In a recent judgment, the Division Bench of the Delhi High Court upheld an interim injunction granted by the District Judge (Commercial Courts), restraining the defendants, KRB Enterprises and others, from using the mark ‘KRB’ or any other mark deceptively similar to ‘KRBL’, the registered trademark of M/s KRBL Limited. The High Court dismissed the appeal filed by the defendants challenging the trial court’s order, reinforcing key principles of trademark law, including source identification, allied and cognate goods, and protection based on deceptive similarity.

Background of the Dispute

KRBL Ltd., a reputed company engaged in manufacturing, marketing, and exporting food products such as rice, quinoa, chia seeds, and flax seeds, filed a commercial suit before the District Court alleging trademark and copyright infringement, passing off, and related claims. The plaintiff is the registered proprietor of the mark in Class 35 and also claims artistic copyright protection for its mark. An application for registration of the mark in Class 30 is pending.

KRBL Ltd. contended that it had been using the mark “KRBL” since 2000 and had built considerable goodwill through continuous and extensive use. It further submitted that the mark is integral to its group entities, including KRBL Food Ltd., KRBL Foundation, and KRBL Infrastructure Ltd.

The dispute arose after the plaintiff discovered in 2016 that the defendant had filed a trademark application for the mark ‘KRB’. The plaintiff opposed the application and, upon further investigation, found that the defendants were selling rice under the disputed mark on e-commerce platforms, which led to the filing of the suit.

Defendant’s stand before the trial court

The defendants argued that they had been using the mark ‘KRB ENTERPRISES’ for goods like rice, coffee, and tea since 2009 and that the mark was adopted honestly.

They had been purchasing rice from the plaintiff since 2014 and that the latter was aware of their business operations, thereby acquiescing to their use of the mark.

They further pointed to the plaintiff’s abandoned application in Class 30 and contended that the plaintiff cannot claim exclusivity over the acronym ‘KRBL’ under trademark law.

Trial Court’s Interim Relief

The District Judge granted an interim injunction in favour of KRBL Ltd., restraining the defendants from using the mark ‘KRB’ or any other mark/name that is identical or deceptively similar to ‘KRBL’. The Court found that the plaintiff had made out a prima facie case of infringement and passing off.

Appeal Before the High Court

Aggrieved, the defendants appealed before the Division Bench of the Delhi High Court. They raised several grounds, including:

1. The plaintiff’s trademark is registered only in Class 35 and not for goods in Class 30 like rice.
2. The plaintiff had voluntarily withdrawn an earlier Class 30 application and refiled it on a ‘proposed to be used’ basis.
3. The trial court erred by dissecting the composite mark ‘KRB Enterprises’ instead of examining it as a whole.
4. The District Judge extended protection beyond the registered class, which was legally unsustainable.

Plaintiff’s Rebuttal

KRBL Ltd. countered these arguments by asserting that:

1. It holds statutory rights under Class 35 for services related to rice, including marketing and retail.
2. Both parties deal in identical goods and operate in overlapping markets, thereby increasing the likelihood of confusion.
3. The earlier trademark application in Class 30 was withdrawn due to legal misguidance during the GST regime rollout and was promptly refiled, indicating no intention to abandon the mark.
4. The plaintiff is a large entity with multiple branches and sales staff, and top management cannot be presumed to know all ground-level transactions, thus, there is no acquiescence.

High Court’s Analysis and Judgment

The Division Bench upheld the trial court’s reasoning and made the following key observations:

1. Trademark Usage of Corporate Names: The Court reaffirmed that a corporate name can qualify as a trademark if it functions as a source identifier. Visual or physical affixation on goods is not a necessary condition for a mark’s valid use under the law.
2. Allied and Cognate Goods Principle: The Court clarified that the classification of goods (i.e., Classes 30 vs 35) is not determinative in infringement actions. Instead, the nature of the goods or services and their market overlap are critical. Since Class 35 covers marketing and retail services of rice, it was held to be closely related to Class 30 goods like rice.
3. Deceptive Similarity: The Court held that ‘KRB’ and ‘KRBL’ are deceptively similar, especially in the context of rice products. Given the identical nature of the goods and the similarity in the marks, the risk of consumer confusion was high.
4. No Acquiescence Established: A few sales of unbranded rice to the defendants did not amount to express or implied consent to use the mark ‘KRB’.
5. Continuous Use and Bona Fide Intent: The Court accepted evidence of continuous use of the mark by the plaintiff and found the re-filing of the Class 30 application indicative of bona fide intent to use and protect the mark.

Conclusion

In view of the above, the High Court held that KRBL Ltd. had established a strong prima facie case of trademark infringement. It found no infirmity in the District Court’s injunction order and accordingly dismissed the appeal filed by the defendants.

Comment

By upholding the injunction passed by the District Court, the Court affirmed that trademark rights extend beyond strict class boundaries when consumer confusion is likely and emphasized that honest adoption alone cannot override the prior goodwill of a registered mark.