India: The Curious Case of 'Amity'

Last Updated: 24 October 2018
Article by AMLEGALS  
Most Read Contributor in India, October 2018

IN THE HIGH COURT OF DELHI

RITNAND BALVED EDUCATION FOUNDATION V. RANCHHOD M SHAH & ORS

CS (COMM) 236/2016

DATE OF DECISION: 16.10.2018

FACTS

That case of the Plaintiff is that it started the chain of "AMITY INTERNATIONAL SCHOOL" and established its first school in the year 1991 in New Delhi and subsequently opened AMITY UNIVERSITY and AMITY LAW SCHOOL across various cities. The Plaintiff also holds registration of its trademark under various classes of the Trade Marks Act, 1999 (the TM Act).

Further, that a trust named Gyanada Educational Trust ("GET") started "AMITY SCHOOL, Bharuch" as a lower primary school in 1986.

Whilst, the Gyanada Educational and Medical Trust ("GEMT") (in the present suit Defendant No. 5), has been using the mark "AMITY INTERNATIONAL SCHOOL" (in the present suit Defendant No. 6), for its school based in Gujarat.

A suit was filed in May 2014, in which while deciding the suit in favor of the Plaintiff the Court restrained the Defendants from using the registered trade mark of the Plaintiff's "AMITY" or any other identical mark in educational services.

On 24.11.2014, an application was filed by the Defendants under O.39 R.4 and O.7 R.10 of the Civil Procedure Code, 1908 ("CPC"), which suspended the above order stating that the Defendants were able to establish that they were the prior user of the impugned mark since 1986 for running the school by the name "AMITY SCHOOL, Bharuch".

Further, they obtained affiliation from the Central Board of Secondary Education (CBSE) as well, and that the Plaintiff came to know about them in the year 2013. Therefore, the Defendants filed for vacation of injunction and moved an application u/O.7 R.10 of CPC.

Meanwhile, the Plaintiff on 07.02.2018 was allowed to file an application under O.11 R.5 seeking directions from the Court to the Defendant to bring on record the Memorandum of Understanding (MoU), executed between GET and GEMT, which allowed the latter to use the mark "AMITY". While deciding the application it was learned that the Defendants laminated the MoU and the Registrar ordered to de-laminate the same.

Consequently, there were three (3) applications filed on behalf of the Defendants and an injunction application filed by the Plaintiff, which are collectively dealt by the High Court. 

ISSUES BEFORE HC

Upon filing of various applications, the Court decided upon the two (2) issues in the present suit:

  1. Whether this Court had territorial jurisdiction.
  2. Whether the Defendant was infringing the trademark of the Plaintiff and should be restrained.

OBSERVATION

Before deciding the grant of injunction, the Court first decided whether the plaint should be returned on the ground of lack of jurisdiction.

The Court made an observation which was substantiated by precedents and the tests laid down therein to establish the territorial jurisdiction of the court where a suit is filed.

The Court therefore, was of the opinion that it did not lack jurisdiction even though the Defendants, their school and all the documents relied upon were in situs Gujarat, but the accessibility of the Defendants' information was throughout the country and the school's activities were also not restricted locally.

Therefore, the Court held that the use of the trade mark "AMITY" was well within their jurisdiction and even under Section 134 of the TM Act as the registered office of the Plaintiff was in Delhi.

The test laid down in IPRS v. Sanjay Dalia (2015) 10 SCC 161 and Ultra Home Construction Pvt. Ltd. V. Purushottam Kumar Chaubey & Ors. 227 (2016) DLT 320 (DB) is set out below:

"13. It is evident from the above observations that the interpretation given to the expression "carries on business" in the context of a defendant under Section 20 of the Code has also been employed in the context of a plaintiff under the said Sections 134(2) and 62(2). Thus, in addition to the places where suits could be filed under Section 20 of the Code, the plaintiff can also institute a suit under the Trade Marks Act, 1999 and the Copyright Act, 1957, as the case may be, by taking advantage of the provisions of Section 134(2) or Section 62(2), respectively. Both the latter provisions are in pari materia. Under these provisions four situations can be contemplated in the context of the plaintiff being a corporation (which includes a company). First of all, is the case where the plaintiff has a sole office. In such a case, even if the cause of action has arisen at a different place, the plaintiff can institute a suit at the place of the sole office. Next is the case where the plaintiff has a principal office at one place and a subordinate or branch office at another place and the cause of action has arisen at the place of the principal office. In such a case, the plaintiff may sue at the place of the principal office but cannot sue at the place of the subordinate office. The third case is where the plaintiff has a principal office at one place and the cause of action has arisen at the place where its subordinate office is located. In this eventuality, the plaintiff would be deemed to carry on business at the place of his subordinate office and not at the place of the principal office. Thus, the plaintiff could sue at the place of the subordinate office and cannot sue (under the scheme of the provisions of Section 134(2) and 62(2)) at the place of the principal office. The fourth case is where the cause of action neither arises at the place of the principal office nor at the place of the subordinate office but at some other place. In this case, the plaintiff would be deemed to carry on business at the place of its principal office and not at the place of the subordinate office. And, consequently, it could institute a suit at the place of its principal office but not at the place of its subordinate office.."

After establishing its jurisdiction, the Court further elaborated its opinion on grant of injunction and at the foremost cleared the confusion by stating the parties to the present suit are not "AMITY SCHOOL, Bharuch" and GET. Rather the party is GEMT and use of the mark by them is "AMITY INTERNATIONAL SCHOOL" which is the school established by GEMT.

Further, the Court observed that the trust containing same members would not devolve to be a same trust. Therefore, the benefit of prior use claimed by GET cannot be obtained by GEMT as they do not constitute to be the same entity. Moreover, even if they claim to be under a licensor-licensee relationship, the former (GET) did not have any statutory right on the mark "AMITY".

Since, GET is not a party to the present suit and the claim of using the mark "AMITY" by GEMT is established to be from 2004 which is much later than the Plaintiff which first established its school in 1991, the Court observed the following:

"There is no doubt in the proposition that prior user rights are superior to registration as held in Century Traders v Roshan Lal Duggar, AIR 1978 Delhi 250 by a Division Bench of this Court. However, insofar as the present case is concerned, the competing marks are identical i.e. 'AMITY INTERNATIONAL SCHOOL'. The Plaintiff is the prior user of the name 'AMITY INTERNATIONAL SCHOOL' since 1991. The Defendants are subsequent users of the name 'AMITY INTERNATIONAL SCHOOL' since 2004".

CONCLUDING VIEW

While concluding the present suit the Court restricted itself to decide whether the use of "AMITY INTERNATIONAL SCHOOL" by GEMT was violating the Plaintiff's right.

The Court while declaring its territorial jurisdiction, concluded that the Defendants were not prior users of the mark "AMITY" and that the balance of convenience was in favor of the Plaintiff and decided to restrain the Defendants from using the name "AMITY INTERNATIONAL SCHOOL" during the pendency of the suit and made an exemption for the present academic year so as to ensure that the students do not suffer in consequence to such change.

REASON OF JURISPRUDENCE

At the outset the Court deliberated through various contentions raised, before deciding the issues which were raised through the application.

The objective of the TM Act as correctly noted by the Court is not only to grant protection to a well-known trade mark or any other registered trade mark but also to ensure that there is no scope of consumer confusion while dealing with a trade mark. In case of even a slight confusion being created in the minds of the consumers, it can lead to various outcomes, including but not limited to ill-effect on the brand and its valuation, the degradation of the brand name and the name of the company and also affecting the consumers' ultimately.

In the present scenario the market or the consumer base as discussed was related to the education services. For which, the Court remarked that such confusion may lead to having an adverse effect on the career of children.

Therefore, while rendering a decision the Court has to establish various grounds like intention of using similar trade mark, prior user of the trade mark, examination of trade mark in whole and not in isolation for grant of injunction. The TM Act also establishes that it is the duty of the Registrar to protect a well-known trade mark.

For protecting a well-known trade mark and fulfilling its duty towards the same, the Courts explained the scope of territorial jurisdiction and ensured that both under the TM Act and the CPC the Court can expand its jurisdiction for hearing and deciding a case pertaining to trade mark while keeping in mind where it is registered or where the cause of action arose. 

While the Plaintiff's stand was to ensure protection of its well-known and registered trade mark, they contended that the Defendants lacked bona fide, for the use of trade mark. Even though their school with the name "AMITY SCHOOL BHARUCH" existed since 1986, they did not demarcate the entities which are concerned with the present suit. Therefore, the Court had to establish the concerning parties and issues before granting injunction.

Further, the Court also clarified the stand of a license holder as far as a MoU is concerned. Therefore, the Defendant's contention that it has been assigned the rights of using the trade mark by GET as GEMT and GET constitute same trust members was outrightly rejected by the Court.

One can understand from above that even though the rights relating to intellectual property can be transferred but it can only take place between an entity which is a registered owner who can transfer such rights in the first place and not an entity which happens to have same members as that entity which has such rights.

It is also pertinent to understand that for registration of the trade mark it should first comply with the various criteria as laid down in the TM Act.

Thereof, a trade mark may contain several generic and/or descriptive terms which are used while even conversing in day to day matter.

The combination of such generic term/words should make a unique term so distinctive that it is eligible for registration and the consumer often associates it with a company thus fulfilling its purpose.

In the present case also "AMITY INTERNATIONAL SCHOOL" was granted registration, even though the words "INTERNATIONAL" and "SCHOOL" are generic in nature. There cannot be a monopoly over a generic word which is a well-established principle.

When combining it with "AMITY" it gives a consumer a unique name thus making it solely being associated with the company, or in the present case the group of educational institution which it represents.

Another point that the Court considers while granting protection to a trade mark is to ensure that use of such mark irrespectively should not affect the business of either of the parties. That is, the Court will ensure that the one who is not the registered owner should also not suffer due the confusion the trade mark may create.

AMLEGALS REMARKS

A trade mark may contain a single word or combination of word or symbol which may or may not be generic in nature but when combined together they are unique in nature thus, a trade mark while being assessed should be assessed as a whole and not in isolation.

Further, to establish prior use of the mark one cannot merely rely upon its existence but also has to establish the usage of the mark since its inception and prove the same by way of documentary evidences.

A registered trade mark is granted protection so as to ensure that there is no deception in the minds of the consumers.

This content is purely an academic analysis under "Legal intelligence series".

© Copyright AMLEGALS.

Disclaimer: The information contained in this document is intended for informational purposes only and does not constitute legal opinion, advice or any advertisement. This document is not intended to address the circumstances of any particular individual or corporate body. Reade should not act on the information provided herein without appropriate professional advice after a thorough examination of the facts and circumstances of a particular situation. There can be no assurance that the judicial/quasi-judicial authorities may not take a position contrary to the views mentioned herein.

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