Delhi High Court issues landmark judgment in BLOOMBERG dispute

In Bloomberg Finance LP v Saklecha (IA No 17968 of 2012 in CS(OS) No 2963 of 2012), the Delhi High Court has held that plaintiff Bloomberg Finance LP had established prima facie that use of the name Bloomberg by the defendants constituted infringement and passing off of its trademark BLOOMBERG. While the plaintiff, a multi-national corporation, had been using the BLOOMBERG mark globally since 1982, the defendants had started using the mark as part of their corporate and trade name in 2011. The court took into consideration the well-known character of the plaintiff’s mark and its trans-border reputation, as well as its reputation in India, and granted an interim injunction in favour of the plaintiff, even though the goods and services offered by the defendants were not identical or similar to those of the plaintiff.

The plaintiff is a multi-national financial news corporation, established in 1982 in the United States. It also has an Indian subsidiary/associate company. The plaintiff has been using the BLOOMBERG mark in over 100 countries for many years, and in India since 1996. In order to protect the value of its mark, the plaintiff has taken an assignment of the registered BLOOMBERG mark in Classes 9, 16, 35, 36, 38, 41 and 42 in India from its predecessor-in-interest, and has registered over 1,000 domain names (including at least six domain names under the Indian country-code top-level domain) incorporating the BLOOMBERG mark. The plaintiff launched a television news channel under the name Bloomberg UTV in 2008, providing its mark with increased visibility among the Indian audience.

There were 36 defendants in the present suit. Defendants 1, 2 and 26 to 36 are the directors of several of the defendant companies. Defendant 4 originally operated under the name Smart Developers Pvt Ltd, but changed its corporate name to Bloomberg Developers Pvt Ltd in August 2011. Defendants 3 and 5 to 25 all used the word ‘Bloomberg’ as a part of their corporate name. In addition, Defendant 3 has also filed several trademark applications containing the word ‘Bloomberg’.

Upon becoming aware of the defendants' activities in January 2012, the plaintiff:

• sent a cease and desist letter requesting that the defendants stop using the Bloomberg name as part of their corporate names;
• filed applications under Section 22 of the Indian Companies Act 1956 requiring the defendants to change their corporate names;
• published a trademark caution notice in prominent newspapers in India; and
• started proceedings before the National Arbitration Forum in the United States to have the domain names registered by the defendants handed over to it.

The plaintiff then learnt that defendant Bloomberg Realty (India) Pvt Ltd was sponsoring a conference in the United States, and was referring to itself as being part of the Bloomberg Group. The plaintiff brought an action for trademark infringement and cybersquatting against Bloomberg Realty and obtained a temporary restraining order from the US District Court for the Southern District of New York.  

However, the defendant continued to use the Bloomberg name and mark in India, and even associated themselves with a Hindi feature film through Bloomberg Entertainment Private Limited (Defendant 5). The plaintiff believed that such an association with the media and film industry was detrimental to its reputation, as a film released by a 'Bloomberg' company was likely to mislead the public as to the involvement of the plaintiff. The plaintiff thus filed the present suit. 

The plaintiff argued that:

• the defendants openly stated on their websites and elsewhere that they aimed “to be one of the global business conglomerates”, and claimed in various proceedings to have a net worth of $1 billion, when in reality the majority of the defendant companies have not conducted any real business;
• the defendants used the Bloomberg name unfairly for their own financial gains and tried to misappropriate the name in the United States and other jurisdictions;
• the defendants registered 'Bloomberg' as their trade name without the authorisation or consent of the plaintiff;
• while the plaintiff’s name and trademark was inspired by its founder, Michael R Bloomberg, the defendants had no justification for using the BLOOMBERG mark;
• the defendants' use of the BLOOMBERG mark aimed to divert the business of the plaintiff and irreparably damaged the reputation and goodwill of the plaintiff;
• the defendants' use of BLOOMBERG without authorisation misled investors and the public; and
• the defendants’ use of BLOOMBERG in connection with a Hindi film was detrimental to the reputation of the plaintiff.

The plaintiff thus sought to restrain the defendants from infringing its trademark, passing off their goods and services as those of the plaintiff and/or diluting the BLOOMBERG trademark. 

The defendants argued that:

• the defendant’s mark BLOOMBERG, which is a combination of the English words ‘bloom’ and ‘berg’, was being used in good faith;
• one of the defendants changed its corporate name to include the word ‘Bloomberg’ since most of its building projects were named after flowers and were considered to stand "tall like the hills and mountains";
• one of the defendants used the mark BLOOMBERG along with an artistic depiction of a "flower in bloom" in order to enhance the distinctiveness of its mark;
• the defendants incurred a huge expenditure on advertisement and marketing in relation to their various business activities and acquired a reputation and goodwill in relation to the goods and services they offer;
• the mark BLOOMBERG is not known in India, and the goods and services offered by the plaintiff on the one hand, and the defendants on the other, were unrelated;
• the defendants were the prior, good-faith users of the mark in India; and
• the defendants have initiated rectification proceedings before the Intellectual Property Appellate Board against the registration of the BLOOMBERG mark in the name of the plaintiff.  

The court passed an interim order on September 27 2012, restricting the defendants from:

• using the name Bloomberg in association with the film Deewana Main Deewana; and
• registering any new companies or domain names including the word ‘Bloomberg’.

During the course of further submissions, the defendants argued that their services differed from those of the plaintiff and offered to provide an undertaking that:

• they would not enter into the film/televised news/financial data fields;
• they would use the mark BLOOMBERG only for their real estate business and would stop using all other corporate names including the word ‘Bloomberg’; and
• they would issue a disclaimer stating that they are in no way associated with the plaintiff’s business.

The plaintiff refused to accept such an undertaking, on the ground that the defendants' limited use of the BLOOMBERG mark for their real estate business would adversely affect the reputation and distinctive character of the plaintiff’s mark. 

The Delhi High Court, before examining the facts, revisited the statutory provisions of the Trademarks Act 1999 and reflected on some important judicial precedents, such as Raymond Limited v Raymond Pharmaceuticals Pvt Ltd (2010 (44) PTC 25 (Bom) (DB)) and ITC Limited v Philip Morris Products SA (2010 (42) PTC 572 (Del)).

The court held that there are two distinct situations:

• Where the business/goods and services of the infringer differ from those of the registered owner of the trademark, the latter can seek a remedy under Section 29(4) of the act, which requires the plaintiff to establish that:
  • its mark has a reputation in India;
  • its mark is used by the defendant without due cause; and
  • such use of the mark by the defendant takes unfair advantage of the plaintiff’s mark and is detrimental to the distinctiveness and reputation of the plaintiff’s mark.
• Where the business/goods and services of the infringer are the same as those of the registered owner of the trademark, Section 29(5) of the act provides that a registered mark is considered infringed if the infringer uses the mark as a part of its trade name.

The court expressed the view that, although Section 29(5) specifically deals with situations where the infringement is by way of use of the trademark as part of the corporate/trade name of the infringer, it is also limited to situations where the goods and services offered by the infringer are identical or similar to those of the registered proprietor of the trademark. Section 29(4), on the other hand, does not refer to the use of the trademark as a corporate/trade name by the infringer. The court noted the absence of a specific requirement in Section 29(4), and further examined the object and purpose of the provisions of Section 29. Upon such examination, the court concluded that Section 29(5), by itself, cannot be intended to be exhaustive of all the situations of use of a trademark as part of a corporate name. It held that, where both conditions under Section 29(5) are not met, the trademark proprietor has the option of seeking a remedy under Section 29(4), by showing that:

• the mark has a reputation in India;
• the mark has been used by the infringer without due cause; and
• such use by the infringer is detrimental to the reputation and distinctiveness of the proprietor’s mark.

According to the court, the documents and materials on record were sufficient to show that:

• the mark BLOOMBERG has been adopted by the plaintiff, which has operations worldwide, and Bloomberg is a well-known brand name;
• the defendants' explanations for the adoption of the BLOOMBERG mark were not convincing;
• the fact that the defendants registered a number of companies under the name Bloomberg within a short period of time indicated that the defendants were trying to cash on the goodwill of the plaintiff for their own financial benefits, by presenting themselves as being part of a large corporate conglomerate, when in fact a number of the defendant companies were not conducting substantial business; and
• the association of the plaintiff’s mark with the construction and real estate industry would be detrimental to the distinctive character of the mark, thus leading to its dilution.

In light of the above, the court concluded that the plaintiff had a prima facie case under Section 29(4) of the act. In addition, the court stated that the registration of the mark by the defendants in Class 43 would not in itself preclude the plaintiff from refraining the defendants from using the mark.

Regarding the plaintiff’s claim that the defendants were passing off their goods and services as those of the plaintiff, the court referred to several important decisions, such as that of the Supreme Court in Cadila Health Care v Cadila Pharmaceuticals (2001 21 PTC 300 (SC)) and explained that a well-known mark “comes to signify certain qualities that transcend the goods and services for which it is registered”. Relying on these cases and the well-known nature of the mark, the court opined that it would not be inconceivable that the defendants' customers, as well as investors in the real estate industry, may associate the activities of the defendants with the plaintiff. In light of this, the court held that the fact that the plaintiff and the defendants operate in different fields was not a good defence in an action of passing off involving a well-known mark.

In light of the above, the court upheld the injunction issued in September 2012, and restrained the defendants from:

• using the word ‘Bloomberg’ as part of their corporate name;
• incorporating new companies or entities whose name includes words identical or deceptively similar to the plaintiff’s mark;
• using the BLOOMBERG mark as a part of their trademark, corporate name, domain name, in advertising material or in any manner whatsoever, thereby passing off their goods and services or business as those of the plaintiff; and
• using the trademark and name Bloomberg in any manner whatsoever.

The court gave the defendants six weeks to complete the statutory formalities to change their company names.

Smitha Krishna Prasad, Aarushi Jain and Gowree Gokhale, Nishith Desai Associates, Mumbai