Delhi High Court favors Yves Saint Laurent in trademark infringement suit

Delhi High Court favors Yves Saint Laurent in trademark infringement suit

Restrains the defendant from using the marks on the premise that the plaintiff would suffer irreparable loss

The Delhi High Court has temporarily restrained a Delhi-based company, Brompton Lifestyle Brands Pvt Ltd from using 'YSL' and 'Yves Saint Laurent' marks belonging to fashion company Yves Saint Laurent (YSL).

The bench of Justice Sanjeev Narula held that the balance of convenience was in favor of the plaintiff (YSL) and if the defendant (Brompton) was not restrained, the plaintiff would suffer irreparable loss.

YSL had moved the court for infringement of its trademarks and copyrights. It sought a permanent and mandatory injunction against Brompton, allegedly unauthorized operations of a boutique under the plaintiff's brand name in a New Delhi shopping mall.

YSL apprised the court that it had entered a franchise agreement with Beverly Luxury Brands Ltd and granted it to open and operate a Saint Laurent boutique. In 2021, though the agreement was terminated, the boutique continued operations. It was being run under the name of Brompton.

Appearing for YSL, senior advocate Akhil Sibal contended that Beverly was permitted to use the YSL marks only in accordance with the terms and conditions stipulated in the franchise agreement, which was terminated.

The advocate informed the court that YSL received an arbitration notice this year from Brompton claiming that pursuant to the agreement, Beverly had executed a supply agreement in July 2019, with an undertaking to supply 'designer clothes and apparel' designed by YSL. The notice also alleged that Beverly had not been performing its obligation under the supply agreement, which included delay in delivery of goods and eventual cessation of delivery of goods.

Sibal argued that as per the franchise agreement, the right to use YSL marks was given only to Beverly on a non-exclusive basis for operating a boutique and selling products, merchandise and items bearing YSL marks. YSL neither had knowledge of the alleged supply agreement nor was Beverly permitted by YSL to enter into such an agreement at any point of time without its prior consent.

Arguing that the agreement was violative of the franchise agreement and was not legally binding on the plaintiff, Sibal stated that permitting Brompton to continue as an unauthorized user of YSL mark even after termination of the agreement, would cause serious damage to YSL's reputation and goodwill.

The counsel for Brompton, senior advocate Sandeep Sethi claimed that YSL was fully aware of Brompton's association with Beverly, as the store was taken on lease by Brompton. It was operating since 2019 with YSL's knowledge. He pointed out that Brompton invested heavily in setting up the boutique and the plaintiff was well-informed of its involvement in the boutique's operations, and it never objected.

Sethi contended that despite Brompton's authorization for the boutique being within YSL's knowledge, YSL labelled Brompton a 'logistics partner' of Beverly with the intent to keep the association 'at arm's length.' Alleging there was active concealment and complete non-disclosure of material and essential facts, he sought dismissal of the suit.

The court noted that the boutique was set up under a franchise agreement to which only YSL and Beverly were parties. It said, "Brompton is clearly not a signatory to the agreement, yet it is operating under the plaintiff's brand as an authorized store by prominently displaying YSL marks at the entrance of the boutique."

The court noted that the supply agreement between Beverly and Brompton did not unconditionally transfer or convey any rights, title, or interest to the latter.

Thus, the bench added, "The rights conveyed are restricted, circumscribed and co-terminus with Beverly's rights. Fully aware of limitations, Brompton willingly and knowingly entered into the supply agreement, agreeing to use YSL marks till such time the franchise agreement was in force."

Justice Narula held that irrespective of the legality, validity, and binding effect of the supply agreement on YSL, the license granted in favor of Brompton to use YSL marks, stood terminated, as the franchise agreement had ended. He observed that Brompton admitted that the supply agreement stood terminated after the termination of the franchise agreement.

Restraining Brompton from using 'YSL' and 'Yves Saint Laurent' marks, the bench ruled, "The supply agreement, which forms the sheet anchor of Brompton's claim of being an 'authorized operator' cannot sustain. There is no legal basis to allow Brompton to use YSL marks."

While advocates Nirupam Lodha, Shivangi Narang, Gautam Wadhwa, Asavari Jain, and Sanya Kumar appeared for YSL, Brompton was represented by Nikhil Kohli, Gaurav Gupta, and Akshaya Ganpath.