Delay Not a Defence Against Infringement, Plays a Pivotal Role in Ascertaining Extent of Harm

Introduction 

In the recent judgment in Modern Snacks Pvt Ltd vs Modern Foods Enterprises Pvt Ltd, pertaining to the use of the trade mark ‘MODERN’ as part of the trade names by the entities Modern Snacks Pvt Ltd (herein referred to as the Plaintiff) and Modern Foods Enterprises Pvt Ltd (herein referred to as the Defendant), both engaged in the field of general consumable food items, the Hon’ble Delhi High Court has made several observations with respect to the criteria of establishing infringement. The Court conducted an in-depth analysis of the facts of the case in light of the Trinity Test employed while assessing whether trade mark infringement has occurred. The test is essentially conducted on the basis of three factors including the prima facie case being made out, balance of convenience as well as irreparable harm to ultimately determine a case for injunction. 

Background

The Court dealt with two countersuits, wherein the first suit was filed by the Defendant seeking a permanent injunction to restrain the Plaintiff from issuing threats in relation to use of the trade mark ‘MODERN’ for consumable foods by the Defendant. The second suit was filed by the Plaintiff seeking a permanent injunction on the grounds of infringement and/or passing off of its trade mark ‘MODERN’ and the accompanying copyright. 

It was the Plaintiff’s case that its trade mark ‘MODERN’ had been extensively used and advertised with respect to “a large variety of bakery products including rusks, cakes, muffins, Indian breads, pizza base, bar cakes, pies, creamburst, sweet fills, batter mixes etc” and therefore had considerable goodwill, of which the Defendant was taking undue advantage by using the word ‘MODERN’ for similar goods. The Plaintiff had also alleged that the Defendant had created an identical website as that of the Plaintiff’s.

On the other hand, the Defendant stated that it too had amassed a reputation owing to its extensive use of the trade mark ‘MODERN’ with respect to “goods including namkeens, snacks, confectionary, savouries and other allied and related goods” and put forth the argument that there is no likelihood of confusion owing to the goods sold under the marks of the two parties being highly dissimilar. The Defendant’s case was also premised on the arguments that not only had the Plaintiff misrepresented the earliest date of use of its mark but had also been aware of the Defendant’s mark since at least 2003 owing to the Defendant’s mark being cited in the Examination Reports dated 16.06.2003 and 17.08.2010 for two of the Plaintiff’s marks, respectively and therefore, claimed honest concurrent use owing to such wilful delay. Further, the Defendant also contended that the Plaintiff, in its response to the above-mentioned Examination Reports, had taken a difference from the marks cited therein and is therefore, estopped from filing the present suit. However, with respect to the same, the Plaintiff resisted the estoppel stating that a mere general difference had been taken from the cited marks and no valuable stance had been taken therein. Thus, the same did not amount to estoppel. 

Based on the facts mentioned above, the Hon’ble Court deals with several issues, the primary issue being whether a prima facie case of infringement can be made out against the Defendant and secondly, whether the delay in challenging the use would change the parameter for adjudicating the balance of convenience and irreparable harm. 

Findings of the Hon’ble Court

With respect to the prima facie case of infringement being made out, the Hon’ble Court did not agree with the submissions of the Defendant and stated that marks of the two parties being identical and used for identical goods, being general consumable food items available through the same trade channels, would create a likelihood of confusion leading to infringement owing to the Plaintiff’s adoption of the mark and its use being prior. 

Further, with respect to the Defendant’s mark being cited in the Examination Reports of the Plaintiff’s marks, the Hon’ble Court was not satisfied with the Plaintiff’s response and reiterated the impact of the rights accrued through the trade mark registration process, thereby, agreeing with the claim of estoppel. In furtherance thereof, with respect to the Defendant’s claim of the Plaintiff being aware of the Defendant’s marks since at least 2003 but failing to act upon the same until 2020, the Hon’ble Court agreed that the same had to be taken into consideration for establishing the gravity of irreparable harm and balance of convenience for both parties, respectively. 

Placing reliance on the Hon’ble Supreme Court’s judgement in Toyota Jidosha Kabushiki Kaisha v. M/S Prius Auto Industries Ltd., the Hon’ble Court observed that “Though this delay cannot act as a defence to a claim of infringement of trade mark, at the same time, it shall have an important impact in determining the lie of the balance of convenience and irreparable harm, two of the three parameters to judge a claim of interim injunction”. Accordingly, the Hon’ble Court acknowledged the conflicting interests and stated that while the Plaintiff is prior in use, it cannot be ignored that the Defendant had also been using its mark since at least 1990 and will also suffer irreparable harm owing to an injunction. In an effort to balance the rights of the two parties, the Hon’ble Court accepted the Defendant’s undertaking to refrain from expanding its range of products largely including snack items, so as to prevent an overlap with the confectionary goods of the Plaintiff. Thus, granting a Limited Interim Injunction. 

Conclusion

It is a well settled principle that a delay in approaching the Court cannot disentitle the Plaintiff from exercising its rights. However, while affirming the same, the Delhi High Court took the stand forward and acknowledged the impact of this delay on the Plaintiff’s right to an injunction and the subsequent harm caused to the Defendant’s long-standing extensive use. As the Plaintiff’s continual silence resulted in the extensive use by the Defendant assuming acquiescence. Evidently, the Court’s approach of moderating the relief granted to the Plaintiff in light of the Defendant’s reliance on delay is a well-balanced approach.