Contradictory ‘Use claim’ in the Trademark application leads to adverse inference

The trademark AMPA is the bone of contention in the instant dispute between two entities dealing in bicycles. The Plaintiff, Jagmohan Ratra (RATRA) filed the suit before the Delhi High Court against the Defendants, Ampa Cycles Private Limited (ACPL) and another alleging passing off. ACPL has filed application to set aside the injunction granted in favour of RATRA which is being considered by the court.

RATRA in the suit contends:

  1. He is the proprietor of the firm, M/s Four Diamonds, engaged in manufacturing and selling bicycles, tricycles, prams, baby rider bicycles, etc. under several brands, one of which is AMPA. The firm was established as a partnership firm in 1983 having two partners, Jagmohan Ratra and Sh. Hari Dutt Sharma.
  2. AMPA trademark and logo was coined by RATRA and adopted by the partnership in 1991.
  3. The partnership firm M/s Four Diamonds was dissolved vide a dissolution deed in 2003. RATRA continued the business under the trading name M/s Four Diamonds as sole proprietorship concern.
  4. Ampa Bikes Private Limited was incorporated in March 1992. In 1995 the company filed trademark application for the mark AMPA claiming use since 1992, however, the application was abandoned in 2002.
  5. As part of settlement, it was agreed RATRA could use the AMPA mark for cycles up to 14 inches and Ampa Bikes Private Limited was allowed to use the mark for all cycle models above 14 inches. In 2013, Ampa Bikes Private Limited was struck off from the Register of Companies and thus, ceased to exist.
  6. RATRA continued to use the mark AMPA uninterruptedly since its adoption in 1991 initially through the partnership firm, M/s Four Diamonds and thereafter, as a proprietorship concern.
  7. In 2019, RATRA applied for registration of the mark AMPA claiming use since 2011 which is pending. The mark has gained reputation and goodwill on account of extensive use, sales and marketing.
  8. In 2020, RATRA became aware of ACPL manufacturing and marketing cycles under an identical mark and logo AMPA. One of the Directors of ACPL had in the past dealt with RATRA and was aware of the prior use of the mark by RATRA. ACPL’s adoption of an identical mark is dishonest and to ride on the goodwill and reputation of RATRA’s mark garnered over three decades.

ACPL in the written statement contends:

  1. The trademark “AMPA” was coined and designed by Sh.Hari Dutt Sharma. Further to the dissolution of the partnership Sh.Sharma continued to use the trademark AMPA.
  2. In 2013, Ampa Bikes Private Limited through its authorised signatories, Hari Dutt Sharma, Ms.Nishtha Sharma and Sh.Ajay Kumar Bawa entered into an agreement for assignment of the trademark AMPA and it was decided that Sh.Ajay Kumar Bawa will have all the rights to manufacture and sell under the trademark AMPA.
  3. In 2013, Ampa Bikes Private Limited was struck off from the Register of the companies as there was no business in the said company. In 2018, Sh.Ajay Kumar Bawa along with Sh.Anmol Bawa decided to manufacture cycles/tricycles/bikes under the brand name AMPA being the bona fide user of the brand AMPA and dealing in the cycle business since many decades.
  4. In 2018, ACPL was incorporated and they applied for the mark AMPA with the Trademark Registry in 2018. The applications were filed in 2018 and 2020 on a ‘proposed to be used basis’.
  5. RATRA with dishonest intention and to extort monies has filed a frivolous trademark application for the mark AMPA claiming its user since, 2011 which is inconsistent and the invoices filed appear to be forged.

The court after considering the pleadings, documents, arguments and case laws held:

  • It is an admitted fact that AMPA mark was coined by the partnership firm, M/s Four Diamonds or one of its partners in the year 1991. Thereafter, in 2003 the firm was dissolved and Sharma exited from the partnership firm and took charge of the company Ampa Bikes Pvt. Ltd. As per the terms of settlement RATRA was entitled to use the mark AMPA in relation to cycles below 14” while Ampa Bikes Pvt. Ltd. was allowed to use the mark AMPA for models of more than 14”. It is further admitted that in 2013, Ampa Bikes Pvt. Ltd. was struck off from the Register of Companies and ceased to exist.
  • The averment that Ampa Bikes Pvt. Ltd. through its authorised signatory, Sharma assigned the trademark AMPA to Ajay Kumar Bawa and he would have all rights to manufacture and sell products under the trademark AMPA is disputed. RATRA has contended that the deed of assignment is a fraudulent document created as an afterthought to justify use of the trademark AMPA by ACPL.
  • ACPL incorporated in 2018 have filed three trademark applications, one in 2018 and two in 2020, all of which are on a ‘proposed to be used’ basis. Thereafter, to claim that this was done based on an erroneous advice and that there is prior user prima facie appears to be an afterthought. Thus, at this stage without leading evidence, ACPL’s plea cannot be accepted. On the other hand, RATRA has filed invoices dating back to the year 2011 and the trademark application also claims user from 2011.

In light of the above, court ruled in favour of RATRA holding that it had made out a prima facie case, confirmed the injunction in his favour and dismissed the application filed by ACPL.

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