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The Not-So-Comfort(inn)g Choice!

April 19, 2022

By Pranit Biswas and Girishma Sai Chintalacheruvu

The plaintiff (Choice Hotels International Inc.) is a chain of hotels headquartered in the USA and having several hotels globally, under the name Comfort Inn, which is also their registered trade mark. A brief timeline of the mark COMFORT INN as adopted by the plaintiff in respect of their hotels is as following:

DATE EVENT
Circa 1939 Company was set up
Circa 1981 The trade mark COMFORT was adopted and used for the first time in the USA
Circa 1985 Secured first registration of their trade mark COMFORT INN in class 16 (in USA)
May 13, 1986 Secured registration of their trade mark COMFORT INN in USA
February 1996 Plaintiff’s domain name www.confortinn.com was registered
December 09, 2015 COMFORT INN declared as a well-known trade mark (CS(COMM) 560/2017) in India.
2021 In the process of launching in Bareilly, India

 

Issues

The Plaintiff in April 2021 discovered that the defendants were misusing the registered COMFORT formative trademarks as part of their trade name, i.e. Hotels Comfort INN. Additionally, they also had online listings across several third party portals, wherein they were found to be actively accepting bookings for rooms at hotels under the impugned name Hotels Comfort INN. Pursuant to the same, the plaintiffs filed a suit, inter alia seeking injunction against the defendants.

 

Ex parte order

Upon asserting that a breach of the plaintiff’s common law rights had occurred, the Hon’ble Court noted that the plaintiff had made out a prima face case and hence passed an ex parte injunction in favor of the plaintiff, restraining the defendant (and its proprietors, partners, etc.) from using the trade mark/trade name HOTEL COMFORT INN.

The court held that the name HOTEL COMFORT INN was identical and deceptively similar to the plaintiff’s trademarks COMFORT, COMFORT INN and other COMFORT formative trademarks, and further directed to issue a notice to the defendant.

Style of adjudication in similar matters

While the instant matter has now been amicably settled out of court by means of a Settlement Agreement in late November, 2021, however, infringement of such nature is not all that uncommon. Instances where small businesses blatantly use the names or marks of pre-existing business entities are quite high. For example, many adopt similar trade names/marks out of inadvertence, and others may do it to fraudulently encash on the pre-existing goodwill. Many cases of the former kind usually do not reach the stage of litigation, as they are mostly settled amicably by both parties. Mediation, including pre-litigation mediation is increasingly becoming a very valuable tool for settling such matters prior to escalation to lawsuit. In fact, the final order as passed in this matter recently, suggests that this matter was also resolved by mediation, as the Order states that the matter has been settled before the mediation centre!

On the other hand, cases involving the fraudulent adoption of marks are usually adjudicated inter alia by placing reliance on the existence of mala fide intentions behind such adoption, along with a comparison of marks involved to ascertain the level of similarities. Additionally, the extent to which the both of them can be confused, from the perspective of a person having average memory also plays as an essential ground. Such cases may need the judicial and adversarial approach of litigation to resolve the matter.

On the contrary, another scenario may involve business entities that were in prior use of a certain name/mark. For instance, in the 2011 lawsuit for infringement of the mark ‘Hilton’ as opposed to the mark ‘Hiltone’, the Supreme Court adjudicated the case by placing reliance on the ‘first use’ aspect, and accordingly ruled the matter against the owner of the international chain of Hilton Hotels and Resorts, further holding that Hiltone was not only registered, but also was in prior use by the Indian group of hotels in India.

Conclusion

In the instant case, the Court proactively issued an ex parte injunction to protect the interests of the plaintiff, however, it all ultimately boils down to the carrying out of the respective responsibilities by the key pillars involved in the entire economics of trade marks, viz. (1) the social responsibility of new business entities to complete their due diligence and adopt/register only bona fide names/marks in respect of their business, (2) the general responsibility of existing business entities to keep a watch on the market and initiate suitable actions against potential threats, (3) the responsibility of the Trademark Registrar to carefully scrutinize trade mark applications to avoid similar registrations. In any case, the adoption of similar/identical names/marks is never a very smart choice!

Nevertheless, it may be worth noting the trend of resorting to mediation as a means of dispute resolution. While litigation provides a much judicial as well as an adversarial approach, mediation on the other hand offers a much more flexible, voluntary and informal means of dispute resolution, thereby giving ample scope for amicable settlement.

Nonetheless, the matter has now been amicably settled by the parties before the mediation center by means of entering into a Settlement Agreement. Pursuant to the same, the matter has been disposed off by the Delhi High Court, vide Order dated January 11, 2022.

 

 

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