Delhi High Court | CS(OS) No. 41/2008 | I.A. No. 279/2008 Decided on 9 April 2009 Judge: Justice Rajiv Sahai Endlaw Citation: 2009 (41) PTC 284 (Del)
Background
Rolex SA is a company incorporated under the laws of Switzerland and is headquartered in Geneva. The company traces its origins to 1905 when Hans Wilsdorf established a firm called Wilsdorf and Davis specialising in the marketing and distribution of wristwatches. The plaintiff adopted the trademark ROLEX in respect of its products and obtained the first trademark registration for it in 1908 in Switzerland. The company subsequently changed its name first to Rolex Watch Company and then to Montres Rolex SA and is now known as Rolex SA. The plaintiff is a globally distinguished manufacturer and distributor of premium quality watches horological and chronometric instruments atomic clocks chronographs watch bands watch cases watch chains watch glasses and related products.
Rolex had registered its trademark in India and had been actively enforcing its rights. The records of the Trade Mark Registry showed a consistent history of opposition proceedings initiated by Rolex from as far back as 1964 to protect the ROLEX mark in India. The plaintiff had a worldwide network of approximately 23 affiliated companies and an after sales service network of some 3000 watchmakers in more than 25 countries. Rolex products were sold across nearly every country in the world making the ROLEX mark one of the most recognized luxury brand names globally.
Defendant No. 1 was Alex Jewellery Private Limited a company carrying on business at Mumbai engaged in the manufacture sale distribution and trading of artificial jewellery under the mark ROLEX. Defendant No. 2 was Mr. Ashish Kumar Ahuja who retailed the said artificial jewellery in Delhi under the business style ROLEX Jewellery House and had also registered the domain name www.rolexjewelleryhouse.com and operated a website under that name. Defendant No. 3 was Mr. S.S. Kohli trading as Kohli Sons who also retailed the artificial jewellery of defendant No. 1 in Delhi. Defendant No. 1 claimed to have adopted the ROLEX mark in relation to its artificial jewellery business in 1993 or 1995. It had also applied for registration of the mark ROLEX for jewellery before the Trade Mark Registry though these applications had been opposed by Rolex SA and those oppositions were pending at the time the suit was filed.
Defendant No. 1 filed affidavits claiming that it had been in business under the ROLEX name for a long time and enjoyed considerable reputation in the jewellery trade. It also raised the defences of acquiescence and delay arguing that Rolex SA had known of its business since around 2003 but had taken no action for several years and had thereby acquiesced in the use of the mark.
Rolex SA filed the suit for infringement of its registered trademark passing off unfair competition delivery up rendition of accounts and damages and along with it filed I.A. No. 279/2008 under Order 39 Rules 1 and 2 of the Civil Procedure Code seeking an interim injunction restraining the defendants from using the trademark ROLEX in relation to artificial jewellery or any other product.
Issue for Determination
The primary issue before the court at this stage was whether Rolex SA was entitled to an interim injunction restraining the defendants from using the trademark ROLEX in relation to artificial jewellery. This required the court to consider the following connected questions.
First whether the trademark ROLEX was a well known trademark within the meaning of the Trade Marks Act 1999.
Second whether the use of the mark ROLEX by the defendants for artificial jewellery which is a product entirely different from watches constituted infringement of Rolex SA’s registered trademark under Section 29(4) of the Trade Marks Act 1999 which deals with use of a registered mark in relation to dissimilar goods.
Third whether apart from statutory infringement the facts also gave rise to a case of passing off on the principles established in earlier decisions concerning well known marks.
Fourth whether the defences of acquiescence delay and long use raised by the defendants had any merit at the interim stage.
Fifth whether defendant No. 2 was entitled to retain and use the domain name www.rolexjewelleryhouse.com.
Statutory Provisions Involved
Section 2(4)(c) of the Trade Marks Act 1999 defines a well known trademark as a mark which in relation to any goods has become so known to a substantial segment of the public which uses such goods that the use of such mark in relation to other goods would be likely to be taken as indicating a connection in the course of trade between those goods and the person using the mark in relation to the first mentioned goods. The court applied this definition to hold that ROLEX was a well known trademark.
Section 29(4) of the Trade Marks Act 1999 provides that a registered trademark is infringed by a person who uses in the course of trade a mark identical with or similar to the registered trademark in relation to goods or services which are not similar to those for which the trademark is registered provided that the registered trademark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to the distinctive character or repute of the registered trademark. This was the primary provision relied upon by the court to find infringement despite the fact that the defendants’ artificial jewellery and the plaintiff’s watches are dissimilar goods.
Order 39 Rules 1 and 2 of the Code of Civil Procedure 1908 governed the application for interim injunction.
Key Holdings of the Court
The court allowed the application for interim injunction and restrained the defendants from using the trademark ROLEX in any manner whatsoever pending the disposal of the suit. The restraint order was to operate from 30 days from the date of the order to give the defendants time to rearrange their affairs.
The key holdings of the court were as follows.
First the trademark ROLEX is a well known trademark within the meaning of Section 2(4)(c) of the Trade Marks Act 1999. The segment of the public that uses watches of the category and price range as Rolex watches would upon coming across jewellery or artificial jewellery also bearing the trademark ROLEX be likely to believe that the said jewellery has a connection with the plaintiff.
Second modern watches have evolved considerably from their traditional function as mere timekeepers. They have transformed into items of fashion jewellery and accessories. A watch is increasingly purchased for its ornamental value its looks and as a gift or souvenir. In fact a watch is one of the few pieces of jewellery available to men. In Delhi and other Indian cities expensive watch brands are sold through retail outlets of jewellers and jewellers often incorporate watches into the designs of their jewellery pieces. Given this reality watches and jewellery cannot be treated as entirely unrelated goods with no commercial connection between them. The convergence between watches and jewellery as product categories reinforces the likelihood of confusion.
Third the court found a case of infringement within the meaning of Section 29(4) of the Trade Marks Act 1999. The ROLEX trademark has an undeniable reputation in India and the use of the mark by the defendants in relation to artificial jewellery without any due cause takes unfair advantage of and is detrimental to the distinctive character and repute of the registered trademark.
Fourth independently of the statutory infringement claim the court also found that a case of passing off was made out on the principles laid down in Daimler Benz Aktiengesellschaft v. Hybo Hindustan and Honda Motors Co. Ltd. v. Charanjit Singh where courts had extended trademark protection to prevent the use of famous marks in relation to goods entirely different from those for which the mark was registered.
Fifth the explanation offered by defendant No. 1 for having adopted the name ROLEX for artificial jewellery was not found convincing. Defendant No. 1 being a manufacturer in Mumbai with sales in Delhi and enjoying a significant reputation in the jewellery trade was bound to have known of the existence and fame of the ROLEX mark when it claims to have adopted it in 1993 or 1995.
Sixth the defence of acquiescence and delay was rejected at the interim stage. The court noted that nothing had been placed on record showing any actual sales by the defendant under the ROLEX mark prior to 2002. Since 2002 the trademark opposition proceedings initiated by Rolex SA had been pending. The period during which opposition proceedings are pending cannot form the basis for a plea of acquiescence or waiver.
Seventh a long list of other applicants or registrants of the mark ROLEX in India did not by itself dent the distinctive character or repute of the mark. Without evidence of extensive use of those marks the mere filing of applications or obtaining registrations by third parties was of no real consequence.
Eighth defendant No. 2 was also not entitled to use or retain the domain name www.rolexjewelleryhouse.com for the same reasons that made his use of the trademark ROLEX impermissible.
Reasoning of the Court
The court’s reasoning is built around two interconnected ideas. The first is the nature of ROLEX as a well known trademark that has transcended its core product category. The second is the commercial and aesthetic convergence between watches and jewellery as product categories in the modern market.
On the question of well known marks the court took the view that the strength and fame of the ROLEX mark is such that even a member of the public who buys artificial jewellery in the lower price range is likely upon seeing the word ROLEX on that jewellery to associate it with the plaintiff’s high-end watch brand. The likelihood of confusion in this context does not depend on the purchaser being a direct customer of Rolex watches. It depends on whether the public at large associates the mark with the plaintiff.
On the convergence between watches and jewellery the court made an important factual observation about how the watch as a product had changed. It observed that watches today are marketed primarily for their ornamental and aesthetic value rather than their mechanical function. Watches are sold through jewellers worn as lockets and armbands and incorporated into jewellery designs. This evolution in the nature of the watch as a consumer product meant that the distinction between watches and jewellery was not as sharp as it might have been at an earlier point in time.
The court also relied on the line of cases concerning famous marks and dissimilar goods including Cartier International v. Choosy Corner where the Cartier mark was protected in relation to garments and Honda Motors v. Charanjit Singh where the Honda mark was protected in relation to pressure cookers. These cases established the principle that where a mark has global goodwill and reputation its use in relation to unrelated goods would be injuncted because the public is likely to assume a trade connection with the famous brand.
Doctrinal Significance
This judgment makes several important contributions to Indian trademark jurisprudence.
It is one of the clearest early applications of Section 29(4) of the Trade Marks Act 1999 which deals with infringement of a registered trademark in relation to dissimilar goods. The court’s analysis of this provision and its finding that ROLEX qualifies as a well known trademark entitled to cross-category protection against dissimilar goods is one of the foundational applications of this provision in Indian courts.
The judgment also makes a thoughtful and practically grounded observation about the commercial convergence between watches and jewellery as product categories. By noting that watches today serve an ornamental and fashion function similar to jewellery the court gave a factual basis for treating the two categories as commercially proximate for the purposes of trademark protection. This kind of product category analysis based on market reality rather than rigid classification is an important contribution.
The rejection of the acquiescence and delay defence on the ground that the pendency of trademark opposition proceedings interrupts any period that might otherwise give rise to acquiescence is also a significant point for practitioners. It confirms that a trademark owner who is actively prosecuting oppositions before the Trade Mark Registry cannot be said to have acquiesced in the use of the mark by those against whom the oppositions are filed.
For luxury brand owners in India this case remains a key reference point for establishing the well known status of a trademark and seeking protection against use of the mark on goods that are different from but commercially proximate to the goods for which the mark is famous.
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