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This article is to highlight the recently decided case of Oriental Cuisines Private Ltd vs. Star Restaurants Pvt. Ltd, by the Hon’ble Delhi High Court regarding passing-off action based on the principles of the common law.
Brief Facts of the Case:- The plaintiff is a private limited company engaged in the business of global specialty and hospitality management services. It is the owner of the mark ‘The Noodle House and claims its adoption since 2003. The defendant in this case is Star Restaurants Private Limited engaged in the similar nature of business as that of the Plaintiff. The plaintiff alleges that in the year 2008 it learned about the proposed launch of the defendant’s restaurant “THE NOODLE HOUSE” in the same vicinity proposing to offer the same cuisine as the plaintiff’s restaurant. Thus the plaintiff filed the present suit alleging passing off and infringement of its trademark and copyright in the mark “The Noodle House” by the defendant engaged in the business of the same nature as that of Plaintiff. The plaintiff prayed for a permanent and mandatory injunction against the defendants and its representative using similar or deceptively similar marks to the Plaintiff’s mark “The Noodle House”.
Arguments Advanced: The learned counsel for the Plaintiff contended that the plaintiff has adopted the trademark ‘The Noodle House’ in the year 2003 for which registration is pending and by its extensive and continuous use the trademark has emerged as the plaintiff company’s most popular chain. Further, it was submitted that the trademark is a fanciful and invented combination of words and has come to be associated exclusively with the plaintiff’s business. It was also contended that the popularity of the plaintiff’s trademark is evidenced by its net sales under the trademark for the year 2008, which amounted to Rupees Twenty Million. It was further submitted that the proposed launch of the defendant’s restaurant under the identical trademark is in a vicinity close by to the plaintiff’s location and that too for the same category of products and services as those of the plaintiff. Thus the use of the trademark “THE NOODLE HOUSE” by the defendant for identical services is with the intention to free-ride on the plaintiff’s popularity. However on the other hand the defendant failed to provide any explanation regarding the genuine basis for the adoption of the Trade Mark ‘The Noodle House’.
Judgment: It was held by the Hon’ble Court that in the absence of any explanation from the defendant as to why the impugned mark was adopted by them, it is crystal clear that the intention of the defendant is to ride on the goodwill and reputation of the Plaintiff’s business and pass off its service of the restaurant like that of Plaintiff. The adoption of the mark by the defendant would result in the dilution of the Plaintiff’s trademark and would cause irreparable loss to the reputation of the plaintiff. Thus the suit was decreed in favor of the Plaintiff to the extent of grant of Permanent Injunction. However, there was no order as to damages in the light of the short duration between the filing of suit and grant of injunction and in view of the absence of any evidence from the plaintiff to establish whether the defendant’s restaurant launched at all. However, the plaintiff was entitled to costs of the suit.
Conclusion:- The court while deciding the case discussed the five elements of the modern tort of passing off as laid down by Lord Diplock in Erwen Warnink BV Vs. J Townend & Sons. The five elements of the modern tort of passing off are
(ii) made by a trader in the course of trade
(iii) to customers of goods and services supplied by him
(iv) which is calculated to injure the business or goodwill of another trader and
(v) which causes actual damage to a business or goodwill of a trader. Thus considering the above elements the Court granted the injunctive relief to the Plaintiff. Pertinently the court while passing the order of injunction also considered the fact that the defendant’s restaurant was in the vicinity of the Plaintiff’s restaurant in addition to the similarity of the mark and services, and this would cause irreparable loss or damage to the Plaintiff because of likelihood confusion and deception being caused in the mind of a potential customer or target population. However, due to a lack of evidence on record regarding the actual damages incurred by the plaintiff and the circumstances being unclear whether the defendant’s restaurant launched or not, the court disentitled the plaintiff for damages.
About the Author: Mr. Abhijeet Deshmukh, Trade Mark Attorney, Khurana & Khurana, Advocates, and IP Attorneys and can be reached at [email protected]