Trademark | Passing Off Rights Trump Registration Rights: Delhi High Court

In a latest judgement, Delhi High Court reinforcing the primacy of passing off rights in trademark law. Justice Amit Bansal granted an interim injunction, restraining Midas Touch from using the trademark ‘INDEED’, finding it deceptively similar to FMI’s mark ‘INDI’. The court underscored that passing off rights, rooted in prior use and goodwill, take precedence over mere registration under the Trade Marks Act, 1999.

The plaintiff, FMI Limited, is a prominent manufacturer of measuring tools and has used the trademark ‘INDI’ since 2015 for its measuring tapes and related products. FMI alleged that Midas Touch Metalloys Pvt. Ltd., a competitor, began selling similar products under the mark ‘INDEED’ in 2024, adopting a blue and white color scheme identical to FMI’s trade dress. FMI claimed that this created a likelihood of consumer confusion and amounted to both trademark infringement and passing off.

An ex-parte interim injunction restraining Midas Touch from using ‘INDEED’ was granted on August 28, 2024. The defendant subsequently sought to vacate the injunction and requested permission to sell its existing stock bearing the disputed mark.

Justice Bansal addressed the key issues of passing off, infringement, and deceptive similarity in detail.

The court relied on the principle established in S. Syed Mohideen v. P. Sulochana Bai, emphasizing that passing off rights are superior to mere registration. It observed:

"The remedy of passing off is broader in its ambit than infringement. Prior user rights remain unaffected by subsequent registration."

FMI demonstrated significant prior use of the ‘INDI’ mark since 2015, supported by sales figures and evidence of goodwill. In contrast, Midas Touch had only begun using ‘INDEED’ in July 2024.

The court found that ‘INDEED’ was phonetically, visually, and structurally similar to ‘INDI.’ The addition of the letter "D" in the defendant’s mark did not sufficiently distinguish it, and the shared blue and white color scheme amplified the likelihood of confusion among consumers.

Justice Bansal noted that the defendant’s use of ‘INDEED’ appeared intentional and lacked bona fide justification, as Midas Touch had previously used distinct trademarks like ‘CUBIT’ and ‘DIGITAPE.’

The court ruled that the balance of convenience favored FMI, given its established goodwill and reputation. It held that allowing Midas Touch to continue using the mark would cause irreparable harm to FMI and confusion among consumers.

The court made the interim injunction against Midas Touch absolute, barring the defendant from:

Using the trademark ‘INDEED’ or any deceptively similar mark.
Selling, advertising, or displaying products bearing the infringing mark.
It also rejected the defendant’s plea to release existing stocks of products bearing ‘INDEED.’ Justice Bansal clarified that these observations were limited to the interim applications and would not prejudice the final adjudication of the suit.

This ruling reiterates the strength of passing off rights in Indian trademark law and the importance of protecting goodwill and prior use against later entrants. The decision highlights the court’s approach to assessing deceptive similarity and ensuring fair trade practices in competitive markets.

Date of Decision: January 8, 2025