Jeweller prevented from using own family name

In Precious Jewels v Varun Gems, the Delhi High Court has restrained the appellant/defendant, Precious Jewels, from using the family name Rakyan in a manner infringing the trademark RAKYAN’S FINE JEWELLERY of respondent/plaintiff Varun Gems.  

The Rakyan family entered the jewellery business in 1951, with Sital Dass Rakyan setting up a sole proprietorship in the name of Sital Dass and Sons. Subsequently, his sons and various other members of the family continued in the jewellery business, and established partnerships and shops in the cities of Jaipur and Delhi. The appellant and the respondent are members of the same family. 

The respondent started a business in the name of Varun Gems in 1998 and set up a shop in Greater Kailash, New Delhi, under the name Rakyan Fine Jewellery in 2000. The appellant, on the other hand, had been operating an independent business under the name Rakyan Gems at a different location within New Delhi. In 2011 the appellant opened a shop next to that of the respondent under the name Diamez. The respondent claimed that the name Diamez was chosen after the respondent asked the appellant not to use the family name as it might lead to confusion among customers. However, in 2012 the appellant changed the name of its shop to Neena & Ravi Rakyan.

The respondent brought suit against the appellant, claiming that the appellant’s action amounted to trademark infringement and passing off. The appellant argued that it had been using the mark since 1986 and that Rakyan is a surname - as surnames are protectable under the Indian Trademarks Act 1999, the respondent’s suit could not be maintained. The suit was filed in June 2012 and an ex parte ad interim injunction was issued against the appellant, restraining it from using the name Rakyan. The appellant then filed responses to the suit and the matter was heard by a single judge. When the hearing date for the matter was pushed back to March 2013, the appellant brought this appeal, citing the losses caused by the continuation of the interim order issued against it. 

Before the court, the appellant contended, among other things, that it was a prior continuous user of the trademark RAKYAN and that its use of the surname as a trademark was protected under the act.

The respondent argued that the mark RAKYAN, while not a common family name, was an essential and integral part of its registered trademark RAKYAN’S FINE JEWELLERY. The respondent stated that, when the appellant opened its shop next to that of the respondent, the appellant had been asked not to use the name Rakyan as it could lead to confusion. It argued that the appellant had agreed at the time, but had subsequently changed the name of the shop in a clandestine manner in order to fraudulently benefit from the reputation and goodwill of the respondent.

The respondent also argued that the appellant was not a continuous prior user of the mark, since there was no commercial use of the name Rakyan Gems by the appellant. The respondent also submitted that it had no objection to the use of the trade name Neena & Ravi Rakyan in different locations, but that any use of that name in the adjoining shop would lead to confusion and deception.

The judgment of the court provides a comprehensive overview of the current Indian jurisprudence with regard to a number of principles used to determine infringement and passing-off cases.

• Continuous prior user - the court considered the various documents provided by the parties, including partnership deeds, tax certificates and sales vouchers. Noting that the standard of proof of continuous prior use in a case of infringement is strenuous and rigorous, the court examined the extent of use of the trademark by the appellant, as well as the nature of the use. The court noted that not a single sale or advertisement had been made by the appellant under the name Rakyan Gems. Accordingly, the court held that the appellant had not established continuous prior use or concurrent use of the mark.



• Surname - the court looked into the claim that Rakyan was the surname of the appellant, as well as a number of other families conducting business under that name in various locations. The appellant also claimed that, if the respondent had no objection to the use of the name Rakyan by other families or by the appellant in different locations, use of the name by the appellant in the present location should be protected under Section 35 of the act. That provision states that the owner of a registered trademark cannot interfere with a person’s good-faith use of his own name.
  
  The court considered the definition of 'good-faith use', particularly the following issues: first, whether it could be proved that the respondent’s mark had acquired a secondary meaning so as to denote the goods of the respondent; second, if secondary meaning had been acquired, whether the appellant had described its goods in such a way that there was a likelihood of confusion among a substantial section of customers with regard to the goods of the parties.
  
  The court noted that the appellant had intentionally and deliberately used the name Rakyan by placing signboards at a shop that was adjacent to that of the respondent. The court held that there was a clear lack of good-faith intention in the appellant's use of the name and that the appellant was using the name Neena & Ravi Rakyan as a trademark and not as a good-faith description. 



• Infringement and passing off - the court examined the jurisprudence concerning the test for infringement of a trademark, which is based on (i) the legal effect of the registration of the mark, (ii) whether the respondent’s mark contains the essential features of the plaintiff’s mark, and (iii) the likelihood of confusion and deception. On the issue of passing off, the court noted the basic principles laid down by the Supreme Court: "when a person adopts a name which already belongs to someone else, it results in confusion, has the propensity of diverting the customers and clients of someone else and thereby results in injury". The court specifically looked at earlier passing-off cases in which the defendant had used its own name. On both issues, the court noted that the respondent in the present case had established that the appellant’s use of the name Rakyan could lead to infringement and passing off, due to the inevitable confusion and deception caused by the appellant’s use of a similar name in a shop adjoining the respondent’s shop.



• Proposal to continue to use the name Rakyan in a certain manner - during the course of the hearing, the appellant proposed to use the name Rakyan in a descriptive manner as a part of the trade name of the shop. Citing a number of cases previously brought before it, the court noted that, while the good-faith use of one's name is an established right, the case law has also stated that, if such use of one's name was likely to deceive, there would be no defence to an action of passing off.

Keeping these principles and the facts in mind, the court held that the appellant should not be allowed to use the name Rakyan in relation to a business similar to that of the respondent in any manner whatsoever. The court did however allow the appellant to use the description “A Unit of Neena and Ravi Rakyan” in its invoices, stationary and packing materials, among others. The appellant was also allowed to use the expression “A Unit of Neena and Ravi Rakyan” as a description, trade name or trademark in any shops run by the appellant in other locations.  

The appeal was dismissed without costs and the matter will be tried on the merits when it comes up for final hearing.

Smitha Prasad, Rakhi Jindal and Vivek Kathpalia, Nishith Desai Associates, Mumbai