Delhi High Court says no to 'Groupon clone'

India

In an action filed by Groupon Inc, a US-based company, against Mr Mohan Rao and his company, Value Net Ecommerce Pvt Ltd, the Delhi High Court has restrained the latter from using the mark GROUPON and/or any deceptive variations thereof.

The court had granted an ex parte interim injunction on May 27 2011, and Value Net had applied to set aside the injunction order. The court, after hearing the submissions of both parties, confirmed the injunction granted in favour of Groupon. The case highlights the role of the Internet in the dissemination of information and goodwill.

In support of its case, Groupon submitted as follows:

  • Its predecessor in interest had adopted the mark GROUPON, coined from a combination of 'group' and 'coupon', in 2002. From 2008 onwards, it had offered online audiences daily discounts on products and services under the name and brand Groupon through its website at 'www.groupon.com', which features daily deals on products and services in more than 40 countries.
  • The mark GROUPON is registered in the United States since September 2009.
  • In addition to 'www.groupon.com', it owned hundreds of other domain names which incorporate the mark GROUPON, including several country-specific domain names such as 'groupon.de', 'groupon.jp', 'groupon.sg' and 'groupon.kr'. In India, Groupon is the registrant of the domain name 'www.groupon.co.in', registered on September 22 2009.
  • Groupon’s website at 'www.groupon.com' receives a significant amount of traffic from India and, in the fourth quarter of 2010 alone, over 30,000 visitors with Indian IP addresses visited the website, which evidenced its popularity. The application for registration of the trademark GROUPON in India was pending.
  • In September 2010 Groupon became aware that Value Net had registered the domain name 'www.groupon.in' and had also applied for registration of the mark GROUPON. Subsequent discussions between the parties for amicable settlement did not materialise.
  • It had used the mark GROUPON since 2008, while it was only on September 12 2009 that Value Net, through Mr Mohan, had sought to adopt the mark GROUPON by registering the domain names 'groupon.in', 'grouponindia.com', 'groupoff.in' and 'groupoff.com' - by that date, Groupon already had a huge subscriber base and had been operating under the mark GROUPON for over a year.
  • By the time Value Net sought to sell its first coupon in February 2011, Groupon had already acquired considerable amount of trans-border reputation that had spilled over into India on account of coverage in various international magazines and websites.

Therefore, due to the prior adoption, use and trans-border reputation of the mark, Groupon claimed that it was entitled to restrain Value Net from adopting the GROUPON mark.

In its defence, Value Net argued as follows:

  • It was the prior user of the mark GROUPON in India. The domain names 'groupon.in' and 'grouponindia.com' were registered on September 12 2009, which predated the date on which the mark GROUPON was adopted by the plaintiff in India (2011). The GROUPON mark was registered as a trademark in their favour.
  • As per Groupon’s own averment, it had not made any use - actual or otherwise - of the mark GROUPON in India in September 2009, when Value Net started using the mark.
  • Groupon had applied for registration of the mark GROUPON in India in March 2010 on a 'proposed to be used' basis. Therefore, as of March 2010, Groupon was not clear about its intention to extend its services to India.
  • Groupon had failed to prove that it had a strong goodwill and reputation in India prior to September 2009, which is when Value Net commenced its business under the mark GROUPON. Therefore, as of September 2009, Value Net could not be said to have been passing off its services as those of Groupon, as the latter did not enjoy any goodwill or reputation in India.
  • Groupon had failed to place on record any substantive evidence in the form of advertisements, journals, coverage in magazines or brochures. Therefore, transborder reputation could not be inferred.

After a detailed hearing, the court held as follows:

  • The documents on record showed that Groupon was the prior adopter and user of the mark GROUPON globally.
  • Until September 2009, Value Net was undisputedly not in the business of offering online discount vouchers.
  • By the time Value Net sold its first coupon on 'www.groupon.in' in February 2011, Groupon had already been offering its services for over two years. Groupon offers its services in cyberspace, and not through physical products. In the era of internet technology, the dissemination of information is instant, as it is not constrained by territorial boundaries.
  • The presence of social networking websites have made it possible for an organisation to advertise its services and products online, thereby reaching thousands of people worldwide instantaneously, as opposed to conventional modes of advertising through journals and magazines.
  • Groupon had established that its goodwill had spilled over into India prior to Value Net's adoption of the trademark.

In view of the above findings, the court dismissed the application filed by Value Net for setting aside the injunction and confirmed the injunction granted in favour of Groupon.

Mohandas Konnanath, RNA Intellectual Property Attorneys, Gurgaon  

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