Bloomberg Finance LP v. Prafull Saklecha & Ors.

Bloomberg Finance LP v. Prafull Saklecha & Ors.

CS(OS) No. 2963 of 2012

Before the Hon’ble High Court of Delhi at New Delhi

Decided on: 11^th October, 2013

Facts

The Plaintiff a multinational financial news corporation was founded in 1982. Plaintiff operated in India through it’s subsidiary/associate Co. in New Delhi. Plaintiff’s ‘Bloomberg’ Trademark was stated to be used in over 100 countries. In India, the Plaintiff was using the mark ‘Bloomberg’ since 1996. The Plaintiff was the registered proprietor of the mark Bloomberg in Classes 9, 16, 35, 36, 38, 41 and 42.

Defendant No. 1, Mr. Prafull Saklecha and Defendant No. 2, Mrs. Sunita Saklecha were directors of various Defendant Companies, who were using the mark ‘Bloomberg’ as part of their Trade Name.

In January, 2012, Plaintiff learnt that one of the Defendants, i.e. Bloomberg Realty (India) Ltd. was carrying on business using the Trade Mark ‘Bloomberg’. Later, it was found out that the Defendant No. 1 and 2 changed the name of many of their other Companies to names incorporating the mark ‘Bloomberg’.

Plaintiff sent a cease and desist notice to Defendant No. 3 and 4 on 20^th January, 2013. After a long history of litigations over the mark ‘Bloomberg’ in various judicial forums the Plaintiff filed the present suit against the Defendants as the Defendant No.5 associated himself with a hindi feature film. The case of the Plaintiff was that the association of the Defendants with cinema and digital media would be detrimental to the Plaintiff’s reputation and goodwill and the same is bound to cause confusion.

Defendant’s Contentions:

• Defendant No. 3 was incorporated in the year 2006 as ‘Smart Developers Pvt. Ltd.’.
• In 2010, Defendant No. 3 started a brand building exercise.
• Most of the Defendant’s projects were named after names of flowers.
• The adoption of the mark ‘Bloomberg’ was honest and in good faith after combining the word ‘Bloom’ which means to produce flowers and the word Berg which means mountains. The combination of the same means ‘flower hills’ or ‘mountain flowers’.
• The present dispute was essentially about the adoption of the mark ‘Bloomberg’ as part of the corporate name of the Defendants group of companies and therefore Section 29 (5) of the Trade Marks Act, 1999 would apply as it was exhaustive of the issue and if the Plaintiff was not able to make out a case under Section 29(5) of the Trade Marks Act, 1999 then clearly it was not entitled to any interim injunction.

As the Defendants’ main argument was on the exclusive application of Section 29(5)[1] to the present case and non-application of Section 29(4)[2], the Hon’ble Court discussed in great detail the scope and implications of Section 29(1), (2), (3) (4) and (5) and the interplay between Section 29(4) and Section 29(5) of the Trade Marks Act, 1999.

The question that came for consideration before the Hon’ble Court could be put down in the following words:

“In case, if the second element (dealing in goods or services in respect of which the trade mark is registered) is not present, the question arises whether in such a scenario the owner or proprietor of the registered Trade Mark is precluded from seeking a remedy under Section 29(5) if the conditions in Section 29(4) are fulfilled.”

The Court opined as follows:

Under Section 29(1), (2) and (3) to constitute infringement the impugned mark has to be similar to or identical with the registered mark and the goods or services for which the impugned mark is being used has to also either be identical or similar to the goods or services for which registration has been granted.

However, the law regarding Section 29(4) is different. To fall within the contours of Section 29(4), following conditions are required to be satisfied:

(i) the person using the impugned mark is neither a registered proprietor in relation to the goods and services for which the mark is registered nor is using it by way of  permitted use;

(ii) the impugned mark must be used in the course of trade; and

(iii) the impugned mark has to be either similar to or identical with the registered mark; and

(iv) the impugned mark is used for goods or services different from those for which registration has been granted; and

(v) the registered trade mark has a reputation in India;

(vi) the use of the impugned mark is without due cause, and takes unfair advantage of or is detrimental to:

(a) the distinctive character of the registered trade mark; or

(b) the reputation of the registered trade mark.

Section 29(4) is essentially an infringement of Trade Mark by way of dilution and tarnishment.

The legislative intent behind Section 29(4) is to afford a stronger protection to a mark that has a reputation without the registered proprietor of such mark having to demonstrate the likelihood of confusion arising from the use of an identical or similar mark in relation to dissimilar goods and services.

As far as Section 29(5) of the Act is concerned, it relates to a situation where (i) the infringer uses the registered trademark ‘as his trade name or part of his trade name, or name of his business concern or part of the name, of his business concern’; and the business concern or trade is in the same goods or services in respect of which the trade mark is registered. If the owner/proprietor of the registered trade mark is able to show that both the above elements exist then an injunction restraining order the infringer should straightway follow.

This is in the nature of a per se or a ‘no-fault’ provision which offers a higher degree of protection where both the above elements are shown to exist. For the purpose of Section 29 (5) of the TM Act 1999, there is no requirement to show that the mark has a distinctive character or that any confusion is likely to result from the use by the infringer of the registered mark as part of its trade name or name of the business concern.

In case, if the second element is not present, the question arises whether in such a scenario the owner or proprietor of the registered Trade Mark is precluded from seeking a remedy under Section 29(4) if the conditions in Section 29(4) are fulfilled.

The Court opined that in regard to the object and purpose of Section 29(1) to (4), Section 29(5) cannot be said to be exhaustive. It cannot render the operation of Section 29(4) otiose if otherwise, the ingredients of Section 29(4) have been made out.

The Hon’ble Court stated that Section 29(5) does not require the registered proprietor to show any confusion that is likely to result from the use by the infringer of the registered mark as part of it’s trade name or name of the business concern or that the mark has a distinctive character or that any detriment is likely to be caused to the reputation of the mark or that infringer has taken unfair advantage of the mark. The whole idea of the Legislature to insert Section 29(5) was to put a better protection and not to shut the door of Section 29(4) and this is the best way to harmonise Section 29(4) and 29(5), so as none of them is rendered otiose.

The Hon’ble Court thus answered the said question in the following terms:

“(a) Section 29 (5) of the TM Act 1999 relates to a situation where (i) the infringer uses the registered trademark “as his trade name or part of his trade name, or name of his business concern or part of the name, of his business concern” and (ii) the business concern or trade is in the same goods or services in respect of which the trade mark is registered.

(b) This is in the nature of a per se or a ‘no-fault’ provision which offersa higher degree of protection where both the above elements are shown to exist. If the owner/proprietor of the registered trade mark is able to show that both the above elements exist then an injunction order restraining order the infringer should straightway follow. For the purpose of Section 29 (5) of the TM Act 1999 there is no requirement to show that the mark has a distinctive character or that any confusion is likely to result from the use by the infringer of the registered mark as part of its trade name or name of the business concern.

(c) However, in a situation where the first element is present and not the second then obviously the requirement of Section 29 (5) is not fulfilled. Where the registered trade mark is used as part of the corporate name but the business of the infringer is in goods or services other than those for which the mark is registered, the owner or proprietor of the registered trade mark is not precluded from seeking a remedy under Section 29 (4) of TM Act 1999 if the conditions attached to Section 29(4) are fulfilled.

(d) Given the object and purpose of Section 29 (1) to (4), Section 29 (5) cannot be intended to be exhaustive of all situations of uses of the registered mark as part of the corporate name. Section 29 (5) cannot be said to render Section 29 (4) otiose. The purpose of Section 29 (5) was to offer a better protection and not to shut the door of Section 29 (4) to a registered proprietor who is able to show that the registered mark enjoying a reputation in India has been used by the infringer as part of his corporate name but his business is in goods and services other than that for which the mark has been registered.

(e) A passing off action is maintainable in the case of a well known mark even if the goods and services being dealt with by the parties are not similar.”

On Merits

The Hon’ble Court decided the matter in favour of the Plaintiff on the following grounds:

On Infringement:

• The Plaintiff is prior user of the mark ‘Bloomberg’.
• The mark of the Plaintiff is a well-known mark and the same has trans-border reputation in India as the Plaintiffs have wide range of operations and a 24-hour broadcast news channel in India and also as the mark ‘Bloomberg’ of the Plaintiff  has been recognized in Trademark World Magazine as the 19^th most well-known mark in India.
• The explanation of the Defendant towards adoption of the mark ‘Bloomberg’ is not convincing at all. It is difficult to accept that the adoption of the name ‘Bloomberg’ by the Defendant was honest.
• For a mark that is distinctive and well known worldwide to be associated with the construction or real estate industry can prima facie be detrimental to its distinctive character and lead to dilution.
• While the Defendants may hold registration for the mark BLOOMBERG in Class 43, that by itself will not preclude the Plaintiff, which holds an earlier registration in other classes from seeking to restrain the Defendants from infringing the Plaintiff’s marks.
• For the aforementioned reasons, the Court is of the view that the elements of Section 29 (4) have prima facie been established and that the Plaintiff has made out a prima facie case for grant of an interim injunction restraining the Defendants from infringing the registered mark of the Plaintiff.

On Passing Off

The marks being identical, there is every possibility that there will be confusion in the minds of the public into thinking that it is the Plaintiff and its group companies that have entered the realty industry and are offering residential and commercial built up spaces.

Author’s Comments – The law on infringement of Trade Mark is a dynamic law, which is always evolving. In many cases, the Courts have stretched the traditional boundaries of a Trade mark action. However, in this particular case, the Court has simply relied on the plain and simple words of Section 29(4) and Section 29(5) of the Trade Marks Act, 1999. The reasoning as such is correct because Section 29 deals with various types of infringement and there can be cases which can fall under several of those types. Therefore, to hold that in case where corporate names/trade names are concerned only Section 29(5) holds the ground is a bad interpretation of provisions of the Trade Marks Act, 1999. Therefore, this particular case is a good example to understand how Section 29(5) and 29(4) operate harmoniously.

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