A division bench of the Calcutta High Court in an appeal proceeding, passed an order on 24 December 2019 clarifying that in case of a trademark infringement, where a defence of acquiescence on part of the registered proprietor is taken by the defendant, it would have to be proved and mere delay in taking action would not deprive the registered owner from obtaining an order of injunction. This order was passed setting aside the order of the Learned Single Judge who refused to pass an order of injunction and directed for filing of affidavits.
The plaintiff, Shyam Steel Industries Ltd.) (Plaintiff) and one of the defendants, Shyam Sel and Power Limted) (Defendant) are both manufacturers of thermostatically treated (TMT) bars covered under Class 6 of the International Classification of Goods and Services. The Plaintiff was the registered proprietor of the trademark 'Shyam' (word-mark) and various other label marks comprising the word 'Shyam' as an integral part. The second defendant was a group company of the first defendant and manufactures of other steel products and ferroalloys. A suit for infringement and passing off of the trademark 'Shyam' was filed in The Calcutta High Court as the Defendant very recently started using the mark "SHYAM" on the packaging of the TMT bars manufactured by them. The Plaintiff is the registered owner of label mark 'Shyam Steel', word mark 'Shyam' and another device 'Shyam Steel (Wheel Device)' claiming use from 30 April 1994, 1 April 1994 and 1 January 1953, respectively. The Plaintiff also filed an application for registration of the trademark "Shyam EQR TMT' which was opposed by the Defendant However, the Defendant subsequently abandoned the same.
The Defendant had filed an application for rectification of the register and cancellation of the Plaintiff's 'Shyam" [Word-mark] before the Intellectual Property Appellate Board (IPAB) during the pendency of the instant suit and the same is pending. The Defendant argued that since the registration is in question, the Plaintiff cannot claim exclusivity over the mark. Further, the Defendant argued that the word 'Shyam' is another name of Lord Krishna and hence is a generic term on which right to use cannot be given to one user exclusively. The Defendants further argued that they have been using the mark since 1945 which is way before the adoption of the mark by the Plaintiff and hence the same is honest and concurrent use under section 12 of the Trademarks Act. The Defendant also submitted that the Plaintiffs have throughout known the use of the mark "SHYAM" by the Defendant and they never objected to the same. Hence, they have acquiesced to its use by the Defendants.
Decision of the Court
The Hon'ble High Court first dealt with the issue whether a name/surname/God's name can be registered as a trademark or not. Relying on the case Reddy Pharmaceuticals Ltd. Vs Dr. Reddy's Laboratories Ltd. reported in ILR (2008) I Delhi 1223 and the decision given by court of appeal of England and Wales in Baume and Co. Ltd. Vs. A. H. Moore Ltd. reported in  2 W.L.R. 797, the High Court opined that in case a name/surname is distinctive of the goods or services for which it is used, the same can be registered as a trademark. The Court also observed that the defendants have not been able to show any authority to establish that a God's name cannot be registered as a trademark.
Second issue that the court dealt with was whether the Plaintiff has acquiesced the use of the trademark by the Defendant. It was observed that the Plaintiff was aware of the use of the trademark by the Defendants at least from December 2015 and still took these many years to apply for injunction. Relying on various judgments, the court pointed out that acquiescence has to be a positive act and a mere inaction cannot be said to be acquiescence. Hence, mere delay cannot deprive the registered proprietor from obtaining an order of injunction. In the present case also, the Plaintiff may have delayed in filing the suit but the same does not constitute acquiescence.
Based on the above observation, the court passed an order of injunction restraining the Defendants from, in any way, manufacturing, selling or advertising their goods with the mark 'Shyam' or with a label or device containing the mark 'Shyam' till the disposal of the suit. However, the order of injunction would be effective since 1 May 2020. The Court, allowed the Defendants to clear their existing stock by 30 April 2020.
This landmark judgment in clear and unequivocal terms, specifies that the party asking for relief on grounds of acquiescence, needs to show that there was a positive action of acquiescence by the other party and mere inaction on its part does not constitute an act of acquiescence. Earlier also, this position was clarified by The Hon'ble Supreme Court in the matter of Midas Hygiene Industries (P) Ltd. and Anr. Vs. Sudhir Bhatia and Ors. [(2004) 3 SCC 90] following the Sumeet Machine Case [(1994) 2 SCC 448] where it was observed that circumstances other than inaction need to be present to take away the right of the registered proprietor of the trademark to restrain the use of the registered mark by others. The issue of acquiescence would only arise out of the positive acts and not merely by silence or inaction.
The Defendants were granted time to clear their stock by 30 April 2020 and the order of injunction will be applicable from 1 May 2020. It is to be seen that in the light of the present circumstances and lockdown in the country due to pandemic arising because of Covid-19, whether the Defendant could take a plea of not being able to sell off its goods because of the closure and hence the date of operation of order of injunction to be postponed and how the court deals with the same.
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