Consumer confusion, even if indirect, is sufficient to grant an injunction in trademark cases
Introduction:
This case revolves around a legal dispute concerning trademark infringement, passing off, and unfair competition between ITC Limited and Arpita Agro Products Pvt Ltd. The plaintiff, ITC Limited, sought an injunction against the defendants, alleging that their use of the mark "POWRNYM" was deceptively similar to its registered trademarks "NIMYLE" and "JOR-POWR," which were acquired through a series of agreements. The matter was adjudicated by the Delhi High Court, which delivered a significant ruling on October 8, 2024.
Factual Background:
ITC Limited is a major Indian company engaged in various businesses, including fast-moving consumer goods (FMCG). The dispute in this case pertains to ITC’s ownership of the trademarks "NIMYLE" and "JOR-POWR," which it acquired from Arpita Agro Products Pvt Ltd and other defendants through several assignment agreements executed in 2018.
Before the transfer, Arpita Agro Products had been manufacturing and selling herbal floor cleaners under these trademarks. The agreements assigned all rights, including ownership, trade dress, regulatory information, and associated goodwill, to ITC for a consideration of ₹100 crores.
In 2023, ITC discovered that the defendants had started marketing a floor cleaner under the trademark "POWRNYM," which was alleged to be deceptively similar to ITC's trademarks. ITC claimed that the mark "POWRNYM" was derived from "JOR-POWR" and "NIMYLE," making it likely to cause confusion among consumers.
Procedural Background:
On October 5, 2023, ITC approached the Delhi High Court seeking an injunction to restrain the defendants from using the mark "POWRNYM" and any similar packaging, trade dress, or branding. The Court granted an ex-parte ad-interim injunction, preventing the defendants from manufacturing or selling products under the disputed mark.
The defendants subsequently filed an application under Order XXXIX Rule 4 of the Civil Procedure Code, 1908, seeking to vacate the injunction, arguing that their mark was distinct and had been adopted in good faith. The Court heard arguments from both sides before delivering its final ruling.
Issues Involved in the Case:
The case raised several legal issues, including whether the defendants' use of "POWRNYM" infringed upon ITC’s registered trademarks "NIMYLE" and "JOR-POWR."?It also examined whether the defendants' use of similar branding and trade dress misled consumers into associating their products with ITC?
Submissions of Parties:
The plaintiff, ITC Limited, argued that the defendants had knowingly adopted a mark that was a derivative of "NIMYLE" and "JOR-POWR," violating the assignment agreements. ITC asserted that the defendants were previously the owners of the marks and were fully aware of their reputation and goodwill. ITC also pointed out that the defendants’ use of similar trade dress, bottle shape, and labeling further enhanced the likelihood of confusion among consumers. It argued that the defendants had applied for the registration of "POWRNYM" only after the non-compete period expired, which indicated bad faith. ITC relied on legal precedents, including Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd. (2001) 5 SCC 73, Midas Hygiene v. Sudhir Bhatia (2004) 3 SCC 90, Laxmikant Patel v. Chetanbhai Shah (2002) 3 SCC 65, South India Beverages v. General Mills Marketing 2015 (61) PTC 231 (Del)(DB).
The defendants contended that "POWRNYM" was not deceptively similar to "NIMYLE" or "JOR-POWR." They argued that the term "NYM" was used to indicate "NEEM" as a natural ingredient rather than as a reference to "NIMYLE." The defendants claimed that their mark was coined independently and highlighted in advertisements as a "Synonym of Power." They also argued that the non-compete clause had expired in 2022, allowing them to engage in similar business activities. They cited Rhizome Distilleries Pvt Ltd v. Pernod Ricard S.A. France 2009 SCC OnLine Del 3346 to support their case.
Discussion on Judgments Cited:
Several landmark judgments were cited in the case. Kaviraj Pandit Durga Dutt Sharma v. Navaratna Laboratories (AIR 1965 SC 980) established that in cases of trademark infringement, phonetic and structural similarities play a significant role. Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd. was relied upon to assert that even minor variations in a mark do not necessarily prevent consumer confusion. Midas Hygiene v. Sudhir Bhatia emphasized that in cases of clear prima facie infringement, an injunction must be granted without delay. Other cases, such as Amar Singh Chawal v. Shri Vardhman Rice & General Mills and South India Beverages v. General Mills Marketing, reinforced the importance of dominant features in trademark comparison. Greaves Cotton Limited v. Mr. Mohammad Rafi & Ors. illustrated that minor alterations in a mark do not remove the likelihood of confusion.
Reasoning and Analysis of the Judge:
Delhi High Court analyzed the agreements, trademark registrations, and the defendants’ past association with "NIMYLE" and "JOR-POWR." The Court found strong similarity in trademarks, as "POWRNYM" incorporated elements of both "NIMYLE" and "JOR-POWR," making it deceptively similar. The defendants had prior knowledge of the trademarks and their goodwill, demonstrating bad faith in adopting the impugned mark. The similarity in trade dress, bottle shape, and branding could mislead consumers into believing "POWRNYM" was related to ITC’s products. The agreements explicitly prohibited the defendants from registering or using any mark similar to "NIMYLE" or "JOR-POWR," and their actions constituted a breach of these contracts.
Final Decision:
The Delhi High Court ruled in favor of ITC Limited and granted a permanent injunction restraining the defendants from using the mark "POWRNYM" or any other similar mark. The Court also dismissed the defendants’ application to vacate the interim injunction.
Law Settled in this Case:
The Court reaffirmed that the assignment of trademarks includes an obligation not to use or register similar marks. Even expired non-compete clauses do not override specific trademark assignment agreements. Deceptive similarity is assessed holistically, considering phonetic, structural, and visual similarities. Consumer confusion, even if indirect, is sufficient to grant an injunction in trademark cases.
Case Title: ITC Limited Vs Arpita Agro Products Pvt Ltd
Date of Order: October 8, 2024
Case No.: CS(COMM) 698/2023
Neutral Citation: 2024: DHC: 2478
Court: Delhi High Court
Judge: Hon'ble Mr. Justice Saurabh Banerjee
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
