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Dishonest Adoption of Trade Name and Interim Injunction

This case delves into a recent legal dispute where Infosys Limited, a global leader in information technology and consulting services, sought judicial intervention to prohibit the unauthorized use of its well-known trademark 'INFOSYS' by 'Southern Infosys Limited'. The case underscores the implications of trademark infringement, particularly under Section 29(5) of the Trademarks Act, 1999.

Case Background:
Infosys Limited, established in 1981, has garnered a formidable reputation in the IT and consulting sectors, with a market capitalization of approximately 93.6 billion USD. As the registered proprietor of the trademark 'INFOSYS', the company has built a robust brand identity recognized globally. The Plaintiff, Infosys Limited, filed a lawsuit under Section 29(5) of the Trademarks Act, 1999, against the Defendant, Southern Infosys Limited, to restrain the latter from using 'INFOSYS' as part of its trade name.

Legal Framework: Section 29(5) of the Trademarks Act, 1999
Section 29(5) of the Trademarks Act, 1999, is a crucial provision addressing trademark infringement through the use of a registered trademark as part of a corporate or trade name. This section stipulates that infringement occurs if:
  1. A registered trademark is used as part of the Defendant's trade name or corporate name.
  2. The Defendant engages in business activities concerning the goods or services for which the trademark is registered.

Unlike other sub-sections of Section 29, which require proof of public deception or dilution of the trademark, Section 29(5) necessitates only the above conditions for establishing infringement. This provision emphasizes the protection of well-known trademarks against misuse in corporate nomenclature.

Facts of the Case:
The Plaintiff contended that the Defendant's adoption of 'INFOSYS' as part of its corporate name, 'Southern Infosys Limited', constituted infringement of its well-known trademark. Infosys Limited's trademark 'INFOSYS' had been declared a well-known mark by both judicial recognition and the trademark registry, enhancing its protection under the law.

The Dishonesty on part of Defendant in changing its Trade Name:
The Defendant, originally named 'Disha Financial Services Limited', changed its corporate name to 'Southern Infosys Limited' on 30th September 1998, with the approval of the Registrar of Companies, N.C.T. of Delhi and Haryana. This change occurred after Infosys Limited had already established substantial rights in the 'INFOSYS' trademark. This manifests bad faith on the part of the Defendant.

Court's Analysis and Interim Injunction:
The court examined the legal principles underpinning trademark infringement, focusing on Section 29(5) of the Act. The court found that the Defendant's use of 'INFOSYS' in its corporate name directly contravened the Plaintiff's trademark rights. Given that the Defendant's business activities overlapped with those for which 'INFOSYS' was registered, the court held that the conditions for infringement under Section 29(5) were satisfied.

The court recognized the extensive recognition and distinctiveness of the 'INFOSYS' trademark, which significantly raised the likelihood of consumer confusion. The potential for consumers to mistakenly associate 'Southern Infosys Limited' with Infosys Limited was deemed substantial.

On a prima facie assessment, the court noted that the Defendant's activities could lead to consumer confusion, suggesting an association between 'Southern Infosys Limited' and Infosys Limited. This misassociation could damage the Plaintiff's brand reputation and erode consumer trust.

Grant of Interim Injunction:
Accordingly, the court granted an interim injunction against the Defendant, restraining them from using 'INFOSYS' as part of their corporate name. The decision underscored the necessity of protecting well-known trademarks from unauthorized use, particularly when such use could mislead consumers and tarnish the trademark's goodwill.

The case of Infosys Limited vs. Southern Infosys Limited highlights the critical importance of trademark protection in maintaining brand integrity and preventing consumer confusion. Section 29(5) of the Trademarks Act, 1999, serves as a robust legal mechanism to safeguard registered trademarks from being misused in corporate nomenclature. The judicial intervention in this case not only protected Infosys Limited's trademark rights but also sent a strong message about the legal repercussions of dishonest adoption of trade names.

Case Citation: Infosys Llimited Vs Southern Infosys Limited:27.05.2024:CS Comm 257 of 2024:2024:DHC:4724:Delhi High Court: Sanjeev Narula, H.J.

The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

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

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