Delhi High Court upholds Larsen & Toubro's rights in L&T mark

A final order of permanent injunction has been passed by the Delhi High Court in an action for trademark infringement, passing off and rendition of accounts filed by the plaintiff, Larsen and Toubro Ltd (L&T), against the defendants, Lachmi Narain Traders and others. The case proceeded to trial while the interim injunction operated in favour of the plaintiff. The court came to the conclusion that, in a passing-off action where the marks are similar and confusion is apparent, it is irrelevant whether the other party acted fraudulently or otherwise.

The plaintiff contended as follows:

1. It is a company incorporated under the Companies Act 1956, and carries on business as engineer, construction contractor and manufacturer of switch gears, among others.
2. The history of the plaintiff dates back to 1938 when two Danish nationals, Henning Holk-Larsen and Soren Kristian Toubro, formed a partnership. In 1946 this partnership was incorporated into a limited company and the name of the plaintiff contains the surnames of the two partners.
3. Since incorporation, the plaintiff has been carrying on business in India. Over the years, the name Larsen and Toubro has acquired distinctiveness in respect of various goods and services, and the short form 'L&T' brings the plaintiff's name to the mind of any person.
4. The plaintiff has obtained registrations for the marks LARSEN AND TOUBRO and L&T in various classes.
5. The words 'Larsen' and 'Toubro' have acquired such distinctiveness that any use by an individual or company of the word 'Larsen' or 'Toubro' or of the abbreviation 'L&T' is bound to cause confusion among traders and members of the public. The abbreviation 'L&T' has acquired a secondary meaning and is associated exclusively with the plaintiff.
6. In the first week of June 2003, the plaintiff learnt that the defendants were using the name/abbreviation 'LNT'/'ELENTE' as a brand name for their electrical goods, including electrical distribution systems such as miniature circuit breakers.
7. Thereafter, the plaintiff sent a cease and desist letter to the defendants asking them to cease use of the brand name 'LNT'/'ELENTE' in relation to their business. However, the defendants failed to comply.

The defendants contended as follows:

1. They have been carrying on business under the trade name Lachmi Narain Trades since April 2001, and applied for registration of LNT as a trademark on April 17 2001. They had commenced trade under the brand name LNT in relation to electric miniature circuit breakers, electric rotary switches, electric PVC insulating tape and electric fluorescent chokes.
2. 'LNT' is the abbreviated form of its firm name Lachmi Narain Trades and, ever since the company launched its products, extensive advertisement has been carried out for the LNT brand.
3. In 2002 the representatives of the plaintiff met the defendants to talk about the miniature circuit breakers sold by them. After the discussion, it was decided that the defendants would change the colour and packaging of their goods and that, thereafter, the plaintiff would have no further objection.
4. The plaintiff has acquiesced in the defendants' use of the brand name LNT, as it was aware that the defendants have been using the brand name 'LNT'/'ELENTE' since April 2001. There was also a delay in filing the action.
5. The brand name 'LNT'/'ELENTE' is not similar to the trademark L&T used by the plaintiff and, as the conflicting products also differed, there was no confusion and deception.

After considering the pleadings, evidence and case law relied on by the parties, the court made the following findings:

1. With regard to passing off, a party may sell its goods or deliver its services under a trade name or style. With the lapse of time, the goods or services associated with that party acquire a reputation or goodwill, which becomes a property protected by the courts. When a competitor starts to sell goods or services under an identical a similar name, it results in injury to the business of the party which has rights in that name. Therefore, the law does not allow a party to carry on business in such a way as would mislead customers into believing that goods or services belonging to someone else originate from that party or are associated with it. It does not matter whether that party does so fraudulently or otherwise. In the instant case, the rival marks L&T and LNT/ELENTE were deceptively similar and the risk of confusion and deception was apparent.
2. With regard to the issue of delay, the defendants had no case as they were the former stockist of the plaintiff’s product. The adoption of the mark LNT was tainted and dishonest. Whenever a new deceitful act is committed, the party deceived has a new cause of action in its favour. Thus, every time a party passes off its goods as those of another, it commits a deceitful act. Similarly, whenever a party infringes a registered trademark, it commits a recurring act of infringement, thereby creating a recurring and fresh cause of action for the aggrieved party.
3. The defendants argued that the mark LNT is registered in the name of a third party and that the plaintiff had taken no action in this regard. The court, however, observed that no issue had been framed and no evidence had been produced in this regard.

In view of the above, the court passed a decree for permanent injunction restraining the defendants from using, in any manner and in relation to any of its business/services/goods, the name/abbreviation 'LNT'/'ELENTE' or any other sign deceptively similar to the plaintiff’s L&T mark.

Mohandas Konnanath, RNA Intellectual Property Attorneys, Gurgaon