Balancing Trademark Rights and Legal Timelines: The INFOSYS Case

By Aishwarya Hariharan and Anuj Dhar

Introduction

The case of Infosys Limited v Southern Infosys Limited is a pivotal judgment delivered by the Hon’ble High Court of Delhi, which underscores the sanctity of well-known trademarks in India. Infosys Limited (hereinafter referred to as ‘Plaintiff’), a global leader in IT and Consulting services, initiated legal proceedings against Southern Infosys Ltd. (hereinafter referred to as ‘Defendant’) for the unauthorized use of the mark ‘INFOSYS’ as part of its corporate name. The case revolved around several crucial aspects of trademark law, including the protection of well-known marks, significance of goodwill and reputation, the impact of delay and laches, and the importance of credible and plausible explanations with respect to minor procedural omissions.

Background

1. The Plaintiff is a global leader in information technology and consulting services, and had coined & adopted the trademark ‘INFOSYS’ in 1981. Thereafter, the Plaintiff obtained registration on the mark ‘INFOSYS’ in 1987 and has been using it extensively and continuously since then. A non-exhaustive list of registrations obtained by the Plaintiff across several classes are provided below:

Sr. No.	Trademark	Application No.	Date of Application	Class	User Claimed
1.	INFOSYS	475267	15.07.1987	9	01.03.1981
2.	INFOSYS	475269	15.07.1987	16	01.01.1981
3.	INFOSYS	484837	27.01.1988	7	01.01.1981
4.		637315	18.08.1994	9	Proposed to be used

Further, the Hon’ble High Court of Delhi and the Trademark Registry have also recognized and declared ‘INFOSYS’ as a well-known trademark. The Plaintiff has also maintained a significant online presence with its website www.infosys.com since July 1992. Thus, the term ‘INFOSYS’ has become exclusively associated with the Plaintiff, being particularly recognized as a hallmark in the technology sector.

2. Upon discovering the unauthorized use of their mark ‘INFOSYS’ as the Defendant’s tradename/corporate name, the Plaintiff promptly issued a cease-and-desist notice dated August 18, 2023, which was not responded to by the Defendant.
3. The Plaintiff, being aggrieved by the Defendant’s malafide adoption of the mark ‘INFOSYS’ as part of its corporate name ‘Southern Infosys Limited’, pleaded that this use of the Plaintiff’s registered and well-known trademark ‘INFOSYS’, constitutes infringement under Section 29(5) of the Trademark Act. Thus, the Plaintiff filed the present suit to restrain the Defendant from using the said trademark as part of its trade/corporate name ‘Southern Infosys Limited’.

Background

Contentions of the Plaintiff

The Plaintiff made several key arguments in support of their claim:

1. Infosys Limited has been using the ‘INFOSYS’ trademark since 1981. The trademark has gained significant reputation and goodwill, both in India and internationally. The company has secured numerous registrations for the mark across various classes, with the first registration dating back to 1987 (Class 9, Registration No. 475267). Additionally, their website, www.infosys.com, operational since 1992, reinforces the association of the trademark with the Plaintiff.
2. The Plaintiff contended that Southern Infosys Limited’s use of the ‘INFOSYS’ mark could mislead consumers into believing there is an association between the two companies, potentially harming Infosys Limited’s reputation and brand equity.
3. Infosys Limited highlighted its financial growth and market capitalization as evidence of its significant market presence and the potential harm from any unauthorized use of its trademark.

Contentions of the Defendant

The counsel of the Defendant submitted several counterarguments against Plaintiff’s claims:

1. The Defendant argued that Infosys Limited had previously issued 2 cease-and-desist notices to Defendant in 2000 and 2020 respectively but failed to disclose this in the current lawsuit. The counsel of the Defendant claimed that this omission was strategic to avoid objections related to delay and acquiescence.
2. The Defendant emphasized that they had been using the name ‘Southern Infosys Limited’ since 1998 without any objection from Infosys Limited. Further, it was submitted that the Plaintiff had been aware of the Defendant’s existence since 2000, arguing that the Plaintiff’s delay of over 20 years in filing the present suit indicated acquiescence, which should bar the Plaintiff from seeking relief.
3. The Defendant contended that the term ‘INFOSYS’ is merely an abbreviation of the words ‘information’ and ‘system’, thereby suggesting that the usage of the mark ‘INFOSYS’ is generic or descriptive and is not solely associated with Infosys Limited i.e. Plaintiff, thus weakening the Plaintiff’s claim of exclusive rights over the mark.
4. The Defendant, while comparing the two trademarks, argued that the marks are dissimilar in their appearance and thus, there exists no likelihood of confusion in the minds of the relevant consumer sections. A side-by-side comparison of the two marks are provided below:

Infosys Limited/td>	Southern Infosys Limited

It was further submitted that there is also a substantial difference in the nature of the business of the Plaintiff and the Defendant.

Legal Issues Considered by the Court and Its Subsequent Findings

1. Scope of infringement under Section 29(5) of the Trade Marks Act, 1999
   After careful and thorough analysis of Section 29(5) of the Act, the Hon’ble Court held that trademark infringement occurs only when the registered trademark is used by the Defendant as part of their trade name and the Defendant engages in commerce concerning the goods/services for which the trademark is registered.
2. Adoption of ‘Infosys’ by the Defendant
   Relying on the submissions of both the parties, the Hon’ble Court took into consideration of the fact that the Plaintiff is the registered proprietor of the mark ‘INFOSYS’ since 1987, and has been using the mark extensively since 1981. On the other hand, the Defendant began using the mark ‘INFOSYS’ as part of their corporate name ‘Southern Infosys Limited’ since September 30, 1998. Thus, the Defendant’s adoption of the mark clearly postdates the Plaintiff’s use and registration of their trademarks, thereby making the Defendant the subsequent user of the mark ‘INFOSYS’.

   The Court further emphasized that the Defendant was originally incorporated as Disha Financial Services Ltd., and as soon as ‘INFOSYS’ was incorporated in their trade name, the Defendant strategically redirected its business focus towards the technology sector. This shift underscores the overlap in the business activities of both parties and increases the likelihood of confusion amongst relevant consumers.

3. Concealment of material facts by Plaintiff
   With respect to the omission of cease-and-desist notice dated April 27, 2020 from the plaint, the Plaintiff submitted that the oversight was not an attempt to mislead but was rather an accidental omission due to the operational disruptions caused by COVID-19 in the year 2020. The Court, while considering the aforementioned submission, held that where clear evidence of trademark infringement exists, minor procedural missteps that are adequately explained should not overshadow the merits of the case. Thus, the Court held that the omission on behalf of the Plaintiff is prima facie credible and does not imply intentional concealment.
4. Delay, laches and acquiescence
   The Court noted that the Defendant concededly incorporated the mark ‘INFOSYS’ in their corporate name in 1998, after more than 17 years of the Plaintiff’s use and subsequent registration of the mark ‘INFOSYS’. The Defendant, by virtue of operating in the same industry and the public listing of the company, failed to undertake thorough due diligence before adopting its corporate name, suggesting a lack of good faith. Thus, the Hon’ble Court held that while the Plaintiff has taken a considerable amount of time to initiate the present suit, this delay would not extinguish the Plaintiff’s right to object and seek protection against blatant and clear infringement.
5. Descriptive nature of the mark ‘INFOSYS’
   The Court, while deciding on the descriptiveness of the term ‘INFOSYS’, held that the term ‘Infosys’ might have begun as a potentially descriptive term, but due to the extensive and continuous use of the mark and the declaration of INFOSYS as a well-known trademark, the mark has acquired a secondary meaning that links it directly to the Plaintiff, thereby making it a distinctive mark.

Judgment

The Delhi High Court, while ruling in favor of Infosys Limited, recognized the unauthorized use by Southern Infosys Limited and thereby restrained the Defendant from using the mark ‘INFOSYS’ as part of their corporate/trade name or in any other manner amounting to infringement of the Plaintiff’s trademark. However, considering the fact that the Defendant has been using the mark for a considerable period of time, the Hon’ble Court granted a period of 4 weeks to the Defendant to make the transition to a non-infringing tradename.

Author’s Note

The Infosys Limited v Southern Infosys Limited case reaffirms the robust legal framework protecting well-known trademarks in India. The judgment highlights the judiciary’s proactive stance in safeguarding the rights of the trademark owners, especially when there is a clear evidence of bad faith adoption and potential consumer confusion. This case serves as a critical reminder for businesses and brands to conduct thorough due diligence before adopting trade names, particularly in industries where brand reputation and consumer trust are paramount. Moreover, the judgment underscores the importance of timely action in trademark disputes, while also demonstrating the Court’s willingness to overlook procedural missteps in the face of substantial evidence of infringement.