Honest and Concurrent Use – A Defence against Trademark Infringement Claim

This post covers a recent judgement of the Delhi High Court titled ‘KEI Industries Limited vs. Raman Kwatra & Anr.’ that focuses upon the issue- whether honest and concurrent use can be asserted as a defence against trademark infringement. The Plaintiff (KEI Industries) filed the suit against the Defendants alleging trademark infringement against use of the mark KEI.

The Plaintiff (KEI Industries Ltd.) in the suit contended:

  • They use the mark KEI since 1968 that was registered in 1988 in class 9 for wires and cables. The mark in special script is used and registered since 2007 for wires, cables and other kinds of electrical items and instruments.
  • Around September 2017, the Plaintiff noticed that the Defendant No. 1 had applied for registration of the mark in classes 7, 11 and 35 for electrical goods and accordingly opposed the same. The Plaintiff also issued a legal notice to Defendants addressing the above which was not responded favourably by the Defendants.
  • KEI is the prominent part of the Defendants’ mark used for identical goods.

Defendants (Raman Kwatra & Anr.) in their written statement contended:

  • Defendants are honestly and concurrently using the mark since 2008 for electrical goods and have prior right in the mark KEI since 1966 through use by Defendant No. 1’s father (“OPK”).
  • The rights in the mark KEI devolved upon them through OPK as OPK’s business under the mark KEI falls under Defendant No. 1’s sole proprietorship.
  • The Trademarks Registry cited the Defendants’ mark to be conflicting with the Plaintiff’s trademark application for the mark KEI in its examination report. The Plaintiff, in its reply to the examination report, stated its mark to be “distinctive of the services of” the Plaintiff and that in view of the difference between the parties’ services, there is no likelihood of confusion in the market with respect to the competing marks.
  • The ingredients of Section 29(4)(c) of the Trademarks Act, 1999 (“the Act”) are not satisfied to make out a case of infringement.
  • Plaintiff’s registration is only in class 9 for wires and cables. It has not succeeded in obtaining registration in class 11, whereas the Defendants are manufacturing electrical appliances in classes 7 and 11 under the mark .

Court’s findings:

  • The Defendant No. 1 succeeded only to OPK’s business and not to the right to use the KEI. OPK permitted Defendant No. 1’s brother to use the brand ‘KWALITY’ who also obtained registration of the KWALITY device mark , comprising the mark KEI, in his name in classes 9 and 11. The Defendants have not disputed the legitimacy of the said registration and thus have no right in the said mark.
  • The Defendants’ mark and the Plaintiff’s mark /KEI are similar. There is no other textual material in the mark KEI.
  • Section 29(4) of the Act is applicable where the infringing mark is used for dissimilar goods or services. In this case the competing goods are similar. The Plaintiff’s registration for the mark also covers ‘other kinds of electrical and electronic instruments’, which includes electrical wires and cables, switch gears, control panels, circuit breakers, transformers, amplifiers, switches, and fuses. Thus, Defendant’s goods being electrical fans, geysers, and water immersion rods under the mark are allied and similar to the Plaintiff’s goods.
  • Defendants coined the mark only in 2008 and filed invoices since 2015 whereas the Plaintiff’s word mark registration is since 1988 and use since 1966 which has been accepted by the Trademarks Registry. Thus, the Plaintiff is prior in use and registration of the mark KEI.
  • Section 12 of the Act contemplates honest and concurrent use only as a ground for granting concurrent registrations of similar or identical marks by the Trademarks Registry. Where a case of infringement is made out, injunction has to follow. Thus, the plea of honest and concurrent use cannot act as a defence to trademark infringement.
  • No substantial benefit is accrued to the Defendants from the Plaintiff’s statement in its reply to the Registry’s objection to the Plaintiff’s mark KEI, to the effect that the Defendants’ mark was not deceptively similar to Plaintiff’s mark. As there is no estoppel against statute, the Plaintiff’s stance before the Registry is irrelevant.

Our comment:

The Court in this case read the rights of a registered proprietor (under Section 28) and provisions under Section 135 i.e., “Relief in suits for infringement or for passing off” to construe that there are no provisions under the Trade Marks Act which contemplates ‘honest and concurrent use’ as a ground on which the Plaintiff can be denied an injunction. In other words, the Court made no exception to cases where there is an actual honest and concurrent use by a party. However, it would seem while considering the ‘balance of convenience’ and ‘comparative hardship’ caused to the parties, the honest adoption and concurrent use are important factors to be considered by the court while granting temporary injunction.

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