Court’s decision
The Madras High Court granted a permanent injunction restraining the defendants from using the mark “BOUNCE” for alcoholic beverages on the ground that the defendants’ adoption lacked bona fides and amounted to passing off. The Court held that the plaintiff had demonstrated prior use, extensive goodwill, and reputation, whereas the defendants’ adoption was clearly “dishonest, intended to ride upon the plaintiff’s market presence.” The Court rejected the defendants’ argument that differences in trade dress insulated them from liability and held that the fundamental test is whether an average consumer would associate the defendant’s product with that of the plaintiff. Applications alleging contempt were closed as they depended entirely on the main injunction suit.
Facts
The dispute arose from the use of the trademark “BOUNCE” for whisky brands. The plaintiff had used the mark for several years, advertised it widely, and established a strong market reputation. The defendant later introduced its own whisky under the identical prominent word “BOUNCE.” The plaintiff issued repeated cease-and-desist notices, which the defendant failed to meaningfully comply with. The plaintiff then approached the Madras High Court seeking a permanent injunction, alleging passing off, unfair competition, and dishonest adoption. During proceedings, the defendant relied on the argument that their label and trade dress were different, and consumers would not be misled. The plaintiff asserted that passing off protects the mark and goodwill, not merely visual similarities.
Issues
- Whether the plaintiff established prior use and goodwill in the trademark “BOUNCE.”
- Whether the defendant’s adoption of the identical word mark amounted to passing off.
- Whether differences in label design, colour scheme, or trade dress negate the likelihood of deception.
- Whether an injunction should be granted even when the defendant claimed concurrent use.
- Whether contempt applications survive after adjudication of the main injunction suit.
Petitioner’s arguments
The plaintiff argued that they were the earliest user of the mark “BOUNCE” for alcoholic beverages and had created substantial goodwill. They demonstrated continuous use, market circulation, advertising expenditure, and sales turnover. The plaintiff contended that trademark protection in passing-off actions hinges on reputation, association, and consumer perception, not on minute variations of packaging. They argued that the defendant’s deliberate adoption of an identical dominant word shows dishonest intent, especially when no explanation for such choice was offered. They submitted that deception is inevitable where both parties sell identical products through similar channels. The plaintiff relied on authoritative Supreme Court precedents holding that lack of bona fides is fatal to defendants in passing-off actions.
Respondent’s arguments
The defendant contended that they had adopted the mark independently and that their label, art-work, device, and colour scheme were distinct from the plaintiff’s packaging. They argued that the relevant public would not be confused because whisky consumers are discerning, purchase repeatedly, and distinguish products by bottle shape and visual details. The defendant suggested that the plaintiff had not demonstrated sufficient goodwill or exclusive association of the word “BOUNCE” with them. They argued that the plaintiff could not monopolize a commonly used English word. Finally, they claimed that there was concurrent usage, and therefore no injunction should be granted.
Analysis of the law
The Court reiterated that passing off protects the source-identifying function of a mark and that the principal test is whether consumers are likely to be misled into believing that the defendant’s goods originate from the plaintiff. The Court emphasized that alcoholic beverages are not purchased after rigorous scrutiny; instead, consumers rely primarily on brand word marks, making identity of words highly significant. The Court held that defendants cannot escape liability merely because the outer packaging differs. Where the dominant word mark is identical, and the plaintiff is the prior adopter, the risk of confusion is automatically high. Adoption of an identical mark without explanation indicates absence of bona fides.
Precedent analysis
Midas Hygiene Industries v. Sudhir Bhatia
The Court cited this case for the principle that when prima facie infringement or passing off is shown, injunction should follow as a rule, especially where the defendant’s adoption is dishonest.
Cadila Health Care Ltd. v. Cadila Pharmaceuticals
This celebrated decision was applied for the broader test of likelihood of confusion, especially in markets where consumer literacy levels vary. The Madras High Court noted that Cadila mandates consideration of overall impression, not label dissection.
Maria Margarida Sequeria Fernandes v. Erasmo Jack de Sequeria
The judgment was referenced to reiterate the duty of courts to arrive at clear findings rather than allow technicalities to cloud justice.
Court’s reasoning
The Court held that the plaintiff proved prior use by documentary evidence, while the defendant failed to justify their adoption. It found the defendant’s conduct suggestive of an attempt to exploit the plaintiff’s goodwill. The Court rejected the argument that whisky consumers exercise high purchasing care, noting that Indian consumer perception varies widely and that brand recall often depends solely on the name. It emphasized that the identical word “BOUNCE” was the most prominent element in both parties’ marks, which created a direct likelihood of association. The Court also held that passing off protects reputation, irrespective of whether the word is common or invented.
Conclusion
The Madras High Court ruled that the plaintiff was entitled to a permanent injunction restraining the defendant’s use of the mark “BOUNCE” for alcoholic beverages. The defendant’s use was held to be dishonest, confusing, and intended to ride on the plaintiff’s goodwill. Consequently, the contempt petitions were closed since the substantive suit had been adjudicated. The Court reaffirmed that in passing-off actions involving identical marks and similar goods, prior user must prevail, and dishonesty on part of the defendant warrants immediate injunctive relief.
Implications
This decision strengthens the position of prior users in India and reinforces that courts will strictly scrutinize marks adopted without bona fide justification. It highlights that word marks dominate consumer perception, and minor variations in packaging will not save infringers. The ruling also stresses that defendants must provide credible explanations for choosing identical marks; otherwise, courts presume mala fides. This judgment is significant for the whisky and FMCG industries where brand identity heavily shapes consumer choice.
