Court upholds rights of Plaintiff against Defendant's violation of terms of co-marketing agreements

INTRODUCTION

Recently, in the case of M/S Kohinoor Seed Fields India Pvt. Ltd. v. M/S Veda Seed Sciences Pvt. Ltd., the Delhi High Court restrained an Andhra Pradesh-based company from promoting or selling any product, other than the BT cotton hybrid seeds bearing the registered ‘SADANAND’, ‘TADAAKHA’ and ‘BASANT’ marks of Kohinoor Seed Fields (hereinafter the ‘Plaintiff’) or any other marks deceptively similar to them.

BACKGROUND

The Plaintiff is a leading Indian seed company and has obtained necessary approvals from the Genetic Engineering Appraisal Committee (‘GEAC’) for developing, producing, and selling transgenic BT cotton hybrid seeds. The Plaintiff has been selling the cotton hybrid seeds under its trademarks i.e., ‘SADANAND’, ‘TADAAKHA’ and ‘BASANT’.

In the year 2014, the Plaintiff entered into a non-exclusive co-marketing agreement with the Defendant, renewed on an annual basis, for marking and distribution of varieties of hybrid seeds. Under the said agreement, the Defendant was prevented from selling any other hybrid seeds under the brand names permitted under the Agreement.

However, in October 2022, the Plaintiff came to the know that the Defendant was promoting and taking advance bookings for Kharif season 2023 the sale of BG II cotton hybrid seeds bearing deceptively similar marks, i.e., ‘VEDA SADANAND GOLD’, ‘VEDA TADAAKHA GOLD’ and ‘VEDA BASANT GOLD’ (hereinafter the ‘impugned marks’). The Defendant even obtained registration for the impugned marks in Class 31 on a ‘proposed to be used’ basis with effect from August 07, 2021 and started using them in relation to cotton hybrid seeds.

Thereafter, the Plaintiff issued notice for termination of agreement and contended that the use of impugned marks by the Defendant was outside the permitted scope of the aforesaid marketing agreement.

FINDINGS OF THE COURT

The Court observed that “the advance bookings taken by the Defendant under the impugned marks are in respect of different hybrids, which do not belong to the Plaintiff and hence, on a prima facie view, violate the terms of the agreement.” Accordingly, it was held by the Court that the use of the impugned marks for goods in the same class by the Defendants, prima facie, amounts to infringement as well as passing off. Moreover, the Court inferred that the packaging and aesthetic of the Defendant’s products were deceptively identical to that of the Plaintiff’s.

The Hon’ble Court, while upholding the goodwill and reputation of the Plaintiff for its product in the target market, held that “use of the Plaintiff’s marks by the Defendant, whether with or without a prefix and/or suffix for different hybrid seeds would not result in a material difference so as to distinguish the marks of the Defendant from those of the Plaintiffs.”

Granting an ex-parte injunction in favour of the Plaintiff, the Court restrained the Defendant from "making, using, promoting, marketing, advertising, offering or exposing for sale, selling any product other than the Plaintiffs BT cotton hybrid seeds under the Plaintiffs' trademarks, being 'SADANAND', 'TADAAKHA' and 'BASANT', with or without prefix or suffix or any other mark, which is deceptively similar to the Plaintiffs' trademarks" .The matter has now been listed before the Court on February 06, 2023.

CONCLUSION

Through the present case, the Delhi High Court has highlighted that the expression “use in the course of trade” has a wide and overarching scope. Even though the parties’ marketing agreement was supposed to end on January 01, 2023 and the advance bookings were for Kharif season 2023, the Court still considered the act of the Defendant as use. Further, the Court has reiterated that no one can freely ride on the coat-tails of a famous mark, or attempt to trade upon its reputation.