Denial of Injunction on the grounds of Acquiescence and Delay by Plaintiffs: SRF Foundation v. Ram Education Society

Devina Choubal, an intern at Khurana & Khurana looks into grounds of denial of an injunction by analyzing the recent case of SRF Foundation v. Ram Education Society.

FACTS:

‘SRF Foundation’ plaintiff no.1 is a registered non-profit society engaged in several social and community work including running schools such as “The Shri Ram School”. The name/mark “Shri Ram” is used by Plaintiff No.1 since 1988 having a good reputation. While plaintiffs No.2 is engaged in setting up schools in India and abroad. With this goodwill, the plaintiffs fulfilled its objective to meet the shortage of good schools by entering into an agreement with “Educomp Infrastructure and School Management” to set up five schools under the name of “The “Shriram Millennium School”. “Ram Education Society” defendant opened “Shri Ram Global Pre School” next to the plaintiff no. 1’s school in Gurgaon. The plaintiffs filed for the registration of a trademark, thereafter subsequently withdrawn and the defendant instead registered their mark. The plaintiffs being the real brother of the defendant’s trustee wrote emails to his brother to alert the defendant of the reputation and goodwill of the name/mark and to stop using it. However, the defendant continued to use the name/mark “Shri Ram. The plaintiffs advertised stating that the name/mark of the school does not belong to them. Thereupon, the defendant’s lawyer sent a legal notice to the plaintiffs to withdraw the advertisement and to render a public apology. The plaintiffs filed a suit for a permanent injunction, passing off and account of profits in the Delhi High Court and also filed an application seeking an interim injunction. The Hon’ble High Court passed an order with respect to the interim injunction which is discussed in detail as below.

ARGUMENTS BY THE PLAINTIFFS:

• It was contended by the plaintiffs that the inherent right to use the name “Shri Ram” rests with each member of the Shri Ram family but such a right is subject to restricting oneself to its domain of business and not encroaching upon others rights. They have no objection if the said mark is used by the defendant in other activities or services but not this activity, as they have been using the name/ mark “Shri Ram” for almost 25 years, the reason being they have goodwill in these services, leading to a monopoly over the name/mark. Though the plaintiff and the defendant belong to the same family, still the use by the defendant hampers the plaintiff’s reputation. Because of passing off the services of the plaintiffs by the defendant, the public is confused about which school belongs to whom. Thus, there is no bonafide use of the name/mark. The use of “Shri Ram” in the name/ mark causes confusion and is deceptively similar.
• The plaintiffs further contended that there is prior use of the name/mark by them, as the name/mark has been used by them extensively for many years before the defendant.

ARGUMENTS BY THE DEFENDANT:

• There exist parallel rights to use the name/ mark, thus, the defendant is protected under the legacy of the Late Shri Ram Family. The defendant and the plaintiff share a common family name. Therefore, there cannot be a claim of any proprietary right or monopoly by the plaintiffs. The defendant’s schools are “Shri Ram Global School”, “Shri Ram Centennial School”, “Shri Ram Global Pre School” which is distinctive from the Plaintiffs, which are “The Shri Ram School” and “Shri Ram Millennium School” in terms of different suffix and logos. Therefore there is a bonafide use of the mark by the defendant and the plaintiffs cannot have monopoly rights over the mark “Shri Ram”. Also, it was further contended by the defendant that the name/mark is not deceptively similar or confusing as it can be distinguished because of different logos & suffix, as stated above. It was further submitted that the email dated 28^th September 2011 stated that there is no objection/ admission on the part of the plaintiffs to running of the schools by the defendant. The said email is as follows: – “I want to mention that if you ever wanted to divest or reduce your shareholding, you would then be reduced to minority shareholding in your company. You must remember that the ‘Shri Ram’ brand might then go to the wrong outsiders. One would have no control over how they would use this brand.”
• The defendant did not deny the prior use by the plaintiffs but they rather denied an exclusive proprietorship, being aware of the plaintiffs have established the schools before them. However, the defendant represented by Mr. Anand, after becoming aware of the fact that the name/mark existed before the use by the plaintiffs as the Shri Ram School in Mawana, UP established by the family’s relatives, they argued on the contention of no prior use by the plaintiffs.

COURT OBSERVATIONS & JUDGEMENT:

The elements of passing off:-

In order to succeed in an action of passing off, 4 main requirements have to be satisfied by a party who intends to seek the relief of injunction.

• Prior use;
• The party who is claiming right must be the proprietor of the mark;
• Confusion & deception;
• Delay, if any.

In respect of the first and the second requirement, the defendant already approved of the prior use by the plaintiffs though denying the exclusive right over the mark/name. The Hon’ble Judge was brought to notice by the defendant about no such written document existing which tells that the plaintiffs have an exclusive right. However, the plaintiffs have a reputation and no other family member though involved in contribution to education have acquired such goodwill, for the simple fact that the operation of Mawana School started by the Shri Ram family relatives prior to the use by the plaintiffs is limited to the place as pointed out by the plaintiffs and thus considered by the Hon’ble Court.

While in respect of the third requirement, it was held that the defendant adopted the trademark even though the plaintiffs have been using it for 23 years, thus, creating confusion by starting school with the name/mark “ Shri Ram” in the same vicinity as that of the plaintiffs. Therefore, the name/ surname being distinctive is protected as per law.

The delay of about 3 years in approaching the court was because the plaintiffs though being aware of the use of “Shri Ram” by the defendant, did not take any action against them. Thus, there was a delay for a considerable amount of time leading to the applicability of the principle of acquiescence. The reason given by the plaintiffs was of the proximity of the relationship between the founding members of the plaintiff and defendant because they are real brothers and the plaintiffs tried to warn and end the matter amicably.

The similarity of marks:-

The Judge observed that the parties have Shri Ram in common and the same was an essential part of their services. It was held in Himalaya Drug Company v/s M/s SBL Ltd. that the essential features of the mark if they are same then the logos are deceptively similar. The mark “Shri Ram” is also used by the defendant like the plaintiffs. Therefore it is deceptively similar.

The admission by the plaintiffs:-

It was further held that the admission made by the plaintiffs cannot operate as an estoppel against the person making it. As held in Gulabchand vs. Bhaiyalal, AIR 1929 Nag 343. There cannot be any estoppel against the law or statutory provisions. When one is concerned with the statutory right or constitutional guarantee, there cannot be any estoppel against the same.

Bonafide Use:-

It was observed that the “bonafide use” as per Section 35 of the Trademark Act, 1999 is not to be considered in the present case because the defendant’s school is started in the vicinity of the plaintiffs and they issued licenses and appointed franchises despite warnings from the plaintiffs.

CONCLUSION:-

The Hon’ble Court held that the defendant to display the disclaimer while continuing the functioning of the schools within 6 months about no connection with the plaintiff’s school. The reason being, the interim injunction of the use of the name/mark would cause hardship to the students and the parents who have already paid fees and taken admission in the defendant’s school. The defendant would be entitled to give a bonafide description in the nature that the school is run by Vivan Bharat Ram under the legacy of his grandfather Shri Ram for future schools.