The SHRI RAM School Trademark Conflict and Ruling on Bonafide Use

Recently, the Delhi High Court delivered an order wherein the name of famous school SHRI RAM was disputed. The Court in the case analysed issues pertaining to bonafide use of a trademark under Section 35 of Trademark Act, 1999 and also opined the merits and demerits while granting an injunction against any party.

Brief Facts of the case:

1. SRF Foundation (hereinafter referred to as the Plaintiffs) is a registered non-profit society engaged in several social and community development initiatives including running of schools under the name of The Shri Ram School. The Plaintiffs claims to be the prior user of the mark/name SHRI RAM in respect of the schools;
2. An application for registration of the trademark THE SHRI RAM SCHOOL was filed by the Plaintiffs on  June 6, 2008 vide Application No.1696277 in Class 41 which is pending with the Registrar of Trade Marks;
3. In or around June 2011, Ram Education Trust (hereinafter referred to as the Defendant) which is managed by the Plaintiffs’ Trust, opened SHRI RAM GLOBAL PRE SCHOOL;
4. Here it would be relevant to mention that the Trust of the Defendant   was opened by Plaintiffs' brother. In view thereof,   Plaintiffs wrote a letter to the Defendant apprising them of the substantial reputation of 'The Shri Ram School' run by the Plaintiffs;
5. However, the Defendant did not stop use of the impugned mark but expanded its operations under the trademark SHRI RAM and opened the SHRI RAM CENTENNIAL SCHOOL, SHRI RAM CENTENNIAL SCHOOL, AGRA and  SHRI RAM CENTENNIAL SCHOOL, INDORE, and is proposing to open SHRI RAM GLOBAL PRIMARY WING a mere 240 metres away from the Plaintiffs’ establishment;
6. Aggrieved by the said, the Plaintiffs put up notices in Indore, Gurgaon and Dehradun informing the general public that THE SHRI RAM SCHOOL had no relation or connection with these schools;
7. Thereafter the Plaintiffs received letter for withdrawal of the advertisements and to tender a public apology for releasing these advertisements

Contentions of the Parties:

Plaintiffs – SRF Foundation & Anr.

1. That they have no objection if the said mark/name SHRI RAM is used by the Defendant in relation to any other different activities or services except in relation to the services of school;
2. That as far as running of school bearing the mark SHRI RAM is concerned, they are prior user and have acquired unique goodwill, name and reputation;
3. That use of similar names would create confusion and deception among public;
4. That the Defendant chose almost a similar name for its schools with the intention of misrepresentation;
5. The use of the words "Centennial" and "Global" by the Defendant in conjunction with the name SHRI RAM for its schools do create confusion and deception as THE SHRIRAM MILLENNIUM SCHOOL (Plaintiffs’ school) and SHRI RAM CENTENNIAL SCHOOL (Defendants’ school) are confusing and deceptively similar; 
6. That even the use of the shield device by the Defendant on its school symbol would not make any difference as the foremost and essential feature of the Defendant's school name is the word 'SHRI RAM";
7. That there is no bonafide use of the family name SHRI RAM by the Defendant as the Defendant malafidely intends to associate its SHRI RAM schools with the Plaintiffs' well- known SHRI RAM schools in Delhi and Gurgaon so as to piggy bank on its reputation and goodwill and gain illicit profits out of the same.

Defendant – Ram Education Trust

1. That it has the right to use the name “SHRI RAM” for schools as it emanates from the common lineage i.e. from the legacy of Late Sir Shri Ram, who is the grandfather of the founding member of the Plaintiffs’ school and the Defendant’s Trust.
2. While forwarding its response, the Defendant adduced a list of educational institutions set up by the Late Sir Shri Ram beginning from the year 1920, thereby showing that the Plaintiffs are not entitled to claim proprietorship / monopoly over the mark / word “SHRI RAM”;
3. That the use of the name "SHRI RAM" by the Defendant in relation to running the services of schools is in furtherance of the common family name held by the Plaintiffs as well as the Defendant, which constitutes a bonafide use under the provisions of the Trade Marks Act, 1999;

Court Observations and Judgment:

1. That it was clear that the mark / word “SHRI RAM” was being used as an essential feature in the logos of both the Plaintiffs and the Defendant, which might be confusing and cause deception;
2. The Court observed that inspite of a letter sent by the Plaintiffs to the Defendant, specifically stating not to use the name “SHRI RAM”, the Defendant without paying any heed went ahead and used the impugned mark. Hence, there was no specific admission made by the Plaintiffs to share the mark “SHRI RAM” with the Defendant in respect of  services of  running schools;
3. That the goodwill in the name SHRI RAM in the field of schools in India is indeed a result of the efforts of Plaintiffs. Hence, the Defendant cannot be allowed to use the identical name SHRI RAM for its schools, amounting to the continuing detriment of the Plaintiffs who have built up a goodwill and reputation in the name SHRI RAM for its schools after years of hard work;
4. That “bonafide use" normally means the honest use by the person of his own name without any intention to deceive anybody or without any intention to make use of the goodwill which has been acquired by another trader;
5. That the words “bonafide use” are the governing words and heart and soul of the Section 35. The party cannot blindly read this Section that under the statute, he is entitled to use his own name, surname in respect of same goods and services. No different meaning can be given to this Section, if the use is not bonafide and the same is tainted and dishonest. Hence, Section 35 would not apply in the facts of the present case;

In view of the aforesaid, the Honourable Court directed the Defendant to display/use the disclaimer in their signboard and all stationary material indicating that they have no connection or relation with the Plaintiffs' school and further restrained the Defendant from using the mark SHRI RAM in relation to running of schools which were under construction.

Conclusion:

Courts often confront trademark tussle among kins over use of family name. A similar issue had cropped up before the Supreme Court in 2014 in the case of Precious Jewels & Anr. v. Varun Gems wherein the use of family name i.e. surname “RAKYANS” as trade name was disputed contention. In the case the Apex Court had prima facie acknowledged the right of using one’s family name as part of a trade name.

However, in this case the Court recognized the reputation, goodwill and secondary significance acquired by the Plaintiffs’ which entitled them to the relief claimed in the case. 

The 2- Minute Maggi Noodles under FSSAI Scanner

All time and everyone’s favourite snack, 2-minutes Maggi noodles is under the regulatory scanner of FSSAI (Food Safety and Standards Authority of India) after news of alleged high lead content was probed in the Maggi noodles.

Indian Daily, Economic Times had reported earlier this month that samples collected from some parts of Uttar Pradesh were found containing added ‘monosodium glutamate’ (MSG) and lead in excess of the permissible limit. In this regard inquiry had been initiated by Lucknow Food Safety and Drug Administration which post inquiry requested FSSAI to cancel license for Maggi and had also asked FSSAI to order sampling of the product from across the country to check its quality.

It was also reported that in view of the alleged probe, food inspectors had ordered Nestle India to recall a batch of Maggi noodles from shops in the northern state of U.P. however Nestle has negated any such claims.

Recent developments in the matter report that the UP Food Regulator FSDA (Food Safety and Drug Administration) has lodged a Criminal Complaint against Nestle India in a Local Court in Barabanki, U.P. It has also been reported that in a separate case filed by an Advocate in the Court of Chief Judicial Magistrate, Bollywood superstars like Amitabh Bachchan, Madhuri Dixit and Preity Zinta have been roped in the matter for allegedly promoting Maggi Noodles in advertisements.

Nestle India’s Response

Nestle has strongly confronted the aforesaid allegations and maintains the stand that Maggi noodles “confirms to all applicable food laws and regulations” and stated that it does not add MSG to Maggi noodles and glutamate, if present, may come from naturally occurring sources. It further stated that food regulators in India also do not specify any limit for the presence of MSG / Glutamate.

Nestle has also urged its retailers to step up promotion of Maggi noodles as the news of alleged lead content and MSG has reportedly declined the sales of Maggi noodles across the country.

It won’t be an exaggeration to state that Maggi has become equivalent to a staple food particularly for students in India who heavily rely on Maggi owing to the great taste it offers in a matter of just 2-minutes. However, the implications as stated above would have definitely affected its sales among masses.

The matter at hand also brings in light the role of FSSAI in the case and the implementation of food safety laws in India where the nuances of food adulteration are rampantly aggravating.

In 2013, FSSAI had issued a notification pursuant to which various packaged foods including Maggi noodles come with the FSSAI logo and license number which imparts the assurance among customers that the product has undergone quality checks. However, the said news does raise concern about quality checks and clarity on the permissible limits of alleged substances in food.

Sources:

http://economictimes.indiatimes.com/industry/services/retail/nestle-urges-retailers-to-step-up-maggi-promotions-as-sales-slide/articleshow/47410287.cms

http://timesofindia.indiatimes.com/india/Maggi-under-regulatory-scanner-for-lead-MSG-beyond-permissible-limit/articleshow/47304615.cms

http://economictimes.indiatimes.com/industry/cons-products/food/maggi-noodles-row-case-lodged-against-nestle-amitabh-bachchan-and-madhuri-dixit/articleshow/47482377.cms

Service Tax Elevates from June 1

Budget 2015 announced hike in service tax from 12.36% to 14%. The increase which is effective from June 01, implies shelling out more for services like travelling, banking, insurance and even eating out.

Reportedly, the Modi Government had proposed to raise the service tax to 14% with the objective to facilitate a smooth transition to the Goods and Services Tax (GST) regime, which the government wants to roll out from April 2016. Once implemented, GST will subsume service tax, excise and other local levies.

The table below enlists the effective rate of service tax applicable of a few services:

Sources:

http://www.ibtimes.co.in/service-tax-raised-14-travel-mobile-restaurants-be-costlier-1-june-634187

http://www.ptinews.com/news/6091332_Mobile--hotel--other-services-to-be-costlier-

'CREATIO' TM  The Fourth Annual Design Competition

Vidya Darshan Rana Charitable Trust in alliance with S.S. Rana & Co. is organizing the Fourth Annual Design Competition on the occasion of World Industrial Design Day observed every year on June 29^th. 

Young Creators are invited to create new designs focused on this year’s theme “Redefine Design” and exhibit it through the platform of 'CREATIO' TM . 

The designers may consider submitting their creation on any of the following themes:

Textile & fashion, Furniture, Household goods (including kitchen appliances), Home décor (interiors and accessories), Pottery, Jewelry, Games, toys & sports or any other new design which would help to redefine the industry., before June 26, 2015.

The winners of the competition will be announced in IPConnect, S.S. Rana & Co.’s weekly newsletter and shall be awarded prizes along with certificates.

For more information you can visit our website at www.vidyadarshan.in .

Intellectual Property Rights in School Curriculum

As per the news reported by Economic Times on May 21, 2015, the Department of Industrial Policy and Promotion (DIPP) is holding talks with National Council of Educational Research and Training (NCERT) and the Central Board of Secondary Education (CBSE) to introduce IPR in the curriculum from class 9 onwards. It is also considering discussions with the Ministry of Human Resource Development (HRD) and the All India Council for Technical Education (AICTE) to introduce IPR as a paper in engineering colleges. This step is intended towards creating awareness about IPR and increase patent application filings in the country.

DIPP is also planning to increase the number of patent examiners and process patent and trademark applications online so as to strengthen and reduce patent pendency in country's Intellectual property offices. Further, the government is expected to come out with the IPR policy in next three months, which will outline India's patent laws and the future roadmap.

The move by DIPP highlights the growing significance of IPR in each and every sector and the efforts by the Government towards making India an IP-intensive nation.

Source-

News:http://articles.economictimes.indiatimes.com/2015-05-21/news/62459673_1_ipr-policy-patent-applications-patent-laws

Image: http://invent.answers.com/patent/6-invention-tips-for-kids

Delhi High Court: Phonetic similarity vital in case of Trade marks apropos medicinal products

GLAXO GROUP LTD. & ANR. Vs. S.D. GARG & ORS

The Hon’ble High Court of Delhi, on May 12, 2015, has passed a decree in favour of the Plaintiffs in the case of GLAXO GROUP LTD. & ANR. Vs. S.D. GARG & ORS. The Hon’ble High Court held that the use of a trade mark, if phonetically similar to another trade mark, would amount to infringement. 

Brief Facts of the Case:

1. Glaxo Group Ltd. (Plaintiff No. 1) is a company incorporated under the laws of the United Kingdom while Plaintiff No.2 was incorporated in India in 1924 under the name of H.J. Foster & Co. It became a wholly owned subsidiary of Joseph Nathan & Co. in 1926. In October 2001, Plaintiff No.2 was renamed as GlaxoSmithKline Pharmaceuticals Ltd, following the merger with SmithKline Beecham Pharmaceuticals (India) with Glaxo India Limited.
2. Plaintiff No. 1 manufactures pharmaceutical products used for the treatment of gastric ailments under the name/trade mark ‘ZANTAC’ and ‘ZINETAC’. Plaintiff No.1 is the owner of the trade marks ‘ZINETAC’ and ‘ZANTAC’, which were registered in the year 1985 and 1981 respectively.
3. The Plaintiffs filed the present case in 2006 against the Defendants and prayed that the medicinal products produced by the Defendants under the name of ‘GENTAC’ amounted to infringement of their registered trade mark ‘ZANTAC’ and ‘ZINETAC’ and passes off the products of the Defendants as that of the Plaintiffs. The Plaintiffs contended that the Defendants’ trade mark was phonetically similar which may cause confusion in the mind of the purchaser.

Relevant Law:

As per section 2(h) of the Trade Marks Act, 1999 deceptively similar means:

“A mark shall be deemed to be deceptively similar to another mark if it so nearly resembles that other mark as to be likely to deceive or cause confusion”

Parties’ Contentions:

A. Plaintiffs: GLAXO GROUP LTD. & ANR

The petitioner put forth the following contentions before the Court:

• The Plaintiffs are the owners of the trade marks ZANTAC and ZINTAC and are associated with medicinal preparations which contains ‘Ranitidine Hydrochloride’ used in the treatment of gastric ailments;
• That the packaging and medicinal products produced by the Defendants under the name of GENTAC are deceptively similar which amounts to infringement of their trademarks;
• That there is hardly any discernible difference between the two classes of medicinal products and the difference between ZANTAC and GENTAC is rather difficult to be differentiated by a man with average intelligence;
• That as both parties are involved in the manufacture and trade of identical products, it is possible that the buyers would confuse the Defendant's’ product to be that of the Plaintiffs’

      B. Defendants: S.D. GARG & ORS

• That the trade mark ‘ZANTAC’ is not associated with any medicinal product and that the trade mark is a dummy registration. The Defendant further contended that during the pleadings the Plaintiffs had failed to lead evidence apropos ‘ZINETAC’, hence under such circumstances, they cannot claim any protection of their trademarks;
• That there can be no possible cause for confusion between the two classes of the medicines as the Defendants’ product is exclusively sold in the form of injections whereas the Plaintiffs’ products are being sold in the form of tablets;
• That the medicine GENTAC has been approved by the Drug Licensing Authority to be sold to the public. Accordingly, once the approval of the Drug Licensing Authority is obtained, the Plaintiffs cannot restrain the them from manufacturing the injections;

     Court’s Observations And Order

  

• The Hon’ble Court observed that medicinal product of the Plaintiff under the trade mark ‘ZANTAC’ and ‘ZINETAC’ and the Defendants’ product under the trade mark ‘GENTAC’ contain ‘Ranitidine Hydrochloride’, which is used in the treatment of gastric ailments and the two classes of medicinal products are Schedule ‘H’ drugs;
• The Hon’ble Court was not persuaded by the contention of the Defendants that since the medicinal products can be procured only through a valid prescription there wasn’t any likelihood of confusion in the mind of the buyer. The Hon’ble Court in this regard observed that- while there may be certain amount of assurance to the purchaser of medicines against prescriptions but it does not obviate or negate the likelihood of confusion by an illiterate person or one under stress, given the very high degree of phonetic similarity between the two competitive names for the same cure. The degree of caution in medicinal and surgical products is greater so as to avoid causing any harm to the unsuspecting consumer. Phonetic similarity is vital in the adjudication of a suit for infringement of trade mark apropos medicinal products; 
• The Hon’ble Mr. Justice Najmi Waziri also observed that the English language is not the primary language to many in this country. There is a very large percentage of population who are unaware of the English nuances of the language. The rural population, who are yet to acquire fluency in the language, may be confused by the phonetic similarity between the two classes of the medicinal products;

      In view of the aforesaid, the Hon’ble Court was of the view that the Plaintiffs had made out a case of infringement and passing off by the Defendants and hence was entitled to the protection of their trade mark and grant for decree as prayed for.

  

       Conclusion  

      The Hon’ble Delhi High Court has once again proven that infringement has a wider scope than just    use of a similar mark/logo/color combination.

  

    The case at hand manifests the degree of caution pharmaceutical companies have to employ while choosing trade names for their medicines. The Hon’ble Court has re-affirmed the principle that was established in the famous Cadila Healthcase Case (Cadila Healthcare Limited vs Cadila Pharmaceuticals Limited, 2001 (21) PTC 541 (SC)), wherein the Apex Court had observed that “a stricter approach should be adopted while applying the test to judge the possibility of confusion of one medicinal product for another by the consumer. While confusion in the case of non-medicinal products may only cause economic loss to the plaintiff, confusion between the two medicinal products may have disastrous effects on health and in some cases life itself. Stringent measures should be adopted specially where medicines are the medicines of last resort as any confusion in such medicines may be fatal or could have disastrous effects. The confusion as to the identity of the product itself could have dire effects on the public health.”

FDI BATTLE IN RETAIL SECTOR

Threatened by the rapid growth of online shopping, the country's top brick and mortar retailers or offline retailers have dragged the Central Government to Court, demanding level playing field in FDI norms vis-a-vis e-commerce players.

Retailers Association of India (RAI), which represents about 900 retailers with 1.72 lakh stores including top retailers such as Future Group, Shoppers Stop and Reliance Retail, moved the Delhi High Court against the Union Government.

Justice Rajiv Shakdher on May 20, 2015 directed RAI to take their complaints against online shopping sites to the government and if no action is taken within 4 months, they can return to the Court.

The Bone of Contention

The e-commerce sites are able to offer attractive discounts and offers to their customers owing to the backing of billion dollar investments received from Indian and foreign capital firms. Along with the pouring investments even the Indian buyers are now increasingly getting comfortable with online shopping.

Large offline retailers are therefore finding it difficult to compete with the prices offered by the online sites, especially in case of electronics and gadgets, where online retailers now command nearly 20 percent of all sales.[1] Physical retailers, which pay hefty rentals and have other establishment costs, say it's extremely difficult for them to compete with online retailers.

According to existing FDI rules for online retailers, foreign investments are only permitted in business-to-business (B2B), or wholesale and not in retail trading. In wholesale e-commerce, the government allows up to 100% FDI. FDI in B2C or business-to-consumer e-commerce is not allowed. But it is contended by RAI that the online retailers have found a way around this.

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[1] http://trak.in/tags/business/2015/05/20/offline-retailers-court-demanding-fdi-level-playing-field-online-retailers/

As for offline retail, in 2012, the government allowed foreign investors to hold up to 51% in multi-brand chains in India. However, this investment was subject to constraints such as sourcing criteria, among others.[1]

Demands of RAI

“We are demanding parity” said lawyer Abhishek Manu Singhvi, who represents the country’s largest lobby of organised retailers, RAI. The petition seeks a level playing field with online retailers on foreign direct investment (FDI) rules. The latter are allowed 100 per cent FDI as most of them are run on the marketplace model, providing a platform for vendors. Multi-brand retailers on the other hand are eligible for 51 per cent FDI, based on whether the state allows it or not.

Response by E-Commerce Companies

The online retailers assembled under the E-Commerce Coalition of India appear to be divided on the issue of FDI. While many online stores are demanding opening up India's ecommerce sector to 100% FDI, the larger online marketplaces such as Flipkart and Snapdeal, which are also part of the coalition, are opposing such a move.

E-commerce firms argue that it is them who are at a disadvantage. Mr. Jariwala of ECI was quoted by the Economic Times on May 26, 2015 saying “While the current multi-brand retail trade policy allows 51% FDI and 100% for single brand, no such provision is allowed for B2C (business to consumer) ecommerce.”

Debate on Marketplace Model

There are essentially two models of doing B2C e-commerce. The first is the inventory model where the e-commerce portal stocks up all the items. The other type is the marketplace model. Here, the e-commerce portal does not hold any inventory. Instead, it brings the buyers and sellers together. The seller uses the website of the e-commerce portal and fulfills the order himself.

The website provides all the enabling services like tracking facility, payment gateways etc. But its job is no more than that of an agent. It hands over the sale proceeds to the supplier as per the agreement with him after deducting its service charges.

However, the brick and mortar retailers believe that the marketplace model adopted by ecommerce companies differs little from conventional methods. Mr. Biyani, founder of Future Group said “All retailers — whether real or virtual — source almost all goods from manufacturers and suppliers. Virtual retailers, like real retailers, store most of their merchandise or inventories in their own warehouses. In addition, in these so-called marketplaces, sellers do not directly interact nor ship goods directly to buyers. Like real retailers, virtual retailers themselves own or handle the logistics and customer delivery for everything that they sell.[2]”

This debate on the meaning and scope of ‘marketplace model’ and whether it is applicable to the brick and mortar retailers sparked off as a result of the framework of the Consolidated FDI Policy, 2014[3] which bars FDI in any e-commerce venture that sells products directly to consumers but allows 100% foreign capital in the B2B model. To avail the 100% FDI cap, the e-commerce companies evolved and adopted the marketplace model, which allows them to set up platforms for other retailers to sell products.

Conclusion

This is the second tough tactic adopted by India's brick and mortar retailers against the government in the past few days. Earlier, the country's physical retailers had boycotted a meeting convened by the Ministry of Commerce and Industry to discuss FDI in e-commerce.

[1] http://articles.economictimes.indiatimes.com/2015-05-21/news/62460157_1_marketplace-model-cent-fdi-amazon-india

[2] http://economictimes.indiatimes.com/industry/services/retail/marketplace-model-adopted-by-e-commerce-companies-just-smart-accounting-kishore-biyani-future-group/articleshow/47435985.cms

[3] http://dipp.nic.in/English/Policies/FDI_Circular_2014.pdf