Khadi And Village Industries Commission V. Girdhar Industries & ANR

Introduction

In the case of Khadi and Village Industries Commission v. Girdhar Industries & Anr, the Plaintiff filed a suit against the Defendant for infringement and passing off of its trademark “KHADI” by the Defendants and sought injunctive relief against the use of such trademark by the Defendants. However, the Court while refusing to grant such relief, established that for a successful claim of infringement against a registered trademark mark, the Plaintiff must establish that the registration is invalid.

Facts of the Case

The case revolves around the dispute between Khadi and Village Industries Commission (KVIC) [Plaintiff], constituted through KVIC Act, 1956 and Girdhar Industries [Defendants], over the use of the trademark "KHADI" on soaps and detergents. The Plaintiff claimed that it has been using the trademark "KHADI" continuously and without interruption since 1956, and has registered the mark in various classes under the Trade Marks Act, 1999 (hereinafter referred to as the “Act”). It further claimed that over a period of time, its trademark has acquired immense reputation and goodwill and is a source identifier of the Plaintiff.

The Defendant, on the other hand, is a manufacturer of soaps and detergents and has registered the trademark "GIRDHAR KHADI" under Class 3 of the Act. The Plaintiff alleges that the Defendant's use of the mark "GIRDHAR KHADI" is deceptively similar to its own mark "KHADI" and is likely to cause confusion and deception among consumers. It also alleges that the Defendant's use of the mark "Girdhar Khadi" amounts to passing off of its products as those of KVIC.

On being aggrieved by the use of deceptively similar mark by the Defendant, the Plaintiff files the present suit of infringement of its registered trademarks by the Defendant and passing off Plaintiff’s products as its own. The Plaintiff, pending disposal of the suit also seek injunctive reliefs against the use of allegedly deceptively similar marks by the Defendant.

Issues

1. Whether the Plaintiff has established a case for infringement of its trademark against the Defendant? Whether the registration obtained by the Defendant of is invalid?
2. Whether the Plaintiff’s mark has acquired goodwill and reputation prior to 2005, when the Defendant’s mark was registered? If not, can the goodwill acquired after “Terminus Ad Quem” be of any relevance?
3. Whether the balance of convenience and irreparable loss dictate in favor of the Plaintiff?

Observations Made by The Court

1. The Court while negating Plaintiff’s claim of infringement of its trademark, observed that there can be no finding of infringement against a registered trade mark until and unless the Court is satisfied that the registration obtained by the Defendant is invalid.
   • In respect of validity of the registration of Defendant’s mark, Court held that the Plaintiff has failed to establish that the Defendant has obtained the registration in bad faith and that the registration is invalid. The Court reached to this conclusion by making the following observations:
   • Plaintiff has made two assertions for challenging the validity of registration obtained by the Defendant: Defendant must have been aware of Plaintiff’s existing “KHADI” mark registration under Class 3 when it applied for registration of its “GIRDHAR KHADI” mark and Defendant has failed to produce any proof of user of mark since 2001, as claimed by the Defendant.
   • Both these assertions failed to satisfy the Court, that the registration is obtained by the Defendant in bad faith as:
     • It would be presumptuous to assume that Defendant was aware of Plaintiff’s registration at the time of applying and even if he was, Section 11(1) does not absolutely prohibits registration of a trade mark which is similar to an earlier mark until and unless there is likelihood of confusion between the two marks.
     • The Defendant has filed an affidavit of user with the application of registration of its mark and hence the Court cannot, at least at this prima facie case in any infringement suit, hold that the registration of Defendants’ mark to be invalid.
2. The Court clarified that for an action of passing of it is mandatory to establish that the infringed mark has acquired goodwill and reputation prior to claim of use or date of registration of infringing mark. Such reputation cannot be proved by the mere assertion that the Plaintiff is engaged in various social activities, the command that its mark has in the public eye etc. The pre-requisite to establish goodwill and reputation, is to show “use”, in which the Plaintiff has miserably failed. There is no evidence of use of the KHADI mark by Plaintiff prior to 2001 or even 2005 when the mark of the Defendant is registered. The existence of pre-existing goodwill and reputation, prior to the commencement of user of the impugned marked by the Defendant, is an indispensable sine qua non for a passing off action to legitimately lie. The “terminus ad quem”, by which date the Plaintiff has to prove the acquisition of the requisite goodwill and reputation for a plea of passing off to succeed, is the date of commencement, by the Defendant, of the rival mark. Goodwill or reputation acquired by the Plaintiff, in the asserted mark, after that date, is of no consequence.
3. Court, on the third issue, observed that the balance of convenience and irreparable loss would also dictate against grant of injunctive interlocutory relief to the Plaintiff at this stage and gave the following reasons for the same:
   • Plaintiff failed to establish the prior use of its trademark in category of soap and detergents.
   • Plaintiff failed to prove that the registration obtained by the Defendant is invalid.
   • Plaintiff failed to establish that it’s mark “KHADI” has acquired goodwill and reputation prior to “Terminus Ad Quem”.

Conclusion

This case holds relevance in two aspects of jurisprudence of infringement and passing off:

• Where infringement claim is made against a registered trademark, the onus on Plaintiff of proving that the registration obtained by the Defendant is invalid is very high as the same constitutes a pre-requisite for moving further with the suit.
• For an action of “passing off” to succeed, the Plaintiff must show that its mark enjoyed goodwill and reputation prior to the claim of use of similar mark by the Defendant.