Trademark Infringement Suit Between Registered Proprietors in Different Classes Maintainable: High Court Clarifies Scope of Act Sections

Udaipur, India - In a significant ruling concerning trademark rights, the High Court, presided over by Justice Vinit KumarMathur , has set aside a trial court's order that had dismissed a trademark infringement and passing off suit between parties holding registered trademarks. The High Court clarified that the provisions of Sections 28(3), 29, and 30(2)(e) of the Trademark Act, 1999, relied upon by the trial court, do not bar a suit for infringement or passing off when the competing registered marks are in different classes (specifically, Goods vs. Services).

The judgment was rendered in a first appeal filed by Appellant-Plaintiff Kutbuddin Kanorwala against the order dated September 2, 2022, passed by the Additional District Judge No.1, Udaipur. The trial court had allowed an application by the defendant-respondent, Zakir Hussain Kanorwala , leading to the dismissal of both the plaintiff's suit and the defendant's counter-claim.

Background of the Dispute

The case originated from a dissolved partnership firm, M/s. Z.A. Kanorwala, founded in 1979 by Zakir Hussain Kanorwala and Abbas Ali Kanorwala , which used the trademark "ZK" (label) for spices (Class 30). Kutbuddin Kanorwala was inducted as a partner in 2005. Upon dissolution in 2006, a dissolution deed stipulated that Kutbuddin would continue the business as a sole proprietor under the same name, M/s. Z.A. Kanorwala, and would be entitled to the sole and exclusive ownership and use of the "ZA" and "ZK" trademarks along with goodwill. Zakir Hussain explicitly relinquished his rights in the firm and its trademarks.

Following the dissolution, Zakir Hussain took steps to dissociate himself from the dissolved firm, including cancelling tax licenses and closing bank accounts. Kutbuddin continued the business using the "ZK" mark (registered under No. 481894) and later obtained registration for "Upkar Spices" (originally registered under the partnership's name, No. 1034169) in his name as sole proprietor, both for goods in Class 30.

The dispute intensified when Zakir Hussain Kanorwala subsequently obtained registration for the mark "ZK" with "Upkar Spices" under Class 35, which relates to services. Alleging misuse of his registered trademarks, Kutbuddin filed a suit seeking a permanent injunction against Zakir Hussain for infringement and passing off concerning the "Upkar Spices" and "ZK" marks in Class 30.

Trial Court's Dismissal

During the pendency of the suit, Zakir Hussain filed an application arguing that since he also held a registered trademark ("ZK" with "Upkar Spices" in Class 35), the suit for infringement was not maintainable against a registered proprietor under Sections 28(3), 29, and 30(2)(e) of the Trademark Act, 1999. The trial court accepted this argument and dismissed the suit, concluding that the mere fact that both parties held registered trademarks of similar nature rendered the suit non-maintainable under these provisions.

Arguments Presented

Appellant's Contentions:

Dr. Ashok Soni, Senior Counsel for the appellant, argued that Sections 28(3), 29, and 30(2)(e) must be read in conjunction with Section 28(1), which clearly distinguishes between registration for "Goods" and "Services". He contended that the exclusive rights granted by registration and the limitations under Section 28(3) apply within the specific category (Goods or Services) for which the mark is registered. Therefore, a suit for infringement is maintainable when registered marks, even if identical, are in different classes.

He further emphasized that a suit for passing off, which emanates from common law rights protected under Section 27(2) of the Act, is always maintainable, irrespective of whether the defendant holds a registered mark. He likened the trial court's dismissal to an application under Order 7 Rule 11(d) of the CPC, arguing that the suit involved disputed facts and required adjudication on merit after framing issues and recording evidence. He also pointed out that the registration of the defendant's mark was under challenge in the Gujarat High Court.

Respondent's Contentions:

Mr. G. D. Bansal, counsel for the respondent, vehemently argued that under Section 28(3), no exclusive right to use an identical or similar mark is acquired by one registered proprietor against another merely by registration. He contended that since both parties were registered proprietors of identical marks, the suit for infringement was barred. He claimed Section 29, dealing with infringement "in the course of trade," does not distinguish between Goods and Services in this context. Similarly, he argued that Section 30(2)(e) protects the use of a registered mark by one proprietor against another. He also argued that a composite suit for both infringement and passing off was not maintainable.

High Court's Analysis and Reasoning

Justice Mathur carefully examined the provisions of the Trademark Act, 1999, particularly Sections 28(1), 28(3), 29, and 30(2)(e).

The Court noted that Section 28(1) grants exclusive rights to a registered proprietor "in relation to the goods or services in respect of which the trade mark is registered." This, the Court observed, clearly delineates rights based on the registered category (Goods or Services).

Crucially, the Court held that Section 28(3), which deals with situations where two or more persons are registered proprietors of identical or similar marks, must be read "in conjunction with sub-section (1) of Section 28." The Court cited the Delhi High Court judgment in A. Kumar Milk Foods P. Ltd. v. Vikas Tyagi & Anr. , which held that Section 28(3) only prevents an infringement action between registered proprietors where the marks are identical or nearly resemble each other AND are in respect of the same class of goods and services . As the registrations in the present case were in different classes (Class 30 - Goods and Class 35 - Services), Section 28(3) did not apply to bar the suit.

Regarding Section 29, the Court found the respondent's argument that it prohibits infringement suits between registered holders without distinguishing classes to be misplaced. Section 29 primarily defines infringement by persons not being registered proprietors. The Court concluded that Section 29, read in context, does not prevent a suit where registrations are for clear and distinct classes.

Similarly, the Court analyzed Section 30(2)(e) and relied upon the Delhi High Court judgment in Rana Steels v. Ran India Steels P. Ltd. , which specifically held that Section 30(2)(e) "does not cover cases where identical or similar trade marks are registered in respect of different classes of goods or services." The question of infringement, the Rana Steels court stated, would itself not arise in such a scenario as the marks are used for different classes.

Furthermore, the High Court reiterated the well-settled principle regarding passing off actions. Citing the Supreme Court judgment in S. Syed Mohideen v. P. Sulochana Bai , the Court affirmed that Section 28(3) provides no rights between registered proprietors only for the purpose of registration but does "nowhere comment about the rights of passing off which shall remain unaffected due to overriding effect of Section 27(2) of the Act." Thus, a suit for passing off is maintainable even if both parties hold registered identical marks.

The Court also noted the pending rectification application against the defendant's mark and found that the trial court erred in dismissing the suit at a premature stage, effectively treating the defendant's application as grounds akin to Order 7 Rule 11 CPC without framing issues or evaluating evidence. The argument regarding the non-maintainability of a composite suit for infringement and passing off was rejected by the Court as being without legal basis or supporting authority.

The Ruling and its Implications

Based on its detailed analysis, the High Court concluded that the trial court had committed an error in dismissing the suit solely on the ground that both parties held registered trademarks, particularly given that the registrations were in different classes. The Court held that the suit required adjudication on its merits, including framing of issues and evaluation of evidence.

Accordingly, the High Court allowed the appeal, quashed, and set aside the trial court's order dated September 2, 2022. Recognizing that the suit has been pending since 2020, the Court directed the trial court to decide the pending suit and the revived counter-claim within a period of one year from the date of receipt of the judgment, in accordance with law.

This judgment clarifies that registration of a similar trademark in a different class does not automatically bar a suit for infringement or passing off between registered proprietors under the Trademark Act, 1999, reinforcing the distinction between Goods and Services classifications in trademark protection and the continued importance of common law rights in passing off actions.