Trademark Case analysis: Swiss Bike Vertrieb Gmbh subsidiary of Accell Group v. Reliance Brands Limited (RBL)

Facts of the Case

• Plaintiff- Swiss Bike Vertriebs Gmbh Subsidiary of Accell Group Defendant- Reliance Brands Limited (RBL)

• Plaintiff has applied for a permanent injunction to stop Defendant from using the impugned mark “RALLEYZ” which is infringing on Plaintiff’s mark “RALEIGH”.

• Plaintiff alleges that the impugned mark is phonetically, deceptively similar to that of the Plaintiff’s mark and it being used for the same goods i.e., bicycles under Class 12, makes it a fit case for trademark infringement.

• Plaintiff codes for the non-usage of impugned marks solely under Class 12 as they essentially deal with bicycles.

Issues

• Does Defendant’s use of the impugned mark amount to infringement of Plaintiff’s mark?

Submissions on Behalf of The Plaintiff

• Plaintiff’s mark, ‘RALEIGH” is a prominent cycling brand in Europe with a consumer base in at least 50 countries including India. The Plaintiff has acquired great prestige over the years for their trademark which was earlier owned by ‘The Raleigh Cycle Company Limited’.

• The trademark has been in commercial use in India since 1939. The said use of the mark by Sen-Raleigh Cycle Factory, Asansol, West Bengal dates back to the pre-independence era.

• To assert on the long and continuous usage of its mark, Plaintiff drew attention to the distribution and license agreement with M/s Naren International permitting them to exclusively manufacture, import, sell, and distribute Raleigh bicycles in India since 2012 and registration of their mark RALEIGH under Class 12 and Class 28, the earliest date of application being January 1, 1939.

• The Plaintiff points out that the earliest date of usage of Defendant’s impugned mark is from December 2021. The invoices corroborating the above date lack the impugned mark and the earliest invoice where the mark appears is August 2022.

• The Plaintiff stressed the lack of action taken by the Defendant under Section 124 of the 1999 Act to invalidate the mark of the Plaintiff. Regarding the plea of non-usage of the mark in India, the Plaintiff argued lack of action taken by Defendant under Section 47 of the 1999 Act.

• Further, in reply to the plea of estoppel raised by Defendant that Plaintiff cannot claim the impugned mark like their mark as they have filed a Reply to Examination Report stating the cited mark “RALLIS” is phonetically different from there’s, Plaintiff submitted the principle of estoppel applies inter-se parties i.e., between the same parties in question.

Submissions of Behalf of The Defendant

• The Defendant argued that the plaint was filed at a later stage as the affidavit in support of the same was dated October 25, 2022, whereas the plaint was dated December 19, 2022. This being asserted, the Plaintiff cannot be entitled to an injunction under Order 39 Rule 1 and 2 of the Code of Civil Procedure.

• The Defendant asserted that being a part of the Reliance Group of Companies, they were well positioned to pay the damages to Plaintiff. In the plaint itself, Plaintiff agreed to the continuance usage of the impugned mark by Defendant while no cease-and-desist notice was served to them.

• It was argued that the Plaintiff failed to substantiate their prior continuous use claim and its business operations in India. The distribution and license agreement so entered with M/s Naren International was dated June 2020 and does not corroborate the claim of prior usage in India.

• Defendant accentuated the principle of ‘sophistication of user’ that owing to the high price of Plaintiff’s bicycles, the customers will be sophisticated and learned and thus, there would be less likelihood of any confusion.

• The Defendant asserted the need to file any Legal Proceeding Certificate to show that they were true owners of the said mark.

• In their defense, the Defendants submitted that their bicycles were sold under the brand name ‘Reliance’ combined with various sub-brands. Their turnover from 2021 to 2022 amounted to Rs. 14.08 crores. Attention was drawn to Invoices from December 2021 wherein the bicycles were sold under the impugned mark, but invoices showed a code number instead of the impugned mark.

• Further, reliance was placed on multiple case laws to assert that interlocutory injunction will not be granted if the Defendant can show a reputation attached to the business and the commercial usage of the mark by the time the suit was made.

Rejoinder on Behalf of The Plaintiff

Senior Counsel for the Plaintiff countered the submissions made by the defendant's counsel with the following points:

• The suit was filed on December 19, 2022, within one year of December 2021, which is when the defendant claimed the use of the mark. The Plaintiff emphasized that the defendant failed to produce any invoice proving the use of the impugned mark on its bicycles before August 2022.

• The Plaintiff referenced the decision in M/s. Hindustan Pencils Pvt. Ltd. v. M/s India Stationery Products Co. and Anr., AIR 1990 Delhi 19, where it was held that delay does not necessarily disentitle a Plaintiff from being granted an interlocutory injunction.

• The plaintiff distinguished the Defendant's reliance on the decision in Wippermann by stating that it was a case of acquiescence, not laches. They cited Daimler Benz Aktiegesellschaft v. Hybo Hindustan, AIR 1994 Delhi 239, to support this distinction.

• The Plaintiff argued that the Defendant's ability to pay damages should not be a legal consideration for denying the plaintiff's statutory right to an interlocutory injunction.

• Addressing the argument of buyer sophistication, the plaintiff cited Baker Hughes Limited v. Hiroo Khushalani & Anr., 1998 (V) AD (Delhi) 525, where the court observed that initial confusion is likely even among sophisticated purchasers. This decision was upheld by the Supreme Court.

• The Plaintiff provided various registered search documents showing the trademarks were in the name of the Plaintiff, which was not refuted by the defendant in their written statement.

Analysis and Conclusion

The case revolves around the alleged infringement by the defendant of the plaintiff's registered trademark 'RALEIGH' by using the mark 'RALLEYZ' on bicycles. The court's analysis and conclusion can be summarized as follows:

• The court assessed whether there was a prima facie case in favor of the plaintiff for sustaining their application under Order XIX Rules 1 and 2 of the CPC. This involved a comparative analysis of the Plaintiff's and Defendant's marks.

• The court compared 'RALEIGH' and 'RALLEYZ', noting both were used on identical goods. Under Section 29 of the Trademark Act, the focus was on whether the marks were similar or identical. The terms 'identical' and 'similar' were defined and distinguished in this context.

• Infringement under the Act involves assessing concepts such as 'identity', 'similarity', 'deceptively similar', 'likely to confuse', and 'likely to have an association'. The court noted that while 'identity' is objective, 'similarity' requires subjective analysis.

• The defendant's counsel provided photographs and invoices to show the sale of bicycles under the impugned mark. However, the court found that the plaintiff had established prior use and reputation, which was significant at the interim stage.

• The court addressed the Defendant's argument of non-use by referring to the Plaintiff's invoices from 2015 and historical evidence of the mark's presence in India. It was noted that the defendant had not filed for rectification of the plaintiff's mark on the grounds of non-use.

• The Defendant's counsel argued for estoppel, citing a previous objection by the Trademarks Examiner. The court favored the Plaintiff's contention that estoppel applies only to inter se parties and not third parties, supported by relevant case law.

The court's conclusion favored the plaintiff, granting an interlocutory injunction against the Defendant to restrain the use of the impugned mark 'RALLEYZ' on bicycles, citing the Plaintiff's established prior use and reputation, and the likelihood of confusion among consumers.

Frequently Asked Questions

1. What constitutes trademark infringement under Indian law?

Trademark infringement under Indian law, particularly under Section 29 of the Trademark Act, occurs when a mark identical or deceptively similar to a registered trademark is used without authorization, causing confusion or association with the original trademark.

2. What is the significance of 'prior use' in trademark law?

'Prior use' refers to the use of a trademark before the use or registration of a similar or identical mark by another party. In trademark disputes, demonstrating prior use can establish the rights of the original user over the subsequent user, often leading to the protection of the original user's trademark rights.

3. What is the 'likelihood of confusion' test in trademark cases?

The 'likelihood of confusion' test assesses whether the average consumer would likely be confused about the source or origin of goods or services due to the similarity between two marks. Factors considered include the similarity of the marks, the similarity of the goods/services, and the consumer perception of the marks.

4. How does the court determine if two trademarks are 'deceptively similar'?

The court compares the visual, phonetic, and conceptual similarities between the marks. It also considers the overall impression created by the marks and the likelihood of confusion among consumers. The context in which the marks are used (e.g., the nature of the goods/services) is also relevant.

5. What is the importance of 'class' in trademark registration?

Trademarks are registered under specific classes that categorize goods and services. In this case, both marks were registered under Class 12, which pertains to bicycles. Using a similar mark in the same class increases the likelihood of confusion and strengthens the infringement case.

6. What is an interlocutory injunction, and why is it significant in trademark disputes?

An interlocutory injunction is a temporary court order that prevents a party from doing something (e.g., using a disputed trademark) until the case is resolved. It is significant in trademark disputes because it can prevent ongoing infringement and potential damage to the trademark owner's business and reputation.

7. How does the principle of 'sophistication of user' affect trademark infringement cases?

The 'sophistication of user' principle considers the awareness and knowledge level of the typical consumers of the products in question. If consumers are deemed sophisticated, the likelihood of confusion may be lower. However, initial confusion can still occur even among knowledgeable consumers, which is relevant in assessing infringement.

8. What is the role of 'estoppel' in trademark cases?

Estoppel prevents a party from taking a legal position that contradicts their previous actions or statements. In this case, the defendant argued that the plaintiff was estopped from claiming the impugned mark was similar to theirs due to a previous statement regarding a different mark. The court considered whether estoppel applied based on the specific circumstances.

9. What evidence is crucial in proving trademark infringement?

Key evidence includes:

• Proof of prior use and reputation of the trademark.

• Evidence of the similarity between the marks (visual, phonetic, and conceptual).

• Instances of actual consumer confusion.

• Sales records, marketing materials, and invoices showing the use of the mark.