Interplay of Statutory Requirements and Private Agreements in Trademark Infringement Disputes
Facts of the Case
This legal dispute involves several companies and family members from the Munjal business family, centered on the use and ownership of the trademark “HERO” in the manufacturing and marketing of bicycles and related products. The Munjal family business was once unified but diversified over the years into different segments. To manage this complexity and avoid conflicts, the four branches of the Munjal family entered into a Family Settlement Agreement (FSA) and a Trademark and Name Agreement (TMA) in 2010. These agreements clearly divided trademark rights and business domains among the four groups. Specifically, the use of the “HERO” trademark for bicycles was assigned exclusively to one family group (F-4 Family Group), while other groups were allocated different trademark rights related to other products or geographic regions.
Despite these agreements, disputes arose when Hero Ecotech Limited (F-1 Family Group) and associated entities started using the name "HERO ECOTECH" on bicycle products marketed by their group company under the brand name "KROSS." The plaintiffs (Hero Cycles Limited and others, representing the F-4 Family Group) alleged this was in violation of the FSA and TMA, amounts to infringement of the “HERO” trademark in relation to bicycles, and constitutes passing off. The plaintiffs had obtained interim injunctions in earlier proceedings prohibiting the defendants from using the “HERO” mark in bicycle manufacture and sales.
Dispute
The core dispute is whether the defendants violated the injunction and family agreements by using the "HERO ECOTECH" name on bicycle products, which the plaintiffs allege is trademark infringement and amounts to contempt of court. The defendants argued that “HERO ECOTECH LIMITED” was only used as a legal manufacturer’s name on packaging as required by law, not as a trademark or brand. They also contended that the trial court erred in initiating contempt proceedings without following proper procedural requirements, such as instituting a miscellaneous judicial case and permitting evidence.
Legal Provisions Involved
Order XXXIX Rule 2A of the Code of Civil Procedure, 1908 (CPC): Prescribes the procedure and consequences for disobedience of any injunction granted by the court, including attachment of property and imprisonment for contempt.
Section 141 of the CPC: Requires the procedure for miscellaneous proceedings to follow the suit trial procedure as far as possible.
Rule 459 (a) (xii) of the Civil Court Rules of Patna High Court: Requires miscellaneous judicial cases such as those under Order XXXIX Rule 2A to be instituted separately.
Trade Marks Act, 1999: Governs protection of registered trademarks against infringement and passing off.
Legal Metrology Act, 2009 and Legal Metrology (Packaged Commodities) Rules, 2011: Mandates specification of manufacturer’s name and address on product packaging.
Reasoning by the High Court
Procedural Shortcomings: The Court first observed that the trial court had prematurely ordered initiating contempt proceedings without first instituting a separate miscellaneous judicial case as mandated by Rule 459 (a) (xii) of the Civil Court Rules. Further, Section 141 of the CPC requires following suit procedures for evidence and document production in such proceedings, which the trial court bypassed.
Premature Contempt Finding: The court noted that the trial court recorded a prima facie finding of contempt against the defendants before leading evidence or adjudicating the issues, which violates principles of fair play and procedural fairness. The label of “contempt” was inappropriate since the proceedings under Order XXXIX Rule 2A are meant to assess if there has been disobedience or breach of injunction, a question requiring evidence.
Manufacturer’s Name vs. Trademark Use: The defendants’ use of "HERO ECOTECH LIMITED" was challenged by plaintiffs as trademark infringement. However, the Court recognized that stating the manufacturer’s name on packaging is legally mandated and is not usage of a trademark or trade dress. The Court emphasized that private agreements or injunctions cannot override statutory requirements under the Legal Metrology Act.
Interpretation of Family Agreements: The Court observed that neither the Family Settlement Agreement nor the Trademark and Name Agreement explicitly prohibited the defendants from using their corporate or manufacturer names on products or packaging.
Finality of Supreme Court Orders: The defendants had unsuccessfully challenged earlier injunctions in various courts and the Supreme Court had restored injunctions against the defendants from using the “HERO” mark in bicycle manufacturing and sales. However, the matter of whether the defendants used the mark as a trademark or merely stated their corporate name remained open for further inquiry.
Scope of High Court’s Supervisory Jurisdiction: The High Court, exercising its supervisory power under Article 227 of the Constitution, declined to assume appellate functions or enter into merits and fact-finding. It focused solely on legality and procedural propriety of the trial court’s order.
Summary of Legal Authority: The Court referred extensively to Supreme Court precedents clarifying:
The nature of contempt proceedings versus enforcement of injunctions.
Necessity of procedural due process including registration of miscellaneous cases and evidence.
Scope and limitations of Article 227 jurisdiction.
Interpretation of “and may also” in Rule 2A CPC for remedies including attachment and civil imprisonment.
Protection of goodwill and passing off in trademark law.
Legal requirement for manufacturer name display overriding private agreements.
Decision
The High Court held that the trial court’s order dated 07-09-2019 initiating contempt proceedings against the defendants was an erroneous exercise of jurisdiction for the following reasons:
Failure to institute a separate miscellaneous judicial case as per Rule 459 (a) (xii).
Premature recording of contempt finding without evidence and without proper procedure.
Inappropriate use of “contempt” label where the question was about breach of injunction warranting inquiry.
Failure to consider statutory mandate of Legal Metrology Act on manufacturer name disclosure.
Procedural irregularities that go to root of jurisdiction.
The Court accordingly set aside the trial court’s impugned order and allowed the civil miscellaneous petition. It also reminded the trial court to expedite disposal of the underlying trademark suit.
Case Title: Hero Ecotech Limited and Another Vs. Hero Cycles Limited and Others
Order Date: 03-09-2025
Case Number: Civil Mis No.1711 of 2019
Name of Court: High Court of Patna
Name of Hon'ble Judge: Honourable Mr. Justice Arun Kumar Jha
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Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
