Delhi High Court: reputation is not limited by physical boundaries

India

In Enterprise Holdings Inc v Enterprise Auto Rentals (CS(OS) No 489/2013), the Delhi High Court has confirmed its ex parte interim injunction order restraining defendant Enterprise Auto Rentals from offering vehicle rental and leasing services under the trademark and trade name ENTERPRISE or ENTERPRIZE, or any other deceptively similar mark. Interestingly, although plaintiff Enterprise Holdings had no physical business presence in India, it was able to show the spill-over reputation of its mark in the country through marketing activities and web presence.

In its complaint, Enterprise Holdings averred as follows:

  • It adopted the mark ENTERPRISE in 1969 in the United States for car rental and leasing services as a tribute to the World War II ship USS Enterprise, on which the company's founder served.
  • It has provided car rental services under the mark ENTERPRISE in Canada, the United Kingdom, Ireland and Germany for many decades, and subsequently expanded into France, Spain, Italy and Portugal.
  • In 2008 it had 1.1 million vehicles in its service.
  • It has been promoting and advertising the trademark ENTERPRISE in India since 2007.
  • Its mark is enlisted with the International Air Transport Association, which has around 4,200 travel agents from India and uses the ENTERPRISE mark.
  • Its website received 545,477 hits during 2009 alone from internet services providers based in India.
  • People travelling from India have availed of its services offered under the mark ENTERPRISE.
  • Its ENTERPRISE mark is registered in India in Class 39 for vehicle rental and leasing services. Another application for the mark ENTERPRISE is pending registration. In addition, the mark is registered for these services in many other countries.
  • It had sales revenue of $15.4 billion in 2012.
  • Its services offered under the mark ENTERPRISE have received various international awards.
  • Its ENTERPRISE mark is well known in India due to its trans-border reputation and to marketing activities directed to India since 2007.
  • Although it had put Enterprise Auto Rentals on notice of its rights in the mark ENTERPRISE by way of a cease and desist notice, the latter did not stop using the marks ENTERPRISE/ ENTERPRIZE.
  • Enterprise Auto Rentals' partners had previously worked with a direct competitor of Enterprise Holdings in the same line of business. Therefore, they were fully aware of the existence of Enterprise Holdings and its reputation before they started offering their services under the marks ENTERPRISE/ ENTERPRIZE.
  • Enterprise Auto Rentals’ adoption and use of identical or substantially similar marks amounted to infringement of its registered trademark and passing off.

In its reply, Enterprise Auto Rentals argued as follows:

  • The court has no territorial jurisdiction to entertain and try the action.
  • The registration referred to by Enterprise Holdings pertained to the mark E-ENTERPRISE, not ENTERPRISE.
  • It had filed a cancellation action against Enterprise Holdings' registration for E-ENTERPRISE, which was pending.
  • It had used the mark ENTERPRISE since 2010 and thus was the prior user of the mark in India. Moreover, 'enterprise' is a generic, descriptive word which cannot be monopolised as a trademark by a single entrepreneur.
  • There are more than six applications and registered marks including the word 'enterprise' on the register in Class 39. It was the honest and good-faith concurrent user of the mark ENTERPRISE for car rental services in India.
  • It had acquired a reputation of its own in the market under the mark ENTERPRISE.

In its rebuttal arguments, Enterprise Holdings mainly argued as follows:

  • Enterprise Auto Rentals offers services under the mark ENTERPRISE and ENTERPRIZE within the National Capital Territory region, including Delhi. Therefore, the suit was not barred by jurisdiction.
  • The word 'enterprise' is the dominant part of its registered mark E-ENTERPRISE in Class 39.
  • As Enterprise Auto Rentals itself sought to claim trademark rights in ENTERPRISE, it could not also claim that the word 'enterprise' is generic.
  • Enterprise Auto Rentals was not the prior user of the mark ENTERPRISE/ENTERPRIZE. The mark ENTERPRISE was first used by Enterprise Holdings in 1969. Enterprise Holdings also placed on record certain documents showing use of its mark in India from 2004.
  • Enterprise Auto Rentals had made a contradictory claim of use in its cancellation petition by alleging use for many decades. Therefore, there was fraud on the registrar of trademarks as Enterprise Auto Rentals gave a wrong date of use.

The court ruled in favour of Enterprise Holdings and made the following key observations:

  • It was the admitted position that the essential feature of the mark ENTERPRISE is registered in favour of Enterprise Holdings.
  • Use of the word 'enterprise' by others cannot be a defence available to Enterprise Auto Rentals, if it can be shown that the term is being used in violation of the statutory rights of Enterprise Holdings.
  • As regards Enterprise Auto Rentals' statement that the mark ENTERPRISE/ ENTERPRIZE is common in the trade, no cogent evidence had been produced to show such third-party use. A long list of applicants/ registrants for a mark cannot, on its own, dent the distinctive character or repute of a mark.
  • The concept of passing off has undergone changes due to the advent of technology and modernisation. Local business presence is no longer an essential requirement in a passing-off action. Thus, localised goodwill and business in a specific territory can be excused if a substantial reputation (by virtue of advertisement in newspapers, media circulation, reputation abroad, internet/web presence and other relevant factors), which has some kind of nexus in the territory where protection is sought, has been proven.

This decision recognises that social media and the Internet have changed the business landscape. The reputation of a business can travel without an actual physical presence in India. However, mere reputation may not be sufficient; it must be proven that reputation has spilled over to reach consumers in India.

Daleep Kumar, Ranjan Narula Associates, New Delhi 

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