Delhi High Court | CS(COMM) 564/2022 & I.A. 12961/2022 Summons issued: 22 August 2022 | Final Order: 30 November 2022 Judge: Justice Amit Bansal Citation: CS(COMM) 564/2022 (Delhi High Court IPD)
Background
Starbucks Corporation is a company incorporated under the laws of the State of Washington in the United States of America. Its predecessor opened the first Starbucks retail store in 1971 in Seattle Washington offering coffee tea and spices. By the time this suit was filed Starbucks had grown into the world’s largest cafe chain with more than 34,630 retail store locations across approximately 84 countries and territories. Its cafes serve a wide variety of food beverages and premium merchandise all sold under the well known trademark “STARBUCKS.”
Starbucks entered the Indian market in October 2012 by opening its first store at the Elphinstone Building in Horniman Circle Mumbai through Tata Starbucks Private Limited which is an equity joint venture with Tata Coffee Ltd incorporated on 30 September 2011. Since then Starbucks expanded its presence to include a substantial number of retail stores across India. The trademark “STARBUCKS” along with its distinctive logo of a crowned siren figure had been registered in India. Starbucks had also built up considerable common law rights on account of long and continuous use of the STARBUCKS marks in India and globally.
Defendant No. 1 was a café operating under the name and style “Star Bucks Cafe” located in Ratangarh District Churu in Rajasthan. Defendant No. 2 was Mr. Hariom Sunil Kumar the proprietor of this cafe. Around October 2021 Starbucks came to know that the defendants were running this cafe using the trade name and mark “Star Bucks Cafe” without any permission authorization or licence from the plaintiff whatsoever. The defendants were using the impugned name and mark on their display board posters wall paintings printed stationery and menu cards. Beyond the physical premises the defendants were also actively promoting the café on social media platforms including Facebook Instagram and YouTube and on various third party portals.
Starbucks sent multiple cease and desist notices to the defendants asking them to stop using the impugned name and mark. The defendants did not respond or take any steps to comply with these notices. The defendants also did not participate in the pre-litigation mediation process before the Delhi High Court Legal Services Committee which accordingly issued a non-starter report. Starbucks then filed the present suit before the Delhi High Court seeking a permanent injunction and other reliefs. Summons were issued on 22 August 2022 and served on the defendants through speed post courier and email. Despite being duly served the defendants chose not to enter appearance at any stage of the proceedings. By an order dated 1 November 2022 the court recorded that defendants had been served and the matter was posted for further hearing. Even on the final date of hearing on 30 November 2022 no one appeared on behalf of the defendants.
Issue for Determination
Since the defendants did not enter appearance and no written statement or defence was placed on record the court had to determine on the basis of the plaintiff’s pleadings and evidence whether Starbucks had established its statutory and common law rights in the STARBUCKS marks and whether the defendants’ use of the name “Star Bucks Cafe” amounted to infringement and passing off entitling the plaintiff to a decree of permanent injunction.
A connected procedural question was whether the suit could be disposed of by way of summary adjudication without requiring the plaintiff to lead evidence in the conventional manner given the absence of any defence from the defendants.
Statutory Provisions Involved
The Trade Marks Act 1999 formed the primary statutory basis for the plaintiff’s case. The court recognised that Starbucks had established both statutory rights as a registered proprietor of the STARBUCKS marks and common law rights on account of long use which entitled it to seek relief against infringement and passing off.
Rule 27 of the Delhi High Court Intellectual Property Rights Division Rules 2022 was specifically invoked by the court. This rule provides for summary adjudication in cases before the Intellectual Property Division of the Delhi High Court. It empowers the court to pass a summary judgment without requiring a specific application for the purpose on principles similar to those contained in Order XIIIA of the Code of Civil Procedure 1908 as applicable to commercial suits under the Commercial Courts Act 2015. The court relied on this provision to dispose of the suit without requiring the plaintiff to formally lead evidence given that no defence had been placed on record by the defendants despite service.
The Commercial Courts Act 2015 and Order XXXIX Rules 1 and 2 of the Code of Civil Procedure were also relevant as the injunction application had been filed under these provisions.
Key Holdings of the Court
The court decreed the suit in favour of Starbucks and against the defendants. The key directions in the final order were as follows.
- A permanent injunction was granted restraining the defendants their partners servants agents and all others acting on their behalf from using the trade name “Star Bucks Cafe” or any other mark identical with or deceptively similar to the plaintiff’s registered trademark “STARBUCKS” in relation to any goods services or business.
- The defendants were restrained from passing off their goods and services as those of Starbucks or in any way representing a connection with the plaintiff’s business.
- The court specifically granted liberty to Starbucks to communicate the order to various social media platforms for the removal of all promotional listings of the defendants bearing the impugned trade name and trademarks. This direction acknowledging the online presence of the infringement and directly addressing social media and third party portals was a practically important part of the relief granted.
The suit was decreed in terms of prayers 50(a) 50(b) 50(c) and 50(h) of the plaint. The plaintiff did not press the remaining prayers in view of the relief granted.
Reasoning of the Court
The court’s reasoning was brief and direct given the uncomplicated nature of the case on facts. The defendants had been duly served through multiple modes including speed post courier and email and had been given every opportunity to appear and defend the suit. They chose not to do so. No defence was placed on record at any stage.
In this background the court took the view that the plaintiff’s case stood entirely unrebutted. Starbucks had established both its statutory rights as a registered proprietor of the STARBUCKS marks and its common law rights on account of long and extensive use of the marks in India and globally. The court found that the plaintiff would be gravely prejudiced if the defendants were permitted to continue using the impugned trade name and marks.
The court invoked Rule 27 of the Delhi High Court IPD Rules 2022 to pass a summary judgment without requiring evidence to be formally led by the plaintiff. The provision was well suited to the facts because there was simply no defence on record and no triable issue raised by the defendants that would require a conventional trial. The court’s decision to use the summary adjudication route reflects the practical approach of the newly constituted Intellectual Property Division of the Delhi High Court in dealing efficiently with clear cases of trademark infringement where defendants choose to remain absent.
On the question of social media the court’s specific direction to Starbucks to communicate the order to social media platforms for removal of the defendants’ promotional listings was based on the fact that the defendants had been actively using Facebook Instagram YouTube and third party portals to promote the infringing cafe. A permanent injunction limited only to the physical premises would have been insufficient to remove the online presence of the infringement.
Doctrinal Significance
While this case is not one of great doctrinal complexity in terms of substantive trademark law it is significant on two counts.
- it is one of the early cases decided by the newly constituted Intellectual Property Division of the Delhi High Court under the Delhi High Court Intellectual Property Rights Division Rules 2022 and demonstrates how the IPD used Rule 27 to pass summary judgments in IP cases where the defendant does not contest the suit. The efficiency of the IPD in disposing of such cases quickly and cleanly without requiring a full trial is well illustrated by this judgment. It sets a working example of how the summary adjudication mechanism under the IPD Rules can be used to protect well known marks against blatant infringement.
- The case illustrates the practical challenge that trademark owners face in the present day where infringers not only use marks on physical signboards but actively promote their businesses on social media and third party food delivery and listing platforms. The court’s direction to allow Starbucks to communicate the order to social media platforms for takedown purposes is a sensible and practical response to this challenge and signals that Indian courts are willing to extend the effective reach of injunction orders into the online space even in ordinary infringement suits.
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