The unauthorized adoption of legacy trade marks under the guise of intra-family agreements.
Case Title: Naidu Hall Family Store Vs. Moham Retail Pvt. Ltd.
Date of Order: 6th January 2025
Case Number: C.S (Comm. Div.) No. 325 of 2020
Court: High Court of Judicature at Madras
Presiding Judge: Hon’ble Mr. Justice P. Velmurugan
Introduction: The case of Naidu Hall Family Store v. Moham Retail Pvt. Ltd. represents a compelling intersection of family legacy, trade mark law, and the commercial exploitation of well-established brand identities. The dispute revolves around the use of the trade mark "NAIDU HALL", a name with deep-rooted goodwill in Tamil Nadu’s retail clothing market, and raises crucial questions about ownership rights, alleged infringement, passing off, and the implications of intra-family agreements. The judgment delivered by the Madras High Court provides critical insights into how courts navigate familial trade mark rights and unauthorized commercial usage.
Detailed Factual Background: The trade mark "NAIDU HALL" was founded in 1939 by late Mr. M.G. Naidu, who initially started a blouse-tailoring unit in Chennai. Over decades, the brand evolved into a renowned retail outlet offering a wide range of women's undergarments, clothing, and accessories. The business was later managed by his sons, particularly Mr. G. Venugopal (the plaintiff’s partner) and Mr. Ramaswamy.A family arrangement occurred following Mr. Ramaswamy’s demise in 2001, culminating in a Memorandum of Understanding (MoU) in 2005. The MoU permitted both family branches to use the trade mark while outlining certain restrictions, including a clause prohibiting the transfer of trade mark rights to external entities without mutual consent.The dispute arose when the plaintiff discovered that the defendant, Moham Retail Pvt. Ltd., was using the mark "NAIDUHALL 1939 – A Moham Venture" for selling similar goods—primarily women's intimate apparel—under the purported authority of a business transfer agreement (BTA) with Mr. Arvind Ramaswamy, a family member and legal heir of the original proprietor. Alleging infringement, passing off, and unauthorized use, the plaintiff initiated this legal action.
Detailed Procedural Background:
The plaintiff filed the suit and sought Permanent injunction to restrain the defendant from using the mark "NAIDU HALL" or deceptively similar variations. An order for destruction of infringing materials.The defendant contested the claim, asserting its right to use the mark through a valid BTA with Mr. Arvind Ramaswamy.
Issues Involved in the Case:
1. Was the defendant's use of "NAIDUHALL 1939" an act of trade mark infringement?
2. Was the plaintiff the sole and exclusive proprietor of the "NAIDU HALL" trade mark?
3. Did the plaintiff acquiesce to the defendant's use of the mark?
4. Did the addition of "A Moham Venture" sufficiently distinguish the defendant's mark?
5. Was the suit defective due to non-joinder of a necessary party (Mr. Arvind Ramaswamy)?
6. Was the plaintiff entitled to retail sales under the family MoU?
7. Did the defendant possess legitimate rights through the business transfer agreement?
Detailed Submissions of the Parties:
Plaintiff's Submissions (Naidu Hall Family Store)
1. Longstanding Reputation and Goodwill:The plaintiff asserted that "NAIDU HALL" had been in continuous use since 1939 and had acquired distinctiveness and goodwill across Tamil Nadu. They presented evidence of registered trade marks across multiple classes, including registrations dating back to the 1990s.
2. Unauthorized and Confusing Use:The defendant's mark "NAIDUHALL 1939 – A Moham Venture" was nearly identical to the plaintiff's mark, with minor additions designed to confuse consumers into believing an affiliation existed.
3. Violation of Family MoU:The MoU explicitly prohibited either party from transferring trade mark rights to a third party. The defendant, however, claimed rights through a BTA with Mr. Arvind Ramaswamy, which the plaintiff argued was invalid under the MoU.
4. Absence of Bona Fide Use:The defendant failed to substantiate its claim of substantial investment or present documentary evidence of commercial use predating the plaintiff's objection.
5. Legal Citations:
K.R. Chinna Krishna Chettiar v. Shri Ambal & Co., Madras (1970 AIR 146) – Highlighting the importance of avoiding confusion in trade mark disputes.
Milmet Oftho Industries v. Allergan Inc. (2004) 12 SCC 624 – Emphasizing that global recognition can establish goodwill in a jurisdiction without physical presence.
Defendant's Submissions (Moham Retail Pvt. Ltd.)
1. Legitimate Acquisition of Rights:The defendant claimed that it acquired the rights to the trade mark through a valid business transfer agreement with Mr. Arvind Ramaswamy, a legal heir with historical rights to the trade mark.
2. Distinctive Marking:The addition of the suffix "A Moham Venture" and the "1939" figure sufficiently differentiated the defendant’s mark from the plaintiff’s.
3. Acquiescence and Delay:The plaintiff knew of the defendant’s use in 2019 but delayed filing suit until 2020, allegedly implying consent through inaction.
4. Shared Family Legacy:The defendant argued that the "NAIDU HALL" trade mark was a family asset rather than the exclusive property of the plaintiff, as evidenced by historical documents and the family MoU.
5. Legal Citations: Power Control Appliances v. Sumeet Machines Pvt. Ltd. (1994 Supp (2) SCC 448) – Arguing that acquiescence could defeat a claim of infringement.
Parle Products (P) Ltd. v. J.P. & Co. (AIR 1972 SC 1359) – Citing principles related to trade mark similarity and confusion.
Detailed Judicial Reasoning and Analysis
1. Trade Mark Infringement:The Court emphasized that the core element of both marks was "NAIDU HALL", with the defendant's additions being insufficient to distinguish its goods. Applying Section 29(3) of the Trade Marks Act, 1999, the Court presumed confusion due to the identical nature of the marks and goods involved.
Precedent Cited:Amritdhara Pharmacy v. Satya Deo Gupta (AIR 1963 SC 449) – Even slight variations do not prevent confusion if the dominant mark remains recognizable.
2. Exclusive Proprietorship of the Trade Mark:The Court acknowledged the plaintiff's valid registrations and extensive historical use of the mark. The defendant's reliance on the business transfer agreement was deemed invalid as it contravened the MoU's prohibition on third-party transfers.
Precedent Cited:Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd. (2001) 5 SCC 73 – Stating that established reputation takes precedence in cases of trade mark similarity.
3. Acquiescence:The Court dismissed the defense of acquiescence, noting that the plaintiff had promptly sent a cease-and-desist notice in 2019 and filed the suit soon after pandemic restrictions were lifted. Delay alone, without conduct implying consent, was insufficient.
Precedent Cited:M/S Hindustan Pencils Pvt. Ltd. v. M/S India Stationery Products Co. (AIR 1990 Del 19) – Holding that acquiescence requires more than mere delay.
4. Addition of "A Moham Venture":The Court reiterated that minor additions do not negate the likelihood of confusion when the dominant element remains identical.
5. Non-Joinder of a Necessary Party:The Court held that the presence of Mr. Arvind Ramaswamy was not necessary, as the suit was grounded in trade mark infringement rather than family ownership disputes.
6. Right to Retail Sales:The Court found no evidence that the family MoU restricted the plaintiff’s retail sales activities.
Final Decision:
1. Permanent Injunction:The Court restrained the defendant from using "NAIDUHALL 1939 – A Moham Venture" or any deceptively similar mark.
2. Destruction of Infringing Materials:The defendant was directed to surrender and destroy all goods, packaging, promotional materials, and digital content bearing the infringing mark.
Conclusion:This case reaffirms the legal principle that family arrangements do not supersede statutory trade mark rights, especially when marks are subsequently exploited for commercial gain. It highlights the importance of distinguishing familial goodwill from commercial use and upholds the integrity of trade mark law by preventing misleading uses that could dilute well-established brands. The Madras High Court's decision stands as a clear warning against the unauthorized adoption of legacy trade marks under the guise of intra-family agreements.
Written by: Advocate Ajay Amitabh Suman: Patent and Trademark Attorney:High Court of Delhi
