Bombay High Court considers passing-off action involving descriptive marks

In Pidilite Industries Ltd v Vilas Nemichand Jain, trading as New Era (Notice of Motion No 2144 of 2010 in Suit No 2130 of 2010), a single judge of the High Court of Bombay has dismissed an application for interim relief in a suit for passing off filed by Pidilite Industries Ltd to restrain Vilas Nemichand Jain, trading as New Era, from using the mark LEAKGUARD in relation to solvent cements and similar chemical compounds. The issue before the court was whether, in an action for passing off involving descriptive marks, merely proving prior use and the acquisition of some goodwill and reputation was sufficient for the plaintiff to succeed.

The dispute arose in September 2009 when Pidilite came across New Era products bearing the identical mark LEAKGUARD. No ad interim relief appears to have been granted. When the interim application came up for hearing, the suit had also reached the trial stage.

In support of its case, Pidilite relied on the following, among other things:

1. its prior use and registration of the mark since 1999 (Hardcastle & Waud had applied to register HOLDTITE LEAKGUARD in 1999 and subsequently assigned its rights to Pidilite);

2. the argument that acquisition of secondary meaning is not a pre-requisite for the grant of an injunction in a passing-off action, even in relation to a descriptive mark;

3. the argument that, in a passing-off action, the plaintiff is required to prove only "distinctiveness in fact" and not "distinctiveness in law" (which is required in an infringement action); and

4. New Era’s application for registration of the mark LEAKGUARD, which implied New Era’s acceptance that the mark was capable of acquiring "distinctiveness in fact".

In its defence, New Era relied on the following, among other things:

1. its use of the mark since 2001 and the fact that Pidilite had only produced scant evidence of use of the mark between 2001 and 2008;

2. the withdrawal of its trademark application for the said mark;

3. the fact that the suit had reached the trial stage made the interim injunction unnecessary;

4. Pidilite’s failure to demonstrate that the mark had acquired distinctiveness/secondary meaning, given that the mark is descriptive;

5. the fact that Pidilite does not use the mark LEAKGUARD on a standalone basis;

6. Pidilite’s concealment of the fact that its trademark registration was subject to a specific disclaimer for the word 'leakguard'; and

7. Pidilite’s acquiescence in relation to New Era’s use of the mark since 2001.

After hearing the parties, the court dismissed Pidilite’s application for interim relief, primarily on the ground that mere prior use without continuous use (pointing to scant use of Pidilite’s mark between 2001 and 2008) and acquisition of secondary meaning was insufficient to support a claim of passing off in a case involving descriptive marks.

Pidilite had acquired the mark LEAKGUARD from its predecessor in February 2008, thinking that it would enjoy exclusive rights in the same. Coincidently, New Era also appears to have applied for the registration of the mark in February 2008. Usually, in an acquisition, the acquirer conducts due diligence regarding any conditions/disclaimers to the registration of the mark to be acquired, and the existence of third-party rights to similar marks. It would be interesting to check whether Pidilite considered the implications of the disclaimer on the word 'leakguard' and the presence of New Era’s LEAKGUARD product in the market during the acquisition. The decision also shows that the due diligence should consider the continuous use of the mark to be acquired, which was a major factor in this case.

Adheesh Nargolkar, Shailendra Bhandare and Meetha Pai, Khaitan & Co, Mumbai