Delhi HC sets aside permanent injunction after finding defendants had prior continuous use of BLACK DIAMOND mark since 1983 under Section 34

Delhi HC allowed appeal and set aside permanent injunction restraining trade mark infringement. Court held that defendants had prior continuous use of BLACK DIAMOND mark from 1983 through family business, predating plaintiff company's 2005 incorporation. Under Section 34 of Trade Marks Act, prior users cannot be restrained from using identical/similar marks. Plaintiff's corporate structure could not override defendants' independent right to use the mark, as they were original adopters rather than permitted users. Appeal succeeded on grounds of defendants' superior prior use rights.

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Issues Involved:

1. Forum Shopping and Interim Relief
2. Oral Family Settlement and Use of Trademark
3. Prior Use and Section 34 of the Trade Marks Act
4. Territorial Jurisdiction

Issue-wise Detailed Analysis:

1. Forum Shopping and Interim Relief:

The primary issue was whether the respondent/plaintiff was entitled to interim relief after having withdrawn a previous suit from the Bilaspur Court, where interim relief was denied, and subsequently filing a new suit in Delhi. The court found that the respondent/plaintiff engaged in forum shopping by withdrawing the suit from Bilaspur and refiling in Delhi, which was deemed an abuse of the court process. The court emphasized that interim relief is discretionary and should be granted only if the court is approached with bona fide intentions and clean hands. The respondent/plaintiff's conduct in seeking a favorable forum was not considered bona fide, leading to the denial of interim relief.

2. Oral Family Settlement and Use of Trademark:

The respondent/plaintiff claimed an oral family settlement restricted the appellants/defendants from using the 'BLACK DIAMOND' trademark for certain goods. However, the court found this claim unsupported by evidence, such as resolutions from the companies involved, and thus not credible at this stage. The court noted that the plea of an oral family settlement appeared as an afterthought, especially since it was not raised in the initial suit filed in Bilaspur. Consequently, the court found no basis to restrain the appellants/defendants from using the trademark based on the alleged family settlement.

3. Prior Use and Section 34 of the Trade Marks Act:

The court examined whether the appellants/defendants were prior users of the 'BLACK DIAMOND' trademark under Section 34 of the Trade Marks Act. The court acknowledged that the appellants/defendants, being part of the family business, had been using the trademark since before the registration was granted to the respondent/plaintiff. The court found that the appellants/defendants were entitled to use the trademark due to their prior use, which predated the respondent/plaintiff's registration. The court emphasized that the appellants/defendants' use of the trademark was not in bad faith, and they were not attempting to pass off their goods as those of the respondent/plaintiff.

4. Territorial Jurisdiction:

While the issue of territorial jurisdiction was raised, the court chose not to address it in detail within this judgment, as it was subject to another order in the suit. However, it was noted that the respondent/plaintiff and appellants/defendants were primarily based in Bilaspur, suggesting that the initial filing in Bilaspur was more appropriate.

Conclusion:

The court set aside the impugned order granting interim relief to the respondent/plaintiff, dismissing the application for interim relief. The appellants/defendants were allowed to continue using the 'BLACK DIAMOND' trademark, provided they included identifiers such as "Raminder Singh Bhatia Group" or "Parvinder Singh Bhatia Group" on their labels to prevent confusion. The court also ordered the respondent/plaintiff to pay costs of Rs. 50,000 to the appellants/defendants.

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