High Court Round UpLegal RoundUpTribunals/Regulatory Bodies/Commissions Monthly Roundup

“For a contract to be enforceable, the restraint of trade clause must be reasonable.”

[Rajesh Kumar Gandhi v. Mukesh Dutt]


Read the interesting picks from the stories eported in first week of February.


Delhi High Court


Baazi v. WinZo| Trademark is used by a manufacturer or service provider to distinguish products from those of competitors: Here’s how Winzo appeared dishonest and unfair in adopting Baazi

Explaining the significance of a trademark, Asha Menon, J., observed that,

When people are satisfied with the products supplied by a manufacturer or service provider, they buy them on the basis of the trade mark and over time it becomes popular and well known. Thus, the use of a similar or identical trademark by a competitor in the same product would lead unwary customers to believe that it originates from the same source.

Read full report here…

Whether a ‘blade’ would be covered under S. 397 IPC as a deadly weapon? Del HC explains in view of settled position of law

Mukta Gupta, J., explained under what circumstances would Section 397 of penal Code, 1860 would be attracted.

Rae full report here…

Court under maintenance proceedings under S. 125 of CrPC, can usurp jurisdiction of Civil Courts? Del HC decides

Chandra Dhari Singh, J., decided a maintenance case wherein the marital status of the parties was the crux of the matter and expressed that,

“…there is no straight jacket formula for judging the validity of the marriage between the parties.”

Read full report here…


Kerala High Court


Is not taking treatment for mental illness to bring out a peaceful family atmosphere a form of cruelty and thus, a ground for divorce? Kerala HC answers

In an interesting case the Division Bench of A.Muhamed Mustaque and C.R. Sophy Thomas, JJ., held that not taking treatment for mental illness in order to bring out a peaceful and harmonious family atmosphere can also be counted as cruelty to the persons at the receiving end. Upholding the Family Court’s order granting divorce on the ground of cruelty, the Bench remarked,

“There is no merit in preserving intact a marriage, when the marital tie becomes injurious to the parties. When there is no rose, and only thorns left, and there is no scope for the plant to sprout again, there is no meaning in watering the same, knowing that it is dead forever.”

Read full report here…


Andhra Pradesh High Court


LGBTQ+ community’s right to reservation; Can a transgender claim to be appointed by reservation in spite of failure to secure minimum cut off marks in screening test? AP HC answers 

In a significant case wherein, a transgender had approached the Court seeking benefit of reservation for appointment in police department, M. Satyanarayana Murthy, J., denied to issue direction to the State in favour of the petitioner. The Bench, however, remarked,

“The State is unconscious of the directions issued by NALSA and failed to provide a specific column meant for gender identity for transgender in the proforma of application in the Notification dated 01.11.2018 and did not provide any reservation to transgenders, as they are socially and educationally backward and not in a position to compete with ordinary men and women.”

Read full report here…


National Company Law Tribunal


Operational Creditor is under obligation to recover money from its client and not agent: NCLT decides while dismissing a petition filed under S. 9 IBC

The Coram of H.V. Subba Rao (Judicial Member) and Chandra Bhan Singh (Technical Member) dismissed a petition filed under Section 9 of the IBC while noting that no operational debt existed under Section 5(8) and expressed that,

“Operational Creditor being the principal was always under obligation to recover the money from the client and not from his agent unless the agent failed to perform his duties.”

Read full report here…


Tis Hazari Court


For a contract to be enforceable, restraint of trade clause must be reasonable: Post-termination non-compete clauses are permissible in employment contracts under S. 27 of Contract Act? District Court explains

Holding that, post-termination non-compete clauses in employment contracts are “restraint of trade” and it is impermissible under Section 27 of the Act, Richika Tyagi, C.J-02, expressed that such agreements of restraint are vid because of being unfair and depriving an individual of his or her fundamental right to earn a living.

Read full report here…


Information Commissioner’ Office


Unsolicited marketing calls causing distress to people and disregard to their privacy rights: Would it lead to imposition of monetary penalty? Detailed decision of Information Commissioner’s Office

Andy Curry, Head of Investigations, on noting serious contravention of regulations 21 and 24 of the Privacy and Electronic Communication Regulations 2003 (PECR) has issued Home2sense Limited with a monetary penalty under Section 55A of the Data Protection Act, 1998.

“Home2sense’s dismissive and troubling response, coupled with its failure to disclose any details of its CDRs or any other information which might assist the Commissioner’s investigation shows, in the Commissioner’s view, a complete disregard for the privacy rights of the individuals whom it sought to contact.”

Read full report here…

Case BriefsForeign Courts

United States Patent and Trademark Office: Cataldo, Adlin and Lebow, Administrative Trademark Judges, decided whether SPOTIFY is entitled against dilution by blurring under 15 U.S.C Section 1125(c).

Applicant U.S Software Inc. sought registration of POTIFY, in standard character and stylized with a design for:

downloadable software for use in searching, creating and making compilations, rankings, ratings, reviews, referrals and recommendations relating to medical marijuana dispensaries and doctor’s offices and displaying and sharing a user’s location and finding, locating, and interacting with other users and place, in International Class 9.

Further, the applicant also sought the registration of the standard character version of the mark for:

clothing, namely, shirts, tops, t-shirts, hoodies, headwear, shorts, in International Class 25;

providing consumer information in the field of medical marijuana dispensary inventories and locations; providing links to web sites of others featuring consumer information on medical marijuana inventories and locations; providing a web site featuring the ratings, reviews and recommendations on products and services for commercial purposes posted by users; providing consumer information regarding medical marijuana dispensaries, inventories and locations, in International Class 35; and 

computer services, namely, creating an on-line community for registered users to participate in discussions, get feedback from their peers, form virtual communities, and engage in social networking in the field of medical marijuana; providing a web site featuring temporary use of non-downloadable software for providing medical and healthcare services, scheduling of medical and healthcare services, in International Class 42.

Opposer Spotify AB alleged prior common law rights in and registration of SPOTIFY, in standard characters.

Further, the opposer alleged that the use of the applicant’s marks would be likely to cause confusion with and dilute the opposer’s mark under Sections 2(d) and 43(c) of the Trademark Act, 15 U.S.C § 1052(d) and 1125(c).

Analysis and Discussion

There is no dispute that Opposer’s SPOTIFY mark is distinctive, both inherently, and by acquisition as a result of widespread use and consumer recognition. Conceptually, it is a coined, fanciful term. It is registered on Principal Register without a claim of acquired distinctiveness and is therefore presumed distinctive.

As for whether the mark is sufficiently “famous” to be entitled to protection against dilution, Trademark Office must determine whether it “is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owner.”

Advertising and Publicity


Opposer “promotes its products and services under the SPOTIFY mark to a wide variety of consumers, including across age groups and across all geographic regions in the U.S.

 It advertises in well known national publications and has exclusive podcast partnership deals with famous celebrities.

Less conventionally, Opposer has engaged consumers’ imaginations with marketing efforts such as the “President of Playlists” job posting after President Obama expressed a desire to work for Opposer (itself a form of free advertising and publicity). This marketing effort was so successful and engaging that it became “the number one trending moment on Twitter”. Id. at 11 (Sauvaget Dec. ¶ 34). The attention this episode received on Twitter strongly suggests that many Americans who listen to music in analog format or not at all were exposed to the SPOTIFY mark.

Sales of Goods and Services offered under the SPOTIFY mark


It was noted that in 2015, before the applicants’ first use of its POTIFY mark, opposer had more monthly SPOTIFY users than most U.S. States had residents.

Evidence was significant, persuasive and corroborative of the advertising and publicity evidence. Not only have many Americans been exposed to the SPOTIFY mark, but a large percentage of Americans are users of or subscribers to opposer’s SPOTIFY goods and services.

 Actual recognition of the mark


Significantly, it was recorded that SPOTIFY had more web “hits” than a number of other trademarks, including ROLEX, MCDONALD’s, AMERICAN EXPRESS, CHANEL and BARBIE.

Opposer’s “President of Playlists” marketing effort was so widely recognized that it was “the number one trending moment on Twitter and claimed the number one spot of Reddit.”

Hence, SPOTIFY is among the most widely recognized brands in the United States.

SPOTIFY is registered on the principal register


Adding to the above, it was stated that the SPOTIFY mark has been registered on the principal register in its broadest (standard character) form for almost 13 years.

SPOTIFY is famous


SPOTIFY is exceedingly famous and entitled to protection against dilution under 15 U.S.C. § 1125(c).

What does Dilution by blurring means?


Dilution by blurring is “an association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark.”

It “occurs when a substantial percentage of consumers, on seeing the junior party’s mark on its goods, are immediately reminded of the famous mark and associate the junior party’s mark with the owner of the famous mark, even if they do not believe that the goods emanate from the famous marks’ owner.” N.Y. Yankees P’ship, 114 USPQ2d at 1509.

To consider whether the applicant’s use of its mark will likely cause dilution by blurring, this office considered:

  • Degree of similarity between applicant’s mark and opposer’s famous mark
  • Degree of inherent or acquired distinctiveness of Opposer’s mark
  • Extent to which opposer is engaging in the substantially exclusive use of its mark
  • Degree of recognition of opposer’s mark
  • Whether the applicant intended to create an association with opposer’s SPOTIFY mark
  • Any actual association between applicant’s mark and opposer’s mark

In the present case, the marks were strikingly similar and in fact, they share the letters P-O-T-I-F-Y with that being the entirety of the applicant’s standard character mark and the literal element of its other mark.

Even if the office presumes that Opposer’s mark will be perceived as a reference to the word “spot”, and that applicants will be perceived as a reference to the word “pot”, because the marks are so similar in appearance and sound, the marks will engender similar commercial impressions.

Findings

  • It was found that the marks were highly similar in their entireties, and that applicant’s mark will “trigger consumers to conjure up” opposer’s famous mark, and this weighs in favour of finding dilution by blurring.
  • Opposer’s mark is highly distinctive
  • Opposer’s use of SPOTIFY is substantially exclusive
  • SPOTIFY mark is widely recognised in the United States
  • Applicant apparently intended to create an association with Opposer’s SPOTIFY mark

Since the marks are so similar in how they look and sound and in their structure, cadence and essential nature, the applicant’s mark will cause consumers to “conjure up” the opposer’s famous mark and associate the two.

although we need only find likely dilution, we find it inevitable that POTIFY will diminish [SPOTIFY’s] distinctiveness

Decision

Registration of applicant’s mark in both ‘717 and ‘185 Application was refused in view of the above. [Spotify AB v. U.S. Software Inc., Opposition Nos. 91243297 and 91248487, mailed on 10-1-2022]

Case BriefsHigh Courts

Delhi High Court: While addressing a trademark dispute between Rooh Afza and Dil Afza manufacturers, Asha Menon, J., expressed that, buying a bottle of sharbat may involve emotions, but not deep to the extent hoped for by the plaintiffs’ counsel (Rooh Afza manufacturers).

Factual Background

Plaintiff 1 is Hamdard National Foundation (India) and plaintiff 2 is Hamdard Dawakhana also trading as Hamdard Laboratories (India) which is a business held in trust, earlier trading as Hamdard Dawakhana. The Plaintiffs are engaged in the business of manufacturing and selling inter alia, Unani and Ayurvedic medicines, oils, syrups and non-alcoholic beverages for over 100 years.

Defendant company since the year 1949, was engaged in the business of manufacturing Unani medicines, syrups and botanical products.

Why was the present matter filed?

Present matter was filed on the ground that the defendant was not only infringing the well-known trademark of the plaintiffs in ‘Hamdard’ and ‘Rooh Afza’ but was also passing off its products as those of the plaintiffs by using the name ‘Dil Afza’.

The plaintiffs claimed that they had acquired immense reputation and goodwill in relation to ‘Rooh Afza’.

Further, it was claimed that the word ‘Rooh Afza’ was used in several products of the plaintiffs. The product/sharbat of the plaintiffs sold under the trademark ‘Rooh Afza’ in bottles, has a unique combination, layout, get-up and arrangement of features, particularly, a unique and distinct floral arrangement.

In March, 2020 plaintiffs came to know that the defendant had issued an advertisement launching its syrup/sharbat, bearing the mark ‘Dil Afza’ in deceptively similar ringlet bottles as that of the ‘Rooh Afza’ bottle.

The defendant had with mala fide intention, also adopted a deceptively similar mark, unique get-up, and design for its product. An application for registration of the mark ‘Sharbat Dil Afza’ in the name of the defendant seemed to have been filed on 10th June, 2018 on the basis of ‘proposed to be used’. Another application was filed on 4th July, 2018, claiming ‘user’ since 1949.

The plaintiffs claimed that it was due to oversight that the above application could not be opposed by the plaintiffs and therefore, the defendant had been granted registrations in respect of the mark ‘Sharbat Dil Afza’.

Analysis and Discussion

High Court noted that the mark of the plaintiffs and the mark of the defendant were both registered.

Under Section 28 of the Trade Marks Act, 1999, a validly registered trademark gives to the registered proprietor the exclusive right to use that trademark, except that where two persons are registered proprietors of trademarks that are identical or nearly resemble each other, their exclusive right to use any of those trademarks cannot be enforced against each other.

Whether this Court issue any directions under Section 124(5) of the Trade Marks Act, 1999?

Whether the use of defendant’s trademark for similar products would result in confusion?

Court denied accepting the contention of the defendant’s counsel that the trademark of the plaintiffs namely ‘Rooh Afza’ was not a well-known mark, cannot be accepted in view of the observations of the Lahore High Court in Unani Dawakhana v. Hamdard, 1930 SCC OnLine Lah 300.

On a prima facie view, the plaintiffs’ claim of having built a vast reputation and goodwill in respect of their trademark ‘Rooh Afza’, cannot be rejected.

Determination of Confusion

The standard to be adopted while determining confusion arising in the mind is of a consumer of imperfect memory or recollection and of ordinary sensibilities. It would be taking an extreme position, even if the consumers were connoisseurs, to believe that the use of the word ‘Rooh’ and ‘Dil’ would cause confusion because they connote deep emotion.

Buying a bottle of sharbat may involve emotions, but not deep to the extent hoped for by the learned counsel for the plaintiffs. In any case, those who appreciate this deep emotion would be the first to be able to distinguish between ‘Rooh’ and ‘Dil’.

In Court’s opinion there cannot be any confusion with regard to the use of words, ‘Dil’ and ‘Rooh’ as they do not denote the same thing.

Word ‘Afza’

Bench referred to the decision of this Court in Cadila Laboratories Ltd. v. Dabur India Ltd., 1997 SCC OnLine Del 360 and Vardhman Buildtech Pvt. Ltd. v. Vardhman Properties Ltd.2016 SCC OnLine Del 4738

Plaintiffs in the present matter do not state that they had applied for and obtained registration for the exclusive use of the word ‘Afza’. Hence it was clear that the exclusivity that the plaintiffs can claim is to the complete name ‘Rooh Afza’ and not to either of the two words that constitute the trademark.

The Court opined that, while ‘Rooh Afza’, that is the complete word, may have acquired a secondary meaning, indicative of sharbat produced by the plaintiffs, ‘Afza’ by itself does not appear to be of that category.

Whether the simultaneous use of ‘Dil Afza’ would prejudice the plaintiffs’ business?

In Class-5, relating to Unani/Ayurvedic medicines, the defendant had been using ‘Dil Afza’. Even if it is considered to have been in the market only since 1976, even then, for such a long time in the field of a more sensitive market of medicine, apparently, there has been peaceful co-existence with no confusion arising in the minds of the consumers.

Even if the sharbat has been produced only since 2020, no case has been made out to restrain the defendant from marketing its sharbat under the name ‘Dil Afza’.

 Decision

In view of the above discussion, the application was dismissed with a direction to the defendant to maintain a true account of sales of ‘Dil Afza’ syrup/sharbat during the pendency of the present suit and to submit to the court, a quarterly report and account, till the disposal of the suit.

High Court in light of Section 124(1)(b)(i) of the Trade Marks Act, 1999, the suit is stayed pending the final disposal of the rectification application filed by the plaintiffs. Conclusion of those proceedings, either side may move an application for listing of the suit before the court. [Hamdard National Foundation (India), Sadar Laboratories (P) Ltd., 2022 SCC OnLine Del 39, decided on 6-1-2022]


Advocates before the Court:

For the Plaintiffs:

S.P. Singh and Sunil Mishra, Advocates

For the Defendant:

N.K. Kantawala and Prakhar Sharma, Advocates