Delhi High Court Passes Interim Order Prohibiting Private Entities from using KHADI Trademark

Delhi High Court Passes Interim Order Prohibiting Private Entities from using KHADI Trademark

The Delhi High Court by its single judge Justice C. Hari Shankar, passed an interim order, restraining the defendants- Khadi Design Council of India (KDCI) and others from using, directly or indirectly, the mark KHADI, either as a word or as part of its trade name or name of its business concern as well as from using the impugned marks other mark identical or deceptively similar thereto.

In the present case, plaintiff Khadi & Village Industries Commission (KVIC)- plaintiff had filed a suit, alleging that the defendants Khadi Design Council of India (KDCI) is not entitled to use the word KHADI as any part of any word or device mark for any purpose whatsoever, as KHADI, both as a word mark as well as part of various device marks, stands registered in the plaintiff’s favor under the Trade Marks Act, 1999.

KVIC is a Central government body tasked with the planning, promotion, organization, and implementation of programs for the development of Khadi and other village industries in the rural areas.

KVIC had approached the High Court stating that they became aware of infringement of their mark in December 2019 when the defendants organised the National Khadi Designers Awards, 2019 and the Miss India Khadi event at Goa, in which they were using the word mark KHADI as well as the logo.

A legal notice was sent to them following which the defendants removed the mark and logo from their banners, posters and hoardings.

However, later they came to know that the defendants infringed on their KHADI and Charkha trademarks through various other methods.

It was the defendants’ case that the intellectual property rights over the term “Khadi” would vest with every person who is associated with Khadi. They said that being publici juris, the Khadi mark cannot be appropriated exclusively by the KVIC.

It was also argued that the defendants were neither engaged in manufacturing or weaving of any Khadi fabric nor in sale of any finished clothes and the designers associated with them purchased clothes or fabric only from authorised outlets of the KVIC.

The Court noted that, undisputedly, the plaintiff was the proprietor of the registered KHADI and Charkha marks/logos in several classes.

The Court elaborately discussed Section 31 of the Trade Marks Act. It noted that, Section 31(1) ordains in all legal proceedings relating to a registered trade mark under the Trade Marks Act – which would include, needless to say, infringement proceedings – the registration of the mark shall be prima facie evidence of the validity thereof.

The Court opined that these words are of signal significance, when examining an application for interlocutory injunctive relief under Order XXXIX Rules 1 and 2 of the CPC. The grant of relief under Order XXXIX is subject to satisfaction of the troika considerations of a prima facie case, balance of convenience and irreparable loss to the applicant were interlocutory relief not to be granted.

In this regard the Court held, “once, therefore, Section 31(1) declares, as a matter of legislative fiat, that the registration of a mark shall be prima facie evidence of the validity thereof, the first of the three requirements which govern grant of interim relief already stands satisfied, insofar as the issue of validity of the asserted mark of the plaintiff is concerned. Ordinarily, therefore, there is no occasion, in the face of such a clear statutory diktat, for the Order XXXIX Court to examine, on merits, the challenge to the validity of the plaintiff’s mark, if the mark is registered. The use of the words ―shall be enforce this legal position, as they indicate the sequitur of registration of the mark, at the prima facie stage, to be mandatory in nature.”

The Court noted that insofar as the challenge to the entitlement of the KHADI mark to registration as being descriptive in nature was concerned, the challenge remains incomplete as there was no absolute proscription to registration of a descriptive mark.

The Court highlighted that the proviso to Section 9(1) permits registration of a descriptive mark if, before the date of application for registration of the mark, it has acquired a distinctive character as a result of the use made of it, or is a well-known trade mark (within the meaning of Section 2(1)(zg)18 of the Trade Marks Act).

The Court held that the onus would, therefore, be on the defendant, challenging the validity of the plaintiff’s mark, to positively aver, with corroborative material, that the plaintiff was not entitled to the benefit of the proviso to Section 9(1), i.e., that, before the date of registration of the mark, it had not acquired a distinctive character as a result of the use made of it and was not a well-known trade mark.

However, there was no assertion in the written statement, that being so, the challenge to the validity of the registration of the plaintiff’s KHADI trademarks, as urged by the defendants, did not prima facie appeal, or defeat the statutory presumption of validity contained in Section 31(1), at least at the Order XXXIX stage, stated the Court.

The Court additionally, held that there is a prima facie case that the defendants tried to pass off their services as being associated with KVIC.

The Court clarified that, ‘Permitted Use’ is a complete defense to an allegation of infringement, under each of the sub-sections of Section 29. Permitted use has, however, to be understood in the manner in which it stands defined in clause (r) of Section 2(1). The Court remarked that, consent of the registered trade mark holder has to be in the form of a written agreement.

However, no such written agreement exists in the present case, ergo, the defendants cannot, prima facie, plead that they were using the KHADI and Charkha marks as permitted users thereof.

The Court finally concluded by stating that, none of the other submissions advanced at the Bar need, in its opinion, considered was prima facie case of infringement and and passing off stands made out against the defendants and in favor of the plaintiff.

It therefore, restrained the defendants as well as all others acting on their behalf om using, directly or indirectly, the mark KHADI, either as a word or as part of its trade name or name of its business concern, as well as from using the impugned marks.