Delhi High Court ruled in favour of New Balance Athletics in trademark dispute

New Balance Athletics, the well-known sports footwear and apparel manufacturer, won a case in the Delhi High Court against New Balance Immigration, a company that offers immigration and visa procurement services, and has been using a corporate name, logo and domain deceptively similar to the sportswear brand’s New Balance trademarks. Although the two companies offer totally different products and services, the court ruled in favour of New Balance Athletics on June 1, 2023.

The defendant, New Balance Immigration, argued that the marks they used were different from the ones used by the plaintiff, New Balance Athletics, and that the marks were implemented in different trade channels, thus causing no likelihood of confusion. However, such argument was not accepted by the court.

C.A. Brijesh, partner at Remfry & Sagar in New Delhi, explained: “The defences to defeat a claim for infringement are encapsulated under Sections 30 to 35 of the Trademarks Act, 1999. If the use of the mark is in accordance with honest practices in industrial or commercial matters and is not such as to take unfair advantage of or be detrimental to the distinctive character or repute of a trademark, then there can be no infringement.”

In addition, Brijesh said there will be no infringement in the following cases:

a.where the use is in relation to goods or services to indicate the kind, quality, quantity, etc. of the goods or rendering of services;

b.use of the trademark in a manner outside the scope of registration where a trademark is registered subject to conditions or limitations;

c.where a person uses the trademark in relation to goods or services for which the registered owner had once applied the mark, and had not subsequently removed it or impliedly consented to its use;

d.a trademark registered for any goods may be used in relation to parts and accessories to other goods or services, and such use is reasonably necessary, and its effect is not likely to deceive as to the origin; and

e.the use of registered trademark being one of two or more registered trademarks which are identical or similar in exercise of the right to the use of that registered trademark.

“Pertinently, Section 29(4) of the act relates to cases in which the allegedly infringing trademark is used in relation to goods or services which are not similar to those for which the trademark is registered,” Brijesh said, explaining that the three requirements of Section 29(4) have to be met simultaneously:

1.the registered trademark must have a reputation in India;

2.the use of the trademark must be without cause; and

3.such adoption or use of the trademark takes unfair advantage of or is detrimental to the distinctive character of the repute of the registered trademark.

Brijesh continued: “In the event the said three requirements are satisfied and the court is convinced that the adoption is dishonest, it is settled law that injunction has to follow where trademark infringement is established and pleas of distinct trade channels, no likelihood of confusion and concurrent and honest adoption are no defences. In the recent New Balance lawsuit, the Delhi High Court opined that the three requirements were satisfied and thus permanently restrained New Balance Immigration and imposed costs.”

Furthermore, the court held that the plaintiff had successfully established a case of infringement and passing off by the defendant. Brijesh explained passing off is an action for deceit and is a common law remedy. It involves “passing off the goods of one person as those of another, whereas an action for infringement is a statutory remedy conferred on the proprietor of a registered trademark for vindication of its exclusive rights to use the trademark in relation to the goods or services in respect of which registration has been granted.”

“The statutory remedy of infringement can also be invoked in respect of disparate goods or services, provided the registered trademark has goodwill, reputation or trans-border reputation spilling into India and the use of the infringing mark is detrimental to the reputed and distinctive character of the registered trademark. Lastly, the use of the trademark by the defendant is not necessary for infringement, but it is a ‘sine qua non’ for passing off,” he said.

The court observed that the plaintiff had associated goodwill and reputation with its marks, which extended beyond the goods of interest. It also decided that the defendant’s use of its marks was dishonest and intended to springboard its business by drawing an association with the plaintiff and riding on the latter’s goodwill and reputation.

According to Brijesh, the court may consider the following factors while determining whether a trademark has sufficient goodwill and reputation in cases related to disparate goods or services:

a.the knowledge or recognition of the trademark in the relevant section of the public, including knowledge in India obtained as a result of promotion of the trademark;

b.the duration, extent and geographical area of any use of the trademark;

the duration, extent and geographical area of any promotion of the trademark, including advertising or publicity and presentation, at fairs or exhibition of the goods or services to which the trademark applies;

c.the duration and geographical area of any registration of or any application for registration of that trademark under this Act to the extent they reflect the use or recognition of the trademark; and

d.the record of successful enforcement of the rights in that trademark, particularly the extent to which the trademark has been recognized as a well-known trademark by any court or trademark office.

“Having said that, substantial evidence and material, including sales, advertising or promotional figures, would have to be placed on record to satisfy the said factors. Should any adoption tend to convey that the subsequent user is in some manner associated and/or affiliated with the prior and registered user, then even in cases related to disparate goods, as held in various judgments of the courts in India, the courts have restrained the defendant opining the adoption to be dishonest solely with the intention to ride on the goodwill and reputation earned by such plaintiff. If the marks are identical or deceptively similar and the defendant has no cogent explanation for adoption, it is obvious that the intention is dishonest, especially if plaintiff has proved its goodwill and reputation in its mark,” concluded Brijesh.