Trademark Tussle: Validity of Assignment Deeds in Nico Quality Products Case

Introduction

This case concerns a trademark dispute between the Plaintiff, Nico Quality Products and the Defendant, N.C. Arya Snuff & Cigar Co. The issue revolves around ownership and use of trademarks related to snuff and cigar products. The Plaintiff claims ownership based on an assignment deed, while the Defendant argues that the assignment was fraudulent and seeks to retain rights over the trademarks. The case was heard in the Hon’ble High Court of Madras, with Justice P. Velmurugan presiding.

Facts                      

• The Plaintiff, Nico Quality Products, filed a suit (C.S. No. 605 of 2013) seeking a permanent injunction against the Defendant for infringing their registered trademarks.
• The Plaintiff claimed that they had acquired the trademarks through a deed of assignment dated 15.12.2011, executed by the Defendant’s partner, Anuradha, who was authorized to do so.
• The Plaintiff also claimed that they paid ₹75 lakhs as consideration for the assignment.
• However, the Defendant denied the validity of the assignment, alleging that the authorization letter and deed of assignment were forged, and that no consideration was paid.

Issues

1. Whether the authorization letter and the deed of assignment were genuine or forged.
2. Whether the Defendant’s use of the assigned trademarks amounted to infringement and passing off.
3. Whether the trademarks were assigned with or without goodwill.
4. Whether the Plaintiff was entitled to the reliefs claimed in the suit.

Plaintiff’s Arguments

The Plaintiff argued that the Defendant’s partner, Anuradha, was authorized to execute the deed of assignment, and the Plaintiff had paid ₹75 lakhs as consideration. They submitted that the Defendant had acknowledged the receipt of the consideration and had allowed the Plaintiff to use the trademarks. The Plaintiff also claimed that they had registered the trademarks and were the lawful owners. They sought a permanent injunction to prevent the Defendant from using the trademarks.

Defendant’s Arguments

The Defendant contended that the authorization letter and deed of assignment were forged, and that no consideration was paid. They argued that Anuradha was not authorized to execute the assignment, and that the Plaintiff had fabricated the documents to claim ownership of the trademarks. The Defendant also claimed that the assignment was not registered within the stipulated time under the Trade Marks Act, making it invalid. They further argued that the Plaintiff had no right to seek an injunction as the assignment was fraudulent.

Analysis of the Court

• The Court examined the oral and documentary evidence, including the alleged assignment deed and signatures.
• It found that the Plaintiff failed to provide sufficient evidence to prove that the assignment deed was forged.
• The Court noted that the Plaintiff had admitted certain facts that supported the validity of the assignment.
• The Court also held that the Defendants had lawfully acquired the trademarks through the assignment and had been using them legitimately.
• The Plaintiff’s allegations of forgery and fraud were not substantiated with strong evidence.

Judgment

The Court held that the authorization letter and deed of assignment were genuine, and that the Plaintiff was the lawful owner of the trademarks. The Court granted a permanent injunction in favour of the Plaintiff, restraining the Defendant from using the trademarks. The Court also dismissed the Defendant’s counterclaims in C.S. Nos. 882 of 2013 and 587 of 2015, holding that the Defendant had failed to prove that the assignment was fraudulent.

Conclusion

The case of Nico Quality Products vs. M/s. N.C. Arya Snuff & Cigar Co. highlights the importance of proper trademark assignment and legal compliance in intellectual property disputes. The court upheld the plaintiff’s trademark ownership, ruling the assignment valid and rejecting the defendant’s forgery claims. The Defendant’s continued use of trademarks beyond the agreed period was deemed infringement and passing off. The judgment reiterates the significance of executing clear agreements, timely registration, and respecting trademark rights to prevent commercial disputes.