Passing Off, Infringement, and Concealment

Quantum Hi-Tech Merchandising Pvt. Ltd. Vs LG Electronics India Pvt. Ltd. & Ors. – Trademark Dispute Analysis

Facts

Quantum Hi-Tech Merchandising Pvt. Ltd., the appellant, instituted a suit before the District Judge Commercial Court-II, Shahdara, alleging that LG Electronics India Pvt. Ltd., LG Korea, and their Brand Store in Delhi infringed its registered trademarks and attempted to pass off their products as those of the appellant. The appellant sought a permanent injunction to restrain the respondents from using the marks QUANTUM, QUANTUM PLUS, QUANTUM DISPLAY, IPS QUANTUM, RGB QUANTUM, SMART QUANTUM, and G QUANTUM for their goods, arguing that these marks were deceptively similar to the appellant’s registered trademarks QUANTUM and related device marks.

The appellant clarified during proceedings that its request was limited only to restraining the respondents from using the marks QUANTUM and QUANTUM DISPLAY, and was no longer seeking an injunction against the respondents’ use of their other registered trademarks containing “QUANTUM” as a part. Quantum Hi-Tech Merchandising Pvt. Ltd. asserted its adoption of the trademark QUANTUM since 1992, with formal registration under Class 9 of the Trade Marks Act, 1999, following a transfer from its predecessor in 2006. The respondents were manufacturing televisions and related goods under similar marks, some of which were separately registered.

Procedural Details

The appellant sought an interim injunction under Order XXXIX Rules 1 and 2 of the Civil Procedure Code to restrain the respondents’ use of the allegedly infringing marks. An ad interim order was initially passed, restraining the respondents. Subsequently, the respondents applied under Order XXXIX Rule 4 for vacation of this interim order.

On 15 December 2021, the Commercial Court dismissed the appellant’s application for interim injunction and allowed the respondents’ application to vacate the order. Aggrieved, the appellant filed an appeal before the High Court of Delhi.

Disputes

• Whether the appellant had a valid trademark registration for the mark QUANTUM for goods in question.
• Whether the respondents’ use of marks such as QUANTUM and QUANTUM DISPLAY constituted infringement or passing off.

Detailed Reasoning

The High Court noticed that the appellant had engaged in wilful and deliberate concealment of facts, noting the lack of bona fide in suppressing details regarding the nature of its trademark registration and use of the relevant affidavit. The Court emphasized that equity dictates interim relief can only be granted to parties who approach the court with clean hands, as per Seema Arshad Zaheer v. Municipal Corporation of Greater Mumbai and S.K. Sachdeva v. Shri Educare Ltd.

Infringement Analysis

Regarding infringement, the High Court clarified that had the concealment not happened, the appellant might otherwise have had a good case for injunction based on a valid device mark registration, especially since “QUANTUM” is the dominant part of its device mark. The Court cited:

• K. R. Chinna Krishna Chettiar v. Shri Ambal Co
• South India Beverages Pvt. Ltd. v. General Mills Marketing Inc
• Pernod Ricard India P Ltd. v. Karanveer Singh Chhabra

The Court reiterated that if a dominant part of a composite mark is replicated in another’s mark, confusion is likely under Section 29(2)(b) of the Trade Marks Act.

Passing Off

For passing off, the court cited Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories and Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd. It held that passing off requires evidence of sale in the market and accumulation of goodwill before the defendant began using the impugned mark. As there was no proof of sale or sufficient material regarding goodwill, the passing off claim failed.

Decision

The High Court upheld the Commercial Court’s order, finding that the appellant was guilty of concealment of facts and therefore not entitled to interim injunction. The appeal was dismissed, with no orders as to costs.

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