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2024 Supreme(Online)(MAD) 27587

HIGH COURT OF MADRAS
Mr. Justice M. Dhandapani, J
M/s.KCP Infra Limited – Appellant
Versus
The Regional Director – Respondent
W.P. NO. 2087 OF 2022



Advocates:
Ms. Gladys Daniel, Mr. Krishna Srinivas, for M/s. Ramasubramaniam Associates for R-2, Mr. A.R. Sakthivel, SPC for R-1

The court affirmed that prior user rights in trademark disputes take precedence, emphasizing the protection of goodwill and reputation against misrepresentation.

Headnote:(A) Companies Act, 2013 - Section 16(1)(b) - Trademarks Act, 1999 - Section 35 - Dispute over company name - Petitioner, having used 'KCP' since 2005, challenged order to change name due to prior user rights of 2nd respondent since 1941 - Court found 2nd respondent's application maintainable and timely, emphasizing the importance of goodwill and reputation in trademark disputes. (Paras 8, 16, 70, 79)

(B) Acquiescence - The principle of acquiescence was discussed, noting that mere delay does not negate the right to seek relief if goodwill is at stake. (Paras 44, 66)

(C) Passing Off - The court reiterated that the three ingredients of passing off are goodwill, misrepresentation, and damage, emphasizing the protection of goodwill against misrepresentation. (Paras 35, 66)

Facts of the case:
The petitioner, initially a partnership firm, incorporated as a private limited company in 2011, used 'KCP' since 2005. The 2nd respondent, a prior user since 1941, sought to enforce trademark rights against the petitioner.

Findings of Court:
The court upheld the 2nd respondent's rights, emphasizing the importance of prior use and the potential damage to goodwill.

Issues: The main issues included the validity of the name change order and the application of acquiescence in trademark disputes.

Ratio Decidendi: The court ruled that the 2nd respondent's prior user rights superseded the petitioner's claims, and the order to change the name was justified to protect goodwill.

Result: Writ petition dismissed, confirming the impugned order.

ORDER

The impugned order in and by which the application of the 2nd respondent herein for a direction to the petitioner to change the name of the company and restrain it from using “KCP” has been affirmatively answered in favour of the 2nd respondent by the 1st respondent is put to challenge in the present petition.

2. It is the averment of the petitioner that initially the petitioner firm was started as a partnership firm in the name of “KCP Engineers and Fabricators” in the year 2005 and later, it was incorporated as a Private Limited Company in the year 2011 under the Companies Act, 1956 under the name of KCP Engineers Pvt. Ltd. The word “KCP” has been part of the name of the company since the date of incorporation of the company in the year 2011.

3. It is the further averment of the petitioner that in the light of Section 16 (b) of the Companies Act, the limitation period for change changing the name is 3/5 years of incorporation of the company, be it under Section 16 (1) (b) of Companies Act, 2013 or under proviso to Section 22 of the Companies Act, 1957. It is the further averment of the petitioner that it has been using the name “KCP” as part of the name of the company from 2011 and by the petitioner’s predecessor in title as part of a partnership from 2005.

4. It is the further averment of the petitioner that the company was converted as a Public Limited Company on 16.04.2021 and subsequent to the same, the name of the company was changed to “KCP Infra Ltd., bearing Corporate Identification No.U45400TN2011PLC099511. It is the further averment of the petitioner that since the inception of the company in the year 2005, the promoter and Managing Director of the Company, viz., Mr. K.Chandraprakash, who is the registered proprietor and trademark holder of ‘KCP’, which mark is valid and subsisting till date had granted unconditional consent to the company to use the trademark ‘KCP’.

5. It is the further averment of the petitioner that the name of the founder of the company has been abbreviated and has been bona fide adopted, which is protected u/s 35 of the Trademarks Act, 1999 . The company has immense reputation and is well known in various Government departments and is executing road and infra projects for the Government and private sector and retail businesses related to manufacturing, sales and marketing of construction related business and construction material suppliers.

6. It is the further averment of the petitioner that the petitioner company, KCP Engineers Pvt. Ltd., was converted to a Public Limited Company as ‘KCP Infra Ltd.’, and had filed Application No.4911560 for Class-37 which came to be registered and that the said mark is valid and subsisting till date on the Trade Mark Register.

7. It is the further averment of the petitioner that the company is carrying on business using the name ‘KCP’ continuously without any interruption and that the company is the registered proprietor of the trademark ‘KCP Infra’ as the company is in continuous use of the trademark KCP and KCP Infra. The petitioner company has spent valuable sums of money and has put its hard work and effort to popularize its trademarks ‘KCP’ and ‘KCP Infra’.

8. It is the further averment of the petitioner that when the matters stood thus, the 2nd respondent initiated proceedings u/s 16 of the Companies Act, 2013 (for short ‘Act, 2013’) against the petitioner seeking to remove the letters KCP forming part of the petitioner’s company name as the same was undesirable in view of the prior incorporation of the 2nd respondent company with the same letters KCP forming part of their company name.

9. It is the further averment of the petitioner that a direction has been issued by the respondent to the petitioner company to change its name within three months u/s 16 (1) of Act, 2013, failing which the Registrar of Companies, Tamil Nadu was directed to initiate action in terms of Section 16 (3) of Act, 2013. Challenging the said order, as the petitioner is left with

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