In CS(COMM) 308/2021-DEL HC- Rights of registered proprietor are not absolute or indefeasible; Registration under Trade Marks Act only gives presumption of validity of mark, which may be rebutted by claims of prior use: Delhi HC Justice Sanjeev Narula [06-10-2022]

Read Order: SHAMROCK GEOSCIENCE LTD & ANR v. KABA INFRATECH PRIVATE LIMITED & ANR 

Tulip Kanth

New Delhi, October 10, 2022: By applying the the classic trinity test of ‘Goodwill, Misrepresentation and Damages’, the Delhi High Court has granted injunction in favour of Kaba Infratech restraining Shamrock Geoscience Ltd. from using the impugned mark “GeoCrete” while also holding that the rights of registered proprietor of trademark are inextricably intertwined with concept of prior use.

Referring to the judgments in S. Syed Mohideen v. P. Sulochana Bai and  N.R. Dongre & Ors. v. Whirlpool Corp. & Anr. (1995) SCC OnLine Del 310, the Bench of Justice Sanjeev Narula asserted, “ In view of the above, the legal position stands well established that rights of a registered proprietor are not absolute or indefeasible. Registration under the Act only gives a presumption as to the validity of a mark, which may be rebutted by claims of prior use.”

In this dispute between Shamrock and Kaba Infratech(TIMAB), the interlocutory applications were filed in cross-suits – both seeking, injunction against each other from use, passing-off, unfair competition, dilution and blurring of the mark ‘GeoCrete’ (impugned mark) over which, both parties claimed proprietary rights and utilise it in respect of identical goods viz. cement additives and soil stabilisation preparations used in construction of roads, highways, pavements, reservoirs etc.

SHAMROCK had asserted its statutory right over impugned mark and also pressed into service the common law rights flowing therefrom. TIMAB, on the other hand, not being a registered proprietor of the impugned mark in India, was seeking injunction against SHAMROCK, purely on the basis of common law rights – on the ground of passing off premised on prior use, deception and fraudulent registration by SHAMROCK.

Considering the fact that both the parties claimed proprietary rights over the impugned mark on the basis of direct and indirect continuous use, the Court opined that the parties were in agreement on one point, being that only one of them is entitled to use the impugned mark in India.

The Bench made it clear that at the interlocutory stage, for either party to obtain favourable relief, the classic three-pronged test of (i) prima facie case, (ii) balance of convenience and (iii) irreparable loss has to be applied. “In that light, the meat of the matter for adjudication is whether the right of SHAMROCK, who is the registered proprietor of impugned mark in India, would triumph over TIMAB’s claims of passing off based on prior use, or vice versa”, the Bench noted.

After referring to sections Sections 27, 28 and 34 of the Trade Marks Act, 1999, the Bench articulated that rights of a registered proprietor of a trademark are inextricably intertwined with the concept of prior use and Section 27(2) expressly recognizes common law rights of a prior user under trademark law. 

Therefore, registration of a mark does not bar initiation of a passing off action by the aggrieved party. Further, Section 34 of the Act stipulates that nothing shall entitle a registered proprietor to interfere with the rights of a prior user, the Bench further added. 

It was taken into consideration by the Bench that being fully aware that TIMAB holds registration in various other jurisdictions, SHAMROCK nonetheless obtained registration in India in an attempt to defeat TIMAB’s rights and encash its goodwill. Considering continuous transactions between parties and voluminous sales of ‘GeoCrete’ products by TIMAB, it was safely assumed by the High Court that SHAMROCK was also aware of prior application of TIMAB.

“Since,SHAMROCK was an ex-licensee of the impugned mark, it was estopped from either challenging TIMAB’s rights or from claiming any rights over the impugned mark”, the Bench remarked. According to the Bench, TIMAB prima facie established that the impugned ‘GeoCrete’ mark had been associated with it for long, much prior to SHAMROCK and accordingly,  TIMAB’s trans-border reputation and goodwill had spilled over in to India.

Thus, considering that the elements of Classic Trinity Test had been sufficiently proved by TIMAB, the Bench opined that TIMAB had prima facie demonstrated prior and continuous use of the impugned mark whereas dishonest registration of the impugned mark by SHAMROCK had resulted in public confusion, violative of the principle of ‘one mark, one source, one proprietor’. As per the Bench, TIMAB’s continuous use of the impugned mark both, in India and internationally, entitled it to assert its common law rights over SHAMROCK’s registration.

Thus, the Bench granted an injunction in favour of TIMAB restraining Shamrock Geoscience Ltd. and its authorized representatives from using the impugned mark or any other identical/deceptively similar mark with respect to goods falling under Class 1 or any other cognate or allied goods resulting in likelihood of confusion and violation of TIMAB’s exclusive rights in the impugned mark.