By Rima Majumdar and Aditi Umapathy
Introduction
In the trademark dispute between the German sports apparel company, Adidas AG (hereinafter, “Plaintiff”), and an Indian proprietor, Keshav H. Tulsiani (hereinafter, “Defendant”), and related persons, the Hon’ble Delhi High Court has rendered a judgment in favour of Adidas AG while declaring Defendants’ use of the trademark ‘ADIDAS’ amounts to trademark infringement.
Background of The Dispute
In 1948, the Plaintiff’s founder, Mr. Adolf Dassler, also known as Adi, coined the trademark ADIDAS, which was a combination of ‘Adi’ and “Das” which were the first three alphabets of his last name. Having a strong global presence, the Plaintiff first registered the trademark ADIDAS in India in the year 1971 and began first commercially trading in India through its licensee, M/S Bata India Pvt. Ltd., in 1989.
The dispute between the parties first arose in 1992 when the Defendant’s application for registration of the trademark ADIDAS in class 24 for ‘textile piece goods’ was advertised in the Trade Marks Journal, and was opposed by the Plaintiff’s then licensee, M/s Bata India Pvt. Ltd. This opposition was rejected by the Trade Marks Registry, and the Defendant’s trademark application proceeded to registration. However, pursuant to an appeal filed against the order rejecting the said opposition, the Bombay High Court remanded the matter back to Trade Marks Registry for de novo consideration of the opposition.
Despite the order of the Bombay High Court ordering fresh consideration of the opposition, the Defendant’s mark was registered. Aggrieved by the same, the Plaintiff filed an application before the Intellectual Property Appellate Board (IPAB) for removal of the Defendant’s registration from the Register of Trademarks.
Thereafter, the present suit was filed. During the pendency of the present suit proceedings, the IPAB passed an order directing removal of the Defendant’s registered trademark ADIDAS from the Register of Trade Marks.
The Suit Proceedings
The judgment notes that the Defendant failed to appear at the time of recordal of evidence despite ample opportunities being afforded to them. Thus, the Defendant’s right to lead evidence was closed, and the suit against the Defendant was thereafter proceeded ex-parte. In view thereof, as part of the final reliefs sought, the Plaintiff only pressed on the relief of trademark infringement, and not passing off.
Contentions of Plaintiff
- Adoption of the mark “Adidas”: The Plaintiff in the suit contended that the mark “Adidas” is a coined mark. The founder of the Plaintiff Company, Mr. Adolf Dassler, also known as ‘Adi’, coined the mark “Adidas” by combining his name ‘Adi’ with the first three letters of his surname ‘Das’ and put it to commercial use in 1949.
- Global reputation of the mark: The Plaintiff next contended that it has launched several brands, including “Adidas Originals,” for its range of products. The cumulative global sales of the Plaintiff till the year 2010, the period preceding the filing of the suit, amounted to €11,990 million. The trademark “Adidas” has been registered in the Plaintiff’s favour in various countries, with the earliest one dating back to 1954.
Furthermore, the Plaintiff has spent substantial amounts in promoting its products across the world. Plaintiff’s products under the mark “Adidas” have been endorsed by various well-known celebrities in the fields of sports, music, and film at several events. The Plaintiff has also periodically sponsored popular football, rugby, and cricket leagues. Owing to Plaintiff’s extensive promotion and high-quality standards of the “ADIDAS” products, they are widely recognized all over the world and exclusively associated with the Plaintiff. - Presence in India: The Plaintiff’s predecessor first registered its mark “ ” in India in the year 1971 and in 1989, the Plaintiff granted a license to commercially trade in India to M/s Bata India Pvt. Ltd., thus marking their entry in the Indian market. Later, in 1996, Plaintiff established a joint venture company named ‘Addidas India Marketing Private Limited’ (formerly, Adidas India Trading Private Limited) in India. This joint venture was terminated in 2006, when ‘Adidas India Marketing Private Limited’ became Plaintiff’s subsidiary. The Plaintiff further contended that it has been openly and continuously carrying on their business in India since 1989. Even before 1989, the Plaintiff’s goods were being purchased by Indian consumers travelling abroad.
- The sales figures of the Plaintiff’s products in India amounted to INR 3,35,81,72,000/- in the year 2009. To further promote their “ADIDAS” mark/ products, the Plaintiff sponsored several teams participating in the Indian Premier League along with other tennis, athletics, and football tournaments, and issued advertisements in print media extensively distributed throughout the country. The mark has also been endorsed by celebrated cricketers.
Trademark registrations in India: The Plaintiff has, over the years has secured multiple registrations for “ADIDAS” trademark including it variants, particulars whereof are as follows
Contentions of the Defendant
- Honest and bona fide adoption of the mark ‘Adidas’: The Defendant contented that mark was adopted with honest and bona fide intentions, asserting that it was was chosen out of affection and devotion for his sister. According to Defendant, the trademark Adidas is a combination of ‘Adi’ which means elder sister in the Sindhi language, and the term ‘Das’ which means devotee.
- Prior user: The Defendant applied for registration of the mark ‘ADIDAS’ in 1987 on a proposed to be used basis, and registration in respect thereof was granted to the Defendant in 2006. Thus, claiming to be the prior adopter and user of the trademark ‘ADIDAS’ since 1987.
- Suit is barred by delay, acquiescence, estoppel and waiver: Despite the Plaintiff’s admitted knowledge of the Defendant’s use of the trademark ‘Adidas’ since 1987, no suit for trademark infringement was filed till 2011. This prolonged period of inaction, spanning over two decades, implies a tacit consent to the Defendants’ use of the mark.
- No likelihood of confusion: Emphasizing a visual distinction in branding, the Defendant averred that the Plaintiff’s trademark Adidas is written in uppercase, whereas the Defendant’s trademark Adidas is written in lowercase and thus, there can be no likelihood of confusion.
Legal Issues Considered by the Court, and the Corresponding Findings
- On whether the suit is barred by delay, laches and acquiescence
The Hon’ble High Court clarified that the principle of delay and laches is an equitable defense, and bars maintainability of a suit when the Plaintiff has unreasonably delayed in approaching the court, thereby causing demonstrable prejudice to the Defendant. Further, the Hon’ble High Court noted that for acquiescence to be a valid defense, positive acts of encouragement of the Plaintiff must give the impression that the use of the mark by the Defendant is accepted by the Plaintiff, and mere silence is not sufficient.Applying these principles, Hon’ble Mr. Justice Sanjeev Narula observed that the Plaintiff has made consistent and active efforts to oppose the Defendant’s adoption and use of the mark Adidas ever since the Defendant applied for registration of the said trademark, and thus the principles of delay, laches and acquiescence do not apply to the present case.
- On whether the Defendant is the prior user of the trademark ‘Adidas’
The Defendants contention that they are the prior users of the “ADIDAS” trademark for textiles, arguing that when they adopted and began using the mark in 1987, the Plaintiff’s products were not commercially available in India under that trademark. However, the Plaintiff’s evidence shows that their products bearing the “ADIDAS” mark were introduced into the Indian market in 1989 through Bata India Pvt Ltd., who acted as their licensee and distributor.
The Hon’ble High Court reiterated that a registered proprietor could initiate legal proceedings for infringement, without actual use of the registered mark. Thus, the relevant date for the purpose of establishing prior use in the present case would be the date of registration of the mark and not when the Plaintiff started using it. Therefore, to prove prior use, it is necessary for Defendants to satisfy usage before the date of registration of the Plaintiff’s marks.
- On whether the use of the trademark ‘ADIDAS’ by the Defendant in respect of textile pieces in class 24 amounts to trademark infringement
The Hon’ble High Court observed that the Defendant’s use of the mark ‘Adidas’ amounts to trademark infringement under Section 29(2)(a) of the Trade Marks Act, 1999 as the Defendant is using a trademark which is identical to the Plaintiff’s trademark ‘ADIDAS’, and in relation to a class of goods that are undeniably similar to the goods of the Plaintiff.
Additionally, given that the explanation given by the Defendant for adopting the trademark ‘ADIDAS’ was unsubstantiated, and the Plaintiff’s trademark being arbitrary, and inherently distinctive, the court found it to be unlikely that the trademark ‘ADIDAS’ was innocently adopted by the Defendant.
In view of the aforesaid findings, Hon’ble High Court restrained the Defendant, and any person acting on their behalf from using the ADIDAS marks or any deceptively similar trademark in relation to textile products covered under Class 24. The Plaintiff was also awarded nominal damages of INR. 3,00,000/-, and cost of legal proceedings to the tune of INR. 11,22,060/.
Author’s Note
The judgement in Adidas AG vs. Keshav H. Tulsiani reiterates the importance of choosing trademarks that are coined and arbitrary, as opposed to generic or descriptive trademarks. One of the primary reasons why the Court rejected the Defendant’s argument on innocent adoption of the trademark ‘ADIDAS’, was because of the inherently distinctive nature of the Plaintiff’s trademark ‘ADIDAS’ and the same having no correlation to words from any language.
Further, applying the principle of acquiescence, the judgment also clarifies that mere silence of the trademark proprietor in relation to the defendant’s use of an identical/similar trademark does not amount to acquiescence. For the principle of acquiescence to apply, the proprietor must commit positive acts giving the impression that it does not object to the defendant’s use of an identical/similar trademark.