2019 (3) TMI 2103 - HC - Companies Law

Infringement of trade mark and passing off via trade name use leads to permanent injunction and directed corporate name change.

Use of a plaintiff's mark as part of a defendant's trade name qualifies as use as a trade mark when it is capable of creating a likelihood of association ... Infringement of trade mark - Passing off - Use as trade name amounts to use as trade mark - Permanent injunction - Registrar of Companies jurisdiction - - HELD THAT:- Once it is found that the registration in the name of the defendant violates Section 15 of the LLP Act and the Registrar of Companies has failed to deal with the representation of the plaintiff in this respect, the Court would not still direct the Registrar of Companies to decide and which would only lead to first round of litigation before the Registrar of Companies and thereafter availing of remedies thereagainst by the aggrieved party. Thus, this Court having found the registration in the name of the defendant to be violative of Section 15, is competent to pass the necessary directions. Section 2(1)(m) relied upon by the senior counsel for the plaintiff, while defining “mark” includes brand, name, word and Section 2(1)(zb) defines “trade mark” as a mark capable of distinguishing the goods or services of one person from those of others. Thus, use by the defendant of the mark of the plaintiff as part of its trade name also would amount to use as a trade mark and considering the new age business of the plaintiff, is likely to convey that the defendant is a venture of the plaintiff and/or is supported by the plaintiff and/or has blessings of the plaintiff and which may lead to unwary people of the trade also investing in the defendant and/or supporting or transacting with the defendant and which qualifies the test of infringement as well as passing off. The plaintiff is entitled to the relief of permanent injunction as sought in prayer paragraph A(i) & (ii) of the amended plaint verified on 14th February, 2019. The defendant is thus directed to, on or before 30th April, 2019 apply to the Registrar of Companies under Section 19 of the LLP Act for change of its name by filing a notice of such change in such format and manner and on payment of such fee as may be prescribed and the Registrar of Companies, NCT of Delhi & Haryana is directed to process the said application of the defendant within further 30 days thereafter and a decree for permanent injunction shall come into operation, immediately on such change of name being allowed by the Registrar of Companies. However in the facts and circumstances of the case, the plaintiff is not found entitled to any of the other reliefs claimed. It is also not the case of the defendant that he was not aware of the plaintiff. The defendant, in any case, on objection being raised by the plaintiff ought to have opted for another name. The plaintiff is thus entitled to costs of the suit with professional fee assessed at Rs. 3.5 lacs. Issues: (i) Whether registration of the defendant's name 'Everstone Ventures LLP' violated Section 15(2)(b) of the Limited Liability Partnership Act, 2008 by being identical with or too nearly resembling the plaintiff's earlier registered trade mark and corporate name and whether this Court can direct change of name; (ii) Whether use by the defendant of 'EVERSTONE' as part of its trade name amounts to use as a trade mark and/or passing off and whether the plaintiff is entitled to a permanent injunction and costs.Issue (i): Whether registration of the defendant's LLP name violated Section 15(2)(b) of the LLP Act and whether the Court can direct change of name.Analysis: The Court examined Section 15(2)(b) which bars registration of an LLP name identical with or too nearly resembling a registered trade mark or name of another body corporate and observed that the statutory test does not require the previously registered entity to be in the same business class. The defendant's name was incorporated after the plaintiff's earlier registration and was found to be identical or resembling the plaintiff's name. The Registrar of Companies had been approached and failed to deal with the plaintiff's representation, leaving the dispute sub judice. The Court held that, in the circumstances where the Registrar abdicated consideration, the civil court is competent to grant relief to end litigation rather than remit the matter to the Registrar for fresh proceedings.Conclusion: The registration of 'Everstone Ventures LLP' violated Section 15(2)(b) of the LLP Act and this Court is empowered to direct change of name.Issue (ii): Whether the defendant's use of 'EVERSTONE' as part of its trade name amounts to use as a trade mark or passing off and whether the plaintiff is entitled to a permanent injunction and costs.Analysis: The Court analysed the Trade Marks Act definitions, noting that a 'mark' includes a name and that a 'trade mark' is a mark capable of distinguishing goods or services. Considering the plaintiff's prior adoption, registration of the mark in Classes 35 and 36, its reputation, and the nature of new-age venture-capital businesses which may operate across sectors, the Court found that the defendant's use of the identical word in its corporate name is likely to convey association with the plaintiff, causing confusion and enabling misappropriation of goodwill. The Court rejected the defendant's contention that different classification of goods/services or use only as a trade name precluded infringement or passing off. The Court further found the defendant's conduct mala fide and entitled the plaintiff to costs.Conclusion: Use of 'EVERSTONE' by the defendant as part of its trade name amounts to use as a trade mark and passing off/infringement is made out; the plaintiff is entitled to a permanent injunction and costs.Final Conclusion: The plaintiff's substantive claims succeed in part: the Court directs the defendant to change its name and grants a decree for permanent injunction against use of the impugned name (to come into operation on Registrar approval) and awards costs to the plaintiff; other reliefs claimed are refused.Ratio Decidendi: Where an LLP's registered name is identical with or too nearly resembles a prior registered trade mark or corporate name, Section 15(2)(b) of the LLP Act bars such registration irrespective of differences in business class, and use of the identical name as part of a corporate/trade name can constitute trade mark use giving rise to infringement and passing off remedies including injunction and costs.