Radico Khaitan Ltd. v. Devans Modern Breweries Ltd.

Radico Khaitan Ltd. v. Devans Modern Breweries Ltd.

258 (2019) DLT 177

Radico Khaitan Ltd. filed a suit for Infringement of Trade Mark and Passing Off against Devans Modern Breweries Ltd. in respect of the Trade Mark ELECTRA in respect of alcoholic beverages. Radico Khaitan Ltd. manufactured Ready to Drink Vodka Infused alcoholic Beverage under the Brand ELECTRA (Class 33) and Devans manufactured Beer (Class 32) under the brand ELECTRA.

Along with the suit, Radico Khaitan Ltd. filed an application for interim relief. The present decision deals with the adjudication of the said application.

Plaintiff’s Contentions:

On 23rd December, 2004, the Plaintiff applied for registration of the word mark ELECTRA under Class 33 claiming user since 1^st December, 2004 and the same was registered in 2007. As Plaintiff is the registered proprietor of the mark ELECTRA, Defendant should not be allowed to use the same as the said act constitutes Infringement of Plaintiff’s mark under Section 29 (2) (a) of the Trade Marks Act, 1999.

Plaintiff is also a prior user of the mark ELECTRA as a Category and Concept Research was done in respect of the mark ELECTRA as well as Bottles were manufactured in respect of the same around 2006-07. However, the products under the mark ELECTRA were officially launched in June, 2015 with the flagship brand MAGIC MOMENTS.

Defendant’s Contentions:

Though, Plaintiff is a registered proprietor, Defendant is a prior user. Admittedly, the Plaintiff’s use is claimed from June, 2015 whereas Defendant has been using the mark at least since August, 2014 with its brand GODFATHER.

As Defendant is a prior user of the mark ELECTRA, the Plaintiff’s case is hit by Section 34 of the Trade Marks Act, 1999 and thus no interim injunction can be granted in favour of Plaintiff.

The Plaintiff is also not entitled to interim injunction as the Plaintiff had sent legal notice in November, 2016 and the present suit was filed in March, 2018.

Plaintiff’s Further Submissions:

Under Section 34 of the Trade Marks Act, 1999 the defendant was entitled to protection if he was a user prior to the Plaintiff’s registration or Plaintiff’s use, whichever was earlier.

Defendant could not rely on Section 34 as the plaintiff was the prior adopter, registrant and user of the trademark ELECTRA. Since 2006, Plaintiff had been conducting production activities with regard to the trademark ELECTRA which amounted to use of the impugned trade mark.

Court’s Reasoning:

• Section 34 of the Trade Marks Act, 1999 at the highest, is a defence in a suit for infringement provided the conditions precedent in the said Section are satisfied, namely, that the Defendant’s use of the impugned mark is prior to the Plaintiff’s use of the mark and/or prior to Plaintiff’s registration, whichever is earlier i.e., in the present case the Defendant’s use has to be prior not only to Plaintiff’s use but also to Plaintiff’s registration.
• Condition precedent in Section 34 of the Trade Marks Act, 1999 is not satisfied in the present case as the Defendant’s use is not prior to the Plaintiff’s registration of the trade mark of the year 2004. Accordingly, the defence of Section 34 is prima facie not available to the Defendant.
• Plaintiff had been continuously using the impugned mark ELECTRA with regard to pre-launch and preparatory activities at least since 2006-07. Court is prima facie of the view that the Plaintiff’s prelaunch and preparatory activities with regard to the trade mark ELECTRA amounts to use under the Trade Marks Act, 1999. The plaintiff had engaged the services of Quantum Market Research Pvt. Ltd. in 2006 for conducting category and concept research and study of the brand ELECTRA for Vodka. Furthermore, it had entered into an agreement with Hindustan National Glass & Industries Ltd. in 2007 for developing, producing and supplying glass bottles of various brands including ELECTRA.
• In Hardie Trading Ltd. and Anr. Vs. Addisons Paint and Chemicals Ltd.; 2003 (27) PTC 241 (SC), the Apex Court has given an expansive and wide interpretation to the expression “use”.
• The Apex Court in M/s Gujarat Bottling Co. Ltd. and others v. Coca Cola Company and others; (1995) 5 SCC 545 has held that protection of a registered trade mark is not dependent on its use.
• Use of the impugned mark by the defendant prima facie constitutes an infringement under Section 29(2)(a) of the Trade Marks Act, 1999.
• Court is also of the prima facie opinion that the Defendant, being a big corporation, had failed to discharge its duty of care and due diligence as it had not conducted a search in the Trade Marks Registry with regard to the impugned mark ELECTRA for goods falling under Classes 32 and 33 before adopting the said mark. It is pertinent to mention that it is an admitted position that Beer and Alcoholic goods are similar goods traded under the same channels.
• There is also no delay on part of the Plaintiff as the Defendant had been put to notice on 2^nd November, 2016 and there reminder notices have been sent till May, 2017. Further, as per Midas Hygiene Industries P. Ltd. & Anr. v. Sudhir Bhatia & Ors.; 2004 (28) PTC 121 (SC) mere delay in bringing action is not sufficient to defeat grant of injunction in cases of infringement of trade mark or Copyright.

Accordingly, the Defendant was restrained from using the mark ELECTRA or any other deceptively similar mark for any Alcoholic Beverages including but not limited to Beer and Ready to Drink Beverages.

The order can be accessed here: Decision of Learned Single Judge

APPEAL

The Defendant thereafter filed an appeal against the said decision which was decided on 5^th April, 2019 and the order of the Learned Single Judge was not interfered with. On Section 34, the Division Bench of the Hon’ble High Court of Delhi observed as follows:

“Prima facie it appears that the expression “whichever is earlier” appearing in Section 34 implies that where there is “use‟ of the mark by both the parties and one is claiming its use to be earlier than the use by the other, that by itself will not decide the issue of “earlier use” if there is a date of registration of the mark which is prior to the date of use by the Defendant of the same mark. In such event, then the defence in relation to Section 34 would not be available. In other words, in order to succeed in the defence under Section 34 of the Act, the Defendant would have to show that its use of the mark is prior to even the date of registration of the mark in favour of the Plaintiff.”

The order  can be accessed here: Decision by Hon’ble Division Bench

KEY TAKEAWAYS

The above mentioned decision is a significant decision on multiple aspects of Trade Mark Jurisprudence because:

• It Clarifies and clearly interprets Section 34 of the Trade Marks Act, 1999 and gives protection to a prior registrant who may be subsequent in using the mark to the Defendant.
• It recognizes that Infringement can happen across Classes of Goods provided goods are similar.
• It recognizes that Vodka based drinks and Beer are sold at identical Trade Channels.
• It recognizes that ‘use’ of a mark need not be only sale or physical use but can also include Market Research and Manufacturing Agreements.
• It recognizes the Importance of Diligence that a subsequent adopter of the mark should ensure by way of conducting a public search in the Trade Marks office.
• Holds that a registered trade mark can be protected despite non-use.
• Appears to be only decision of Division Bench of Hon’ble High Court of Delhi which interprets Section 34 in such a manner.