Goodwill whether Territorial or Universal
The instant dispute between two entities in the hospitality industry over the mark INTERCITY for hotels revolves around prior adoption and use; whether use has to be considered in India or international use and adoption can be relied upon to claim superior rights. The Plaintiff, Intercity Hotel GMBH, Germany, (Intercity) has filed the suit before the Delhi High Court alleging trade mark infringement, passing off, unfair competition, etc., against Hotel Intercity Delhi (HID) and restrain the latter from using the mark INTERCITY in relation to their business.
The post discusses arguments advanced by parties in relation to application for injunction and decision of the court.
Intercity in the suit contends:
- It is a part of Deutsche Hospitality group of companies comprising 130 hotels in 17 countries on 3 continents, INTERCITY being one of its leading brands.
- The mark INTERCITYHOTEL is registered in numerous jurisdictions, earliest registration dating back to 1992 in Germany. In India, the mark is registered since May, 2011, in class 43.
- The mark INTERCITYHOTEL has acquired global reputation and goodwill and the trade and public associate the mark with them alone.
- HID is engaged in the business of providing temporary accommodation, food and drinks and use of the identical name Intercity amounts to trademark infringement.
- HID’s use of the domain name hotelintercitydelhi.com will create confusion and deception as Intercity maintains a website www.intercitvhotel.com
HID in its defence argued:
- They are using the trademark HOTEL INTERCITY continuously, extensively and openly in relation to their business since 2010 and thus, become distinctive of their services.
- The word INTERCITY is common to the trade, even the Indian railways uses the word INTERCITY for several trains.
Intercity contends that the documents filed by HID shows their use is subsequent to the registration obtained by the former. Moreover, HID has applied for registration of the mark INTERCITY, thus, their contention that the word is common to the trade fails.
HID argues that Intercity applied for registration of the mark on a ‘proposed to be used’ basis and till date no hotel is operating in India under the said name. HID cannot be restrained from using the mark as they are the prior user of the mark in India and protected by Section 34 of the Trademarks Act, 1999. Intercity’s registration of the mark is subsequent to their use.
- Pleadings and documents evidence that HID claims use of the trademark since 2010, whereas, Intercity applied for registration on 20th May 2011, on a ‘proposed to be used’ basis.
- Section 34 of the Trademarks Act 1999 holds that a proprietor of a trade mark does not have the right to prevent the use by another of an identical or similar mark where that use commenced prior to the user or date of registration of the proprietor.
- More than five years have lapsed and Intercity has admittedly not used their trademark in India nor is there any hotel or other establishment set up by them which is using the said trademark.
- Intercity claims reputation and goodwill based on its use abroad. After considering the case laws relied on by the parties Court took the view that territoriality principle should be given weightage in the instant case.
- The averments in the plaint do not show any spill over of the reputation and goodwill of the mark INTERCITY in India. Even though it is averred Intercity has a global reputation and goodwill and is a well-known brand based on account of promotion through the medium of magazines and newspapers, the names of magazines and newspapers are not stated. Reliance is placed on promotion along with copies of advertisement/s, however, the advertisements appear to have circulation abroad.
- On the other hand HID has filed documents evidencing use of the mark from 2010. Thus, at this stage HID seems to be the prior user of the mark in India and apparently Intercity does not seem to have made any use as well. Intercity has failed to prove a prima facie case and balance of convenience also is not in their favour.
- Considering the similarities of the domain names hotelintercitydelhi.com and www.intercitvhotel.com the Court directed HID to prominently display on the website that they have no connection with Intercity Hotel, Germany.
In light of the above the Court dismissed the injunction application filed by Intercity.