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The Presumed Knowledge Of The Ex-Dealer Or Distributor Regarding Owner's Trademark

When relation ship of distributor or dealer is terminated with a trademark owner, question may arise regarding the use of that trademark or any other trademark deceptively similar thereto ,by the former dealer or distributor. This article deals with this issue in view of recent Judgment of Hon'ble High Court of Calcutta.

This article delves into this critical issue in light of a recent landmark judgment delivered by the Hon'ble High Court of Calcutta. We will explore the implications of the judgment and its impact on trademark rights and infringement concerns for all parties involved.

The Suit:
The Plaintiff filed suit for Trademark Infringement and Passing off against the Defendants.

The Basic Facts Of Plaintiff:
Plaintiff is manufacturer and distributor of spare parts for Earth Moving Machines etc. Plaintiff was incorporated since the year 1989. Plaintiff was registered Proprietor of Trademark ITR and USCO. Suit was filed by the Plaintiff as the Defendants have also been using the Trademark IITR and/or ITR.

The Defendant Was Ex Distributor Of Plaintiff:
Another important aspect of the matter is that the Defendants have also been ex dealer of the Plaintiff. This also one of the important factor, leading to filing of the subject matter Suit.

The Order:
The Court granted injunction in favour of the Plaintiff and against the Defendants,

The Reasons:
In the Court's observation, it was noted that the plaintiffs presented documents proving that plaintiff No.1 was incorporated in 1989 and had been selling its products in India since at least 2007.

Furthermore, the mark "ITR" of the Plaintiff has been a registered mark under class 7 (device) of the 1999 Act since 2009, following the application for registration made in 2007. The general public, when purchasing the plaintiffs' goods, associates them with the trademark "ITR" and intends to buy goods originating from Plaintiff Company.

On the contrary, the defendants used to be either dealers or distributors of the plaintiffs' goods until 2017. A simple comparison between the registered mark "ITR" and the defendant's "IITR" reveals a clear deceptive similarity. The Defendants , initially applied for Trademark IITR , which shows that intention of Defendants is not bonafide.

The combination of the logo, font, and color used in "IITR" is highly likely to cause confusion among customers seeking goods with the "ITR" mark, which is associated with products originating from Plaintiff Company. The defendants were fully aware that the plaintiffs' goods were sold with the "ITR" mark and identified as products of USCO Company.

Given that the defendants were ex-dealer or ex-distributor, it can be assumed that they had knowledge of the plaintiff's trademark. These factors led the Hon'ble High Court of Calcutta to grant an injunction order in favor of the plaintiff.

The Concluding Note:
Post-termination trademark use, ex-distributors must be aware of their rights and limitations to avoid infringing upon the trademark owner's exclusive rights. If an ex-distributor continues to use the trademark without proper authorization, it could risk infringing upon the trademark owner's rights. The trademark owner will have legal remedies available, such as filing a lawsuit for trademark infringement, seeking injunctive relief, and claiming damages resulting from unauthorized use.

This recent judgment delivered by the Hon'ble High Court of Calcutta serves as a significant milestone in the realm of trademark law and its application in cases of distributor or dealer relationship termination. It reinforces the importance of trademark owners' rights and the need to protect their intellectual property from unauthorized use. The judgment also emphasizes the significance of consumer trust and confidence in upholding the distinctiveness of trademarks and preventing confusion in the marketplace.

The Case Law Discussed:
Case Title: USCO S.P.A. Vs Twin Parts Pvt. Ltd.
Date of Judgment: 03.07.2023
Case No: IA No. GA 1 of 2023 in CS No.87 of 2023
Neutral Citation No: N.A.
Name of Hon'ble Court: Hon'ble High Court of Calcutta
Name of Hon'ble Judge: Arindam Mukherjee, H.J.

Information contained herein is being shared in the public Interest. The same should not be treated as substitute for legal advice as it is subject to my subjectivity and may contain human errors in perception, interpretation and presentation of the facts and law involved herein.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: [email protected], Ph no: 9990389539

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