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In Passing Off Action, The Relevant Date Of Proving Goodwill Is When The Defendant Enters Into The Market

A critical element in a passing off claim is the establishment of goodwill and reputation in the relevant market. This article examines a notable case in which the Hon'ble Court refused to grant an injunction due to the plaintiff's failure to demonstrate goodwill at the time the defendant entered the market.

The essential feature of Plaintiff's as well as Defendant's Trademark VASUNDHARA. The Plaintiff claimed user since 1999 while Defendant claimed since 2001. Both of the parties were registered proprietors.

The plaintiff filed a trademark application with the Trade Mark Registry in 1999 for jewelry in precious metals and gems. In June 2019, while reviewing the defendant no.1's 'VASUNDHARA' marks, cited in the Examination Report for the plaintiff's application, the plaintiff became aware of the defendant.

The crux of the dispute lies in the alleged deceptive similarity between the plaintiff's 'VASUNDHRA' and the defendant's 'VASUNDHARA.' The plaintiff, in their response to the Examination Report, asserted that their mark differed significantly from the defendant's, specifically highlighting the stylized form of the letter "V" used by the defendant, which they believed created enough distinction to avoid consumer confusion.

The Plaintiff's Contradictory Stance
In the ongoing lawsuit, the plaintiff's position became questionable due to their contradicting statements. While they initially claimed that the defendant's mark was not deceptively similar to theirs, they later filed the subject matter suit asserting the opposite. This inconsistency weakened the plaintiff's right to seek injunction against the Defendants as a party can not be allowed to Aprobate and reprobate.

Defendant's User Claims and Factors Affecting Injunction
The defendant no.1 claimed to have used the mark 'VASUNDHARA' since the year 2001, which, they contended, was subsequent to the plaintiff's use of 'VASUNDHRA.' This claim further complicated the matter and added complexity to the question of trademark infringement. The court considered various factors while deliberating on the grant of an injunction in favor of the plaintiff.

Registered Proprietorship and Passing Off Remedy:
Both the plaintiff and the defendant held registered trademarks, which led the court to conclude that the relief of infringement could not be granted in favor of the plaintiff. Consequently, the case was analyzed with respect to the passing off remedy, wherein the plaintiff sought to establish their goodwill and reputation in the market.

Suspect Nature of Plaintiff's Invoices
One critical aspect that came to light during the proceedings was the suspect nature of the plaintiff's invoices. The court noted that the plaintiff's invoice dated 17th August 2016 included Goods and Services Tax (GST), even though the GST was enacted only on 1st July 2017. This discrepancy raised doubts about the authenticity of the plaintiff's claims and further weakened their position.

Burden of Proof in Passing Off Action
In an action of passing off, the burden of proof lies with the plaintiff to demonstrate the existence of goodwill and reputation at the time the defendant entered the market. Since there was no evidence to show that the plaintiff had established goodwill in the year 2001 when the defendant began trading in jewelry under their name, the court had reservations about granting relief in favor of the plaintiff.

The Concluding Note
In passing off action, the Relevant date for establishing good will , is the date when defendant enters into the market: The Court observed that the plaintiff failed to provide sufficient evidence demonstrating the existence of goodwill in the relevant market at the time the defendant started trading. The absence of credible documentation, or any other substantial proof to support the plaintiff's claim of goodwill in the year 2001 when defendant entered into the market, weighed against the plaintiff's case.

The Case Law Discussed
Case Title:Vasundhara Jewellers Pvt.Ltd. Vs Vasundhara Fashion Jewellery LLP and Another
Date of Judgement:19.07.2023
Case No.CS Comm 161 of 2022
Neutral Citation:2023:DHC:4960
Name of Hon'ble Court:High Court of Delhi
Name of Hon'ble Judge:Amit Bansal, 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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