Unregistered Trademark Protection: Key Takeaways From Emerge Classes V. Kashmir Institute Of Excellence

Posted On - 25 July, 2024 • By - King Stubb & Kasiva

Introduction

The recent case of Emerge Classes Private Limited v. Kashmir Institute of Excellence[1] and Others, centers on a dispute between two educational service providers in Kashmir, India. The crux of the issue lies in the alleged similarity between the branding used by both parties.  Emerge Classes claimed that the Kashmir Institute of Excellence (one of the respondents) was using a confusingly similar brand name and logo, thereby misleading the public and infringing upon their goodwill. The Kashmir Institute of Excellence contested these claims. Ultimately, the J&K High Court upheld the lower court’s decision, effectively preventing Emerge Classes from using the disputed trademark.

Arguments of the Parties

Plaintiff’s Contentions

The Plaintiffs contend that:

  • They are all reputable service providers in education, each with their own established brand (KIE, MissionE, HOPE Classes).
  • Plaintiff 1 owns the registered trademark “KIE” (device and logo) for coaching services.
  • They have built a strong reputation and goodwill associated with their brands.
  • In January 2024, they formed a company, EMERGE KIE HOPE MISSION-E Pvt. Limited, to provide coaching services under a unified brand “EMERGE – KIE HOPE MISSIONe – Infinity and beyond”.
  • They have invested significantly in advertising and promoting this new brand.
  • The defendant is using a confusingly similar brand name “EMERGE Infinity & beyond – powered by KIE” for coaching services in Srinagar.
  • This includes a similar logo/device and social media presence (“Emerge Srinagar”).
  • The defendant’s use of “KIE” is particularly misleading as it’s a registered trademark of the Plaintiffs.
  • By using these similar elements, the defendant is deceiving the public and trying to capitalize on the Plaintiffs’ goodwill.

The Defendant/ Appellant’s Contentions

The defendant contends that:

  • The Plaintiffs’ trademark “EMERGE KIE HOPE MISSION PRIVATE LIMITED” isn’t registered and has no traction in Kashmir.
  • They (the defendant) have already begun registering their own trademark “Emerge-infinity and beyond” with a distinct logo.
  • There’s no similarity between the two brand names.
  • They aren’t using the Plaintiffs’ registered trademark “KIE” and the Plaintiffs themselves abandoned it by forming a new company.
  • The Plaintiffs’ business is new and hasn’t established any goodwill for their current brand.
  • Their brand name and logo are entirely different from the Plaintiffs’ and won’t cause any deception, especially for their target audience.
  • The Plaintiffs don’t have a strong case for an injunction since their trademark isn’t established.

The Court’s Decision

The Court undertook a detailed analysis of the applicable law and its application to the facts of the present case.

Legal Analysis

  • Unregistered trademarks – Action for passing off is available under Section 27(2) of the Trade Marks Act for unregistered trademarks.
  • Several cases like Satyam Infoway Ltd. v. Siffynet Solutions (P) Ltd.[2] and Cadila Health Care v. Cadila Pharmaceuticals Ltd.[3] have highlighted the elements for passing off and the principles for granting injunction.
  • Elements of Passing Off – To succeed in a passing off action, the Plaintiff must prove:
    • Goodwill in the business
    • Misrepresentation by the defendant leading to confusion
    • Damage or likelihood of damage
    • Prior user
  • Principles for Granting Injunction – Injunctions in passing off cases are granted based on:
    • Prima facie case
    • Balance of convenience
    • Likelihood of irreparable loss without injunction
    • Proof of actual damage is not necessary for passing off
  • Ingredients of Passing Off – The following are the ingredients to establish passing off for unregistered trademarks:
    • Defendant selling goods/services in a way that deceives the public into thinking they are from the Plaintiff
    • The Plaintiff is not required to prove long-term user to establish a reputation
    • Misrepresentation by the defendant
    • The likelihood of confusion in the minds of the public is assessed using the “imperfect recollection and ordinary memory” test
    • Loss or likelihood of loss
    • Goodwill of the Plaintiff as a prior user
  • Factors considered while assessing the likelihood of deception:
    • Nature of the market
    • Class of customers
    • Extent of the Plaintiff’s reputation
    • Trade channels
    • Connection in the course of trade
  • Differences between Passing Off and Infringement:
    • Passing off is based on goodwill, and infringement is based on proprietary rights in a registered trademark.
    • Passing off is an action for deceit, and infringement is a statutory remedy.
    • Use of the trademark by the defendant is not necessary for passing off but is required for infringement.

Application to Facts

  • Plaintiffs claim prior user of the brand name “EMERGE KIE HOPE MISSIONe- Infinity & Beyond” since January 2024.
  • The defendant started using “EMERGE Infinity & Beyond – Powered by KIE” from April 2024.
  • The trial court observed that the Plaintiffs’ brand name and logo are deceptively similar to the defendant’s.
  • Plaintiffs have goodwill in the coaching business established through their prior brands “KIE”, “Mission-E”, and “Hope Classes.”
  • There is a likelihood of confusion among students due to the similar brand names and the use of “KIE” by the defendant.

Decision

  • The appeal is dismissed.
  • The trial court’s decision granting an injunction is upheld.
  • All the ingredients for granting an injunction in a passing-off action are fulfilled.

Analysis and Conclusion

In this recent trademark dispute, the court protected unregistered trademarks through the lens of passing off. Emerge Classes successfully argued that despite lacking registration, their prior use of “EMERGE” with past ventures established goodwill. The defendant’s use of a similar brand name “EMERGE Infinity & Beyond – Powered by KIE” likely caused confusion due to the overlapping terms and inclusion of “KIE,” potentially misleading students about the service origin. This case highlights the importance of creating distinct branding, even for unregistered trademarks. By emphasizing prior user rights and the potential for deception, the court discourages exploitation of another’s reputation and protects fair competition in the marketplace.

[1] Emerge Classes Private Limited v. Kashmir Institute of Excellence, J&K High Court, FAO No.18/2024, CM No. 3278/2024.

[2] Satyam Infoway Ltd. v. Siffynet Solutions (P) Ltd., (2004) 6 SCC 145.

[3] Cadila Health Care v. Cadila Pharmaceuticals Ltd, (2001) 5 SCC 73.