How Indian Startups must face foreign Bully’s

(Key takeaways for Startup founder’s, strategic heads, and corporate legal folks)

It was 10.30 am on 24th August 2022, barely a week left for me in the office of Head-Strategy
where I also handled legal affairs of the company that I got a call from my legal counsel,
“We have been sued in Delhi High Court!”, panic was clearly visible in her voice. None in the
company had an experience of facing a court notice hence panic and anxiety in a young
startup was very much understandable.
Background:
BOLT.EARTH formerly known as BOLT (Ujoy Technology Pvt Ltd) had been sued by Bolt
Technology OU, an Estonian company providing services such as ride-hailing, food and
grocery delivery, rental of cars, e-bikes and scooters and EV (electric vehicle) charging
stations/docks for “Passing Off” of their mark “BOLT” through its service of providing EV
charging services thereby deceiving the unwary consumer into believing the existence of an
association between the 2 companies.
Despite not having any trademark under Bolt name in India the Estonian company claimed
that it’s reputation and goodwill over the mark Bolt had been appropriated by the Indian
company through its services and hence pleaded before the Delhi HC to grant interim
injunction in its favour with relation to use of mark “Bolt”
The court observed that since the Estonian company is not engaged in providing EV charging
services anywhere in the world and has merely installed some EV charging stations in a
handful of locations for charging its own vehicles, no trans-border reputation in providing EV
charging services can be credited to it which can be said to have spilled over to India.
Moreover, and most importantly the Court observed that :
"In examining these aspects, the Court has to be acutely conscious of the cautionary note
sounded both in Milmet Oftho and in Toyota, that the Court must not permit large
multinational corporations, which have no intent of coming to India, to throttle an Indian
company by not permitting it to sell its product in India."

This is an important observation and we should be thankful to the Delhi High Court for
having stood by a young Indian startup in face of a legal challenge thrown by a mammoth
multinational company from Europe.
So here are my key takeaways and learnings which I’d like to share with you all through this
Case study:
1) Always Keep a lawyer handy
They say “Don’t dig well when house is on fire” and rightly so when it comes to
setting up a legal team at a startup. Fortunately for Ujoy, the legal team had already
appointed an external legal counsel so when the team received a legal notice on 23 rd
August 2022 for a hearing on 25th August 2022, they did not have to huddle up in
finding a lawyer who is ready to take the case, finalising his commercials and
completing paperwork related to his appointment, they were already to appear in
the first hearing though there was no requirement to do so but strategically it would
have been a blunder as the Estonian company would obtain an ex-parte order from
Delhi HC without UJOY being able to voice it’s objection.

2) Avoid an Ex-Parte Order at any cost:

An Ex-Parte order is an order the court enters without notice/hearing the other
party. In this case, UJOY had not received any notice from High Court to appear in
the first hearing. If Ujoy had chosen to stay away from appearing, the Estonian
company could have obtained Ex-Parte order restraining Ujoy from using the BOLT
until the court decided on the matter. This would have been detrimental to business
of Ujoy as it would have to stop conducting its business activities under the name of
BOLT until court decided the matter which would take forever.

3) Resolve Issues through Mediation:

Resolving issues through mediation is always recommended as this could save
significant legal costs associated with carrying out legal recourse through courts. Try
putting up your points in front of the opposite party and if reasonable you could
always take help of the mediator appointed by the court to settle issues quickly and
in a cost effective manner

4) Legal Costs Money

Remember one thing, fighting a legal case in India or anywhere else costs money. If
you choose to Brand yourself in market big time then you would definitely catch eye
balls and not all the attention that you catch are benevolent. As they say in Hindi
“Nazar lag jaati hai!”. Moreover,if you happen to catch “Nazar” of a large MNC then
be rest assured that they will deploy the best resources to fight out their case and
hence you would be also forced to hire the best legal brains who don’t come cheap.
As a norm always budget 10% of your total marketing spends towards fighting
malevolent legal attention that may arise out of your PR exercise.

5) Always Choose a Unique Name Mark for your Brand/Company

Avoid using generic name for your Brand/Company. Generic names would have been
already trademarked or somebody would have applied for trademark under different
services and this could get you into unnecessary legal wrangles.
6) Devil lies in details
Pay attention to details, study law by yourself. You don’t need to know everything of
law but you should always try to understand how your lawyers are going to defend
you. Keep asking them what steps, under which section of law can we fight this case.
Remember, your lawyer will show only that much interest as much you show in your
case. It’s your case and its always you who will bear the consequences and not the
lawyer.
7) Avoid Legal at any costs
Unless there is any claims or compensation that you choose to gain from fighting a
legal case there is no other advantage to gain. It’s only the lawyers or courts that
make money when there are legal issues. Moreover, legal issues pull significant time
from your bandwidth, which you could have used more productively in growing your
business. It also drives anxiety and doesn’t help you focus on your core tasks thereby
making you less productive. So avoid legal at any cost.