22 April 2014

Passing off action by former licensee – Trademark not to confine to particular product

Rajasthan High Court has on 31-3-2014 held that in cases of passing off, the question is no longer of “common field of activity”, but is of “common class of consumers”. The court in the case of Vijay Solvex Ltd. v. Shree Hari Agro Industries Ltd noted that though trade mark relates to the goods or to the service for which it is registered, modern judicial trend is not to confine the trade mark to the particular goods for which it is registered. Contention that the defendant’s registered mark should be confined only to mustard oil and not vanaspati was hence rejected by the court, further relying on precedents holding oil and vanaspati to be similar goods.

In this interesting case where the former licensee had filed a case of passing off against the registered proprietor, the court relying on Delhi High Court Order in the case of Century Traders and Supreme Court Order in the case of Heinz Italia held that registration of the mark in the name of the defendant would not prevent plaintiff from filing suit for passing off against the defendants.

Further noting that the plaintiff had filed the case in 2013 after three years of expiry of the licence in 2010 and hence during this three year period had carved out a niche in the market for the brand, the court upheld the impugned order finding prima facie case in favour of plaintiff. For the purpose, it was also noted that the plaintiff was already there in the market when another person (to whom licence given in 2009) and the proprietor started using the trademark. To buttress its claim of prior user, the defendant sought to file evidences invoking Order 41, Rule 27 of CPC but the court held that the same could not be accepted as they were neither file before trial judge nor did they file proper application before it.  Considering Supreme Court’s Ruling in the case of Cadila Health Care Ltd., prescribing the factors for the purpose of passing off, the court noticed that products had deceptively similar labels, had common class of consumers and hence there was a strong prima facie case of passing off. Stay was granted on sale of products manufactured by the defendants, even in the absence of application for same, considering interest of consumers. The court also held that there was prima facie infringement of plaintiff’s copyright in the design of the label.


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