Introduction:The case of Fullstack Education Pvt Ltd versus Institut Europeen D Administration Des Affaires (INSEAD) Association & Anr. exemplifies the tensions that arise when two entities hold seemingly similar trademarks for related services, leading to disputes over rectification under the Trade Marks Act, 1999.
This appeal before the Division Bench of the Delhi High Court challenged a Single Judge's decision to rectify the trademark register by removing the appellant's mark based on phonetic similarity and potential confusion. The core issue revolved around whether a rectification petition under Section 57 of the Act could be decided on a "prima facie" basis or required a final, conclusive determination.
The judgment underscores the procedural rigor demanded in rectification proceedings, distinguishing them from interim relief applications, and highlights the enduring relevance of classical trademark infringement tests in modern disputes involving educational institutions specializing in artificial intelligence and business administration.
By setting aside the impugned order and remitting the matter for fresh consideration, the court reinforced the need for definitive findings in matters that could irrevocably alter trademark rights, while also addressing broader implications for honest adoption and consumer deception in a globalized educational market.
Factual Background:The dispute originated from the registration of trademarks by two educational entities offering services in higher education, particularly involving artificial intelligence and data science. The respondent, Institut Europeen D Administration Des Affaires (INSEAD) Association, a renowned international business school, held the registered trademark "INSEAD," which stands for its full name and is associated with providing executive education and business programs worldwide.
On the other hand, the appellant, Fullstack Education Pvt Ltd, operated under the mark "INSAID," representing "International School of AI and Data Science," and offered similar services in AI-focused higher education. Both marks were undisputedly registered under the Trade Marks Act, 1999, but the respondent alleged that the appellant's mark created a manifest phonetic similarity, potentially leading to consumer confusion among students seeking admissions.
The respondent contended that the appellant's adoption of "INSAID" was dishonest, pointing to evidence that the appellant's CEO, Mr. Manvender Singh, was aware of INSEAD's reputation prior to adopting the similar acronym. This awareness was inferred from materials such as interviews and website content where the CEO referenced INSEAD, suggesting that the choice of "INSAID" was not coincidental but deliberate, occurring later in time than INSEAD's established use.
The competing marks visually differed in styling—"INSEAD" featured a circular logo with the tagline "The Business School for the World," while "INSAID" had a colorful design emphasizing AI and data science—but the auditory resemblance formed the crux of the conflict, with arguments centering on how terms like "-ead" and "-aid" could be pronounced similarly, akin to words like "dead" and "said." This factual matrix set the stage for a rectification petition invoking Section 11 of the Act, which prohibits registration of marks likely to cause confusion due to similarity with existing marks.
Procedural Background:The procedural journey began when the respondent filed a petition under Section 57 of the Trade Marks Act, 1999, seeking rectification of the trademark register by removing the appellant's "INSAID" mark. This petition was heard by a Single Judge of the Delhi High Court, who, after considering arguments on phonetic similarity and likelihood of confusion, allowed the petition via a judgment dated 17 May 2023. During the Single Judge proceedings, the respondent emphasized initial interest confusion among educated consumers like students, while the appellant countered that the targeted audience's sophistication precluded any real deception and invoked tests from landmark cases like Pianotist Co.'s Application.
The Single Judge reserved orders on an interim relief application under Order XXXIX Rules 1 and 2 of the Civil Procedure Code on 10 September 2021, but the matter was reopened on 12 January 2023 after a significant lapse, leading to the final impugned judgment. Aggrieved by this, the appellant filed Letters Patent Appeal (LPA) No. 536/2023 before the Division Bench, along with applications for stay and additional facts.
The appeal was argued on grounds that the Single Judge erred in applying Section 11 without fully evaluating classical infringement principles and, crucially, decided the rectification petition on a prima facie basis rather than through a conclusive determination.
The Division Bench heard submissions from both sides, with the appellant's counsel detailing flaws in the confusion analysis and the respondent's counsel urging expeditious disposal given the petition's pendency since 2021. The court ultimately allowed the appeal on 30 October 2023, setting aside the Single Judge's order and remitting the matter for fresh adjudication, while requesting fast-tracking subject to court priorities.
Reasoning and Decision of Court:The Division Bench's reasoning pivoted on a critical procedural distinction between interim relief and final rectification under Section 57 of the Act. While acknowledging the Single Judge's analysis of phonetic similarity—observing that "INSEAD" and "INSAID" shared auditory traits that could invoke initial interest confusion, especially in educational services—the court noted that these conclusions were repeatedly qualified as "prima facie." For instance, the Single Judge held that phonetic similarity existed based on examples like "dead" and "said," and that even enlightened students might experience momentary wonderment upon encountering the marks, satisfying the likelihood of confusion test under Section 11.
Similarly, on dishonest adoption, the Single Judge prima facie rejected honest concurrent use, citing the appellant's CEO's prior knowledge of INSEAD from interviews and materials. However, the Division Bench emphasized that Section 57 empowers courts to cancel or vary registrations with finality, as such orders result in a mark being struck off the register, carrying irreversible consequences.
A prima facie opinion, being tentative and based on preliminary examination, suffices for ad interim injunctions but falls short for rectification petitions, which demand definitive and conclusive findings.
The court rejected the respondent's attempt to downplay the "prima facie" language as mere phrasing, insisting on adhering to the explicit record. Although the appellant raised substantive arguments on infringement tests from Pianotist Co.'s Application, the Bench set aside the judgment on this narrow ground without delving deeply into them, deeming it sufficient for reversal. The decision allowed the appeal, remitted the petition to the Single Judge for fresh consideration with expeditious disposal, kept all contentions open, and disposed of pending applications, thereby ensuring a thorough trial-like evaluation rather than a summary disposal.
Point of Law Settled in the Case:This judgment settles a pivotal point in trademark rectification proceedings: that decisions under Section 57 of the Trade Marks Act, 1999, must be based on final and conclusive determinations rather than prima facie opinions. The court clarified that while prima facie assessments are appropriate for granting interim relief under provisions like Order XXXIX of the Civil Procedure Code, rectification petitions involve exercising a power imbued with finality, as they lead to the permanent removal of a registered mark from the register. Such actions cannot rest on tentative views formed from initial impressions or preliminary examinations of the dispute, as they would undermine the stability and integrity of the trademark system. By drawing this distinction, the ruling reinforces that rectification requires a rigorous, evidence-based conclusion on elements like phonetic similarity, likelihood of confusion, and honest adoption, ensuring that only after a comprehensive evaluation—potentially akin to a trial—can a court direct alterations to the register. This principle protects registered proprietors from hasty cancellations and aligns with the Act's objective of maintaining a reliable public record of trademarks, while also highlighting that procedural lapses, such as conflating interim and final standards, can vitiate even well-reasoned substantive analyses.
Case Title: Fullstack Education Pvt Ltd vs. Institut Europeen D Administration Des Affaires (INSEAD) Association & Anr.
Date of Order: 30 October 2023
Case Number: LPA 536/2023
Name of Court: High Court of Delhi at New Delhi
Name of Hon'ble Judge: Hon'ble Mr. Justice Yashwant Varma and Hon'ble Mr. Justice Ravinder Dudeja
Disclaimer: Readers are advised not to treat this as substitute for legal advise as it may contain errors in perception, interpretation, and presentation
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
Suggested Titles:
Trademark rectification and Prima Facie Finding
"Prima Facie Pitfalls: Delhi High Court's Stance on Finality in Trademark Rectification Proceedings"
"INSEAD vs. INSAID: Unpacking the Requirement for Conclusive Determinations Under Section 57 of the Trade Marks Act"
"Setting Aside Hasty Rectifications: A Deep Dive into Fullstack Education's Successful Appeal"
"Phonetic Similarity and Procedural Rigor: Lessons from the Delhi High Court's Ruling in LPA 536/2023"
"From Prima Facie to Finality: Analyzing the Division Bench's Reversal in the INSAID Trademark Dispute"
Suggested Tags:
Trademark Rectification, Section 57 Trade Marks Act, Phonetic Similarity, Likelihood of Confusion, Prima Facie Opinion, Delhi High Court, INSEAD vs INSAID, Honest Adoption, Educational Trademarks, Intellectual Property Law, Letters Patent Appeal, Final Determination in IP Disputes, Consumer Confusion in AI Education
