H & M Hennes & Mauritz Ab & Anr. v. HM Megabrands Pvt. Ltd. & Ors.

2018 (74) PTC 229 (Del)

Brief facts:

• Plaintiff, was a well-known designer, marketer, and seller of wide and varied fashionable clothing collection and ancillary product and services for women, men, teenagers, and children. To firmly and formally establish its presence in India, Plaintiff No. 1 claimed to have incorporated its subsidiary H & M Hennes & Mauritz Retail Pvt. Ltd., Plaintiff No. 2, in 2013 and launched its first store in a very prominent mall in Saket, New Delhi in 2015 to carry on the business under the trade name of the Plaintiff No.1.
• Plaintiff No. 1 had been manufacturing in India the garments in the name of ‘H&M’ for the purpose of export since 1972. In India, the trade mark was registered since October 2005. Plaintiffs had also registered the domain name as ‘www.hm.com’ in the year 1998.
• Defendant no. 1 was incorporated in 2012 of which other Defendants were officers/directors. Defendants were engaged in the business of marketing, supplying, and selling of the garments under the trade mark  ‘HM’ since 2011.
• Defendants had also registered the domain name comprising ‘HM’ viz. ‘www.hmmegabrand.com’. The said website was offering the goods or services similar to that of the Plaintiff. Further Defendants were also offering the good under the tradename ‘HM’ through their online shopping portals such as amazon, jabong and myntra etc.
• Defendant No. 1 had also filed a suit for groundless threats against the Plaintiffs.
• Aggrieved by the acts of the Defendants, Plaintiffs filed the present suit qua infringement of trade mark and passing off along with an application for interim relief. The present decision covers the adjudication on the application for interim relief.

Defendants’ Contentions:

• In 2011, Defendant no. 4, Mr. Hashim Merchant started the HM enterprise to carry out the business for various FMCG products. In May 2012, Defendant No. 4 along with his brother Defendant No. 3, Mr. Hamza Merchant considering the initials of their name, honestly and bonafiely adopted the trademark ‘HM Megabrand’.
• There was no recognition for the Plaintiff’s mark ‘H&M’ in India in 2011.
• The court has no territorial jurisdiction as the Defendants have no stores in Delhi
• Present suit is liable to be stayed on account of previously instituted suit by Defendant No. 1.
• ‘H’ and ‘M’ are the two alphabets having no trademark significance. Hence, no person can claim an exclusive right to the acronyms/alphabets ‘HM’ or ‘H & M’.
• Two letter mark is not registrable under the Trade Marks Act, 1999 and is inherently not distinctive or capable of distinguishing the goods/services of the Plaintiffs.
• Online record of registry shows that the term ‘HM’ has been used by several manufacturers as their trade name or trade mark.
• Plaintiffs have not used the mark for five years in India from the date of registration.
• There is no similarity between the marks of the parties.

Plaintiffs’ Contentions:

• In the suit at Bombay, Defendants have pleaded that their products are sold all around the world via interactive e-commerce website; Further, the Defendant is also carrying out its business in Delhi by selling its product in through the online portals. Therefore the objection of territorial jurisdiction is misconceived.
• Though the first store in India was opened in 2015 but Plaintiffs have manufactured garments in India for export since 1972.
• Plaintiff is the first in the world for using the said mark. Therefore, the members of the trade and public are well aware of the reputation and goodwill of the trade mark vesting in the mark ‘H&M’ on account of media, television, or newspaper.
• On account of extensive use and promotion, the mark has acquired secondary meaning.

Court’s Observations:

On territorial jurisdiction

• The Defendants’ claim of revenue of over Rs. 12 crores  in 2015-16 through extensive online sales through websites, nullifies the objection of territorial jurisdiction.

On challenge by Defendant to validity of Plaintiff’s registration and stay of suit

• Challenge made by the Defendants to the validity of the Plaintiffs’ registration does not come in the way of consideration of the application for interim relief.
• The present suit is not liable to be stayed because of the previous suit of groundless threats filed by Defendant No. 1 as:
  • The said suit would not lie as per Section 142 (2), once the Plaintiff have commenced and/or are prosecuting this suit.; and
  • A suit for infringement is a substantial suit in which claims of both parties can be adjudicated and the adjudication of claims of Plaintiffs cannot be kept pending decision of a suit under Section 142.

On Merits

On defence that there are multiple users on the register using the term ‘HM’

• Mere presence of the mark on the register or on the records of the registrar of the companies does not prove the use of the mark and proprietor of the trademark is not expected to pursue each and every infringer.[1] Even if any entity is using ‘HM’ or ‘H & M’, it cannot deprive the Plaintiffs, if otherwise found entitled to interim injunction against the Defendants of such injunction.
• In a suit for infringement, it is the right of the two parties before the Court only which are to be examined and not qua others.[2]

On intention of Defendants

It is not as if the business was started in the name of Defendants and subsequently came to be known as ‘HM’. Defendants started the business under the name of their initials rather than using their own name. Defendants having done so, cannot claim that those transacting business with the Defendant No.1 HM Megabrands Pvt. Ltd. or with the brand/mark ‘HM Megabrands’ would know that they are transacting business with Hashim Merchant and/or Hamza Merchant. The adoption could have been said to be bona fide if to attract customers by disclosing the identity of the proprietor who was well known to the customers or commanded goodwill unless the adoption of the name itself in childhood was mala fide.

On similarity of marks

• Defendant’s main argument is that addition on the word ‘Megabrands’ distinguishes the marks. ‘Brand’ is a name given to a product and/or service such that it takes on an identity by itself. ‘Mega’ means very big or huge or excellent. Thus, the word ‘Megabrands’ would mean a brand which is very big or huge or which is excellent. Thus, the addition of suffix ‘Megabrands’ to the alphabets ‘HM’, only connotes that ‘HM’ is a megabrand. The brand of the Defendants was thus ‘HM’ as ‘megabrands’ is descriptive and generic word to describe successful brands.
• Anyone familiar with ‘H & M’ on seeing ‘HM Megabrands’ is unlikely to differentiate the Defendants from the Plaintiffs. The suffix ‘Megabrands’ rather than distinguishing, reinforces the impression in the mind of the consumer that the business of the Defendants is the business of the Plaintiffs.

On ‘H & M’ as a mark; On protection of alphabets and acronyms

• ‘H&M’ or ‘HM’ however are not generic or publici juris to the trade or business for which they are being used by the Plaintiffs and the Defendants. The said alphabets are alien to the trade / business of clothing / garments / accessories and were applied thereto by the Plaintiffs, admittedly much prior to the Defendants.
• A word, even if generic, if applied to a business with which the word is unrelated, is indeed to be protected. Merely because it is alphabets or acronym, is immaterial.
• Supreme Court has held that a mark includes amongst other things a name or a word also and name would include any abbreviation of a name.[3]

On Defendant’s plea of non-use of mark by the Plaintiff for five years from the date of registration

• A Defendant in a suit for infringement, without seeking remedies under Section 47 of the Trade Marks Act before the Registrar of Trademarks, cannot set up pleas of non-use and the same if permitted, will undermine the efficacy of registration and the presumption of validity of registration under Section 31 of the Act and an action for infringement of trade mark cannot be defeated for disuse.[4]

On Defendant’s plea that Plaintiffs having not acquired any distinctiveness in India and/or of the Plaintiffs having no reputation in India

• For a mark/brand to have a reputation or goodwill in India, setting up a shop in India or sale in India is no longer a necessity. The introduction of web based sales which enables Indians to shop for whatever brands/goods available wheresoever, has further increased the familiarity in India with the marks and brands essentially sold/marketed outside.
• Worldwide prior user is given preference over registered trade mark in India.[5]
• for the purpose of establishing reputation, visibility in India of webpages displaying the product is sufficient to show that buyers or Indians travelling abroad are aware of the product and are likely to associate it with Plaintiffs
• It is not in dispute here that the Plaintiffs are the prior user and thus at this stage, the argument of the Plaintiffs being not entitled to injunction for the reason of having no sales in India prior to 2015 will not enure to the benefit of the Defendants.

Interim relief was granted in favour of the Plaintiff.

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[1] The Hon’ble Court relied on Express Bottlers Services Pvt. Ltd. v. Pepsico Inc., 1989 (9) PTC 14, Century Traders v. Roshan Lal Duggar & Co., AIR 1978 Delhi 250 (DB) and Pankaj Goel v. Dabur India Ltd., 2008 (38) PTC 49 (Del) (DB)

[2] The Hon’ble Court relied on P.M. Diesels v. S. M. Diesels, AIR 1994 Delhi 264

[3] The Hon’ble Court relied on Laxmikant V. Patel v. Chetanbhai Shah, 2002 (24) PTC 1 (SC)

[4] The Hon’ble Court relied on Sun Pharmaceutical Industries Limited v. Cipla Limited, 2009 (39) PTC 347 and American Home Products Corporation v. Mac Laboratories Pvt. Ltd., AIR 1986 SC 137

[5] The Hon’ble Court relied on  Milmet Oftho Industries v. Allergan Inc., 2004 (28) PTC 585 (SC)

Summarised by: Mr. Pramit Rastogi, The ICFAI Universtiy, Dehradun