Burger King Secures Interim Stay: The Story Behind Suit Dismissal

On August 26, the Bombay High Court issued a stay on the Pune District Court’s ruling from last month, which had dismissed the Burger King Corporation’s suit against the owners of Pune-based restaurants alleging infringement of its registered and well-known trademark.[1] This interim stay will remain in effect until the next hearing scheduled for September 6.

In this post, we highlight the key aspects of the case and delve into why the Pune Court ruled against the global giant in this longstanding 13-year trademark dispute despite it being the first in the world market.

The case before Pune District Court:

Brief facts

The plaintiff company, incorporated under the laws of the State of Florida and operating over 15,000 restaurants globally, has used the trademark Burger King since 1954 and registered it in over 122 countries.

It became aware of the defendants’ trademark application for BURGER KING and their use of the same name for restaurants at two locations in Pune. The plaintiff filed a suit in 2011 after its cease-and-desist notice was rejected by the defendants, seeking permanent injunction, damages, rendition of accounts, and the relief of delivery up.

While the plaintiff launched its first Burger King restaurant in India in 2014 (and in Pune in April 2015), the defendants claim to have been operating their restaurant since 1989 and using the impugned name since 1992. The plaintiff secured an interim order of injunction in January 2012, through which the defendants were restrained from using the plaintiff’s registered trademark in India.

The plaintiff validly holds the trademark in food articles

The Court accepted that the plaintiff proved that it was validly holding the trademark in the name of Burger King in the field of hamburgers, chicken sandwiches, etc. In this regard, it was also pointed out that the defendants had withdrawn the application for cancellation of the plaintiff’s registration before the Intellectual Property Appellate Board (IPAB).

No infringement – oral and documentary evidence not considered

As to the evidence affidavit filed on behalf of the plaintiff, the defendants contended that the verification was not in accordance with Order 19 Rule 3 (1) of the Civil Procedure Code, 1908. Agreeing with this view, the Court held that it couldn’t be accepted as evidence to prove the contentions made in the plaint. The admissions of the witness during cross-examination were pulled up to show that he had no personal knowledge about facts, events, averments, etc., made in the evidence affidavit of the examination-in-chief. It was stated that he ought to have disclosed the source of his information, which he referred to in the affidavit. Moreover, while the suit was filed in 2011, the witness came in association with the plaintiff company in 2018.

The Court noted that the documents which the plaintiff had placed on record in support of its claim could not be proved. It was held that even if documents were exhibited following a previous Court order, the mere exhibition did not dispense with its proof. With this, the Court held that the plaintiff ‘miserably failed’ to prove that the defendants had infringed its trademark while running their restaurant in Pune.

Suit not instituted by authorised representatives

The plaintiff maintained that Cecilia Dempsey, being a principal officer of the plaintiff corporation at the time of the institution of the suit, was duly authorised to sign and verify the plaint. This authorisation was said to be accorded vide a power of attorney executed in February 2009. It was also averred that the amended plaint was signed and verified by Pankaj Pahuja, who was also authorised to do the same.

Finding merit in the defendants’ arguments, the Court noted that there was no resolution passed by the Board of Directors authorising said persons to sign and verify the plaint. Further, it was not proved that they were principal officers of the plaintiff company, and neither did they step into the witness box to clarify under which capacity and authority they had signed and verified the plaint.

Consequently, the Court held that the suit was not instituted by authorised persons in accordance with Order 29 Rule 1 of the Civil Procedure Code, 1908, and thus was not maintainable.

In view of the above and the absence of evidence regarding proof of infringement of the trademark and actual damage caused to it, the plaintiff was held not entitled to damages of INR 20 lakh and rendition of accounts.

Registration of trademark for restaurant service under class 42

As mentioned earlier, the plaintiff started providing services through a restaurant under its trademark Burger King in India in 2014, whereas the defendants had been using the said trademark to provide restaurant services since 1992. Considering that the plaintiff registered its trademark under class 42 pertaining to restaurant services in 2006 (after the enforcement of new Trademark Rules, which enabled the registration of service marks) and the defendants were prior users of the trademark, the Court opined that the plaintiff had no cause of action to seek relief of perpetual injunction.

Counter-claim dismissed

Due to lack of evidence, the Court also dismissed the counterclaim of the defendants, who sought to permanently restrain the plaintiff from using the name Burger King for their restaurant service in Pune, compensatory damages to the tune of INR 20 lakh along with costs.

Comments

Although this case had the potential to be a landmark ruling on trademark infringement, it was derailed by procedural lapses. As a result, the matter was argued solely on technicalities rather than on its substantive merits. The Hon’ble Court’s remark that the plaintiff had not even presented the registration certificate under Class 42 before 1991-1992 underscores the gravity of these oversights and highlights the Court’s awareness of the underlying facts.

References:

[1] Burger King Corporation v. Anahita Irani & Anr. (IA/11936/2024)

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Photo by Bay Kadir Oguzhan on Pexels

The plaintiff started providing services through a restaurant under its trademark Burger King in India in 2014, whereas the defendants had been using the said trademark to provide restaurant services since 1992. Considering that the plaintiff registered its trademark under class 42 pertaining to restaurant services in 2006 (after the enforcement of new Trademark Rules, which enabled the registration of service marks) and the defendants were prior users of the trademark, the Court opined that the plaintiff had no cause of action to seek relief of perpetual injunction.

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Jan Vishwas Amendment: DPIIT Releases Draft Trade Marks Rules

Pursuant to provisions introduced by the Jan Vishwas (Amendment of Provisions) Act, 2023, the Department for Promotion of Industry and Internal Trade (DPIIT) has released draft rules for holding inquiry, imposing penalties, and preferring appeals under provisions of the trademark and geographical indications legislations.[1] Public comments on these draft rules may be shared by August 1. [The final version of the rules has been published; click here and here to read].

The draft patents, trademarks and geographical indication rules unveiled in January of this year have undergone significant revisions.[2] Though the amendments made vide the Jan Vishwas (Amendment of Provisions) Act, 2023, to the IP laws have yet to be brought into force, the DPIIT proceeded to notify amendments to Patents Rules, 2003, in March 2024. Through the Patents (Second Amendment) Rules, 2024, Chapter IX A, on adjudication of penalties and appeals, was introduced. These require complaints regarding contravention committed under Sections 120 (unauthorised claim of patent rights), 122 (refusal or failure to furnish information), and 123 (practice by non-registered patent agents) of the Act to be filed in Form 31. Further, the appeal against the order of adjudicating officer has to be filed in Form 32.

The procedure provided under the Patents (Second Amendment) Rules, 2024, has been retained, with slight changes, in the draft trademark and geographical indication rules notified on July 2, which are summarised below:

Draft Trade Marks (Holding Inquiry and Appeal) Rules, 2024

As per Rule 3 of the draft Trade Marks (Holding Inquiry and Appeal) Rules, 2024, any person may file a complaint pertaining to contravention under Section 107 of the Trade Marks Act, 1999, in Form-I through electronic means to the adjudicating officer. The said Section deals with the penalty for false representation of a trade mark as registered.

Rule 4 contains provisions pertaining to the holding of inquiry. It envisages issuance of a seven-day show cause notice to the person against whom the inquiry is to be conducted, indicating the nature of contravention alleged to have been committed. If, after considering the cause, the adjudicating officer determines that an inquiry has to be held, a notice will be issued calling for the appearance of the person for a hearing on the date fixed in the notice. At this hearing, the contravention, along with the applicable provisions, will be explained. Thereafter, an opportunity will be accorded to file a counter statement and present relevant evidence (document or evidence to be furnished in Form-II).

If the adjudicating officer is satisfied that the person has committed the contravention, he may impose a penalty under the Act via a written order mentioning the specific provisions and the reasons for the penalty imposition. Notably, the proceeding has to be completed within three months of issuance of the notice to the opposite party.

Persons aggrieved by the adjudicating officer’s order may file an appeal, under Rule 5, in Form-III, to the appellate authority within 60 days.

Other important aspects include the electronic transmission of all communications and the mandate to upload every order to IP India’s official website.

Draft Geographical Indications of Goods (Holding Inquiry and Appeal) Rules, 2024

The draft Geographical Indications of Goods (Holding Inquiry and Appeal) Rules, 2024, specifies that any person may file a complaint regarding contravention committed under Sections 38 (falsifying and falsely applying geographical indications), 39 (penalty for applying false geographical indications), 40 (penalty for selling goods to which false geographical indication is applied), 41 (enhanced penalty on second or subsequent conviction), and 42 (penalty for falsely representing a geographical indication as registered) of the Act in Form-I. The remaining provisions are more or less the same as those of the draft Trade Marks (Holding Inquiry and Appeal) Rules, 2024.

Conclusion

The draft rules signify a crucial advancement in the enforcement and management of IP rights in India. By providing structured procedures for filing complaints, conducting inquiries, and appealing decisions, the DPIIT aims to foster a more transparent and efficient system. The emphasis on electronic communication and timely resolutions reflects a modern approach which can enhance stakeholder confidence in the IP ecosystem. Overall, these initiatives not only aim to streamline processes but also to uphold the integrity of trademarks and geographical indications, ultimately contributing to a more robust IP framework in India.

References:

[1] The draft Trade Marks (Holding Inquiry and Appeal) Rules, 2024, and the draft Geographical Indications of Goods (Holding Inquiry and Appeal) Rules, 2024. 

[2] Click here, here and here to download the draft rules from January 2024.

Image Credits:

Photo by olm26250 on Canva

The draft rules signify a crucial advancement in the enforcement and management of IP rights in India. By providing structured procedures for filing complaints, conducting inquiries, and appealing decisions, the DPIIT aims to foster a more transparent and efficient system. The emphasis on electronic communication and timely resolutions reflects a modern approach which can enhance stakeholder confidence in the IP ecosystem. Overall, these initiatives not only aim to streamline processes but also to uphold the integrity of trademarks and geographical indications, ultimately contributing to a more robust IP framework in India.

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'INFOSYS' Trademark: Injunction Against Use in Corporate Name

In a judgment dated May 27, 2024, the Delhi High Court issued an injunction restraining the use of the registered and well-known trademark, ‘INFOSYS’, as part of the corporate name of the Defendant, Southern Infosys Limited.[1]

The present suit was filed by Infosys Limited, the plaintiff, against the Defendant, alleging infringement under Section 29(5) of the Trade Marks Act, 1999.

Incorporation of Companies:

Incorporated in the year 1981, the Plaintiff, six years after its incorporation, secured registration of ‘INFOSYS’ as a wordmark in Class 9. Since then, the mark has been registered across several other classes.

The Defendant company, on the other hand, was incorporated in 1994 under the name ‘Disha Financial Services Limited’. Subsequently, it shifted its business focus and changed its name to ‘Southern Infosys Limited’ in 1998.

The decision of the Delhi High Court:

The decision of the Court is summarised below:

  • Trademark as part of corporate name

As per Section 29(5) of the Act, the use of a registered trademark by a person amounts to infringement if a) such mark is used as his trade name, name of business concern, or part thereof, and b) the person deals in goods or services in respect of which the trademark is registered. Both the conditions were said to be fulfilled in the instant case. The adoption of the trademark by the Plaintiff and its registration predated the mark’s incorporation in the Defendant’s corporate name. Further, specific references were made to the overlap in the parties’ business activities, the objects clause in the Defendant company’s MOA and failure on the part of the Defendant to show dissimilarity in the goods and services.

  • Likelihood of consumer confusion

Though the Court clarified that the said Section did not require one to prove that the use of the trademark resulted in public deception or dilution of the mark, it went on to address this aspect as well. Considering the visual, phonetic, and conceptual similarity between the marks, on a prima facie assessment, the Court observed that there was a likelihood of consumer confusion.

  • Concealment regarding issuance of previous notices not intentional

As to the submissions made by the Defendant asserting deliberate concealment by the Plaintiff of the issuance of notices in 2001 and April 2020, the Court noted that there was no documentation regarding the 2001 notice and also accepted the Plaintiff’s contention that operational disruptions owing to the pandemic led to the oversight in disclosing the April 2020 notice.

  • Delay in initiating action does not extinguish rights under trademark law

Before proceeding to the objection regarding delay, the failure on the part of the Defendant to conduct due diligence before adopting its corporate name was pulled up. This was considered against the backdrop of the trademark being recognised in the industry for over 17 years (before Defendant’s adoption). The Court went on to hold that the delay of over 20 years on the part of the Plaintiff in initiating action did not extinguish its trademark rights, especially in light of the continuous use of the trademark. The mere delay was also held not to constitute acquiescence.

  • Trademark has acquired distinctiveness

Citing the concept of acquired distinctiveness, the Court dismissed assertions that the Plaintiff’s trademark was generic and merely descriptive of the services provided. The Court remarked, “‘INFOSYS’ has transcended its ostensibly descriptive origins to embody a unique identifier of the Plaintiff’s goods and services. Over decades, ‘INFOSYS’ has been consistently used, promoted, and legally protected as a trademark, deeply embedding it in the public consciousness as synonymous, not with a general category of technology services, but specifically with the Plaintiff’s goods and services.”

Finally, the Court issued an injunction restraining the Defendant from using the Plaintiff’s trademark in its corporate name. Since the Defendant had been using the trademark for over twenty years, it was considered prudent to give the defendant four months to transition to a non-infringing trade name. The matter will be heard next on August 20.

Remarks:

While there have been numerous cases of Infringement of Infosys marks in India and some landmark cases as well, this will indeed be added to the list provided the final rulings are in favour of the Plaintiff. This is purely due to the Court’s acknowledging the infringement even though the delay in filing the suit was over two decades. This ground, if upheld upon appeal, will help in future action where the delay in initiating the suit denied an injunction.

References:

[1] Infosys Limited v. Southern Infosys Limited [IA 6817/2024 in CS(COMM) 257/2024]; Judgment can be accessed here.

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Photo by maxkabakov on Canva

As per Section 29(5) of the Act, the use of a registered trademark by a person amounts to infringement if a) such mark is used as his trade name, name of business concern, or part thereof, and b) the person deals in goods or services in respect of which the trademark is registered. Both the conditions were said to be fulfilled in the instant case. The adoption of the trademark by the Plaintiff and its registration predated the mark’s incorporation in the Defendant’s corporate name. Further, specific references were made to the overlap in the parties’ business activities, the objects clause in the Defendant company’s MOA and failure on the part of the Defendant to show dissimilarity in the goods and services.

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‘NEW BALANCE’ and ‘NB’ Get Recognised as Well-Known Trademarks

In an order dated November 2, 2023, the Delhi High Court declared the Plaintiff, New Balance Athletics Inc’s marks, ‘NEW BALANCE’ and ‘NB’ as well-known marks.[1]

In May 2022, the Plaintiff came to know that the Defendant, New Balance Immigration Private Limited, a Noida-based company incorporated on March 30, 2022, was using marks “deceptively similar” to its ‘NEW BALANCE’ marks and ‘NB’ device marks. When the Defendant failed to revert to the cease-and-desist notices sent to it, the Plaintiff proceeded to file the present suit before the Delhi High Court seeking a permanent injunction. It was contended that the adoption of the impugned marks by the Defendant was “with a view to encash upon the immense goodwill and reputation” of the Plaintiff.

After noting that the Plaintiff was the registered proprietor of the said marks and making a comparison between the marks of the parties, the Court concluded that the mark and the domain name of the Defendant were “deceptively similar” to those of the Plaintiff. Further, it was held that the acts of the Defendant amounted to trademark infringement as per provisions of the Trade Marks Act, 1999, and passing off the services of the Defendant as that of the Plaintiff. Hence, the Court ruled in favour of the Plaintiff vide judgment dated June 1, 2023. Considering the continued use of the infringing marks by the Defendant despite the service of cease-and-desist notices in May 2022 and the issue of interim injunction in October 2022, and that the resolution to voluntarily wind up the Defendant company was passed only on May 30, 2023, the Court awarded costs to the tune of Rs. 4 lakhs.

The matter regarding the declaration of Plaintiff’s marks as well-known marks was pending to be decided on the day the said judgment was passed; the Plaintiff was directed to furnish evidence in support of the same. Accordingly, the Plaintiff made submissions regarding the registrations obtained in India under various classes since 1987, registrations obtained in other countries, the amount invested in advertising and promotions, etc. to depict compliance under Section 11(6) of the 1999 Act. The said Section provides the list of factors to be taken into account by the Registrar in determining whether a trademark is a well-known trademark.

Upon perusal of relevant case laws, and the evidence furnished, the Court declared the Plaintiff’s marks, ‘NEW BALANCE’ and ‘NB’ as well-known marks. However, it was clarified that this declaration would not operate as a bar on the use of the words ‘New’ or ‘Balance’ separately in respect of any other goods or services.

Remarks

Now that the Delhi High Court has declared the Plaintiff’s marks as well-known marks, the Plaintiff can approach the Trademarks Registry for the publication and inclusion of trademarks in the list of well-known trademarks. As per Rule 124 of the Trade Marks Rules, 2017, for such inclusion, an application has to be made electronically in Form TM-M and the applicable fee (i.e., Rs. 1 lakh for each mark) has to be paid. Section 11(8) of the 1999 Act specifies that if a trademark is “determined to be well known in at least one relevant section of the public in India by any court or Registrar, the Registrar shall consider that trade mark as a well-known trade mark for registration under this Act”. The same has been interpreted by the Delhi High Court in the case of Tata SIA Airlines Limited vs. Union of India [WP(C)-IPD 64/2021], to mean that the Registrar is not entitled to re-determine the status of the trademark declared by the Court as a well-known trademark. 

References:

[1] New Balance Athletics Inc. v. New Balance Immigration Private Limited [CS(COMM) 444/2022 and IA 11940/2023]

Image Credits:

Photo by felipepelaquim on Unsplash

Section 11(8) of the 1999 Act specifies that if a trademark is “determined to be well known in at least one relevant section of the public in India by any court or Registrar, the Registrar shall consider that trade mark as a well-known trade mark for registration under this Act”. The same has been interpreted by the Delhi High Court in the case of Tata SIA Airlines Limited vs. Union of India [WP(C)-IPD 64/2021], to mean that the Registrar is not entitled to re-determine the status of the trademark declared by the Court as a well-known trademark. 

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