Delhi High Court dismisses lame excuse for adoption of HTC brand for Trimmers and Clippers

A Taiwanese and Chinese company fight out for rights in the mark HTC at the Delhi High Court. Plaintiff, HTC Corporation claims prior adoption and use of HTC for mobile phones and computing products. Defendants, Mr. L V Degao & Ors claim rights over the identical mark for trimmers and clippers. Both parties have registered the mark HTC for respective goods.

The court has thus to rule if one registered proprietor can obtain a restraint order against another? Whether the delay by the Plaintiff to bring the action disentitles them to seek a preliminary injunction. The post discusses the contention of the parties and the court’s decision on the preliminary injunction sought by Plaintiff.

The Plaintiff in support of its case states:

  1. They are a company incorporated under the laws of Taiwan and a leading manufacturer of consumer electronic items, such as smartphones, mobile phones, personal digital assistant (PDA) devices, etc. 
  2. They were incorporated in 1997 as ‘High Tech Computer Corporation’ but gained popularity as ‘HTC’ and are known since 1998. In 2008, the company formally changed its name to ‘HTC Corporation’, reflecting the growing popularity of the ‘HTC’ brand. 
  3. The trademark is registered in India in Class 9 since 2006 and being used in India from the year 2007. They are the registered proprietor of several HTC and HTC formative marks in India such as HTC Listen, HTC Ultrapixel, HTC Sense Voice, etc. The HTC mark is registered in several countries of the world. 
  4. Defendant No.1 is a Chinese individual and owner of Defendants No.2 to 4 companies. Defendants No.2 to 4 manufactures in China electric hair trimmers, hair clippers, and hair dryers bearing identical infringing trademark HTC and export the same to the other Defendants in India. The Defendants are also selling their products through the Amazon India website. The bad faith is evident from the web link provided on the product listing that takes the user to Plaintiff’s website.   
  5. In 2013, when Defendant no.1 obtained registration of the mark HTC in Class 8, Plaintiff’s HTC mark was well-known internationally and acquired a reputation in India. When use is dishonest, the commonality of the products is not essential, and Plaintiff is entitled to an injunction. 
  6. Plaintiff has filed a cancellation/ rectification petition against the HTC mark in Class 8 in the name of Defendant no.1. Plaintiff has also opposed the application for registration of the mark HTC in class 11 in the name of Defendant no.2.
  7. The cease-and-desist letter addressed by Plaintiff was not acted upon, and the Defendants continued to sell the infringing products both in Delhi and through online shopping websites. This led to the filing of the suit.

 Defendants counter the injunction application making the following averments:

  • Plaintiff manufactures computer and computing products, whereas, the Defendants deal only with hair grooming products. Thus, the rival products are different, and as the registration also pertains to different classes, there is no cause for confusion.
  • The parties are registered proprietors of their respective marks. The Plaintiff had taken no steps to question the validity of the Defendant’s registration for 6 years and filed the rectification petition just before filing the suit.
  • Plaintiff is not dealing in hair trimmers, or hair clippers, and Defendants are ‘prior user’ in respect of these products in Class 8. As Plaintiff’s registration is in class 9, Defendants cannot be injuncted from using its registered trademark.
  • Plaintiff has no goodwill in respect of grooming products. Therefore, the equities are in favour of the Defendants.

After considering the pleadings, arguments and case laws the court held:

  1. Admittedly, Plaintiff has filed a rectification petition against Defendant’s registration, and the proceedings are ongoing. That said, the court is not precluded from making an interlocutory order, including any order granting an injunction during the stay of the suit. In the instant case, since both the Trademarks are registered, all the facts would have to be considered holistically to determine whether or not the Plaintiff is entitled to interim protection.  
  2. Section 124 of the Trademark Act deals with a situation where the validity of the trade mark registration is being questioned, and Section 124(5) empowers the court to pass interim injunction order. It is only logical that even when two registered trademarks are involved and the Plaintiff seeks protection against the user of a similar or identical registered trademark, the court can consider not just the question of passing off, but also of infringement. Section 124 of the Trademarks Act is in relation to a trademark and not to mere passing off.  
  3. In the instant case, admittedly, ‘HTC’ stands for ‘High Tech Computers‟ manufactured and sold by the Plaintiff since 2006. Further, the name ‘HTC’ itself has gained immense recognition and popularity and indicates the origin of the products of the Plaintiff. On the other hand, Defendants contend that their HTC mark stands for ‘High Tech Trimmers’ and Clippers’, which is a lame explanation. Thus, the inference that can be drawn is Defendants have adopted the mark to gain an unfair advantage and without due cause. Further, even though Defendant No.1 is the proprietor of the trademark HTC, in advertisements as well as on the products, they use the mark which is clearly a copy of the registered trademark of Plaintiff. 
  4. The reason offered for the adoption of the random alphabets ‘HTC’ and the copying of the exact trademark of the Plaintiff, prima facie discloses fraudulent use and bad faith of the Defendants. 
  5. The argument regarding the dissimilar nature of the products ought to fail as it is common to find companies producing and marketing many disparate products under a single registered trademark. Thus, it is of no significance that Plaintiff is not making any hair trimmers or clippers, so long as they have a reputation in India in respect of the goods that they produce and market. 

In light of the above findings, the High Court restrained the Defendants from using the mark /HTC or any other mark deceptively similar to the Plaintiff’s registered trademark.

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