Two trademark judgements of note by Justice Deepa Sharma of the Delhi High Court yesterday: a final decree against the use of a deceptively similar acronym in Ram Krishan & Sons v. ILM Consulting and another jurisdiction/cause of action decision in GD Foods v. Zihawa Foods.
ILM finds the Defendant’s acronym ILM (which appears to be an orphan acronym) deceptively similar with the Plaintiff’s acronym IILM (Institute for Integrated Learning in Management). It’s ex parte, which, predictably, means there’s no attempt to construct a serviceable hypothetical defence and overcome it.
It’s also a diligent order, and leaves little room to disagree with the strength of the Plaintiff’s case. However, there is one issue which merits a closer look.
It has to do with the parties’ respective businesses. The Plaintiff runs educational institutions, the Defendant runs consulting services for educational institutions and employability/skill development academies. This is relevant because, while it’s the same class of service, the parties are not direct competitors.
To be clear, this would matter little in a clear-cut case of deceptive similarity.
However, this is an acronym case. And it is understood that tougher standards must apply for a Plaintiff to make deceptive similarity (as distinguished from identity; see VIT, for instance) in such cases.
And an intra-class difference between the services or products in question (as is the case here) would, at a minimum, require a Delhi judge to distinguish these facts from those before the same Court in last August’s Staar Surgical v. Care Group India, which found against Plaintiffs seeking an acronym injunction in relation to related but not competing products. This judge hasn’t discussed Staar Surgical, however, and that constitutes a bit of an asterisk on the reliability of this decision going forward.
GD Foods, on the other hand, has decided a jurisdiction and cause of action question in favour of the Plaintiff who has filed suit in Delhi against a Chennai-based Defendant (the judge’s discussion starts at para 7). The question arose after the Defendant challenged the Plaintiff for failing to make jurisdiction or disclose a cause of action against it in Delhi. Returning a finding in favour of the Plaintiff, the judge makes two observations of note.
First, she says that, if the Plaintiff follows the path of making jurisdiction before a Court by setting up a cause of action in that jurisdiction, it is sufficient for this to be a small part of the cause of action. The provision at issue is Section 20(c) of the Code of Civil Procedure (CPC), which, to be clear, offers a Plaintiff jurisdiction against a Defendant where “the cause of action, wholly or in part” against such a Defendant arises.
Reading the unwieldy language to render this condition sufficiently met in a jurisdiction where a “part of the cause of action” arises has been ruled on in several cases. However, two decisions by Justice Gauba last December had pushed back against this view, openly questioning whether this “part” of the cause of action needs to be read to mean a substantial part of the cause of action before the Court where the suit is presented.
GD Foods pushes back against the pushback and finds that a small part of the cause of action is good enough. Among other cases, it relies on 2004’s Supreme Court decision in Kusum Ingots. This reliance is properly curious, though, since the judge quotes some generic background on the meaning of cause of action from it but doesn’t use the part of the judgement that most directly could be used to support a fingerpoke-style reading of “part of cause of action”.
The part of Kusum Ingots that I’m referring to says that “even if a small fraction of [the] cause of action accrues within the jurisdiction of the Court, the Court will have jurisdiction.” In fact, this judge’s very next words of relevance on the subject (para 10) are to the effect that a Court where “even a part of cause of action” has arisen will have jurisdiction — the use of the word “even”, in that gloriously off-pace but typically Indian way, to connote “even if”, confirming the judge’s intentions about reading it very much like Kusum Ingots has.
The judge’s second conclusion of note is that the Plaintiff’s claim on jurisdiction in Delhi checks out because its averment as to the Defendant’s business in Delhi, if taken as true (as is necessary in a preliminary cause of action inquiry), is good enough to make jurisdiction.
This conclusion is routine enough. However, it appears that the Defendant also claimed that Delhi’s jurisdiction was improperly availed of in relation to the passing off limb of the Plaintiff’s composite claim, and that the Plaintiff’s registered office being in Delhi or its trademark registrations being held by the Delhi Trade Marks Registry cannot be used to sustain a passing off claim (para 12).
Reference is made to the Supreme Court decisions in Dhodha House and K Narayanan, which, taken at their necessary minimum here, would presumably suggest that the Plaintiff needs to make jurisdiction on the passing off portion of the claim independent of its office or its trademark registrations being housed in Delhi.
The judge’s dismissal of this objection, however, merely says that Narayanan (which had found that a trademark application by a Plaintiff with the Trade Marks Registry in a given location would be insufficient to make jurisdiction for a passing off claim there) isn’t attracted to the facts of the case because, here, the Plaintiff’s trademarks are not merely applied for but registered. She goes on to find jurisdiction on the passing off claim after taking as the “gospel truth” (para 17) the Plaintiff’s claims as to the Defendant’s business activities in Delhi.
The overall finding is indisputable. However, it surely must come with the qualification that the Plaintiff’s trademarks being registered as opposed to applied for with the Delhi Trade Marks Registry has nothing to do with the sustainability of the Plaintiff’s claim at passing off. There is a strong suggestion that this is still a sticking point in the judge’s thinking, as having to defend the Plaintiff’s claim at passing off from the situs of the trademark registration (as she does for the whole of para 12) is simply unnecessary.
If you’re finding jurisdiction for passing off based on averments about the Defendant’s business activities via the part of cause of action route, where the Plaintiff’s (or, indeed, the Defendant’s) trademarks were registered or applied for is irrelevant because you can have a pure passing off claim without a trademark registration or an application.
If, on the other hand, a trademark registration rather than a trademark application is at all a determining factor, it can only speak to the remedy of trademark infringement, in which case the Plaintiff-option jurisdiction under Section 134(2) would be made for the Plaintiff by virtue of the Plaintiff’s place of business being in Delhi and not on account of the Plaintiff’s trademark registrations being on file at the Delhi Trade Marks Registry. A claim for jurisdiction for such an action, once again, would not live or die by where the trademark is registered.
A little flag for the future, then, for similar cases before this judge or other judges relying on GD Foods. No harm done on merits, though, so calling it a red flag would be unfair. It’s the Thursday night before an exciting weekend and I’m feeling charitable, so let’s call it an orange flag and plant it in the turf marked ‘cause of action’.
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