M/s AZ (India) & Anr.

Vs

M/s Intex Technologies (India) Ltd.

2017 (70) PTC 118 (Del)

FACTS OF THE CASE :

1. The Plaintiff, AZ Tech were operating as incorporation in India and had been
marketing and selling mobile phones handsets in India in the trade name of "Aqua"
since 2009. it had also launched various other mobile phone accessories like
earphones, chargers, bluetooth devices etc. in the same trade name since then.

2. In 2012 the defendants, i.e. Intex Technologies launched their mobile phone handsets
in the name of "Intex Aqua" which was claimed by petitioners as passing off their
products in the trade name of Plaintiff and therefore violates the IP rights of the
Plaintiff.

3. The Plaintiff filed a suit against the Defendant which was put up before a single judge
bench of Delhi High Court to order an injunction against the defendants to compel
them to stop using the mark aqua for their mobile phone handsets.

4. The Single Judge Bench passed the interim injunction on 24.12.2016 against the
defendants and therefore the defendants cannot be allowed to use the same name as
this would deceive the customers of the Plaintiff.

5. Aggrieved by this order of Single Judge Bench, the defendant appealed before the
Division Bench of same High Court against the order of the Single Bench

ISSUES RAISED :

1. Whether mere prior use of the trade mark is enough to succeed in a passing off claim
or is it the goodwill /reputation in addition to prior use which is essential for
establishing a case for passing off?

2. Whether added matters in the product are sufficient to dispel the likelihood of
confusion in the minds of public at large?
CONTENTIONS OF PARTIES :

The plaintiffs claimed that they were prior users of the “Aqua” mark in India since 2009, and
their product had been an instant hit as it was economically priced. They claimed that in
2012, the defendants launched phones under the brand name “Intex Aqua” in an attempt to
exploit the goodwill of the plaintiff’s mark and cause a likelihood of confusion in the minds
of the consumers. It was contended that the defendant’s products are also deceptively similar
in both looks and features.

On the other hand, the defendants claimed that the plaintiffs could not claim exclusive rights
over the impugned trademark as it was descriptive and devoid of any distinctive character. It
was contended that the suit was not maintainable owing to the added features such as the
addition of the house mark “Aqua”, its get-up, colour-combination, placement, writing style
etc. which make the goods of both parties distinguishable and negate any possibility of
confusion between the marks. It was also argued that the plaintiffs had acquiesced to the use
of the mark as the suit was filed after a delay of 14 months. Further, the defendants contended
that the inspiration for the term “Aqua” came from the fact that the display was crystal clear
and the defendants have been aggressively advertising the mark, with sales of the “Intex
Aqua” phone exceeding 200 crores.

The defendants claimed that the plaintiff had not come to court with clean hands. The 104
service centers as claimed by the plaintiffs did not service the products of the plaintiffs, as per
their investigation. They also claimed that despite the fact that the plaintiff’s application for
registration of trademark was still pending, they were wrongly using the ® mark with their
logo, amounting to misrepresentation. The plaintiffs claimed that the investigations carried
out by the defendant were a sham and the use of the ® mark was a bona fide mistake.

JUDGMENT DELIVERED :

Insofar as the question of goodwill in the present case is concerned, we find that as on
August, 2012, when Intex started selling its mobile phones under the mark, “AQUA”, it
cannot be stated with any degree of confidence that the mark ‘AQUA’ had acquired a
goodwill or reputation in respect of the respondents mobile phones. The property which is
protected in an action of passing off is not the Plaintiffs proprietary right in the mark which
the defendant allegedly misappropriates, but the goodwill and reputation of his business,
which is likely to be harmed by the Defendants misrepresentation

“Thus, insofar as this point is concerned we are of the view that AZ Tech has not been able to
establish that it had a goodwill/reputation in India in the mark in August 2012
when Intex launched its product under the mark ‘AQUA

Insofar as the issue of added matter is concerned, there is no doubt that if the added matter is
so prominent as to completely distinguish one product from the other, then there would be no
case for confusion whether it be confusion proper or, initial confusion or reverse confusion.
In the present case, we find that the mark “Intex” is as prominent, if not more, than the mark
“AQUA” in the appellant’s product  packaging

Insofar as the question of initial interest confusion is concerned, that, in our view, does not
arise in the facts of the present case. The added matter in the form of the word mark ‘INTEX‘
is so prominent and distinct as to dispel any chance of even an initial confusion.

“It is clear in the present case which is one of passing off, the appellant/defendant would
escape liability inasmuch as the added matter is, in our view, sufficient to distinguish the
appellant’s products from those of the respondents.

ANALYSIS :

It is a landmark judgment and the Division Bench observations are path breaking in view of
the fact that despite the Plaintiffs/Respondents being the prior adopter and user of the
mark AQUA, the Division Bench went ahead and vacated the initial interim injunction so
granted in their favour.

It is noteworthy that despite of Division Bench Judgment Century Traders vs. Roshan Lal
Duggar & Co. AIR 978Delhi250, wherein the Court observed that “For the purpose of
claiming proprietorship of a mark, it is not necessary that the mark should have been used for
considerable length of time. As a matter of fact, a single actual use with intent to continue
such use confers a right to such trade mark as trade mark “ and the Supreme Court
Judgment S. Syed Mohideen vs. P. Sulochana Bai, 2016 (66) PTC 1 (SC) wherein the
Supreme Court has observed that “essentially the right of the prior user is considered to be
superior than that of any other rights,  being in the favour of  the Plaintiffs/Respondents, the
Division Bench observed that the Plaintiffs/Respondents could not establish
goodwill/reputation, a necessary ingredient of the tort of passing off, in India on relevant date
i.e. August 2012,  when the Defendants/Appellants launched their product under the
mark AQUA.

Hence, in view of such observation of the Division Bench, one is required to establish
goodwill in the mark along with the claim of prior adoption and use on the relevant date i.e.,
the date on which the other party commences with the infringing activities under the
impugned mark.