In the case of Shell Brands International AG & Anr. V.
Gagan Chanana & Others, the Delhi High Court, while
disposing two applications, one by Shell Brands International AG
& Anr (Plaintiffs) seeking temporary injunction and the second
by Gagan Chanana (Defendants) for stay of the proceedings under
Section 124 of the Trademarks Act, 1999, discussed the differences
between Trademark Dilution and Trademark Infringement.
This particular case involved Shell Brands International, the
owners of the "SHELL" brand and several trademarks in
conjunction with, used in connection with a host of business
activities, the best known among which is its retail service
stations , oil and gas production and exploration on land and at
seas. In their written submissions, Shell Brands pointed out that
they produce approximately 3% of the world's oil and about 3.5%
of the world's gas, further in a survey of public brand
awareness, the brand was recognized by 54% of general public and as
such their brand is a well known brand in the world and has
acquired distinctiveness over the years. They traced their presence
in India to 1928.
It was alleged by Shell Brands that in 2007 they became aware
that Gagan Chandana who was engaged in marketing auto cables and
machinery under the style "M/s. Honesty Machinery Store",
was marketing goods under the "SHELL" brand. Under such
circumstances, they stated that an ad interim order was imperative
as the Defendant was seeking to appropriate their well known mark
and sell goods which may not be of the same good quality as the
Plaintiff's products, thereby leading to injurious association.
They further alleged that the Defendant cannot be permitted to
dilute the well-known mark under the pretext of marketing
On the other hand, it was contended by the Defendant that the
Plaintiff had deliberately concealed material facts from the Court,
which would disentitle them from the equitable order of
The Court, while not disputing the fact that the Plaintiff's
"SHELL" mark had acquired a distinctiveness stated that
the question to be considered though was whether the
Plaintiff's claim for interim injunction could be sustained.
The Court opined that the charge against the Plaintiff for not
mentioning in its suit averments that the Defendant was also a
registered owner of the trademark and that they had applied for
rectification of the registered mark "SHELL" in the
Defendant's name, was very relevant and well founded.
The Court then stated that in the present case, where the
Plaintiff claims that the Defendants use of the impugned mark would
tarnish or tend to tarnish or dilute the distinctiveness of the
mark, it becomes essential for the Court to reiterate the
principles of Dilution. It was stated that although a claim to
dilution is statutorily recognized by Section 29 (4), yet in view
of the parliamentary prohibition, the standards applicable to such
claims is different form those applicable in relation to trademark
infringement in relation to similar goods, the Courts therefore
have to adopt a different approach. The distinction between the
aforementioned two were then discussed as follows:
No presumption of infringement arises in the case of Dilution
as opposed to trademark infringement in relation to similar
In the case of Dilution the trademark owner has to establish
two elements besides others, i.e. the use by the rival
mark would lower its reputation and the rival use is mala
fide. Also, the degree of harm suffered or likely to be
suffered has to be prima facie established.
The Court then dismissed the Plaintiff's claim for temporary
injunction stating that the "SHELL" word is a common word
capable of varied meanings. Moreover, the use by the Defendant was
only of the word with no other embellishments as opposed to the use
by the Plaintiff. Further, the use of the mark by the Plaintiff and
the Defendant was for different products. The fact that the
Plaintiff had abandoned the opposition to the Defendant's
application for registration in 2004, meant that there was delay on
their part to approach the Court thereby allowing the defendant to
carry on with their activities.
With regard to the Defendant's claim for stay, the Court
said that there is no doubt that under Section 124 (1) (b), where
the Defendant raises the plea of being owner of a similar mark they
should thus be protected under Section 30, the suit would have to
be stayed. However, in the present case the suit was framed by the
Plaintiff in such a manner so as to encompass the claim for
infringement as well as passing off, although the heading of the
suit is a claim for passing off. In such circumstances to Court
opined that Section 124 would not be attracted.
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