Supreme Court stays High Court’s order on Chandrika Soap

Facts and Background

M/s Wipro Enterprises Limited (Wipro) brought a suit against the M/S Mariyas Soaps And Chemicals (Mariyas) at the Additional District Court (VI), Ernakulam claiming that their mark is similar to . Both marks are being used for soaps. Wipro uses it for ayurvedic soap and Mariyas for washing soap and detergents.

The District Court, after hearing the parties and considering the materials on record held that the mark ‘Chandra’ is deceptively similar to ‘Chandrika’. The Court observed that the colour combination, writing style and design used by Mariyas to market their products have close resemblance and amount to infringement of Wipro’s trademark. Thus, the Court restrained Mariyas from offering products or services using the trademark ‘Chandra’ as well as packaging, colour scheme and writing style as of Wipro. Aggrieved by the injunction order Mariyas approached the High Court by way of this appeal.

The post discusses the findings of the Division Bench (DB, two Judge bench) of the Kerala High Court against the order of the Additional District Court (VI), Ernakulam.

Mariyas in the appeal contended:

  1. Both Mariyas and Wipro have valid registrations for the marks Chandra and Chandrika.
  2. As per Section 28 of the Trademarks Act, 1999 a registrant has exclusive right to use the trademark in relation to the goods or services in respect of its registered trademark . The fact that Wipro obtained registration on an earlier point of time does not entitle them to seek an order of injunction against Mariyas alleging infringement of trademark.
  3. Wipro has instituted the suit with the definite plea of infringement of registered trademark, and not passing off and thus, not entitled to get a prohibitory injunction.
  4. The District Court’s order ought to be set aside.

Wipro countered the appeal on the following:

  1. They have been marketing products using the name ‘Chandrika’ since 1940 and the reputation and the acceptance they wield in the market cannot be passed off by Mariyas on the basis of the registration recently obtained, issuance of which itself is illegal.
  2. On account of long and extensive use ‘Chandrika’ has become synonymous with their products, and Mariyas ought to be restrained from marketing their products using such a deceptively similar name and packaging materials.

Findings of the DB

Two points come up for consideration before the DB in the instant appeal.

(1)      Is Wipro entitled to claim a prohibitory injunction since Mariyas also hold a valid trademark registration.

Admittedly both sides have obtained registrations with respect to the products in class 3. While Wipro are marketing ayurvedic soap using their registered trademark ‘Chandrika’, Mariyas are marketing washing soap and detergents using the trademark ‘Chandra’.

Section 28 of the Trademarks Act, 1999, provides exclusive right to use the trademark in relation to the goods or services in respect of which the trademark is registered and obtain relief in respect of infringement of trademark.

Sub-section (3) of Section 28 contemplates a situation where two or more persons are registered proprietors of the trademarks which are identical with or nearly resemble each other. A plain reading of this Section makes it clear that the exclusive right to use any of those trademarks shall not be deemed to have been acquired by one registrant as against the other registered owner of the trademark. This disentitles Wipro from claiming a prohibitory injunction restraining Mariyas from using their registered trademark on the ground of infringement.

However, Section 27(2) of the Trademarks Act recognizes the common law rights of a trademark owner to act against any person for passing off his goods or services as the goods or services of the former. The rights in passing off are emanating from the common law and not from the provisions of the Act and they are independent of the rights conferred by the Act.

In this regard Wipro ought to prove all the three elements of the “classical trinity”, goodwill, misrepresentation and damage to sustain the injunction order against Mariyas.

The DB concurred with the findings of the District Judge that the label, color combination, writing style and design on the labels used by Mariyas have resemblance and is deceptively similar to those used by Wipro.

(2)      Whether Mariyas marketing their products using the trademark ‘Chandra’ resulted in damage to the goodwill of Wipro.

The question of damage on account of misrepresentation can be decided only with reference to the economic loss suffered by Wipro on account of Mariyas selling similar products.

Wipro is marketing Ayurvedic bath soap, whereas Mariyas is dealing with washing soap and bleaching preparations for laundry use. Although both parties are marketing soaps falling in class 3, the purpose of the rival products are different.

The High Court after comparing the market shares of the rival parties since 2020 when Mariyas launched their Chandra products held that Wipro has not suffered any economic loss or damage on account of the same. The DB thus held that Wipro has failed to establish the third element of passing off, i.e., damages.

In view of the above the DB allowed the appeal and set aside the injunction order against Mariyas.

Appeal before the Supreme Court

Wipro has assailed the order of the High Court by way of special leave petition before the Supreme Court. The Apex Court has yet to hear the parties in detail. However, the Supreme Court primafacie appears to have agreed with the reasoning of the District Court and admitted the appeal and stayed the order of the High Court.

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