Delhi High Court recognises that MICROSOFT is well-known mark

In Microsoft Corporation v Kurapati Venkata Jagdeesh Babu (CS(OS) 2163/2010 & IA No 14225/2010), plaintiff Microsoft Corporation has been granted a permanent injunction and damages by the Delhi High Court against defendant Microsoft Multimedia Pvt Ltd. The permanent injunction order was issued within the context of a trademark infringement and passing-off action filed by the plaintiff for infringement of its rights in the trademark MICROSOFT. The defendant had registered the domain name 'microsoftmultimedia.com', incorporated a company under the Companies Act using 'Microsoft' as part of its trading name and had applied for registration of MICROSOFT MULTIMEDIA as a trademark.

The plaintiff, a company incorporated in the United States, is reported to be the largest software publisher for personal and business computing in the world. The plaintiff’s software is installed and used on millions of computers in numerous countries, including India. The plaintiff claimed that the trademark MICROSOFT is one of the most famous and well-known trademarks in the world, and is identified by the purchasing public as relating exclusively to the goods and services of the plaintiff. Further, according to the Forbes list of the most powerful brands of 2013, MICROSOFT is the second most valuable brand in the world.

In July 2010 the plaintiff became aware of the defendant’s trademark application for MICROSOFT MULTIMEDIA in Class 41 of the Nice Classification for services in relation to education and training. The plaintiff's enquiries revealed that the defendant had also registered the domain name 'microsoftmultimedia.com'. The plaintiff opposed the trademark application, which was subsequently abandoned for non-prosecution. Pursuant to the filing of the present suit, an ex parte ad interim injunction was passed in favour of the plaintiff, restraining the defendant from using the mark MICROSOFT in relation to services or products, and from using the name Microsoft in any way in their domain name and trade name.

The defendant failed to enter an appearance despite service of summons and the suit proceeded ex parte. The plaintiff adduced ex parte evidence by examining witnesses and filed extensive documents to substantiate its use of the MICROSOFT mark.

In considering the case, the court discussed the differences between the trademark infringement provisions contained in Clauses (4) and (5) of Section 29 of the Trademarks Act 1999. The court was of the view that Section 29(5) relates to a situation where:

1. the infringer uses the registered trademark as its trade name or as part of its trade name, or as the name of its business concern or as part of that name; and
2. the infringer's business concern or trade concerns the same goods or services as those for which the trademark is registered.

The court opined that Section 29(5) is a 'no-fault' provision, which offers a higher degree of protection if both the abovementioned elements are shown to exist. In other words, for the purpose of Section 29(5), there is no requirement to show that the mark has a distinctive character or that any confusion is likely to result from the use of a registered mark by the infringer as part of its trade name or name of its business concern.

However, if the infringer is trading in goods not covered by the registered mark, then the second requirement of Section 29(5) is not fulfilled. In such a situation, one may rely on the protection conferred to well-known marks under Section 29(4) of the act, if the conditions set out in that provision are fulfilled:

1. the party using the infringing mark is not a registered proprietor in relation to the goods and services for which the mark is registered and does not use it by way of permitted use;
2. the infringing mark is used in the course of trade;
3. the infringing mark is either similar or identical to the registered mark;
4. the infringing mark is used for goods or services that are different from those for which the mark is registered;
5. the registered trademark has a reputation in India; and
6. use of the infringing mark is without due cause, and takes unfair advantage of, or is detrimental to, the distinctive character or reputation of the registered trademark.

The court, having considered the affidavit and evidence placed on record, held that the plaintiff’s MICROSOFT mark is a well-known trademark and that the defendant was not entitled to use it either as a trademark or as part of its corporate name in relation to similar or dissimilar goods, as the MICROSOFT mark benefits from extensive goodwill and reputation. In view of the above, the court issued a permanent injunction in favour of the plaintiff.

The court awarded Rs200,000 (approximately $3,000) to the plaintiff as compensatory damages, and Rs300,000 (approximately $4,500) as punitive/exemplary damages, as well as damages on account of loss of reputation and goodwill. The court also awarded the plaintiff Rs50,000 (approximately $850) in costs.

Mohandas Konnanath, Ranjan Narula Associates, Gurgaon