Acquiescence requires positive acts, not mere delay
Introduction:
In the bustling world of commerce, where brands battle for supremacy, the case of Abdul Rasul Nurallah Virjee and Another vs. Regal Footwear stands as a testament to the fierce protection of intellectual property rights. Decided on January 2, 2023, by the Bombay High Court, this legal skirmish revolves around the trademark "REGAL," a name synonymous with footwear for over half a century. The plaintiffs, claiming proprietorship since 1954, sought to restrain the defendant from using an identical mark, alleging infringement and passing off. The defendant countered with claims of prior use since 1963 and defenses of honest concurrent use and acquiescence. This case study delves into the intricate details of this trademark dispute, unraveling the factual tapestry, procedural journey, legal issues, arguments, judicial reasoning, and the final verdict that shaped the outcome.
Detailed Factual Background:
The plaintiffs, Abdul Rasul Nurallah Virjee and Jalalluddin Nurallah Virjee, asserted their lineage to the "REGAL" trademark, tracing its use back to 1954 through their predecessor, M/s. Regal Footwear. They secured registration under the Trade Marks Act, 1999, with Registration No. 284961 in Class 25 for footwear (dated December 27, 1972) and Registration No. 1278782 in Class 42 for retailing services (dated April 15, 2004), both claiming use since 1954. Their business spanned manufacturing, distribution, and retail across India and exports to countries like the USA, Italy, and UAE, boasting sales of Rs. 425.54 crore from 1954 to 2017 and advertisement expenses of Rs. 7.88 crore. Evidence included sales invoices, income tax assessments, and advertisements from 1955 onwards, showcasing a robust commercial presence.
The defendant, Regal Footwear, a partnership firm based in Pune, claimed adoption of the "REGAL" mark on April 21, 1963, by its founder, Habib Dharmashi Shivani. Operating from 26, M.G. Road, Pune, since 1963, the defendant relied on a leave and license agreement from 1961, a shop license from 1963, and subsequent renewals to assert continuous use. A fire in 1999 allegedly destroyed early records, but the defendant produced post-1999 documents, including sales figures from 2005-2017 and a 2010 advertisement, to support its claim. The defendant expanded with new outlets in 2017 and 2018, prompting the plaintiffs’ legal action.
Tensions escalated when the plaintiffs opposed the defendant’s 2006 trademark application (No. 1422577) in 2008, which was rejected by the Trade Marks Registry in 2020, affirming the plaintiffs’ prior use. Consumer complaints in 2019 about product quality from the defendant’s stores, mistaken as the plaintiffs’, further fueled the dispute.
Detailed Procedural Background
The legal saga began with the plaintiffs filing Commercial IPR Suit No. 630 of 2017 in the Bombay High Court’s Commercial Division, accompanied by Notice of Motion No. 516 of 2017, seeking an interim injunction against the defendant’s use of "REGAL." An ad-interim order on July 24, 2017, directed the defendant to file a reply, with no immediate relief granted, and the defendant agreed not to claim equities from new shops. The plaintiffs’ appeal (Commercial Appeal (L) No. 54 of 2017) was dismissed, maintaining the status quo.
A second Notice of Motion (No. 1841 of 2018) addressed the defendant’s third shop opening, with the court allowing it on September 4, 2018, without equity claims, requiring four weeks’ notice for further expansions. The notices were heard together, with judgment reserved on August 30, 2022, and pronounced on January 2, 2023, by Justice R.I. Chagla.
Issues Involved in the Case
The case hinged on several pivotal issues: whether the defendant infringed the plaintiffs’ registered "REGAL" trademark; whether the defendant’s use constituted passing off; whether the defendant could claim prior continuous use under Section 34 of the Trade Marks Act, 1999; whether honest concurrent use was a valid defense to infringement; whether the plaintiffs acquiesced to the defendant’s use; and whether the plaintiffs’ alleged suppression of facts disentitled them to relief.
Detailed Submission of Parties
The plaintiffs, argued that their registered trademarks (Nos. 284961 and 1278782) with use since 1954 granted them exclusive rights. They presented extensive evidence—advertisements from 1955, income tax orders from 1956-1998, and invoices—to prove continuous use and goodwill. Kadam asserted that the defendant’s identical mark on identical goods/services infringed their rights under Section 29, with no statutory challenge to their registrations. He dismissed the defendant’s Section 34 defense, noting their 1963 use postdated 1954, and argued that honest concurrent use was not a defense under the 1999 Act, citing KEI Industries Ltd. v. Raman Kwatra and Hindustan Pencils Pvt. Ltd. v. India Stationary Products. On acquiescence, he relied on Power Control Appliances v. Sumeet Machines and Torrent Pharmaceuticals v. Wockhardt Pharma, requiring positive acts, not mere delay, which the plaintiffs negated by opposing the defendant’s 2008 application.
The defendantcountered that the plaintiffs suppressed knowledge of the defendant’s use since 1984 and 2004, citing nearby shops and a 1984 cease-and-desist notice, rendering their 2008 awareness claim false. They claimed prior use since 1963, supported by a 1963 license, tax records, and photographs, attributing gaps to the 1999 fire. Saraf argued honest concurrent use and acquiescence, citing Essel Propack v. Essel Kitchenware and Unichem Laboratories v. Eris Lifesciences, asserting the plaintiffs’ inaction for decades implied consent. He challenged the plaintiffs’ goodwill and confusion evidence as fabricated, urging denial of interim relief due to disputed facts requiring trial.
Detailed Discussion on Judgments Along with Their Complete Citation Cited by Parties and Their Respective Context Referred in This Case
The plaintiffs cited Kamat Hotels (India) Ltd. v. Royal Orchid Hotels (2011 BOM CR 416) to argue that Section 34 requires continuous use predating the plaintiff’s use or registration, which the defendant failed to prove. Consolidated Foods Corporation v. Brandon and Co. (1961 (66) BOM L.R. 320) supported their claim of superior title via prior adoption. Satyam Infoway v. Siffynet Solutions Pvt. Ltd. (2004 6 SCC 145) reinforced this principle. KEI Industries Ltd. v. Raman Kwatra (Del HC CS (COMM) 9/2021) and Hindustan Pencils Pvt. Ltd. v. India Stationary Products (AIR 1990 Del 19) negated honest concurrent use as a defense, a stance echoed in Cadila Pharmaceuticals Ltd. v. Sami Khatib (2011 (47) PTC 69 (Bom) (DB)), Winthrop Products Inc. v. Eupharma Laboratories (1998 (18) PTC 213), and Kirloskar Diesel Recon Pvt. Ltd. v. Kirloskar Proprietary Ltd. (1997 17 PTC 469). Power Control Appliances v. Sumeet Machines (1994 2 SCC 448) and Torrent Pharmaceuticals v. Wockhardt Pharma (Comm Appeal No. 125 of 2017, Bombay HC, dated November 17, 2017) clarified acquiescence requires positive acts, upheld by Wockhardt Ltd. v. Torrent Pharmaceuticals Ltd. ((2018) 18 SCC 346). Schering Corp. v. Kilitch Co. (1994 IPLR 1) and Midas Hygiene v. Sudhir Bhatia (2004 3 SCC 90) dismissed delay as a defense, while Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd. (2001 5 SCC 73) applied the comparable strength test.
The defendant relied on Brihan Karan Sugar Syndicate Pvt. Ltd. v. Karma Veer Shankarrao Kale Shahakari Sakhar Karkhana Ltd. (2018 (3) MH.L.J. 746) and Essel Propack v. Essel Kitchenware ((2016) 3 BCR 466) to argue suppression disentitled relief. Shri Gopal Engineering and Chemical Works v. Promx Laboratory (DRJ 1992 (22)) and Warner Bros Entertainment Ltd. v. Harinder Kohli (ILR 2009 I DEL 722) supported this. Yonex Kabushiki Kaisha v. Philips International ((2007) 35 PTC 345) backed acquiescence via delay, though later questioned. Gujarat Bottling Co. v. Coca-Cola Co. ((1995) 5 SCC 545) and Wander Ltd. v. Antox India P. Ltd. ((1990) Supp SCC 727) balanced interim relief considerations.
Detailed Reasoning and Analysis of Judge
The court meticulously dissected the case. The court first addressed the defendant’s suppression claim, finding the plaintiffs’ 2008 knowledge assertion contextual to the trademark application, not absolute ignorance, and deemed pre-2008 knowledge (e.g., 2006) immaterial given the 2017 suit filing, citing Midas Hygiene. The 1984 shop claim was dismissed due to lack of evidence and the partner’s 1976 retirement, negating imputed knowledge.
On prior use, the court found the plaintiffs’ 1954 use substantiated by advertisements, signed tax orders, and invoices, outweighing the defendant’s 1963 claim, supported only by a license and sparse records, undermined by the fire excuse and selective pre-1999 evidence. Section 34 required pre-1954 use, which the defendant failed to prove, per Kamat Hotels.
Honest concurrent use was rejected as a defense, aligning with KEI Industries and Hindustan Pencils, noting Section 12’s limited scope and the defendant’s implausible 1963 adoption story, contradicted by the license agreement and lacking firsthand evidence. Commercial dishonesty was inferred from the defendant’s use of the ® symbol and similar font post-2008 opposition.
Acquiescence failed the Power Control test, requiring positive acts, not mere delay, reinforced by Torrent Pharmaceuticals. The 2008 opposition was a negative act, and no encouraging conduct was shown. The defendant’s reliance on Essel Propack was overruled by Torrent.
Infringement and passing off were upheld due to identical marks, the plaintiffs’ prior use, goodwill, and consumer confusion evidence. The comparable strength test (Cadila Health Care) favored the plaintiffs, with irreparable harm outweighing the defendant’s loss, mitigated by its post-suit expansions on a no-equity basis.
Final Decision
The court granted the interim injunction in Notice of Motion No. 516 of 2017, restraining the defendant from using "REGAL" in footwear trade or retail, making it absolute in terms of prayer clauses (a) and (b). Notice of Motion No. 1841 of 2018 was disposed of as redundant. A four-week stay was granted, acknowledging the defendant’s long operation.
Law Settled in This Case
This case reaffirmed that prior use and registration confer superior trademark rights under Section 34, honest concurrent use is not a defense to infringement under the 1999 Act, and acquiescence requires positive acts, not mere delay, per Power Control and Torrent Pharmaceuticals. Suppression claims must materially affect the case to bar relief, and the comparable strength test guides interim relief.
Case Title: Abdul Rasul Nurallah Virjee Vs. Regal FootwearDate of Order: January 2, 2023
Case No.: Commercial IPR Suit No. 630 of 2017
Neutral Citation: Name of Court: High Court of Judicature at Bombay
Name of Judge: Justice R.I. Chagla
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Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
