Trademarks: Doctrine of delay, laches and acquiescence

The Indian judicial system follows rules of equity in the court of justice. The doctrine of ‘Delay or Laches’ is thus an equitable doctrine. It is based on the maxim “Vigilantibus non dormientius aequitas subvenit” which means equity aids the vigilant and not the ones who sleep over their rights. It refers to the unreasonable delay in enforcing a legal claim or moving ahead with legal enforcement as a right. This is an equitable defense. The party may claim that the person invoking the suit had been “sleeping over his rights” and therefore such a right is no longer available to him since it is barred by laches.

The defense of ‘Delay' or ‘Laches' is allowed in Intellectual Property law provided the defendant fulfils all the requirements which include prior knowledge of claim, unreasonable delay on part of the Plaintiff and neglect. It has been time and again held by various courts that mere passage of time does not amount to latches. The Delhi High Court in the case of Cable News Network LP, LLLP (CNN) v. CAM News Network Limited[1], has provided an explanation to the three terms delay, latches, and acquiescence as follows-

“Inordinate delay is generally understood to be delay of such a long duration that the defendant could have come to the conclusion that the plaintiff has, possibly, abandoned his right to seek life or to object to the defendant using the trademark. However, ‘inordinate delay’ is not analogous to ‘latches’ and the two ought not to be used interchangeably. ‘Mere passage of time cannot constitute latches, but if the passage of time can be shown to have lulled defendant into a false sense of security, and the defendant acts in reliance thereon, laches may, in the discretion of the trial court, be found’. It would follow, logically, that delay by itself not sufficient defense an action for interim injunction, but delay coupled with prejudice caused to the defendant would amount to laches.”

The court, in this case, held that defence of delay and laches was not sufficient to for granting an injunction in case of trademark infringement and passing off. It was held that in order to contend the defense of delay and latches there is a reciprocal duty on the defendant to also establish itself to be an honest and concurrent user of the mark in question.

The doctrine of delay and latches being an equitable one is based on the principle of equity that is one who comes to equity must come with clean hands. Recently the Delhi High Court in the case of Dr. ING H.C.F. Porsche AG. v. Pritam Gain & Ors.[2] granted the Plaintiff interim injunction for infringement of trademark by the Defendants.

Plaintiff Dr. ING H.C.F Porsche AG. is the registered proprietor of the trademark “PORSCHE” in class 14. It filed a suit against the Defendants Pritam Gain, Kach Gain, Minoti Gain, and Bodhi Brands Pvt. Ltd. restraining them from using their trademark and logo.

The Plaintiff first instituted the suit against the Defendants on 22nd March 2018, however, did not receive ex-parte interim relief from the court due to delay on part of the Plaintiff in instituting the suit. The court provided the Defendants time to address the application for interim relief, however, upon not receiving a response from the Defendants, the court finally decided to hear the case for interim relief and held that “…grant of interim relief cannot be deferred owing to the defendants, in spite of having sufficient time, not choosing to file their written statement/ reply.”

The court, in this case, held that delay in instituting a suit for infringement of trademark can at best deprive the Plaintiff of relief of recovery of damages for the period forgone. But it cannot deprive the Plaintiff relief of permanent injunction since the injury caused is a recurring one. The court also held that delay is not much so as to disentitle the Plaintiff of interim relief.

Again, following the principle of equity, the court held that the Defendants could not take the plea of delay or latches since they did not fulfill the requirement of the reciprocal duty to be an honest and concurrent user of the trademark.

The Defendants claimed to be registered trademark holders of "PORSHE JEWELS" which was registered under class 35. Class 35 is under the heading of ‘Services' and deals with Advertising, Business Management, Business administration and Office Functions. However, the Defendants were not in the business of any of the categories mentioned in class 35 but were in the business of selling jewelry items. Therefore, the Defendants were registered in a class different from their actual business and therefore, they could not be held to be registered owners of the trademark “PORSHE JEWELS”, which was being contended by the Plaintiff. The court, in this case, granted the Plaintiff the interim relief and restrained the Defendants from using their trademark till the pendency of the present suit.

In a recent judgment of the Delhi High court in Marico Limited v. Mr. Mukesh Kumar & Ors.[3], it was held that the defense of laches or inordinate delay is a defense of equity. The court, in this case, has added another condition on granting the defense of laches. The court held that “Further, if the court is of the view that prejudice is likely to be caused to the general public who may be misled into buying the goods manufactured by the defendants thinking them to be the goods of the plaintiff, then an injunction must be issued.” Thus, even if the defendant fulfills the requirements to obtain the defense of “laches”, in case there is a possibility of confusion between the goods of the defendant and the plaintiff, then an injunction may be granted in favor of the plaintiff. Since the concept is based on equity the court is tilted towards the welfare of the general public over the individual welfare of the defendant.

However, at times, a plaintiff may be presumed to have acquiesced when there has been a delay in filing a suit and thus, the plaintiff may be denied interim relief in such a situation.

The term “acquiesce” has been explained by Justice B. N. Kripal in the Delhi High Court judgment of Hindustan Pencil (P) Ltd. v. India Stationary Products Company[4]. According to him acquiesce means encouragement by the plaintiff to the defendant to use the infringing mark. The plaintiff wants the defendant to believe that the action of the defendant does not violate the plaintiff's rights. There is also an implied or express assent from the plaintiff and in a way encourages the defendant to carry on the business. According to the judgment;

“Acquiescence may be a good defense even to the grant of a permanent injunction because the defendant may legitimately contend that the encouragement of the plaintiff to the defendant's use of the mark in effect amounted to the abandonment by the plaintiff of his right in favor of the defendant and, over a period of time, the general public has accepted the goods of the defendant resulting in increase of its sale. It may, however, be stated that it will be for the defendant in such cases to prove acquiescence by the plaintiff. Acquiescence cannot be inferred merely by reason of the fact that the plaintiff has not taken any action against the infringement of its rights.”

In conclusion, it may be observed that a plaintiff should be vigilant in taking prompt actions in cases of trademark infringement or passing off in order to avoid a situation where the defendant may plead the equitable doctrine of delay or laches. Although delay by itself is not a ground for an injunction to be refused, if the intention was to cause prejudice to the defendant, the doctrine may apply. On the other hand, the defense of laches is an equitable defense and can only be taken up by a defendant whose conduct has not been dishonest or whose use and adoption of the mark was bona fide.

[1] MIPR 2008 (1) 113

[2] CS(COMM)751/2018

[3] CS (COMM) 1569/2016

[4] AIR 1990 DELHI 19

The article was originally published on www.lexology.com on September 13, 2018 and can be accessed here.