Atlas Cycle Industries Ltd. Vs Hind Cycles Limited

Atlas Cycle Industries Ltd. Vs Hind Cycles Limited:Proof of actual deception is unnecessary in an infringement claim; likelihood of confusion is sufficient

Case Title: Atlas Cycle Industries Ltd. vs Hind Cycles Limited

Date of Order:April 28, 1972

Case No.:Regular First Appeal No. 18 of 1959

Citation:ILR 1973 Delhi 393

Name of Court:Delhi High Court

Name of Judge:Justice T.V.R. Tatachari

Introduction:

The case revolves around a trademark dispute between Atlas Cycle Industries Ltd. and Hind Cycles Limited concerning the use of the word STAR in their respective trademarks. Atlas Cycle, which had acquired the registered trademark EASTERN STAR, alleged that Hind Cycles' use of the trademark ROYAL STAR amounted to infringement and passing off. The case provides an important precedent on the principles of deceptive similarity, consumer perception, and the protection of prior trademark rights.

Factual Background:

Atlas Cycle Industries Ltd. was incorporated in 1950 and acquired rights over the trademark EASTERN STAR from its predecessor Janki Dass & Co., which had been importing bicycles into India under this mark since 1938. Janki Dass & Co. had secured registration for both the monogram and the word mark EASTERN STAR in 1943. Upon Atlas’s incorporation, all rights to these trademarks were assigned to it, and the company continued using the marks extensively.

By 1956, Atlas had achieved significant sales, manufacturing approximately one lakh bicycles per year. Due to the popularity of EASTERN STAR bicycles, customers began referring to them as STAR CYCLES. Various parties attempted to use similar marks like BLUE STAR, ROYAL STAR, STAR BICYCLE, ARABIAN STAR, and WESTERN STAR, against whom Atlas successfully obtained injunctions.

In 1959, Atlas learned that Hind Cycles was using ROYAL STAR for its bicycles and had applied for its registration under Application No. 177777. Atlas filed an opposition before the Trade Marks Registry, Bombay, and subsequently initiated a suit against Hind Cycles, seeking an injunction against the use of ROYAL STAR, cancellation of its application, damages, and delivery of infringing goods.

Procedural Background:

The case was first heard by the District Judge, Delhi, who dismissed Atlas’s suit on November 27, 1961. The trial court ruled that ROYAL STAR was not deceptively similar to EASTERN STAR and that Atlas had failed to prove actual consumer deception. The trial court also observed that Atlas could not claim exclusive rights over the word STAR alone, as its trademark was a combination of EASTERN and STAR.

Atlas challenged this decision in the Delhi High Court by filing Regular First Appeal No. 18 of 1959.

Issues Involved in the Case:

Whether Atlas Cycle Industries Ltd. was the proprietor of the registered trademarks EASTERN STAR and its monogram.

Whether Hind Cycles' use of the trademark ROYAL STAR constituted an infringement of Atlas's registered trademark.

Whether Hind Cycles had passed off its goods as those of Atlas Cycle Industries Ltd.

Whether Atlas was entitled to an injunction, damages, and cancellation of Hind Cycles’ trademark application.

Submission of Parties:

Atlas argued that the use of ROYAL STAR was deceptively similar to EASTERN STAR, especially since consumers already referred to EASTERN STAR bicycles as STAR CYCLES. The phonetic and structural similarities between the two marks were likely to confuse consumers. Atlas also emphasized that its extensive prior use gave it exclusive rights over the word STAR in the context of bicycles.

Hind Cycles contended that EASTERN STAR and ROYAL STAR were distinct, as the words EASTERN and ROYAL created clear differentiation. It argued that Atlas could not monopolize the word STAR, which was common in the trade and used by multiple manufacturers. Hind Cycles also pointed out that the trial court correctly held that no actual confusion had been proven.

Discussion on Judgments Cited and Their Context:

The court referred to several landmark cases on trademark infringement and passing off.

Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories, AIR 1965 SC 980 – The Supreme Court distinguished between infringement and passing off, holding that in an infringement action, it is enough to show similarity between the marks; proof of actual deception is unnecessary. This principle was applied in the present case.

Amritdhara Pharmacy v. Satya Deo Gupta, AIR 1963 SC 449 – This case emphasized that in determining deceptive similarity, the perception of an average consumer with imperfect recollection is crucial. The Delhi High Court applied this principle to assess whether ROYAL STAR was likely to confuse consumers who recognized EASTERN STAR bicycles as STAR CYCLES.

Coca-Cola Company of Canada Ltd. v. Pepsi-Cola Company of Canada Ltd., AIR 1942 PC 402 – This case discussed phonetic similarity in trademarks. The Delhi High Court referred to it while analyzing the structural and phonetic resemblance between EASTERN STAR and ROYAL STAR.

Modi Sugar Mills Ltd. v. Tata Oil Mills Co. Ltd., AIR 1943 Lahore 196 – This case established that the test for confusion is whether an ordinary purchaser exercising ordinary caution would likely be deceived. The Delhi High Court applied this test in evaluating the likelihood of confusion.

James Chadwick & Bros. Ltd. v. National Sewing Thread Co. Ltd., AIR 1951 Bom 147 – The Bombay High Court held that the essential feature of a trademark must be considered when assessing deceptive similarity. The Delhi High Court adopted this reasoning to conclude that STAR was the dominant feature in both marks.

Reasoning and Analysis of Judge:

The High Court overturned the trial court’s ruling, emphasizing that the words EASTERN STAR and ROYAL STAR must be considered in their entirety. However, the presence of STAR as a common dominant feature created a likelihood of confusion.

The court observed that an average consumer with imperfect recollection was likely to associate ROYAL STAR with EASTERN STAR, particularly given that EASTERN STAR bicycles were already recognized as STAR CYCLES. The phonetic similarity of both marks ending in STAR increased the potential for deception.

The High Court also considered the commercial reality that Atlas had built a reputation over two decades, during which no other cycle manufacturer had used a STAR mark until Hind Cycles introduced ROYAL STAR. This reinforced the likelihood that consumers would assume a connection between the two brands.

The court further rejected Hind Cycles' argument that STAR was common in the trade, noting that Atlas had taken successful legal action against other parties attempting to use similar marks.

Final Decision:

The High Court allowed the appeal and set aside the trial court’s decision. It granted a permanent injunction restraining Hind Cycles from using ROYAL STAR for bicycles and from proceeding with its trademark application. Atlas was also awarded costs.

Law Settled in This Case:

The dominant feature of a trademark plays a crucial role in determining deceptive similarity.

Phonetic and structural resemblance between marks must be assessed from the perspective of an average consumer with imperfect recollection.

Prior use and consumer association with a trademark strengthen the case for infringement.

The presence of a common element in trademarks (such as STAR) does not necessarily dilute exclusivity if one party has established prior and extensive use.

Proof of actual deception is unnecessary in an infringement claim; likelihood of confusion is sufficient.

Trademark protection extends to how a mark is perceived in the market, including informal references by consumers.

This case remains a significant precedent in Indian trademark law, reinforcing the principles of deceptive similarity and consumer perception in infringement disputes.

Disclaimer:The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation. 

Written By: Advocate Ajay Amitabh Suman,IP Adjutor [Patent and Trademark Attorney] ,High Court of Delhi