaintiff infringes the Defendant’s trademark rights;
• The Plaintiff’s product infringes the Defendant’s patent; 

Plaintiff’s Contentions

The Plaintiff sought the relief of injunction to restrain the Defendant from issuing groundless, unjustifiable or wrongful threats to the Plaintiff and also from circulating threats through circulars or advertisements or by communications (oral or written) to the Plaintiff or any other person, in this regard. The Plaintiff also sought damages of Rs.20 lacs on account of the unjustifiable and wrongful threats issued by the defendant. 

1. The Defendant had just filed a Patent Application pertaining to pressure points whereas it falsely alleged that the shoe or the insole is patented in India;
2. The PCT application from which it claims priority claims novelty only in the material and the thickness of the insole and not in the configuration of pressure points. Therefore, the Defendant could not go beyond the claims of PCT Application. 

Statutory Provisions 

According to the provisions of Section 106 of the Patents Act, the Plaintiff is entitled to file suit seeking

- declaration to the effect that the threats are unjustifiable;

- injunction against groundless threats,

- such damages, if any, as he has sustained thereby.

unless in such suit the Defendant proves that the acts in respect of which threats are being issued are arising from patent infringement or from the publication of a complete specification.

In view thereof, in this case the onus was on the Defendant to show that the Defendant has a patent right over the reflex/pressure points.

Court’s Order

A conjoint reading of Section 48, 52 and 70 of the Patents Act shows that in order to be successful to claim infringement, there must be granted a patent to the person who has issued the threat/legal notice that the Plaintiff should not violate the rights of the patentee. Since the Defendant had been unable to show that it has a valid patent pertaining to five pressure points/reflex points, the Defendant was restrained to issue any groundless threats through circulars or advertisements or by communication to the Plaintiff with respect to five pressure points/reflex points.

It was thus declared that the threats made by the defendant to the plaintiff are groundless, unjustifiable and wrongful.

The complete order can be found at the below link:

http://lobis.nic.in/ddir/dhc/VJM/judgement/27-08-2015/VJM24082015S11122006.pdf

iBall - Ericsson not FRANDS

The Delhi High Court on September 02, 2015 has issued an injunction against iBall from importing the devices that are infringing Ericsson’s essential patents. The interim order would become operative from September 09, 2015 and will be effective till the next hearing date.

Standard Essential Patents (SEPs) are necessarily required to be used by any party (manufacturing, selling, offering for sale etc.) to comply with technical standards.  Standardization organizations require licenses of essential patents to be on fair, reasonable, and non-discriminatory (FRAND) terms.

Brief facts of the case

1. Telefonaktiebolaget Lm Ericsson (the plaintiff) has filed the suit for permanent injunction on August 21, 2015 restraining infringement of patents, damages, rendition of accounts, delivery up etc. against M/s Best It World (India) Private Limited (the defendant) popularly known as iBall.
2. Prior to said suit, the defendant instituted a complaint before the Competition Commission of India (CCI) alleging that the plaintiff being the owner of Standard Essential Patents has abused its dominant position.
3. Thus, the plaintiff submitted that due to lack of good faith on part of the defendant, the suit for permanent injunction was filed.
4. Further, the plaintiff also alleged that from November, 2011 till date the defendant has refused to even execute a mutually agreeable NDA so that commercial discussions can commence between the parties.
5. However the defendant alleged that the plaintiff failed to provide relevant details thereby enabling the defendant to be aware about the legal rights of the plaintiff. Also that the plaintiff in the suit has incorrectly mentioned that the defendant is unwilling to execute the FRAND Agreement.
6. Further, the defendant insisted that it is not the manufacturer and is merely an importer of the products in question.

Core Contention of Ericsson

It is contented that the suit patents relate to three technologies in the field of telecommunications pertaining inter alia to 2G, EDGE and 3G devices (mobile handsets, tablets, dongles etc.):

1. Adaptive Multi-Rate (AMR) speech codec – a feature that conserves use of bandwidth and enhances speech quality; (AMR)
2.  Features in 3G phones - Multi service handling by a Single Mobile Station & A mobile radio for use in a mobile radio communication system; (3G)
3. Enhanced Data Rates for GSM Evolution (EDGE) - A transceiving unit for block automatic retransmission request; (EDGE)

The details of patents infringed by iBall as alleged by Ericsson are following:

The plaintiff has also filed an expert affidavit of Mr. Vijay Ghate along with reports of internal tests which were performed on three devices namely: 

• iBall Andi Xotic;
• iBall Cobalt Oomph;
• iBall Andi Sparkle.

 Observations and Decision of court

• The Court felt that the defendant has not taken any step or shown any interest for the purpose of execution of the FRAND Agreement.
• Further on one hand the defendant has alleged that it has not infringed the suit patents of the plaintiff and on the other hand the defendant itself has filed the complaint before the CCI wherein certain admissions of the rights of the plaintiff have been made.
• The court was of the opinion that if the interim direction/ order is not granted, the plaintiff would suffer irreparable loss and injury because of the reason that the defendant would keep on marketing the mobile devices without the FRAND agreement and without paying any royalty.
• Therefore, an injunction was issued against iBall from importing the devices that are infringing Ericsson’s essential patents which would become operative from September 09, 2015 and will be effective till the next hearing date.

Conclusion

In this case, the Court has strongly condemned the actions of iBall of not taking any step for execution of FRAND Agreement and alleging that it has not infringed Ericsson’s SEPs, while in the meantime, it filed a complaint before the CCI against Ericsson for abusing its market dominance. The Court granted the interim injunction keeping into consideration that Ericsson would suffer huge loss due continuous operations of marketing and sale of iBall devices without the execution of FRAND agreement.    

Click here to access the court order.