India: Delhi High Court grants injunction to Hennes & Mauritz for infringement of their mark ‘H&M’

Source: www.delhihighcourt.nic.in

On May 31, 2018 the Hon’ble Delhi High Court, in the case of Hennes & Mauritz AB & ANR. vs. HM Megabrands Pvt. Ltd. & Ors., passed an official order granting interim injunction in favor of Hennes &Mauritz and restraining HM Megabrands Pvt. Ltd. from making any direct or indirect usage of Plaintiff’s mark/style or name, with effect from July 9, 2018.  The Court was of the view that online presence of HM Megabrands Pvt. Ltd, would bring the suit against him within its territorial jurisdiction.

Brief Facts

•  Hennes & Mauritz AB, Sweden (hereinafter referred to as “Plaintiff no. 1”) is the proprietor of the trademarks H&M; and H & M Hennes & Mauritz Retail Pvt. Ltd., New Delhi (hereinafter referred to as “Plaintiff no. 2”) is a subsidiary of Plaintiff no.1 in India.
• The Plaintiffs are designers / marketers / sellers of wide and varied fashionable clothing collection and ancillary products / services for women, men, teenagers and children. They have more than 4000 outlets worldwide along with their online presence in over 21 countries.
• The information pertaining to the Plaintiff is readily available on all search engines as well as on their website www.hm.com
• HM Megabrands (hereinafter referred to as the “Defendant 1”) along with its officers (hereinafter referred to as “Defendant 2 & 4”) are engaged in the business of marketing, supplying, selling of garments and ancillary products under the mark HM since the year 2011 and applied for registration thereof on April 11, 2014.
• The representatives of the Plaintiff No.2 came across the goods of the Defendants bearing the mark “HM” along with use of HM MEGABRANDS, and on making enquiries they came to know that the Defendants had registered a domain name comprising “HM” viz. “hmmegabrands.com” and were operating a website www.hmmegabrands.com and offering products / goods / services similar to that of the Plaintiffs under the mark “HM” through the said website. Further, Defendants were also offering goods bearing the mark “HM” through other online shopping portals such as www.jabong.com, www.amazon.com, www.myntra.com etc. and the Defendants also had retail stores in Mumbai and various other cities in India.
• On June 2, 2016, the two Plaintiffs sued HM Megabrands Pvt. Ltd. & others (hereinafter collectively referred to as the “Defendants”) for injunction restraining passing off / infringement of trade mark H&M of the Plaintiffs, by use of the trade mark HM MEGABRANDS and for ancillary reliefs.

Comparative Analysis of Plaintiff’s and Defendant’s Marks 

Issues 

1.      Whether the Court had the jurisdiction to entertain the suit filed.
2.      Whether the mark of the Defendants infringed the mark of the Plaintiffs’ and/or whether the Defendants’ by adopting the impugned mark were passing off their goods as that of the Plaintiffs’?
3.      Whether the mark of the Plaintiffs’ had any recognition in India at the time when the Defendants’ started using their mark?
4.      Whether the adoption by the Defendants’ of their mark was bona fide and if so to what effect?
5.      Whether the Plaintiffs’ were not entitled to claim exclusive rights to the two letters “HM” or “H&M” and whether the said letters didn’t have any trade mark significance?
6.      What was the effect, if any of other manufacturers/companies using the alphabets “HM” in their trade name, trading style and trade mark?
7.      Whether the Plaintiffs' used the mark in India for five years from the date of registration and if not, whether such non-use had any impact on the present case?

Plaintiff’s Contentions and Written Submissions

• ·        The Plaintiffs’ contended that they got their mark registered in various countries including India and were using various registered domain names to provide online services. Thus, emphasized their exclusive and prior rights in the mark and claimed the mark to be well-known.
• ·        Plaintiffs’ contended that the Defendant represented the alphabets “H” & “M” in an informal and asymmetrical italicized manner similar to that of the Plaintiffs’ artwork and also used the color combination of red and white identical to that of the Plaintiffs’. It was further submitted that the Defendants were found to be marketing their product under other brands such as “Femme” and “Bonjour” which were popular French words show implying intent to pass off their goods as those of the Plaintiffs.
• ·        The Plaintiffs pleaded that the Defendant’s objection regarding the territorial jurisdiction was misconceived since the Defendants themselves invoked the jurisdiction of Bombay High Court based on their online presence through various e-commerce sites like www.hmmegabrands.com, www.jabong.com, www.myntra.com, www.amazon.com.
• ·        It was further submitted that though the Plaintiffs opened their first store in India in 2015 but they had been manufacturing clothes, garments bearing the trade / service mark / name H&M in India for the purpose of export since 1972 and as per Section 56 of the Trade Marks Act, 1999, use of trade marks in respect of export outside India constitutes use of trade mark in India.
• ·        It was submitted that trade and public were even otherwise very well aware of the reputation and goodwill vesting in the mark on account of media, television and newspaper. Further, on account of extensive use and promotion, a secondary meaning was attached in respect of the mark / name / artwork H&M and the same was exclusively associated by members of the trade and public with Plaintiffs and the Plaintiffs’ products.
• ·        It was further submitted that the stay of suit under Section 124 (5) of the Trade Marks Act does not preclude the Court from making interlocutory orders and it was only in exceptional circumstances such as the registration being ex facie illegal, fraudulent which shocked the conscience of the Court, that the Court refused the interim injunction in favor of registered proprietor of the trade mark 
• ·        The Plaintiffs objected the contention of Defendants that the marks “H&M” were non-distinctive. They stated that Megabrands was descriptive of the service of the Defendants and in effect the mark of which registration was applied was “HM”, since the Defendants had tried to claim exclusivity over the letters “H” and “M” could not contend the same to be non-distinctive.
• ·        Lastly, relying on the cases of Prakash Roadline Ltd. Vs. Prakash Parcel Service (P) Ltd. and Pankaj Goel Vs. Dabur India Ltd., the Plaintiffs objected the Defendants defense of use of alphabets “H” and “M”. 

Defendants Contentions and Written Submissions

• ·        The Defendants contested the plaint stating that the name and the mark was honestly and bona fidely conceived and adopted by the Defendants and had been derived from the initials of their proprietor, Mr. Hashim Merchant and his brother Mr. Hamza Merchant being Defendant No. 4 and 3 respectively and that “HM” had always been an integral part of the Defendants, their sister concern’s business, corporate name / trade name, trading style and trade mark since the year 2011.
• ·        Defendant challenged the Courts jurisdiction (territorial) to entertain the suit as the Defendants did not have any physical outlets in Delhi and claimed that the suit was instituted with mala fide intention. It was added that the present suit was liable to be stayed owing to the pendency of previously instituted suit filed by the Defendant no.1 against the Plaintiff at Bombay.
• ·        It was contended that the alphabets “H” and “M” did not have any trademark significance and no person could claim exclusive rights to the acronym / two letter mark “HM” or “H & M”. A trademark search revealed that several manufacturers were using the alphabets “H” and “M” or the term “HM” as their tradename, style or trademark. Further the Defendants challenged the validity of Plaintiffs registration and stated that the mark was inherently not distinctive or capable of distinguishing the goods / services of the Plaintiffs from those of others, relying on para 12.2.5 of Draft Manual of Trademarks.
• ·        It was submitted that the Plaintiffs’ had neither pleaded nor had filed any documents to show that they had any trans-border reputation in India before the adoption of the mark “HM Megabrands” by the Defendants. The Defendants had established a reputation parallel to the Plaintiffs for their products in India based on the extensive online sales and revenue generated in the financial year 2015-16. The Plaintiffs trade mark “H&M” had not been declared as a well-known trade mark by the Trade Marks Registry or by any Court and the Plaintiffs of their own could not declare their trade mark as well-known.
• ·        Further, it was pleaded that there was no similarity between the Plaintiffs’ trade mark “H&M” and the Defendants trade mark “HM Megabrands” since comparison of the two marks should be done in entirety and not in separate components.
• ·        Lastly, it was submitted that the Plaintiff had not been using their mark for the last five years and therefore it was liable to be rectified. 

Courts View

• ·        The Court rejected the Defendant’s argument with respect to territorial jurisdiction (issue 1) on the grounds that the Defendants had generated revenue of over INR 12 crores (USD 1744059 approx.) in the financial year 2015-2016 including extensive online sales through websites. The Court stated that it had the cause of action to entertain the suit as long as the effect of infringement or passing off, if any by the Defendants of the trademarks and/or goods of the Plaintiffs could be felt in Delhi.
• ·        The Court rejected the Defendants contention regarding stay on the present proceedings on account of pendency of a previous suit instituted by the Defendants against the Plaintiffs at Bombay. It was opined that such suit was instituted only to prevent the Plaintiffs from meting out threats of infringement to the defendants i.e. under Section 142 of the Trade Marks Act.
• ·        With respect to Issue 6, the Court referred to P.M. Diesels vs. S. M. Diesels wherein it was held that in a suit for infringement, it is the right of the two parties before the Court only which are to be examined and not qua others. The Court concluded that the proprietor is not expected to pursue each and every insignificant infringer. Thus, use, even if any by others of the alphabets “HM” or “H&M” as part of their trade mark/ trade name, cannot deprive the Plaintiffs, if otherwise found entitled to interim injunction against the Defendants of such injunction.
• ·        The Court then held that the adoption could have been said to be bona fide if to attract customers by disclosing the identity of the proprietor who was well known to the customers or commanded a goodwill, unless adoption of name itself in childhood was mala fide. 
• ·        As regards the similarity and likelihood of deception between the two marks the Court was of the view that the business of the two was the same and/or alike i.e. fashionable theory and the trade circles and patrons / customers of the two were also the same. In addition to this, the usage of the generic word “Megabrand” which means a big and strong brand along with “HM” would only imply association and affiliation with H&M. The only other point of difference that remained was the character “&” for which the Court opined that the patrons of the Plaintiffs’ as well as the Defendants’ were only likely to remember and recollect the alphabets “H&M” in the mark of the Plaintiffs’ and not the symbol “&” between the said two alphabets. Therefore, it was held that “HM MEGABRAND” was deceptively similar to “HM”.
• ·        Also, “H&M” or “HM” were not considered to be generic or publici juris to the trade or business for which they were being used by the Plaintiffs’ and the Defendants. The said alphabets were alien to the trade / business of clothing / garments / accessories and were applied thereto by the Plaintiffs’, admittedly much prior to the Defendants.
• ·        With respect to issue 7, the Court relied on its judgements in Sun Pharmaceutical Industries Limited Vs. Cipla Limited wherein it was held that a Defendant in a suit for infringement, without seeking remedies under Section 47 of the Trade Marks Act before the Registrar of Trademarks, cannot set up pleas of non-use and the same if permitted, will undermine the efficacy of registration and the presumption of validity of registration under Section 31 of the Act and an action for infringement of trade mark cannot be defeated for disuse. Therefore, the present case was not of non-use.
• ·        The Court was of the opinion that due to opening up of Indian Economy, the world has shrunk to a global village and therefore for a brand/mark to have a reputation or goodwill in India, setting up a shop in India or sale in India is no longer a necessity. The Court relied on Cadbury UK Ltd. Vs. Lotte India Corporation Ltd., wherein it was held that for the purpose of establishing reputation, visibility in India of webpages displaying the product was sufficient to show that buyers or Indians travelling abroad were aware of the product and were likely to associate it with Plaintiffs.

Decision

The Court was of the opinion that the Plaintiffs’ had established a prima facie case. It acknowledged that the Defendants were in business since 2011 but believed that if they were permitted to continue their business during the pendency of the suit, would be likely to develop further goodwill under the impugned mark and once a prima facie case is found in favor of the Plaintiffs’, it is not deemed appropriate to allow the Defendants’ to gather further goodwill and business in the mark. The Plaintiffs’ were thus found entitled to an order of interim injunction as claimed.

The Defendants, with effect from July 9, 2018, were restrained from using in any manner whatsoever the trade / service mark / trade name “HM” or “HMMEGABRANDS” or any deceptive variation/s thereof, singularly or in conjunction with any other word or monogram/logo or label in relation to their products/services/business whether as a trade mark, service mark, trade name, corporate name, trading style or as website, domain name and e-mail address.