Introduction
This case involves a trademark dispute between the plaintiff, ITC Limited (“ITC”) and Arpita Agro Products Pvt Ltd and others (“Arpita Agro”). The dispute centers on ITC’s allegation of trademark infringement concerning its registered trademarks ‘NIMYLE’ and ‘JOR-POWR,’ including Arpita Agro’s use of a deceptively similar mark.
Facts
- ITC Limited, a well-known FMCG company, purchased the trademarks “NIMYLE” and “JOR-POWR” from Arpita Agro Products Pvt Ltd through a series of agreements in 2018 for Rs. 100 crores.
- Arpita Agro had used the trademarks “NIMYLE” and “JOR-POWR” since 1996 and sold floor cleaners under these brands before assigning the trademarks to ITC.
- In 2023, ITC discovered that Arpita Agro was marketing a floor cleaner under the brand name “POWRNYM,” which ITC claimed was deceptively similar to its trademarks “NIMYLE” and “JOR-POWR.”
- ITC asserted that the trade channels and general public associate the trade dress with the ‘NIMYLE’ brand and identify its source as ITC.
- ITC filed a suit alleging trademark infringement, passing off, and unfair competition, and sought an injunction to restrain Arpita Agro from using the “POWRNYM” mark and infringing upon the marks ‘NIMYLE’, ‘JOR-POWR’ and/ or any of the ‘NIM’ family of marks registered in ITC’s name.
- When the suit was listed, the Court granted an ex-parte ad interim injunction against Arpita Agro as ITC was able to establish a prima facie case in its favour.
- Arpita Agro was ordered to propose new alternative names for the product ‘POWRNYM’ in coordination with ITC’s counsel.
- Arpita Agro came up with the following suggestions:
- However, Arpita Agro sought vacation of interim injunction and stated that it had started using ‘POWRNYM’ after the expiration of the non-competition clause under the Agreement.
- Arpita Agro also contended that ITC never raised any objections to the mark ‘POWRNYM’ before the Trade Marks Registry when it was published.
Issues
- Whether Arpita Agro’s use of the “POWRNYM” trademark constituted an infringement of ITC’s trademarks “NIMYLE” and “JOR-POWR.”?
- Whether Arpita Agro was passing off its goods as those of ITC by using a mark and trade dress that was deceptively similar to ITC’s products?
- Whether the agreements between ITC and Arpita Agro prohibited the use of similar trademarks by Arpita Agro after the assignment of rights?
Law Involved
- Trade Marks Act, 1999: Section 29 addresses trademark infringement, including the use of deceptively similar marks.
- Passing off: Common law doctrine aimed at preventing one business from misrepresenting its goods as those of another.
- Contractual Obligations: Arpita Agro had entered into binding agreements with ITC, which included provisions not to use confusingly similar trademarks.
Analysis
- Trademark Infringement: The Court found that “POWRNYM” was phonetically and visually similar to ITC’s trademarks “NIMYLE” and “JOR-POWR.” Arpita Agro had used parts of both trademarks in creating “POWRNYM,” which was likely to confuse consumers.
- Passing Off: The Court found Arpita Agro’s use of the similar mark, trade dress, and bottle design was an attempt to ride on ITC’s goodwill. This was likely to cause deception among consumers.
- Contractual Obligations: Arpita Agro had assigned all rights, title, and interest in the trademarks to ITC in exchange for a significant monetary consideration. The agreements explicitly prevented them from using similar marks, and the Court found that Arpita Agro had breached these agreements.
- Dishonesty of Adoption: The Court stated that merely because ITC had not filed any objection before the Trade Marks Registry upon publication of “POWERNYM”, it was not relevant due to the dishonesty of adoption by Arpita Agro.
Order
The Court found a prima facie case of trademark infringement and passing off by Arpita Agro. The balance of convenience was in favour of ITC, and an interim injunction was necessary to prevent further harm to ITC’s goodwill and business reputation.
Therefore, the Court granted an interim injunction in favour of ITC, restraining Arpita Agro from using the mark “POWRNYM” or any other mark deceptively similar to “NIMYLE” and “JOR-POWR” until the final disposal of the suit. Arpita Agro was also prohibited from using any packaging or trade dress that resembled ITC’s products.
Takeaways
- This case underscores the importance of valuing trademark rights and the serious consequences of breaching contractual obligations regarding intellectual property.
- The judgment reinforces the protection of the goodwill and reputation of established brands, especially when there is clear evidence of infringement and passing off.
- Businesses should exercise caution when choosing brand names and packaging to avoid infringing on the trademarks of others, particularly when those trademarks have been acquired through legal agreements.
Citation: ITC Limited vs. Arpita Agro Products Pvt Ltd & Ors., CS(COMM) 698/2023, High Court of Delhi, pronounced on October 8, 2024. Available at: https://indiankanoon.org/doc/31091603/
Relevant paras:
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- Reliance is placed upon RN Gosain v. Yashpal Dhir, AIR20 and Automatic Electric Limited v. R. K. Dhawan21, wherein it has been held that a person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, and then turn around and say it is void for the purpose of securing some other advantage.
- However, considering the past history involving the defendants being the erstwhile owners of the registered trademarks ‘NIMYLE’ and ‘JOR-POWR’, who were using the registered trademark ‘NIMYLE’ for almost twenty years till the execution of the aforesaid agreements in the year 2016 and who had sold them for a valuable consideration of Rs.100 Crores to the plaintiff for all times to come, none of the so-called reasoning of the defendants appeal to the conscience of this Court. On the contrary, in the considered opinion of this Court, it is hard to believe that the impugned mark ‘POWRNYM’ of the defendants is not a derivative of the registered trademarks ‘NIMYLE’ and ‘JOR-POWR’ of the plaintiff.
- Therefore, under the peculiar facts and circumstances, it is highly implausible to expect that the competing marks involved are not phonetically, structurally, visually and otherwise identically similar to each other. They need not be so in all cases, particularly, when the issues involved are of the present nature herein. Even otherwise, the impugned 1993 SC 352 1999 SCC OnLine Del 27 impugned mark ‘POWRNYM’ of the defendants is a combination/ derivative/ amalgamation of the registered trademarks ‘NIMYLE’ and ‘JOR-POWR’ of the plaintiff it is sufficient to hold that the defendants are guilty of infringement and passing off. In fact, it appears that there seems to be a clear intention of the defendants to show to the general public at large that the impugned mark ‘POWRNYM’ is another variant/ byproduct/ alternative/ amalgamation of the registered trademark ‘NIMYLE’ of the plaintiff.
- The defendants cannot be allowed to take benefit thereof by merely taking note of the essential features of both the competing marks involved and combined into one as the same is impermissible and defies plain logic. Allowing the defendants to do that would result in them reaping undue benefits with no investments from their side, and in this case, even after having earned/ willingly accepted a valuable consideration of Rs.100 Crores from the very same plaintiff. Also, the same is likely to cause immense confusion and deception amongst the minds of the general public as also the members of the trade, especially since the trade channels, the routes/ manner adopted and the end user customer base for both the competing products are the same and as the plaintiff is also the owner of other NIM family of marks for the same products already circulating/ available in the open markets since long.
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- The plaintiff has not used/ is not using the registered trademark ‘JOR-POWR’ is no ground to deny injunction, particularly, since the plaintiff is the holder of the registration for the same. A reading of Section 18 of the Act bears that the applicant claiming to be a proprietor of a trademark can apply if it is being used or if it is proposed to be used. Thereby meaning, an actual use is not necessary to acquire proprietary right in a trademark and the mere proposal/ intention of such use and applying for the same is sufficient. Reliance is placed upon Four Pillars Enterprises Co. Ltd. v. Mahipal Jain & Ors.28.
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Authored by Kavya Sadashivan, IP Innovation, Consulting & Strategy Team, BananaIP Counsels.
Disclaimer
The case note/s in this blog post have been written by IP Attorneys at BananaIP Counsels based on their review and understanding of the Judgments. It may be noted that other IP attorneys and experts in the field may have different opinions about the cases or arrive at different conclusions therefrom. It is advisable to read the Judgments before making any decisions based on the case notes.
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