India: L&T versus LNT/ELENTE

The appellant Larsen and Toubro Ltd. (L&T), in the instant case Larsen & Toubro Ltd. v. Lachmi Narain Trades. & Ors 2008 (36) PTC 223 (Del.) (DB), is engaged in diverse business activities including transportation and infrastructural development, finance, information technology within and outside the country. Nearly a dozen subsidiary companies using the 'L&T' prefix with their names have been incorporated over the years to carry on the said business activities. The annual turnover of the company which runs into thousands of crores and its publicity expenditure which has gone up from 7 crores in 1991-92 to 53 crores in 2001-02 also denotes its popularity.

Aggrieved by the use of the names/abbreviation 'LNT' and 'ELENTE' as brand names for electrical goods including electrical distribution systems like miniature circuit breakers etc. by the defendants, the plaintiff company filed a suit restraining it from passing of the said goods as that of the plaintiff by confusing the wary customers. The plaintiff's case was that the defendant intended to capitalize on the goodwill of the plaintiff, for there was no reason for the defendant to adopt such a name and abbreviation. An application seeking an ad interim injunction restraining the defendants from using the mark LNT/ELENTE was also filed. The defendants contested alleging that the name LNT/ELENTE was not similar to the trade mark and trade name used by the plaintiff and that LNT was nothing but the abbreviated form of the defendant's family business name since 2001, Lachmi Narain Traders. Another plane of argument was that the parties did not indulge in the same 'field of activity'. The application was allowed ex-parte by a learned Single Judge of the Delhi High Court on 27^th June 2003. The Judge despite allowing the injunction by stating that the test of ' field of activity' is no more valid, found favour in the willingness of the defendants to use the trade name "LNT/ELENTE-Lachmi Narain Traders" and said the injunction would not apply should the appropriate changes be made.

The appellants appealed against this, thus bringing the case under the purview of a Division Bench. The appellants referred to the Judge's own findings in the judgment that "they have, therefore, acquired a secondary meaning as the moment the word 'L and T' or 'L&T' appear on a product, the consumer will associate the same with the plaintiffs". It was reiterated that the test of 'field of activity' is no longer valid. Reliance was placed on precedence like:

The decision of the Division Bench was to allow the appeal to make the ex parte ad interim order absolute and have the defendants restrained from using the trademark/names 'LNT/ELENTE' or other deceptively similar name in relation to any of its products.

Conclusion

The decision of the Hon. Division Bench of the High Court in the intent case is praiseworthy as it has substantially reiterated the non-applicability of the test of 'field of activity'. It has done this by over-riding the learned Single Judge's acquiescence to the defendant's suggestion to continue using the trademark in the following manner - "LNT/ELENTE-Lachmi Narain Traders". They observed that the defendant's argument about the ability of a lay man/average consumer to realize the difference between brand names in 'different fields of activity' was highly optimistic in nature, thereby categorically stating the end of the test of 'field of activity'. The question is more of real likelihood of confusion or deception among the consumers and the resultant damages to the plaintiff, which has undoubtedly been proved in the present context as has been clearly worded in the final judgement.

The decision is also far-sighted in the consideration that it opens up an individual's/business house's scope for expansion into any field of profit maintaining his/its existing trademark.

© Lex Orbis 2008

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