Trade name licence and passing off: continued use of "Baker" after termination justified interim restraint.

A permissive agreement allowing use of a trade name remained operative because the technical know-how agreement governed a separate subject-matter and did not supersede it. The permission to use the word "Baker" was only a licence, not a transfer of proprietary rights. On passing off, the plaintiffs showed goodwill and reputation extending to India, and continued use of the name after termination of relations was likely to create false association, initial confusion and damage to goodwill. The Delhi HC therefore held that interim protection was warranted and restrained the second defendant from continuing to use the word "Baker" in its corporate name.

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Issues: (i) Whether the basic agreement permitting the use of the word "Baker" in the corporate name of the second defendant survived the technical know-how agreement and remained binding on the parties; (ii) Whether the plaintiffs established a prima facie case for interim injunction on the basis of goodwill, trans-border reputation and passing off, warranting restraint on the second defendant's continued use of the word "Baker".

Issue (i): Whether the basic agreement permitting the use of the word "Baker" in the corporate name of the second defendant survived the technical know-how agreement and remained binding on the parties.

Analysis: The two agreements operated in separate fields. The technical know-how agreement governed transfer of know-how and related financial obligations, whereas the basic agreement dealt with formation of the Indian company, equity participation and the permissive use of the word "Baker" in the company name. The clause in the technical know-how agreement making it the sole binding document was confined to its own subject-matter and did not supersede the basic agreement. The basic agreement was not shown to be unlawful, and the court treated the defendant's continued benefit from that arrangement as inconsistent with its challenge to that agreement.

Conclusion: The basic agreement was not displaced by the technical know-how agreement and remained operative; the permission to use "Baker" was only permissive and not an assignment of proprietary rights.

Issue (ii): Whether the plaintiffs established a prima facie case for interim injunction on the basis of goodwill, trans-border reputation and passing off, warranting restraint on the second defendant's continued use of the word "Baker".

Analysis: The plaintiffs showed goodwill and reputation in the name "Baker", including reputation extending to India. Continued use of the name by the second defendant after severance of relations was likely to suggest a false association, create initial confusion, dilute the plaintiffs' goodwill and amount to passing off. The court held that sophistication of purchasers did not eliminate the risk of confusion, and that the plaintiffs had satisfied the settled requirements of goodwill, misrepresentation and likely damage. The balance of convenience also favoured protection of the plaintiffs' trade name.

Conclusion: The plaintiffs were entitled to interim protection and the second defendant was restrained from continuing to use the word "Baker" in its corporate name.

Final Conclusion: Interim mandatory relief was justified because the plaintiffs' permissive licence to use the name had ended, their goodwill required protection, and continued use by the second defendant was likely to mislead the market and injure the plaintiffs' reputation.

Ratio Decidendi: A permissive user of a trade name cannot continue to use it after the licence comes to an end, and where continued use is likely to create confusion and damage the proprietor's goodwill, interim injunctive relief in passing off is warranted.

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