Court’s Decision
The Bombay High Court refused to grant interim relief to a start-up seeking to restrain the defendant from using the trademark “AQUESTIA”. The Court held that the plaintiff had failed to demonstrate prior use, market reputation, or established goodwill associated with the mark. Observing that the term “AQUESTIA” was merely coined and had not yet acquired secondary meaning in the minds of the public, the Court dismissed the notice of motion for interim injunction. The defendant was permitted to continue using the trademark “AQUESTIA” in connection with its product range under the existing agreement with a distributor.
Facts
The plaintiff, a start-up, filed a suit seeking protection of its trademark “AQUESTIA” against the defendants, who were allegedly using the same mark for their products. The plaintiff claimed that it had coined the term “AQUESTIA” and entered into a distribution agreement with Defendant No. 2. Under this agreement, the defendants were permitted to use the mark solely for marketing and selling the plaintiff’s goods.
Subsequently, the plaintiff alleged that the defendants had misappropriated the mark and started using it independently, including by entering into a distribution arrangement with a third-party retailer, even after the plaintiff had withdrawn its authorization. The plaintiff filed a notice of motion seeking an injunction against the defendants from using the mark “AQUESTIA” and a direction to disclose sales and profits.
The defendants opposed the motion, contending that the plaintiff had no registered trademark or market presence and that the mark was being used solely due to their efforts and investments.
Issues
- Whether the plaintiff had established prior use and reputation in the mark “AQUESTIA” sufficient to claim protection against infringement or passing off.
- Whether the defendants’ continued use of the mark without the plaintiff’s authorization amounted to misappropriation or unlawful use.
- Whether the plaintiff was entitled to interim relief, including injunction and disclosure of profits, pending trial.
Petitioner’s Arguments
The plaintiff contended that it was the original creator and proprietor of the mark “AQUESTIA”. It submitted that the word was coined by the plaintiff and had no dictionary meaning, making it a distinctive invented mark. The plaintiff argued that the defendants were initially allowed to use the mark only as part of a distributorship arrangement, which had since been revoked.
The plaintiff further asserted that the defendants had, in bad faith, continued to use the mark without authorization, thereby diluting the plaintiff’s proprietary rights and creating confusion in the market. It was submitted that the use of the identical mark by the defendants amounted to passing off, as the plaintiff had spent time and effort conceptualizing and designing the brand.
The plaintiff emphasized that the term “AQUESTIA” was novel and had potential to develop goodwill, and any unauthorised use would jeopardize its future business plans. It relied on the principle that prior adoption, even without registration, entitled the originator of a mark to protection under common law.
Respondent’s Arguments
The defendants argued that the plaintiff had not made any commercial use of the trademark “AQUESTIA” prior to entering into the agreement with Defendant No. 2. They contended that all sales, promotions, and branding using the mark “AQUESTIA” were undertaken by them, and that the plaintiff had contributed little more than the coined name.
The defendants emphasized that they had made all the investments in building the brand, manufacturing the goods, and establishing market relationships. They claimed that the plaintiff’s case was devoid of any material demonstrating actual use, market presence, or recognition of the mark before their involvement.
They also pointed out that the plaintiff had neither registered the mark nor had sufficient goodwill or market reputation to assert rights in the mark. The defendants submitted that in absence of established use or goodwill, mere coinage of a word does not grant exclusive rights, particularly when the defendants had contributed significantly to its market visibility.
Analysis of the Law
The Court examined the law relating to trademark protection under common law, especially in cases where the mark is unregistered. The principle that emerges from Indian and international jurisprudence is that mere adoption or coinage of a mark, without actual commercial use or established goodwill, is insufficient to claim passing off or protection from use by others.
The Court noted that while registration of a mark is not a pre-condition to claim protection under common law, such protection depends heavily on evidence of prior use, market presence, and consumer association with the mark. In this case, the plaintiff had not produced any substantial evidence of use of the mark “AQUESTIA” in the market before or independently of the defendants’ efforts.
The Court also referred to the principle that in order to establish passing off, the plaintiff must prove that the mark has acquired distinctiveness and goodwill, and that the defendant’s use is likely to cause confusion. In the absence of such proof, courts do not grant injunctive relief.
Precedent Analysis
While the judgment does not explicitly cite case law, it is clearly grounded in the established doctrine laid down in cases like:
- S. Syed Mohideen v. P. Sulochana Bai (2016) 2 SCC 683, where the Supreme Court reiterated that in passing off cases, what matters is the reputation, goodwill, and prior use of the mark, not merely its creation.
- Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd. (2001) 5 SCC 73, where the Court laid down tests for deceptive similarity, but emphasized that actual reputation and use in the market are key to such claims.
- Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories (AIR 1965 SC 980), which underlined that trademark protection under common law arises only through use and public association.
These principles have been applied in spirit, even if not expressly cited.
Court’s Reasoning
The Court was not convinced that the plaintiff had established the necessary elements to merit interim relief. It found that while the plaintiff had coined the term “AQUESTIA”, there was no credible evidence that the mark had acquired goodwill or had been used in commerce independent of the defendants’ efforts.
The Court observed:
“It is a word coined by the Plaintiff and there is no goodwill or reputation yet attached to it.”
This, the Court held, was fatal to the plaintiff’s claim for protection at the interim stage. The Court also noted that the balance of convenience did not favour the plaintiff since the defendants were already using the mark in the market and had made investments in its promotion.
The Court thus concluded that granting an injunction at this stage would be premature and unjustified. The matter was left open for trial, where the plaintiff would have an opportunity to prove use, association, and misappropriation.
Conclusion
The Bombay High Court dismissed the plaintiff’s notice of motion for interim relief. It held that mere coinage of a mark without actual use or market recognition cannot justify protection under the law. The Court ruled that the plaintiff’s entitlement to relief, if any, would have to be established at trial. No injunction was granted, and the defendants were allowed to continue using the mark “AQUESTIA” under their existing arrangement.
Implications
This judgment reinforces the settled principle that intellectual property protection, especially in trademark law, hinges on actual commercial use and public recognition. Coining a term, however unique, does not in itself confer enforceable rights unless accompanied by market use and goodwill. Start-ups and entrepreneurs must ensure that their brands are actively used, promoted, and documented to qualify for protection under passing off laws.
The case also serves as a caution to parties entering into commercial agreements — clarity in rights and post-termination usage is critical to avoid disputes.
FAQs
1. Can a party claim trademark protection merely by coining a unique name?
No. Mere coinage of a term is insufficient. To claim protection under common law, the party must show actual use in commerce and acquired reputation or goodwill associated with the mark.
2. Is trademark registration necessary to claim legal protection?
Not necessarily. Under common law, unregistered trademarks can be protected through a passing off action, but only if prior use and goodwill are clearly established.
3. Why was interim relief denied in this case despite the plaintiff having coined the word?
Because the plaintiff failed to show any prior commercial use or market reputation for the term “AQUESTIA.” Without evidence of goodwill, the Court refused to restrain the defendants from using the mark.
