Global Goodwill Insufficient To Succeed In Claim Of Passing Off: Delhi High Court In VIP Industries V. Carlton Shoes Ltd
The Delhi High Court dismissed Appeals arising out of a common Judgment of the Single Judge in cross suits instituted against each other by Carlton Shoes Ltd. and VIP Industries Ltd.
The Delhi High Court observed that the worldwide or global goodwill and reputation of a brand is not sufficient to succeed in a claim of passing off.
The Court was hearing Appeals arising out of a common Judgment of the Single Judge in cross suits instituted against each other by Carlton Shoes Ltd. (CSL) and VIP Industries Ltd.
A Division Bench comprising Justice C. Hari Shankar and Justice Ajay Digpaul held, “We, therefore, entirely agree with the learned Single Judge that “the existence of goodwill and reputation has to be shown to exist in India and worldwide or global goodwill and reputation, sans any evidence of territorial goodwill and reputation, will be insufficient to succeed in a claim of passing off and thus yardstick to judge the claim of passing off will be “prior user” in India”. Of course, mere priority of user in India may not be sufficient to sustain a claim of passing off unless the plaintiff ascertaining the claim is able to establish that such prior user has resulted in accumulation of goodwill and reputation in the mark that it seeks to assert.”
The Bench explained that so long as the Plaintiff’s name or mark carries goodwill, it is entitled to protection against passing off, and against every other person using the same, or a deceptively similar name, or mark, as would result in the consuming public regarding the goods or services provided by such other person as those provided by the Plaintiff.
Senior Advocate Akhil Sibal appeared for the Appellant/VIP while Senior Advocate Sandeep Sethi appeared for the Respondent/CSL.
Facts of the Case
CSL and VIP both possessed registrations of the mark CARLTON in Class 18 for various goods. CSL’s registration in Class 18 was with effect from (w.e.f.) May 6, 1994 whereas, VIP possessed two registrations of the said mark in Class 18 w.e.f. July 26, 1995 and April 21, 2006. A Suit was instituted by CSL against VIP and VIP also instituted a Suit against CSL, both seeking permanent injunction, restraining the opposite party from using the mark CARLTON, as a word mark or a device mark.
During the course of arguments, Senior Advocate for VIP submitted that the restraint that his client seeks against CSL is only against use of the mark CARLTON for luggage, bags, and similar goods and has no objection to CSL using the mark for any other item. As against this, CSL pressed its claim for injunction against VIP in respect of the use of the mark for any goods in Class 18. VIP and CSL with their respective suits, filed applications under Order XXXIX Rules 1 and 2 of the Civil Procedure Code, 1908 (CPC), seeking interim injunctions pending disposal of the suits. The Single Judge dismissed the application filed by VIP and allowed the one filed by CSL. Being aggrieved by this, the VIP filed Appeals.
Court’s Observations
The High Court after hearing the contentions of the senior counsel, noted, “Both sides have proceeded on the premise that, as the mark CARLTON, whether as a word mark or a device mark, is registered in favour of CSL as well as VIP under the Trade Marks Act, neither CSL, nor VIP, could maintain a case of infringement against the other. This finding of the learned Single Judge has not, therefore, been questioned by either side. … In any event, the finding is clearly in sync with Section 28(3) of the Trade Marks Act, which proscribes a registered holder of trademark from claiming exclusivity, in respect of the mark, against any other person who may also be a registered holder of the same, or of a deceptively similar, trademark, while preserving the rights of each such registered trademark holder to claim exclusivity, for use of the mark, against any third person who is not a registered holder of the same, or of a deceptively similar, trademark.”
The Court said that Section 30(2)(e) of the Trade Marks Act, 199 specifically excludes, from the ambit of ‘infringement’, the use of a trademark by its registered proprietor, by virtue of the registration so held, and protects such use from any injunctive attempt by any third party and there cannot, therefore, be an action for injunction, on the ground of infringement, against the registered proprietor of a trademark. It added that the Single Judge has, therefore, correctly rejected the rival claims of infringement.
“As the learned Single Judge has correctly held, therefore, it is only to be seen whether either side could successfully maintain a case, against the other, or passing off. If it can, it is entitled to an injunction against the use, by the other, of the CARLTON mark, as sought. If it cannot, neither side would be entitled to an injunction, and both suits must fail. At the present stage, of course, as we are concerned only with the applications for interlocutory injunction, both applications would have to be dismissed”, it further said.
The Court refused to accept the submission of Senior Advocate for VIP that for a passing off action, the goodwill that is required to be proved is in the name or mark when used in connection with particular goods or services.
“Though, in every case, the name or mark would undoubtedly be used for providing goods are rendering services, the goodwill has to reside in the name or mark per se”, it also enunciated.
Furthermore, the Court was of the view that there is no factual or legal irregularity or illegality in the finding of the Single Judge, in the impugned Judgment that, prior to 2004, the CARLTON mark, for any goods, as used by VIP, did not have any reputation or goodwill in India.
“No case of trans-border reputation having been earned by the mark, prior thereto, was forthcoming. … Even if CSL had established goodwill, in respect of the CARLTON mark, for footwear, that by itself would suffice to maintain a plea for injunction against VIP using the CARLTON mark, even if it was for travel luggage”, it remarked.
The Court was not in agreement with Senior Advocate Sibal that handbags and purses are not allied and cognate, or similar goods, vis à-vis travel luggage. Moreover, it observed that there is no real basis for this submission, except insistence that handbags and purses are fashion accessories.
Conclusion
The Court remarked, “To our mind, handbags and purses are also receptacles in which persons carry items for use by them, though on a much smaller scale than travel luggage. Not everyone, it is obvious, uses a handbag as a fashion accessory, nor are all handbags, for that matter, capable of, or even meant for, such use. At least at a prima facie stage, keeping in mind the circumspection which the judgment of the Supreme Court in Wander requires us to maintain while sitting in appeal, we certainly cannot set aside the judgment of the learned Single Judge by accepting Mr. Sibal’s contention that handbags and purses are not allied and cognate to luggage. Even on merits, the submission appears to be highly debatable.”
The Court held that the finding of CSL having proved the existence of goodwill and reputation of the CARLTON mark, as used by it for more than 13 years prior to the commencement of user of the CARLTON mark by VIP for travel luggage, does not brook interference.
“The learned Single Judge has also examined whether the balance of convenience lies, in the present case. She notes that CARLTON is the house mark of CSL, and is the only mark used by it. As against this, VIP has at least six marks other than CARLTON, which it uses. Keeping in mind the reputation that the CARLTON mark, as used by CSL, has earned since 1993 even in India, the learned Single Judge holds that the balance of convenience was in favour of grant of injunction, to CSL, against VIP, restraining VIP from using the CARLTON mark for goods which fall in Class 18, pending disposal of the suit”, it noted.
The Court agreed with the Single Judge that it would be hard to believe that VIP was unaware of the prior existence of the CARLTON mark, in India, as used by CSL since 1993.
“The CARLTON mark in fact stands registered, under the Trade Marks Act, for Class 18 goods, in favour of CSL, since 1986. CARLTON is not a word of ordinary usage, or one which would readily come to the mind of a manufacturer of travel luggage. If, therefore, the learned Single Judge has come to a conscious and subjective finding that the adoption of the CARLTON mark, by VIP, for travel luggage in 2006, was not innocent but deliberate, we do not find that any case to interfere with that finding, within the peripheries of the appellate jurisdiction which vests in us, exists”, it concluded.
Accordingly, the High Court dismissed the Appeals and upheld the Single Judge’s Judgment.
Cause Title- VIP Industries Ltd v. Carlton Shoes Ltd & Anr. (Neutral Citation: 2025:DHC:5042-DB)
Appearance:
Appellant: Senior Advocate Akhil Sibal, Advocates Nishad Nadkarni, Ankur Sangal, Ankit Arvind, Aasif Navodia, Khushboo Jhunjhunwala, Shaurya Pandey, Rakshita Singh, and Ridhie Baja.
Respondents: Senior Advocate Sandeep Sethi, Advocates Peeyoosh Kalra, C.A. Brijesh, Ishith Arora, Sumer Dev Seth, and Simranjot Kaur.
