Prior Use and Fair Competition Prevails Over Well-Known Status- The Delhi High Court Rules Against VANS Inc.

The Delhi High Court rendered a consequential decision in the matter of VANS Inc. v. FCB[1]. The Court’s decision in this trademark dispute centered on the trademarks “VANS”, held by the Petitioner- VANS Inc., and “IVANS” and “IV ANS NXT”, belonging to the Respondent - FCB Garment. VANS Inc. sought rectification of FCB’s trademark registrations, asserting claims of deceptive similarity and infringement, particularly in light of VANS’ recent recognition as a well-known mark. However, the Court’s decision notably sided against VANS Inc., denying their plea for rectification and upholding the validity of FCB’s trademark registrations.

Background

The Petitioner, VANS Inc., is a venerable American corporation established in 1966, renowned for its footwear, apparel and related goods marketed under the brand name VANS. The initial registration of the mark “VANS” was filed in 1992, although the mark was registered in 2006. However, VANS Inc. entered the Indian market only in 2011. Notably, VANS Inc. obtained official recognition of their mark “VANS” as a well-known trademark during the proceedings on February 19, 2024.

On the other hand, FCB, the Respondent in this case, applied for its trademarks in 2002, asserting user claim dating back to 1999. FCB’s mark was published in 2006 and then duly registered in 2007 without encountering opposition during the process.

Facts

The Petitioner filed a cancellation Petition against the trademarks “IVANS” and “IV ANS NXT” owned by FCB, alleging significant phonetic and visual similarity to their own mark “VANS”, which could confuse consumers and dilute their mark’s distinctiveness. The Petitioner also accused FCB of adopting “IVANS” and “IV ANS NXT” dishonestly to capitalize on “VANS” brand reputation, causing confusion and harm to their business.[3] Seeking relief from the Delhi High Court, the Petitioner requested cancellation or rectification of FCB’s trademarks and an injunction against further use.

In response, FCB emphasized differences between their marks and “VANS”, including pronunciation, visual appearance, packaging, client base and product focus (men’s apparel vs. footwear). They asserted openly using “IVANS” since 1999 without opposition, backed by advertising efforts dating back to 2008. FCB argued their mark had been registered for 16 years and used unchallenged for 20 years, questioning the timing of the Petitioner’s claim of ‘well-known trademark’ status granted in 2024. They contended prior usage rights and suggested the Petitioner acquiesced to their mark’s use over a prolonged period.

Decision of the Court

While assessing this matter, various factors beyond mere similarity and the well-known mark status were considered. The Court dismissed the plea for rectification of the impugned mark, stressing that the status of a trademark as well-known does not automatically grant the proprietor unrestricted rights to seek rectification of all marks existing on the register prior to their own. The Court reasoned that such recognition does not suddenly take away Respondent’s rights over his mark considering factors like prior use, non-deceptive differences in price range, class, devices, and labels used, etc.[4] While acknowledging similarities between the marks, the Court conscientiously balanced the interests of both parties to prevent undue prejudice to FCB’s established rights. They applied the Global Appreciation Test[5] to assess the likelihood of confusion, underscoring that mere visual likeness between marks does not automatically amount to infringement. Factors such as the products’ use, market entry timelines, and extensive promotion of the ‘IVANS’ mark since 2008 were considered. The Court also referenced the principle from Neon Laboratories. v. Medical Technologies[6]- the ‘first in the market’ test, emphasizing the significance of actual market use over mere application dates. That is to say, even if “VANS” achieved well-known status later, “IVANS” enjoyed prior market use and registration, protecting its rights.

The Court additionally underscored the doctrine of acquiescence and precedent set in the S. Syed Mohideen v. P. Sulochanabai[7], affirming that registration merely acknowledges existing common law rights, and in conflicts between registered proprietors, common law rights are crucial in determining superiority. Furthermore, the Court noted VANS Inc.’s significant delay of 16 years in filing the rectification application and their unopposed allowance of FCB's mark to be enjoyed for 20 years, leading to acquiescence.

Conclusion

In conclusion, the Court’s decision to dismiss VANS Inc. 's rectification Petitions against FCB’s trademarks “IVANS” and “IV ANS NXT” settles the debate on how well-known status interacts with prior use. The decision clarifies that factors like prior use, good faith use of similar marks, and lack of consumer confusion are crucial in trademark disputes. Simply having a well-known brand doesn’t automatically trump these other considerations. This case also emphasizes the importance of taking timely legal action and safeguarding established rights under common law. The Court’s approach maintains a balance, protecting well-known marks while ensuring fair competition.