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TRANS-BORDER REPUTATION OF FOREIGN TRADEMARK- INDIA

July 20, 2020

By Priya Adlakha and Isha Tiwari

Keller Williams Realty, Inc. vs. Dingle Buildcons Pvt. Ltd. And Ors.- a case analysis

Introduction

The Hon’ble Delhi High Court  vide its order dated  April 17, 2020, dismissed an application for the ad-interim injunction filed by real estate mogul, Keller Williams Realty, Inc. in the above suit[1]. The Court headed by Hon’ble Mr. Justice Rajiv Sahai Endlaw reaffirmed the principle of trans-border reputation and goodwill subsisting in a trademark upon the asterisk condition that the same shall reach the Indian shores for a substantial claim of infringement and passing-off.

Brief facts

Keller Williams Realty, Inc. i.e. the Plaintiff is a Texan real estate franchisor founded in 1983 and one of the largest privately held global residential real estate brokers.

Plaintiff’s brand operated through wholly owned subsidiaries, agents, franchisees and its associates on worldwide basis under the trademarks ‘KELLER WILLIAMS’/‘KW’/  and thus, acquired immense reputation for itself.

The Plaintiff claims to be the registered proprietor of KW trademark in numerous countries, including in India since 2012 under classes 35 and 36.

The Plaintiff approached the Court seeking permanent injunction against the acts of infringement and passing off against the three Defendants namely Dingle Buildcons Pvt. Ltd., KW Homes Private Limited  and its sister concern KW Security and Services Private Limited. It was alleged that the Defendants were running businesses under KW formative trademarks and the same being identically and/ or deceptively similar to the Plaintiff’s KW trademarks lead to deception and confusion amongst the general public.

Contentions of the Plaintiff

The counsel on behalf of the Plaintiff contended the following arguments:

  • Being the registered proprietor of an inherently distinctive trademark KW, adopted as an abbreviation of its trade name ‘Keller Williams’, in several classes entitled protection to the Plaintiff under the provisions of the Trade Marks Act, 1999 (The Act).
  • In India, the Plaintiff applied for registration of KW and KELLER WILLIAMS in Classes 35 & 36, on March 2, 2012 and the said registrations were granted;
  • Prior registered domain names such as kw.com and www.kwworldwide.com, dating far back to 1995 and 2005 respectively, extensive use and advertising campaign across nations, which resulted in generation of reputation amongst the public, including Indian public staying abroad as well as in India.
  • As against the Defendants, use of the KW formative trademarks such as , and KW BLUE PEARL amounted to infringement and passing-off as the same was identically and/or deceptively similar to its KW trademark, in respect of identical/similar services such as insurance, financial affairs, monetary affairs, real estate affairs, advertising, business management, business administration, office functions etc. and led to false association in the minds of public.
  • Legal history with the Defendant, wherein several applications and registrations in classes 08, 35 and 36 were previously contested for the KW The counsel for the Plaintiff relied on the fact that all such applications had common user detail showing use since April, 2006, in support of which no evidence had been procured.
  • Plaintiff relied on the judgment delivered by this Court in Mac Personal Care Pvt. Ltd. Vs. Laverana Gmbh and Co. Kg.[2], wherein, it was held that trans-border reputation is sufficient to establish a claim of passing-off for an unregistered trademark without having any commercial use in the market.
  • Defendants’ explanation for adoption of the impugned KW formative trademarks, has been inconsistent during the length of the proceedings.

Contentions of the Defendants

The counsel on behalf of the Defendants contended the following arguments:

  • Bonafide adoption of KW formative trademarks on account of being adopted from the initials of Lt. Umadhar Kesar Wani, founder of KW Group. Further, KW formative trademarks are distinctive on account of being used with other words.
  • Defendants are the registered proprietor of the KW formative trademarks in classes 14, 16, 17, 20, 21, 28, 35, 36, 37, 41 & 42. Defendant’s registration of the KW formative trademark in Class 35 dates back to August, 2011, as compared to Plaintiff’s registration of March, 2012 on proposed to be used basis. Defendants’ prior user claim dating back to April 1, 2006 for classes 36 and 37.
  • In addition, the Defendants also own copyright registrations for their trademarks.
  • Newspaper advertisements of the trademark KW SRISHTI dating back to 2010 and 2012, are indicative of prior use of the KW formative trademarks and therefore, protection of vested rights under Section 34.
  • Plaintiff’s reply to the examination report issued in its trade mark application, wherein it took the stand of dissimilar nature of Plaintiff’s and the Defendants’ business, in order to overcome the objections raised by the Registrar, acts an estoppel to its submissions in the plaint.
  • Plaintiff’s registration dated March 12, 2012 in India is on a ‘proposed to be used basis’ and it has also failed to establish continuous use, reputation and goodwill for a claim of passing off.
  • Registrations acquired by Plaintiff were liable to be removed from the Register on account of non-use as per Section 47 as there has been no use till date nor the Plaintiff has expressed any intention to use the same in India post registration.
  • Since Defendant is the also the registered proprietor of the mark KW in India, Plaintiff has failed to establish a suit for infringement as per Sections 29(1) and (2) and 30(2)(e).

Observations of the Court and Judgment

The  Hon’ble Court  made the following observations in his judgment:

  • Plaintiff placed reliance upon Neon Laboratories Limited Vs. Medical Technologies Ltd.[3], Milment Oftho Industries Vs. Allergan Inc.[4] in its favour, wherein, the test of ‘first in the world market’ was emerged.
  • Whereas, Defendants placed reliance upon Toyota Jidosha Kabushiki Kaisha Vs. Prius Auto Industries Limited[5], wherein as per the territorial doctrine of trademarks, prior claim of use of a trademark in one jurisdiction does not automatically grant exclusive rights of protection in another. The test of “first in market” is subject to the territorial limits of a trademark.
  • The Hon’ble Court distinguished the above two judgements referred by the Plaintiff in its favour, stating that the said judgements were passed in the context of drugs and medicinal products, having International character.
  • The Court placed reliance on the judgement of Hon’ble Supreme Court in Toyota vs. Prius (supra) and made an observation that ‘mere ownership or even registration of a mark does not lead to any presumption of the mark having a reputation and goodwill, even in the territories where the mark is being used; the plaintiff, while applying for registration of the mark, did not claim any use, in India, of the mark, by spill over of reputation and goodwill from another territory to India; the plaintiff has not made out any case of any use or spill over of goodwill and reputation, since registration’.
  • By applying aforementioned principle for a successful claim of passing off, the Plaintiff must establish reputation and goodwill spread into Indian territories much before its use by the Plaintiff and before the Defendants’ use of their trademark. Since the Plaintiff had neglected to use its KW trademark since registration in 2012 and had also failed to establish with sufficient evidence that the KW trademark had acquired any reputation in India, registration alone was not sufficient to stop the Defendants from using their KW formative trademarks in India. Had the Plaintiff acquired any reputation before filing for registration, the application would have been filed with a use claim.
  • No scope of any confusion between the trademarks in questions as they are dissimilar in nature and being used in respect of dissimilar services. Defendants’ KW formative trademarks appeared along with their corporate name or with BLUE PEARL, SRISHTI and DELHI-6 and the Plaintiff had also acquiesced to the same in their reply to the examination report. Furthermore, KW being English letters and common initials did not grant exclusive monopoly to any proprietor of a trademark.
  • Plea of likelihood of confusion sustainable, only at the beginning of the proceedings and not when the matter is at the final stages of adjudication.
  • Plaintiff guilty of delay and laches as they had been aware of Defendants’ use of the KW formative trademarks and had also defended their use against the Defendants’ in their reply to the examination report.

In view of the aforementioned observations, Hon’ble Justice Endlaw held that though the explanation of the Defendants of the reason for the use of alphabets ‘KW’ does not inspire confidence and is also contrary to the stand of the Defendants themselves, of KW standing for “Kesarwani World”, however the same alone would not entitle the Plaintiff to injunction without making out at least a prima facie case for infringement or passing off.

Therefore, there was no prima facie case of infringement or passing-off against the Defendants’ use of the KW formative trademarks and hence, dismissed Plaintiff’s application for ad-interim injunction.

Analysis and Take away

Chapter IV of the Trade Marks Act, 1999, enumerates both rights and limitations and their exercise upon a registered proprietor of a trademark. Registration cannot be construed as an impermeable right, especially against the rights of another registered proprietor of a resembling trademark. The underlined objective of the Act is to ensure protection against infringement and passing off by way of dishonest use of a trademark and not honest use by another[6]. The aforementioned case highlights that registration is entangled with responsibility. Defence of registration may not always ensure protection in a suit, especially in passing off as the registered proprietor must show its grievance to the use by the Defendant, substantial account of its use along with the reputation and goodwill earned throughout its use.

Trademarks are limited by their geographical limits unless such a reputation transcends those limits and permeates the jurisdiction of another region. This has to be cemented with the intention to use that trademark in such region, which was evidently absent in the Plaintiff’s case. Filing an application on a ‘proposed to be used’ basis has been clearly construed to be ‘no use of the mark’ at least as on the date of application at the ad-interim injunction stage, and the Plaintiff is burdened to prove the same through detailed trial.

An application for trademark can have ripple effects throughout its term of protection. Even as basic as a reply to the examination report of the Registrar can determine your future defences in a suit for infringement and hence, applicants are recommended to seek guidance from a trademark attorney before filing an application.

Related Posts

Transborder Reputation and Passing off Action: Toyota Prius Case

[1] Keller Williams Realty, Inc. vs. Dingle Buildcons Pvt. Ltd. And Ors. CS(COMM) 74/2019

[2] 2016 (65) PTC 357 (DB)

[3] (2016) 2 SCC 672

[4] (2004) 12 SCC 624

[5] (2018) 2 SCC 1

[6] Section 28(3) and Section 30(2)(e) of the Trade Marks Act, 1999; http://www.ipindia.nic.in/writereaddata/Portal/IPOAct/1_43_1_trade-marks-act.pdf; accessed on June 03, 2020

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