Arpita Agro Products Pvt. Ltd. Vs. ITC Limited: Courts will apply a stricter test when infringer was previous owner of the mark.
Case Title: Arpita Agro Products Pvt. Ltd. & Ors. Vs. ITC Limited
Date of Order: February 21, 2025
Case No.: FAO (OS) (COMM) 289/2024
Neutral Citation: 2025:DHC:1097-DB
Court: High Court of Delhi
Judge: Hon'ble Mr. Justice Navin Chawla, Hon'ble Ms. Justice Shalinder Kaur
Introduction:
The case concerns a dispute between ITC Limited and Arpita Agro Products Pvt. Ltd. regarding the alleged infringement and passing off of ITC's trademarks, primarily 'NIMYLE' and 'JOR-POWR'. ITC claimed that Arpita Agro's use of the mark 'POWRNYM' for a similar product was deceptive and misleading. The High Court of Delhi granted an injunction in favor of ITC, restraining Arpita Agro from using the impugned mark.
Detailed Factual Background:
ITC Limited acquired ownership of several trademarks, including 'NIMYLE' and 'JOR-POWR', through an Asset Purchase Agreement and a Brand Assignment Agreement executed in April 2018. These agreements transferred all intellectual property rights, including goodwill, copyright, and brand-related assets from Arpita Agro to ITC for a consideration of over INR 100 crores. Post-assignment, ITC extensively marketed and promoted these trademarks, making them household names in the herbal floor cleaner segment.
In 2023, ITC discovered that Arpita Agro had started selling a floor cleaner under the brand name 'POWRNYM' in a bottle similar to ITC’s 'NIMYLE'. ITC alleged that the appellants deliberately combined elements from both 'NIMYLE' and 'JOR-POWR' to create a deceptively similar mark, intending to capitalize on ITC’s brand reputation. ITC filed a suit seeking an injunction against the use of 'POWRNYM', claiming infringement and passing off.
Detailed Procedural Background:
ITC filed a suit before the Single Judge of the Delhi High Court, which granted an ad-interim ex-parte injunction restraining Arpita Agro from using 'POWRNYM' or any mark deceptively similar to 'NIMYLE' or 'JOR-POWR'. Arpita Agro challenged this order by filing an appeal under the Commercial Courts Act, arguing that 'POWRNYM' was distinct and that the non-compete clause in the agreement had expired. The Single Judge dismissed their application, leading to the present appeal before the Division Bench.
Issues Involved in the Case
Whether 'POWRNYM' was deceptively similar to ITC’s trademarks 'NIMYLE' and 'JOR-POWR'? Whether the use of 'POWRNYM' constituted trademark infringement under Section 29 of the Trade Marks Act, 1999?
Detailed Submissions of the Parties:
Arpita Agro argued that:'POWRNYM' was a distinct mark and not deceptively similar to 'NIMYLE' or 'JOR-POWR'.The word 'NIM' was commonly used in trademarks and was not exclusive to ITC.ITC had not objected to their trademark application published in 2021, implying acquiescence.The non-compete clause in the Asset Purchase Agreement had expired, allowing them to compete freely.
ITC contended that:The appellants, having assigned the trademarks to ITC for significant consideration, had no right to adopt a similar mark.'POWRNYM' was deliberately coined by combining elements from 'NIMYLE' and 'JOR-POWR' to deceive consumers.The trade dress and packaging of 'POWRNYM' were also strikingly similar, increasing the likelihood of confusion.The delay in filing the suit was due to their recent discovery of the infringing use.
Detailed Discussion on Judgments Cited:
Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd., (2001) 5 SCC 73 Established the test for deceptive similarity and held that phonetic, visual, and structural similarity should be assessed holistically.The court applied this test and found 'POWRNYM' to be deceptively similar to ITC’s marks.
Wander Ltd. v. Antox India P. Ltd., 1990 (Supp) SCC 727:Emphasized that appellate courts should not interfere with interim injunctions unless they are perverse or arbitrary.The High Court ruled that the Single Judge’s order was reasonable and did not warrant interference.
Kirorimal Kashiram Marketing v. Shree Sita Chawal Udyog Mill, 2010 SCC OnLine Del 2933:Held that copying the dominant part of a mark constitutes infringement. The court noted that Arpita Agro had copied key elements of ITC’s trademarks, leading to a finding of infringement.
South India Beverages Pvt. Ltd. v. General Mills Marketing Inc., 2014 SCC OnLine Del 1953:Discussed the importance of the dominant feature of a trademark in determining infringement. The court found that 'POWRNYM' incorporated dominant features of ITC’s marks, leading to consumer confusion.
Detailed Reasoning and Analysis of the Judge:The High Court observed that Arpita Agro had assigned all rights, goodwill, and associated intellectual property in 'NIMYLE' and 'JOR-POWR' to ITC in 2018, making them the rightful owner. The court held that Arpita Agro’s adoption of 'POWRNYM' was not an independent creation but a deliberate attempt to exploit ITC’s goodwill.The court further ruled that Arpita Agro’s defense regarding the expiration of the non-compete clause was irrelevant to the issue of trademark infringement. It emphasized that even if the agreement allowed competition, it did not permit the use of deceptively similar marks.The court dismissed the argument of delay, stating that ITC acted promptly upon discovering the infringing use. It also noted that the sale of 'POWRNYM' in similar bottles with nearly identical trade dress strengthened ITC’s case.
Final Decision:
The High Court upheld the Single Judge’s order, confirming the injunction against Arpita Agro. It ruled that the use of 'POWRNYM' constituted both infringement and passing off, as it was deceptively similar to ITC’s marks and likely to confuse consumers. The appeal was dismissed.
Key Legal Principles Established:A mark that incorporates dominant features of a registered trademark can be deemed deceptively similar and infringing. Assignment of a trademark includes an obligation not to adopt similar or derivative marks.The expiration of a non-compete clause does not permit trademark infringement or passing off. Delay in filing a suit does not bar relief if the infringement was discovered recently. Courts will apply a stricter test when the alleged infringer was the previous owner of the mark.This case reaffirms strong trademark protection principles and the importance of safeguarding acquired goodwill against deceptive market practices.
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
