M/s AZ Tech (India) & Anr. v. M/s Intex Technologies (India) Ltd. 2017 (70) PTC118(Del)

Introduction

This is a landmark case where the court has stated that goodwill is also an important aspect along with the prior use to prove passing off by the later user of the mark.

Such a judgment was passed by the division bench of Delhi High Court rejecting the injunction order passed by the Single Bench prohibiting the defendants in this case from using the mark already being used by the plaintiff.

Facts-

• The Plaintiff, AZ Tech were operating as incorporation in India and had been marketing and selling mobile phone handsets in India in the trade name of “Aqua” since 2009. It had also launched various other mobile phone accessories like earphones, chargers, Bluetooth devices etc. in the same trade name since then.

• In 2012 the defendants, i.e. Intex Technologies launched their mobile phone handsets in the name of “Intex Aqua” which was claimed by petitioners as passing off their products in the trade name of Plaintiff and therefore violates the IP Right of the Plaintiff.

• The Plaintiff filed a suit against the defendant which was put up before a single judge bench of Delhi High Court to order an injunction against the defendants to compel them to stop using the mark Aqua for their mobile phone handsets.

• The Single Judge Bench passed the interim injunction on 24.12.2016 against the defendants stating that Plaintiff were using the trade name AQUA from three years before the defendants and therefore the defendants cannot be allowed to use the same name as this would deceive the customers of the Plaintiff.

• Aggrieved by this order of Single Judge Bench, the defendants appealed before the Division Bench of same High Court against the order of the Single Bench.

Issues Raised-

Following issues were raised before the Division Bench in this case:

• Goodwill needs to be considered along with the prior use for establishing a case of passing off.

• Whether the added word “Intex” to the word “Aqua” was sufficient to make difference between the two marks and therefore would be sufficient to avoid and confusion in the minds of the people.

Judgment and Decision-

• The Single Judge Bench on deciding the First Issue held that to establish the case for passing off, the plaintiff would merely need to show prior use.

• But the Division Bench on appeal held that the respondents (the plaintiff in the previous case) need to prove their goodwill as well along with the prior use for establishing a case of passing off. The court analyzed that the case of passing off can only be made if by the use of mark that is being used earlier by someone else, the goodwill or the company claiming prior use is hampered.

• The court on deciding on the first issue held that since the respondents did not establish goodwill and reputation of their mark “Aqua” till the time when the appellants launched “Intex Aqua” in the market i.e. till August, 2012 therefore the case of passing off cannot be established.

• It is so because passing off is not an offence against the proprietary right over a mark but it is a loss to goodwill and reputation of a company which is likely to be harmed by the misrepresentation of the appellants.

• On deciding upon the second issue, the Single Judge Bench held that conjunction of word “Intex” with “Aqua” is not sufficient enough to remove the confusion from the mind of people about the linkage of product with the Plaintiff’s company.

• Therefore the court held that it was of the view that adding the word “Intex” did not remove the confusion in the minds of people and cannot be seen as a different brand from the Petitioners but it is sufficient to create a doubt in the minds of people that the Plaintiff’s company might have been overtaken by the Defendant’s company.

• The Division Bench on the other hand, while deciding on the case held that as far as the issue of added material is concerned, if the added material i.e. “Intex” in this case is sufficiently prominent in the phrase and thereby it can be sufficient to remove the doubts from the minds of people then there would be no confusion in the minds of the people regarding the similarity

of both products.

• The court further stated that there cannot be any initial interest confusion as the mark “Intex” attached to the term “Aqua” is prominent enough to erase any doubt of similarity.

• The Division bench hence vacated the interim injunction passed by the Single Bench thereby laying down a landmark judgment where prior use was held to be not sufficient in proving the case of passing off.

• To prove the case of passing off the defendants also had to prove loss of goodwill and reputation to their product and company along with the proof of prior use of the mark.

• The Division Bench had in this case overruled many other cases including Century Traders vs. Roshan Lal Duggar & Co. AIR 978 Delhi 250 and Syed Mohideen vs. P. Sulochana Bai, 2016 (66) PTC 1 (SC) to reach on the above stated decision.