Court’s Decision
In this case, the Delhi High Court intervened in a trademark dispute and modified the trial court’s interim injunction order issued on December 13, 2024. The initial injunction had restrained the appellant from using the mark “The Crush Coffee” and its associated label in the context of their business operations. The High Court modified this order to clarify that the appellant is not restrained from using the wordmark “The Crush Coffee”, as the respondent had not sought an injunction on this specific mark. However, the injunction over the label mark was upheld, but the appellant was granted the liberty to file an application before the trial court to seek the vacation of this part of the injunction. The court also directed the trial court to adjudicate on any such application within four weeks of the first listing.
Facts
The dispute revolves around a trademark infringement claim concerning the use of the mark “The Crush Coffee” and a label mark that the respondent alleges is deceptively similar to their own registered trademark. The respondent had filed a suit before the Commercial Court at Rohini, Delhi, seeking an injunction against the appellant’s use of the mark in connection with its business operations, particularly in the restaurant and café sector.
On December 13, 2024, the trial court issued an ex-parte ad-interim injunction restraining the appellant from using the mark “The Crush Coffee” and any deceptively similar marks. The appellant, who was already involved in prior litigation with the respondent in Ahmedabad, contested the injunction, arguing that it was issued despite the existing legal proceedings in the Commercial Court at Ahmedabad, where a similar matter was being heard. The appellant’s main argument was that since respondent no. 2 held the rights over the label mark, the trial court should not have issued an injunction based on the same mark.
Issues
- Prior Litigation: Did the trial court err in issuing an injunction despite the ongoing litigation in Ahmedabad?
- Trademark Ownership: Did the appellant’s use of the label mark infringe on the respondent’s rights when the respondent no. 2 was the actual owner of the label mark?
- Right to Contest Injunction: Was the appellant entitled to seek modification or vacation of the injunction on the label mark in the trial court?
Petitioner’s Arguments
The appellant presented several arguments to contest the injunction granted by the trial court:
- Pre-existing Litigation: The appellant pointed out that a previous litigation was already underway in Ahmedabad regarding the same trademark dispute. The appellant argued that the trial court should have taken this into consideration and avoided granting an injunction in a matter that was already being adjudicated.
- Ownership of Label Mark: The appellant argued that the respondent no. 2 was the actual owner of the label mark in question, and as such, an injunction should not have been issued. The appellant claimed that the label mark should not be considered in the injunction because it was owned by another party.
- Liberty to Contest the Injunction: The appellant sought the right to move the trial court for the vacation of the injunction on the label mark and requested the liberty to seek modification of the injunction if necessary.
Respondent’s Arguments
The respondent countered the appellant’s claims with the following arguments:
- No Injunction on “The Crush Coffee”: The respondent clarified that it was not seeking an injunction on the wordmark “The Crush Coffee”. Therefore, the High Court was urged to consider this clarification and ensure that the injunction applied only to the label mark.
- Deceptive Similarity of the Label Mark: The respondent argued that the appellant’s use of the label mark was done in bad faith and was deceptively similar to the respondent’s registered trademark. The respondent contended that the appellant should not be allowed to use a mark that closely resembles the respondent’s, especially given the allegations of passing off and the deceptive nature of the label mark.
- Cooperation for Early Resolution: The respondent committed to cooperate with the trial court for the expeditious resolution of any application filed by the appellant seeking the vacation of the injunction. This was to ensure that the matter could be resolved promptly.
Analysis of the Law
- Conflict of Injunctions: The High Court acknowledged the ongoing litigation in Ahmedabad, where a similar dispute regarding the mark “The Crush Coffee” had already been raised. It highlighted the importance of avoiding conflicting injunctions over the same issue in different courts, which could lead to inconsistent judicial orders.
- Ownership and Prior Use: The case involved questions of trademark ownership and prior use. According to the Trade Marks Act, 1999, registered trademark owners have exclusive rights over their marks. However, if another party claims prior use, such claims must be properly adjudicated. The court took into account the fact that respondent no. 2 owned the label mark in question, and the appellant’s use was in dispute. The appellant’s claim that the respondent’s ownership of the label mark made the injunction improper was central to the argument.
- Right to Contest Injunctions: Under Order XXXIX Rule 4 of the Civil Procedure Code, a party can file an application to modify or vacate an ex-parte injunction. This provision was important in granting the appellant the right to contest the injunction on the label mark before the trial court.
Precedent Analysis
The High Court relied on several precedents to arrive at its decision:
- Satyam Infoway Ltd. v. Sifynet Solutions Pvt. Ltd. (2004) 6 SCC 145 – The Supreme Court in this case emphasized the importance of prior use in trademark disputes and held that registered marks are protected, but prior users may still have a case.
- Neon Laboratories Ltd. v. Medical Technologies Ltd. & Ors. (2016) 2 SCC 672 – In this case, the Court ruled that prior use can override later registration, and the appellant’s right to use the mark should be given due consideration.
- Wander Ltd. v. Antox India Pvt. Ltd. (1990) Suppl. SCC 727 – The case emphasized that appellate courts should be reluctant to interfere with interim orders, except in exceptional circumstances, to ensure fairness.
Court’s Reasoning
The High Court, after hearing the arguments from both sides, arrived at the following reasoning:
- Clarification on Scope of Injunction: The High Court clarified that the injunction issued by the trial court did not apply to the wordmark “The Crush Coffee”, as the respondent had not sought such an injunction. This was a key point of clarification, and the High Court ensured that the appellant could continue using the wordmark without further restriction.
- Modification on Label Mark: The High Court recognized that the label mark injunction might have been issued inappropriately. Therefore, it allowed the appellant to file an application for modification or vacation of the injunction before the trial court, thus ensuring that the appellant’s right to challenge the injunction was preserved.
- Efficient Litigation Process: The High Court also directed the trial court to resolve the application within four weeks, aiming for expeditious resolution of the dispute to prevent unnecessary delays in the ongoing litigation.
Conclusion
The Delhi High Court modified the interim injunction:
- No injunction was imposed on the use of “The Crush Coffee” by the appellant.
- The injunction concerning the label mark was upheld, but the appellant was allowed to seek the vacation or modification of this injunction before the trial court.
- The trial court was directed to resolve the appellant’s application within four weeks of its first listing.
- The appeal was disposed of based on these terms.
Implications
- Trademark Dispute Resolution: The case sets an important precedent on how courts should deal with conflicting injunctions in trademark disputes, especially when prior litigation exists.
- Protection of Trademark Rights: The decision underscores the protection of registered trademarks, but also emphasizes the importance of considering prior use and ownership when granting injunctions.
- Procedural Fairness: The ruling affirms the right of affected parties to contest injunctions, ensuring that interim orders are not imposed unfairly and are open to modification or vacation upon proper legal application.
The decision highlights the need for judicial economy and fair adjudication in complex trademark disputes, allowing both sides to contest claims fairly.
