Supreme Court holds in case of identical trademarks and identical goods or services, the injunction must follow in favour of the registered trademark.
Introduction
In Renaissance Hotel Holdings Inc. Vs Vijay Sai & Ors. (civil appeal no. 404 of 2022) the Supreme Court has set aside the Order of the High Court of Karnataka and held that when the competing marks, as well as the class of services, were identical, the High Court should have upheld the decree of injunction passed by the trial court, and could not have asked irrelevant questions, like, whether the Plaintiff’s trademark had a reputation in India; or whether the use of the mark without due cause takes unfair advantage to the distinctive character of the registered trade mark; or whether the Defendants and the Plaintiff cater to different classes of customers; or whether there was likely to be confusion in the minds of consumers with regard to the hotel of the Defendants belonging to the same group as of the Plaintiff’s.
Background
In 2009, the Appellant (Plaintiff in the Trial Court) filed a suit before the Principal District Judge, Bengaluru, seeking permanent injunction against the Respondents (Defendants) from using their trademark “SAI RENAISSANCE” or any other trademark identical with the Plaintiff’s trademark “RENAISSANCE”, and from operating, in hotels, restaurant or hospitality services of any manner under the trademark “RENAISSANCE.”
In a nutshell, the Plaintiff’s case before the trial court was following:
it is an American Company having one of the world’s largest and leading chains of hotels and the proprietor of the trademark and service mark “RENAISSANCE” in relation to hotel and its allied services
using the trademark “RENAISSANCE” for its hospitality business throughout the world since the year 1981 and in India since 1990
has registration in India for the mark “RENAISSANCE, in Class 42 for “hotel, restaurant, catering, bar and cocktail lounge services, etc.
and it filed the present Suit when it discovered that Defendants were operating hotels in Bangalore and Puttaparthi under the name “SAI RENAISSANCE”, wholly subsuming the Plaintiff’s mark, suggesting nexus or connection with the business of the Plaintiff
The Defendants resisted the Plaintiff’s claim of trademark infringement primarily on the grounds:
delay, laches and acquiescence on the part of Plaintiff in filing the Suit as he has been running the hotel for the last 15 years
“RENAISSANCE” is a generic word, and no such exclusive rights can be claimed over it in India as it is neither a well-known mark, nor it has any reputation built up by the Plaintiff
that the class of customers to which they were catering was totally different from the class of customers to which the Plaintiff was catering
the services provided by them, and the Plaintiff were also totally different as they did not provide nonvegetarian food and alcoholic drinks to its customers
Based on the above arguments, the Defendants contended that there was no possibility of confusion being created in the minds of the customers that the hotel of the Defendants belonged to or was affiliated to the Plaintiff.
In 2012, the trial court partly decreed the suit and restrained the Defendants from using the mark “SAI RENAISSANCE”, interalia, for hotel, restaurant, etc.
In the appeal against the decree, the High Court set aside the decree by holding that there was no infringement of trademark by the Defendants as firstly, the evidence of Plaintiff didn’t disclose its transborder reputation to uphold its plea in that regard; secondly, Plaintiff’s hotel is a 5 Star hotel, but the Defendants’ hotel is not of that standard; and thirdly, Plaintiff didn’t prove that the Defendants were taking unfair advantage of its trademark or that the use of the word “SAI RENAISSANCE” was detrimental to the distinctive character or reputation of the Plaintiff’s trademark.
Being aggrieved of the High Court’s Order, the Plaintiff filed an appeal before the Supreme Court.
Decision
The Supreme Court (SC) traced down the history of trademark legislation in India and observed that the 1999 Act has been enacted considering the globalization of trade and industry, the need to encourage investment flows and transfer of technology, and the need for simplification and harmonization of trademark management systems. One of the purposes for which the Act has been enacted is prohibiting the use of someone else’s trademark as a part of the corporate name or the name of business concern.
The SC held that in all legal proceedings relating to trademark registered under the Act, the original registration of the trademark and of all subsequent assignments and transmissions of the trademark shall be prima facie evidence of the validity thereof.
It further held that once both the trial court and the High Court have concluded that the trademark of the Defendants is identical with that of the Plaintiff and further that the services rendered by the Defendants are under the same class, the trial court was correct that Plaintiff’s case is covered by Section 29(2)(c) read with Section 29(3) of the Act.
The High Court’s findings that the Plaintiff had failed to establish that the trademark has reputation in India; the Defendants’ use was honest; and further that there was no confusion likely to be created in the minds of the consumers inasmuch as the class of consumers was totally different are all wrong.
Interpretation of Subsections 29 (2), (3) and (4) of the Act
While interpreting S.29 of the Act, the SC held that the High Court erred in considering only S.29(4) (c) of the Act to arrive at its conclusion. The SC while distinguishing subsections (a) (b) and (c) of S.29 held that the legislature has used the word ‘or’ after clauses (a) and (b) in S.29 (2) of the Act, whereas, it has used ‘and’ after clauses (a) and (b) in S.29 (4) of the Act.
Insofar as 29(2) is concerned, it is sufficient that any of the conditions as provided in clauses (a), (b) or (c) is satisfied, whereas, in case of an eventuality covered under clause (c) of S.29 (2) in view of the 29 (3) of the Act, the Court shall presume that it is likely to cause confusion on the part of the public.
In contrast to above, S.29(4) of the Act deals with an eventuality when the impugned trademark is identical with or similar to the registered trademark and is used in relation to goods or services which are not similar to those for which the trademark is registered. Only in such an eventuality, it will be necessary to establish that the registered trademark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trademark.
The legislative intent is clear by employing the word “and” after clauses (a) and (b) in 29(4) of the Act. Unless all the three conditions are satisfied, it will not be open to the proprietor of the registered trademark to sue for infringement when though the impugned trademark is identical with the registered trademark but is used in relation to goods or services which are not similar to those for which the trademark is registered.
To sum up, while S.29 (2) of the Act deals with those situations where the trademark is identical or similar and the goods covered by such a trademark are identical or similar, S.29 (4) deals with situations where though the trademark is identical, but goods or services are not similar to those for which the trademark is registered.
Undisputedly, the Plaintiff’s trademark “RENAISSANCE” is registered in relation to goods and services in Class 16 and Class 42 and the mark “SAI RENAISSANCE”, which is identical or similar to that of the appellant Plaintiff’s trademark, was being used by the Defendants in relation to the goods and services similar to that of the Plaintiffs.
The SC relied upon the Ruston & Hornsby Limited v. Zamindara Engineering Co (1969) 2 SCC 727, and held that in an action for infringement, once it is found that the defendant’s trademark was identical with the Plaintiff’s registered trademark, the Court could not have gone into an enquiry whether the infringement is such as is likely to deceive or cause confusion. In an infringement action, an injunction would be issued as soon as it is proved that the defendant is improperly using the trademark of the Plaintiff.
S.29(5) as well as S.29(9) is applicable in the present case
The SC also held that Plaintiff’s case is also covered under S.29(5) of the Act as the Defendant is using “RENAISSANCE” as a part of their business concern.
It further held that since the words “RENAISSANCE” and “SAI RENAISSANCE” are phonetically as well as visually similar, the Defendant’s use of SAI RENAISSANCE is an act of infringement in view of S.29(9) of the Act.
S.30(1) not applicable
SC rejected the High Court’s reliance upon Section 30(1) of the Act to hold that since Plaintiff failed to prove that the Defendants were taking unfair advantage of its trademark or that the use of the word “SAI RENAISSANCE” was detrimental to the distinctive character or reputation of the Plaintiff’s trademark, it is not entitled to any relief.
The SC held that for availing the benefit of Section 30, one has to fulfill two conditions, i.e., the use of the impugned trademark being in accordance with the honest practices in industrial or commercial matters, and that such a use is not such as to take unfair advantage of or be detrimental to the distinctive character or repute of the trademark, are required to be fulfilled.
Section 30 (1) of the Act, after clause (a), the word used is ‘and’, like the one used in S.29(4) of the Act, in contradistinction to the word ‘or’ used in S.29 (2).
The High Court has referred only to the condition stipulated in clause (b) of S.30(1), ignoring the fact that, to get the benefit of S.30 (1) both the conditions had to be fulfilled. Unless it is established that such a use is in accordance with the honest practices in industrial or commercial matters and is not to take unfair advantage or is not detrimental to the distinctive character or repute of the trademark, one could not get benefit under Section 30(1) of the said Act.
As such, the SC held that the finding of the High Court in this regard is also erroneous.
Interpretation of the provisions of an Act
The Supreme Court observed that the High Court while deciding the case has failed to consider two important principles of interpretation. The first one being of textual and contextual interpretation.
While interpreting the provisions of a statute, it is necessary that the textual interpretation should be matched with the contextual one. The Act must be looked at as a whole and it must be discovered what each section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act. No part of a statute and no word of a statute can be construed in isolation.
By picking up a part of the provisions in 29 (4) and a part of 30 (1) and giving it a textual meaning without considering the context in which the said provisions must be construed, the High Court had erred.
Another principle that the High Court has failed to notice, observed the SC, that a part of a section cannot be read in isolation. Ignoring this principle, the High Court has picked up clause (c) of 29 (4) in isolation without even noticing the other provisions contained in the said subsection (4) of Section 29 of the Act.
Similarly, again while considering the import of S.30 (1), the High Court has only picked up clause (b) of S.30 (1), ignoring the provisions in 30(1)(a). The High Court has relied upon the observations to reverse the order of injunction on the ground that there is no dishonesty in the Defendants’ adoption of the mark and therefore, they cannot be said to have infringed the trademark. These observations are made out of context.
SC also criticized the High Court’s out of context reliance the observations made in Midas Hygiene Industries (P) Limited and Another v. Sudhir Bhatia and Others5 ([1965] 1 SCR 737) to reverse the order of injunction on the ground that there is no dishonesty in the Defendants’ adoption of the mark and therefore, they cannot be said to have infringed the trademark.
In Midas Hygiene (supra), the SC had observed that the grant of injunction becomes necessary if its prima facie appears that the adoption of the mark was itself dishonest. However, the said judgment cannot be used as a ratio for the proposition that, if the Plaintiff fails to prove that the defendant’s use was dishonest, an injunction cannot be granted. On the contrary, the High Court failed to note the observations made in the very same paragraph to the effect that in cases of infringement, either of a trademark or copyright, normally an injunction must follow.
The SC distinguished Nandhini Deluxe v. Karnataka Cooperative Milk Producers Federation Limited (2018) 9 SCC 183), cited by the Defendants, on the ground that in Nandhini, not only the visual appearance of the two marks were different, but they even related to different products.
The SC allowed the appeal and observed that the High Court fell in error by interfering with the well-reasoned Order of the trial court.
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