The Hon'ble High Court of Delhi in KARIM HOTELS PVT LTD & ANR versus NIZAMUDDIN & ANR [CS(COMM) 241/2018 held on May 3, 2024] that the defendants were infringing the plaintiffs' registered trademark "KARIM'S" and artistic works by using a deceptively similar mark "KARIN'S" for their restaurant services.
Facts of the Case:
The plaintiff no. 1, Karim Hotels Pvt Ltd, is the registered proprietor of the trademark "KARIM'S" used for their renowned chain of restaurants serving Mughlai cuisine. The "KARIM'S" mark was first adopted by Mr. Haji Karimuddin in 1913 and was subsequently bequeathed to his lineal descendants. In 1987, Mr. Karimuddin's heirs constituted the plaintiff no. 1 company to develop their business operations. Plaintiff no. 1's first trademark registration for the label "KARIM'S" dates back to December 24, 1998 in class 29. Over time, they secured numerous other registrations for stylized variants of their "KARIM'S" trademarks across classes 16, 30 and 43. Plaintiff no. 1 also asserts copyright protection over the artistic works comprising these registered labels.
The plaintiff no. 2 is Karim's Mughlai Foods, a sole proprietorship of one Mr. Asifuddin. Plaintiff no. 1 had granted a license to plaintiff no. 2 authorizing the use of the "KARIM'S" trademarks for commercial exploitation in relation to restaurant services. Pursuant to this arrangement between the plaintiffs, plaintiff no. 2 secured a lease dated May 1, 2008 for premises situated at Plot No. 169, Adarsh Nagar, Ghaziabad, owned by defendant no. 2. The lease agreement was executed between plaintiff no. 2 and defendant no. 1, who is the son of defendant no. 2. As per the agreement, defendant no. 1 would lease the premises along with culinary equipment and furniture to plaintiff no. 2 for operating a restaurant. In return, plaintiff no. 2 would pay defendant no. 1 a fixed commission of 12% of the restaurant's sales. The agreement stipulated that the trade name and goodwill of the "KARIM'S" mark would vest in plaintiff no. 2.
Subsequently, when the restaurant operations failed to meet expectations, plaintiff no. 2 opted to terminate the Lease Agreement in November 2009 by paying the pre-determined severance fee of Rs. 10 lakhs to defendant no. 1. Consequently, plaintiff no. 2 and defendant no. 1 entered into a Cancellation Agreement on November 1, 2009. As per this agreement, defendant no. 1 undertook not to use the "KARIM'S" trademark or any other deceptively similar mark in any manner going forward.
In November 2010, the plaintiffs learnt that the defendants, in contravention of the Cancellation Agreement, were using a deceptively similar mark "KARIN'S" along with the plaintiffs' registered "KARIM'S" marks and artistic works for a restaurant at the leased premises. The plaintiffs issued a cease-and-desist notice to the defendants on November 22, 2010. The defendants apparently halted the infringing activities but resumed them again in April 2012.
Aggrieved by the defendants' infringement of their trademark rights and copyright, the plaintiffs filed the present suit CS(COMM) 241/2018 before the Delhi High Court seeking permanent injunction, rendition of accounts, damages and costs against the defendants.
Issue:
Whether the defendants, by using the mark "KARIN'S", were infringing the plaintiffs' registered trademark "KARIM'S" and artistic works.
Held by the Court:
The Hon'ble High Court of Delhi in CS(COMM) 241/2018 held that
Held that the trademarks/names used by the plaintiffs and defendants were indistinguishable.
Observed that the defendants had entirely imitated the plaintiffs' registered trademarks, replicating all aspects such as font, design, color scheme, size, style, placement of letters and taglines.
Opined that given the prior business relationship between the parties, this appeared to be a deliberate effort by the defendants to deceive consumers into believing their partnership with plaintiffs continued.
The court held that these similarities in the competing trademarks, combined with their use for identical restaurant services, constituted a clear infringement of plaintiff no. 1's registered trademarks under Section 29(1), 29(2)(b) and 29(2)(c) of the Trademarks Act, 1999.
Further held that the extensive imitation of the artistic design of plaintiffs' labels by defendants also amounted to violation of plaintiffs' copyright.
Found that the plaintiffs had established their ownership over the "KARIM'S" trademarks through registration certificates, which was not refuted by defendants. The defendants' use of plaintiffs' marks despite the Cancellation Agreement was also proven through the Local Commissioner's report.
The court rejected the defendants' defense of having a terminated franchise agreement, observing it lacked substantiation.
The court held the defendants liable for trademark infringement and copyright violation of plaintiffs' intellectual property rights.
On May 18, 2012, while issuing summons, the court granted an ex-parte ad-interim injunction restraining the defendants from using the plaintiffs' trademarks from the leased premises.
The court also appointed a Local Commissioner to seize all infringing goods like signboards, packing materials etc. bearing the plaintiffs' marks from the defendants' premises.
On August 23, 2013, the ad-interim injunction was directed to continue till the pendency of the suit.
In the final judgment, the court decreed the suit in favor of plaintiffs granting them permanent injunction against use of infringing marks by defendants as per prayer 35(A) of the plaint.
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