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Ranjan Narula Associates


Prior use settles the issue in favour of AZT
The right over the mark AQUA for mobile phones is subject of a hotly contested battle between AZ Tech (India) and Intex Technologies (India) Ltd at the Delhi High Court. AZT filed the suit for passing off at the Delhi High Court to restrain Intex from using the mark 'AQUA' in relation to mobile phones on the basis of their prior rights and use of the mark AQUA.

AZT in support of their case contended:
  1. AZT is engaged in the importation and sale of mobile phones under the trademark AQUA since 2009. AQUA is an arbitrary mark in relation to mobile phones and merits protection.

  2. AQUA branded mobile phones have acquired goodwill and reputation in India not only on the basis of their superior quality and reliability but also on account of active marketing strategies and promotional activities. The AQUA branded products are also sold in Hong Kong, China, Nigeria, Nepal, Bangladesh and United Arab Emirates.

  3. The AQUA mark was registered in Hong Kong in the year 2012 and is pending registration in India since 2009.

  4. In 2012, Intex adopted an identical mark 'AQUA' and launched a range of mobile phones in the name 'Intex Aqua' with a view to exploit the goodwill of AZT's mark AQUA. The Intex Aqua branded mobile phones are deceptively similar not only in looks but also in features which creates confusion in the market and thus amounts to passing off.
Intex made the following submissions in support of its case:
  1. AZT cannot claim exclusive rights over the mark 'AQUA' which means 'water' and has been used by numerous entities. AZT has made an incorrect representation before the Trade Marks Registry as it has never used the mark for the goods as described in the application. Registry in its examination report has raised objection with regard to the AQUA mark being non-distinctive and further cited several marks which contain the word 'Aqua'.

  2. AZT has failed to establish user of the mark since 2009 and the documents filed does not substantiate their case. Further, the revenue generated by Intex from their mark 'Intex Aqua' is substantially more than that of AZT.

  3. Intex's phone contains added features including get-up, placement, colour combination and writing style which make the goods of the parties completely distinguishable.

  4. There is acquiescence as the suit is filed after 14 months since Intex started using the mark in the year 2012.

  5. Intex has enjoyed tremendous success and for easy identification introduced sub-names to their house mark 'Intex' including 'Cloud', 'Turbo', 'Victory', 'Neo', 'Pride', 'Hero', 'Nova', 'Aura', 'Brave', etc. The word 'Aqua' was inspired from the fact that the graphics and the picture quality of the phones are crystal clear that it gives an impression that the screen is as clear as pure water.
Both sides made extensive arguments and relied on documents and case laws to substantiate their case. The court after considering the pleadings, documents and case decisions ruled in favour of AZT holding that:

  1. The word 'Aqua' has Latin origin and means water which does not readily conjure up the image of mobile phones and thus is an arbitrary mark in relation to such goods. Further, Intex has also claimed proprietary rights in the mark AQUA, thus, they cannot turn around and claim that the mark is not capable of distinguishing the goods. Moreover, mere filing of a search report by Intex without cogent and clear evidence of user cannot establish that the mark is common to trade.

  2. The documents, invoices, Facebook page, registration of domain name www.aqua-mobiles.com all prove prior use of the mark AQUA by AZT. Further, for establishing priority in adoption and use at an interim stage it is not necessary to show substantial sales or advertisements.

  3. The use of the word 'Intex' will not be sufficient to dispel the likelihood of confusion especially when 'AQUA' is being marketed as a separate sub-brand. This may even create an impression that AZT's business has been acquired by Intex. Moreover, Intex has also applied for registration of the mark 'Aqua' standalone and not with the word 'Intex' in Class 9 and 16 which shows their clear intention to use the mark by itself.

  4. AZT is not guilty of misrepresentation so as to deny them an equitable relief of injunction and more so such allegations have to be proved at trial. The court further observed that as AZT has established prior use, goodwill and reputation, balance of convenience is also in their favour.
In view of the above the court restrained Intex from using the mark AQUA in relation to mobile phones till the disposal of the suit. Intex has appealed against the order to the two judge bench (division bench) and obtained stay of the preliminary injunction order. The parties it seems are negotiating settlement. Overall a well reasoned judgment that grants protection to arbitrary marks.
 
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