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This article is written by Gaurav Kumar, from Surendranath law College (University of Calcutta). In this article, the author analyses the case of IntercityHotel GMBH V. Hotel Intercity Delhi and Others decided by Hon’ble Delhi High Court in the year 2019.

Introduction

These days, most often the disputes arise on the proprietary over similar trademark names. Trademark law was enacted in the year 1999 for the registration of trademark and regulating the disputes arising over the similar name of proprietary. The Indian judiciary has from time to time witnessed such disputes and resolved it with the help of existing common laws, case laws and legislation. In the year 2019, a dispute of trademark infringement was brought before the Hon’ble Delhi Court where two hotels having similar names; one multinational having branches globally spread and another one a Delhi based having its single hotel in Karol Bagh. In this article the case analysis of Intercity Hotel GMBH v. Hotel Intercity Delhi and Others has been drawn.

Brief facts of the case

A very thoughtful and notable judgement was delivered by the Hon’ble Delhi High Court while settling the dispute between IntercityHotel GMBH vs Hotel Intercity Delhi & Ors. The decision delivered by the Hon’ble High Court was important in the way as it was related to Section 34 of the Trademark Act, 1999. The plaintiff Intercity Hotel GMBH is a part of Deutsche Hospitality Group having 130 hotels in 17 countries providing temporary accommodation along with food and drinks. It is one of the reputed group of hotels with its registered trademark of Intercity Hotel in numerous places including Germany, India, Brazil and Uruguay. In Germany, it was registered back in 1992 and in India, it was registered in 2011.

The device registration was done in the year 2017. The plaintiff’s chain of renowned hotels experiences millions of national and international tourist traffic annually. Since 2010, defendant no. 1 has been operating its hotel with a similar trademark name Hotel Intercity Delhi near Karol Bagh metro station opposite of Jes Ram Hospital in New Delhi providing temporary accommodation with food and drinks. The defendant had earlier applied for the trademark registration in January 2019, but later they withdrew the same. However, the defendant again applied for the registration of the said trademark device in the same year. The plaintiff contended that the similar trademark name registered by the defendant amounts to infringement of the plaintiff’s registered trademark.

The plaintiff said that as it is having its trademark registered so the exclusive rights as proprietor adoption and use of the said trademark vests in him. The plaintiff approached the Hon’ble High Court of Delhi under Order 39 Rule 1 and 2 of the Code of Civil Procedure, 1908 seeking interim injunction to be issued against the defendants in order to refrain them from using the mark of Intercity Hotel and another such similar mark as the registered trademark was plaintiff’s proprietary.

Issues  

There were some major issues arising out in this case. The issues are:

  • Whether the plaintiff has the vested proprietary of the registered trademark device? 
  • Whether the use of a similar name of hotel by defendants amounts to infringement of trademark? 
  • Whether mere registration of the trademark device without any commercial establishment in India amounts to the proprietary?
  • Is there any trans-border reputation of the plaintiff’s trademark in India and the defendant’s action has spilled the goodwill and brand reputation of the plaintiff?
  • Was the defendant using his establishment before the date in which the plaintiff had registered its trademark device?

Judgment

The Hon’ble High Court of Delhi putting its reliance on the apex court’s several judgements gave its view on the aforementioned issues. The Hon’ble Court while deciding- 

  • Whether the plaintiff’s petition on issuing interim injunction was justifiable or not found that although the plaintiff had registered its trademark device in India, they were not carrying out any business since the date of its registration. 
  • Secondly, with regard to the question of spillover of trans-border global reputation the court found that no evidence of advertisement, promotion was brought in knowledge as the evidence by the plaintiff. 
  • The Hon’ble Court was of the view that interim orders can be granted to the global multinational brands having its trans-border reputation, but as the plaintiff failed in adducing any of the evidence of its presence in India, so it had no rights over the customers of the Indian markets. 
  • Moreover, the defendants marked its presence adducing the trade-license as a document which shows their presence since 30.09.2010. The court found that the defendants were the user of the trademark even before the registration of the plaintiff’s device. 
  • The reverence over Section 34 of the Trademark Act 1999 was put over and the court found that registration of the trademark is merely a recognition of the rights and in case of conflicts over the proprietary, the rights of the superior shall be upheld as according to the common law. 
  • The balance of the convenience was also not in the favour of the plaintiff as despite trademark registration they failed to mark themselves as a prima-facie user of the trademark since 2010. 
  • The defendants had proven that they were using the trademark earlier from the registration date of the plaintiff’s device. 
  • The court in view of all above facts held that no interim injunction could be granted in the favour of the plaintiff. However, in the interest of justice, the court ordered the defendant to mention on its website that their establishment is not in any manner connected with the plaintiff’s group of hotels (IntercityHotel GMBH, Frankfurt Germany). The court further added to mention the said clarification on the front page of the website.

Precedent cases

Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd. and Ors. 

This is one of the important cases of the Supreme Court on which Delhi High Court had put reliance on the case of IntercityHotel GMBH vs Hotel Intercity Delhi. In this case, the plaintiff had launched its world’s first Hybrid car Prius in 1997. In India, it was launched in 2009. Till the year the plaintiff had not registered the trademark name “Prius”. The defendant had registered its trademark “Prius” in the year 2001-2002. However, the defendant claimed that they had not obtained the trademark till 2002 and had been using it since 2001.

The Hon’ble Supreme Court held that mere prior claim of use of trademark in one jurisdiction does not provide exclusive rights of protection in another. The use of the trademark is subjected to a test of “first in market” within the territorial limits. The Hon’ble Court found that the plaintiff case lacks merit as there was no use of trademark while registration and there was no spillover its global reputation on having only mere registration.

Neon Laboratories Ltd. v. Medical Technologies Ltd. and Ors., 2016

In the aforementioned case, the Supreme Court, putting reliance over Section 34 of the Trademark Act 1999, held that the registered proprietor of the trademark cannot interfere with the rights of prior users by a defendant to a proceeding. The test of “first in the world market” was emergent from this case.

Choice Hotels International Inc. v. M.Sanjay Kumar and Ors., 2015 (62) PTC 269 (Del)

In the aforementioned case, the Hon’ble Delhi Court held that various multinational brands are settling their business across borders and the courts have started recognising their global character and provide protection to their global reputation. But this has to be decided with a number of certain essential characteristics to protect the trans-border reputation. The spillover of trans-border reputation and the evidence of brand regulation name across the territorial market through advertising and promotion amounts to the protection of trademark through the court passing interim injunction.

Rainforest Cafe Inc v. Rainforest Cafe & Ors. MANU/DE/1666/2001 : 91 (2001) DLT 508

In the aforementioned case the plaintiff, a renowned restaurant operator having its 37 restaurants worldwide was planning to open its chain of restaurants in India. It had started advertising and promotions for its project in leading newspapers and magazines. The defendant had not only copied the name of the plaintiff’s trademark “Rainforest Cafe” but also its tagline “A WILD PLACE TO EAT.” The plaintiff reached before the Hon’ble Delhi High Court demanding the issuing of an interim injunction against the defendant as it was causing irreparable damage to the plaintiff’s global brand reputation. The Hon’ble Delhi Court held that the balance of convenience was in the favour of the plaintiff as the defendant is operating the restaurant blindly on a similar name and tagline which is likely to cause irreparable loss to the plaintiff’s global reputation. Henceforth, an interim injunction was granted in the favour of the plaintiff.

In Caesar Park Hotels v. Westinn Hospitality Services Ltd. 1999 PTC (19) 123

In the aforesaid case, the division bench of Madras High Court set aside the judgment of the learned single bench judge. The Hon’ble Court applying the principle of trans-Border reputation put restriction over the defendant on using the name “Westinn” and granted an interim injunction in the favour of the plaintiff.

S. Syed Mohideen vs P. Sulochana Bai

In this case, the respondent (plaintiff in original suit) was the owner of the trademark “Iruttukadai Halwa” back in the year 2007. The appellant was using a similar trademark name in his sweet shop and it approached the trial court for the issuance of a permanent injunction.The trial court rejected the relief of rendition. Aggrieved from the decision of the court the appellant approached the Hon’ble Madras High Court with an appeal. The High Court dismissed the appeal by upholding the decree of the trial court. The matter was again appealed before the Hon’ble Supreme Court where the court put reliance over Sections 27, 28, 29 and 34 of the Trademark Act, 1999.

                   

The Court was of the opinion that registration of the trademark is merely a recognition of pre-existing rights in the common law and in the case of disputes over two registered proprietors the evaluation of better rights in the common law is necessary as it creates common law rights which enables the court to recognise that whose rights are better and superior between the two proprietary. On adducing a plethora of evidence in the favour of the respondent the court found that the respondent family was carrying out business and the use of trademarks for 100 years. The use of a similar trademark by the plaintiff will be like deceiving the customers with a similar brand- name. It will further destroy the goodwill and reputation of the respondent. Henceforth, the apex court deciding in the favour of respondent dismissed the appeal.

Analysis

The case of Intercity Hotel GMBH v. Hotel Intercity Delhi brought an evolution in an arena of disputes arising out of similar trademark name users and infringement of trademark law. However, for the disposal of disputes arising out of such cases the court, in this case, has put a strong reliance over Section 34 of the Trademark Act, 1999. Section 34 of the act read as:

Nothing in this Act shall entitle the proprietor or a registered user of a registered trade mark to interfere….” Thus, the scheme of the Act is such where rights of prior users are recognised superior than that of the registration and even the registered proprietor cannot disturb/interfere with the rights of prior users. The overall effect of collective reading of the provisions of the Act is that the action for passing off which is premised on the rights of prior users generating a goodwill shall be unaffected by any registration provided under the Act.

From analyzing the above section it deems that the registration is merely a recognition of rights, and it shall not protect the trademark as an exclusive proprietary of the registered user. If there is any user having the use of that trademark prior to the registered date of the registered trademark user the effect of that user will override the registered user despite the registration being done prior or in the favour of the registered user. However, in case the registered user of the trademark is a multinational brand and it is found that there is a spill-over of trans-border reputation due to the use of trademark by an unregistered user and it damages the goodwill and reputation of the trademark proprietor the court shall go in the favour of the registered trademark user. So, the spill-over of the trans-border reputation is a criterion for protection of the registered trademark user.

Conclusion

This case has widely explained the applicability of Section 34 of the Trademark Act, 1999. The disputes of claiming the proprietary over the similar trademark shall arise in the future and in such a situation this case law shall play as a pathway for deciding disputes arising on similar issues. In addition, the disputes arising of trademark infringement of multinational brands due to the similar trademark name in the local markets shall also be resolved on similar lines as decided by the Hon’ble Delhi High Court in this case. 


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