CO-EXITENCE OF AN IDENTICAL TRADEMARK BY SEPARATE ENTITIES

Exide India, a company incorporated within the laws of India, have for long been using the mark EXIDE in India. So much so that, the word EXIDE refers to the products of Exide India only. Such exclusive recognition has been earned by virtue of long, continuous and uninterrupted use of the mark EXIDE. Thereafter, Exide India sued Exide US for infringement. Finally, after almost two decades, the said dispute may be said to have been resolved. The order passed last month, not only put an end to the stretched dispute but Exide US by way of a settlement agreement waived all rights / claims to ownership of the mark EXIDE in India. Although such agreement requires further elucidation.
Such aforesaid decision was acuity was delivered by Justice Valmiki Mehta; wherein, he restrained Exide US from using the mark EXIDE in India. This order came after 15 years after the suit was first filed in 1997. The Court confirmed both passing off and infringement of the mark EXIDE by Exide US. Among several things, the substantive part of the decision included J. Valmiki’s recognition of Exide India as the prior user, since customers in India would associate the products and the mark EXIDE only with Exide India and its predecessors.
Subsequently, Exide US filed an appeal with the Division Bench of the Delhi High Court in August 2016. The following legal issues were raised while settling the dispute:-
1. Is Exide India the lawful proprietor of the mark EXIDE in India?
2. Who is the prior user of the mark EXIDE in India?
3. Does use of the mark EXIDE by Exide US amount to infringement/passing off?
4. Does use of the mark EXIDE by Exide India amount to infringement/passing off?
With regard, to the first issue at hand, the court decided that it may be assumed that Exide India is the lawful proprietor of the mark EXIDE unless proved otherwise. Moreover, such determination is restricted to the jurisdiction vested with the IPAB (Intellectual Property Appellate Board).
With regard to the remaining three issues, i.e., whose use of the mark can qualify as “prior use” and whether Exide US or Exide India is liable for passing off/infringement of the mark, the Court first noted the difference between passing off and infringement. For the same, it relied on landmark Supreme Court decisions like Cadila Healthcare Limited vs Cadila Pharmaceuticals Limited (2001), Cadbury India Limited vs Sm Dyechem Limited (1999) and Laxmikant V.Patel vs Chetanbhat Shah & Anr (2001).
Applying the underlying legal principles from the aforesaid citations to the present case, the Court observed that the mark EXIDE used by both the parties are identical. The question, then, was – who had infringed/passed off the mark. In answer to this, the Bench concluded that both were genuine users and were to be allowed to continue using the mark.
The Court then noted that through an assignment deed, the mark EXIDE was assigned to Exide India. However, deciding in light of several case laws, the Court opined that although the rights in the mark were assigned, the goodwill in the mark was retained by Exide US. This was because the agreement did not expressly transfer goodwill along with the transfer of rights in the mark. In order to determine the same, the Court highlighted transnational reputation. Relying on the decision of N.R. Dongre And Ors vs Whirlpool Corporation And Anr (1996), the court opined that an enterprise need not exist in a particular territory to have goodwill within it. Further, giving the case a unique dimension, it allowed Exide US to be in possession of goodwill in the mark EXIDE despite of the valid assignment of the mark EXIDE to Exide India. To reach the said decision of retention, the Court relied upon Scandecor Developments AB v. Scandecor Marketing AV and Others to establish that it is possible for an enterprise to retain its goodwill. Another related observation was that internationally acquired goodwill may coexist with locally acquired goodwill. Thus, Exide US was held to have a bonafide claim to the use of the mark EXIDE.
In view of the aforesaid insight, it was thus decided that there was no case of infringement/ passing off whatsoever.

As written by:-

Ms. Sulagna Nandy
Trademark Attorney
Of L. S. Davar & Co.

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