The Bombay High Court, under the bench of Justice R.I. Chagla, has recently delivered an order granting injunction in favor of Everest Food Products Pvt. Ltd. ("Plaintiff") against Shyam Dhani Industries Pvt. Ltd. ("Defendant") in a trademark infringement and passing-off dispute. The case revolves around the Plaintiff's well-known trademark "TIKHALAL," used for its chili powder products, and the Defendant's allegedly infringing mark "Shyam Tikha Lal."

The Plaintiff, a prominent spice manufacturer under the brand "EVEREST," secured trademark registration for "TIKHALAL" in 2002 and has continuously used it for its chili powder products. The word "TIKHALAL," coined by the Plaintiff, has no prior usage in commerce, no dictionary meaning, and is unique to the Plaintiff’s brand. Over two decades, the Plaintiff has built significant goodwill and reputation through extensive use, advertising, and sales. The Plaintiff supported its claims with evidence such as sales turnover records, promotional materials, advertisements, and online listings of its "TIKHALAL" products.

The dispute began in 2019 when the Plaintiff discovered the Defendant marketing chili powder under the name "Shyam Tikha Lal." On further inquiry, it was revealed that the Defendant had secured trademark registration for "Shyam Tikha Lal" despite the Plaintiff’s prior registration and extensive use. In response, the Plaintiff filed a rectification application before the Registrar of Trade Marks seeking cancellation of the Defendant’s registration. The Plaintiff also issued a cease-and-desist notice, which the Defendant ignored, prompting the Plaintiff to file a suit for trademark infringement and passing off, accompanied by an interim application for urgent relief.

The Plaintiff argued that the Defendant’s mark was phonetically, visually, and aurally similar to "TIKHALAL" and likely to deceive or confuse consumers into associating the Defendant’s products with those of the Plaintiff. The Plaintiff also alleged that the Defendant had fabricated sales invoices to falsely establish prior use of the mark. These invoices, which contained glaring discrepancies in the description of goods, were presented alongside contradictory affidavits. Justice Chagla observed, “The Defendants, in my prima facie view, have deliberately fabricated Sales Invoices… and produced the same before this Court in an attempt to falsely show their use of the impugned trade mark.” He further noted that the Defendant’s affidavits were inconsistent and lacked a satisfactory explanation for the discrepancies.

In defense, the Defendant contended that "Tikha Lal" was merely a descriptive term referring to the spicy characteristics of chili powder and was therefore protected under Section 30(2)(a) of the Trade Marks Act, 1999. The Defendant also claimed that it had been using the mark "Shyam Tikha Lal" continuously since 2015 and that no instances of consumer confusion had been reported. The Defendant attributed the discrepancies in its sales invoices to errors caused by computer software but failed to provide credible evidence to substantiate this claim.

Justice Chagla rejected the Defendant’s arguments, holding that the visual depiction of "Shyam Tikha Lal" on its product packaging clearly indicated use as a trademark rather than as a description of the goods.

He stated, “The manner in which the impugned trade mark is visually depicted on the impugned product leaves no manner of doubt that the Defendants are using ‘TIKHA LAL’ in the sense of a trademark.” The court further observed that the Defendant’s act of filing a trademark application for "Shyam Tikha Lal" estopped it from arguing that the term was descriptive. Justice Chagla concluded that the Defendant’s conduct was dishonest and aimed at misleading the court, emphasizing, “The Defendants’ defense to the Interim Application itself is required not to be considered. The Plaintiff is entitled to interim reliefs on this ground alone.”

The court also addressed the Defendant’s reliance on its trademark registration, holding that it could not shield the Defendant from liability as the registration appeared prima facie fraudulent and illegal. Referring to the precedent set in Lupin Ltd. v. Johnson and Johnson, Justice Chagla affirmed that courts are empowered to go behind the validity of a trademark registration at the interim stage if the registration is ex-facie deceptive or fraudulent.

Having established a strong prima facie case, the court granted the Plaintiff’s application for interim relief. The Defendant was restrained from using, depicting, or adopting the name "Tikha Lal" or any other mark deceptively similar to "TIKHALAL" until the final disposal of the suit. The court also prohibited the Defendant from manufacturing, packaging, selling, or advertising any product under the impugned mark. Additionally, the court imposed a cost of Rs. 2,00,000 on the Defendant for fabricating evidence and submitting contradictory affidavits, directing that the amount be paid to the Plaintiff within four weeks.

Case title: Everest Food Products Private Limited vs. Shyam Dhani Industries Pvt. Ltd. & Ors. (Interim Application No. 1628 Of 2021 In Commercial IPR Suit No.178 Of 2021)

Counsel for Plaintiff: Mr. Hiren Kamod, Counsel a/w Ms. Kavita Srivastav, Ms. Manorama Mohanty, Ms. Mittal B. Nor i/b S.K. Srivastav & Co.

Counsel for Defendants: Mr. Harshit S. Tolia, Senior Counsel a/w Ms. Rushvi N. Shah, Mr. Amit Mehta, Mr. Hitesh Mishra, Mr. Zahid K. Shaikh, Mr. Javvad Z. Shaikh and Ms. Riya D. Dani i/b Mr. Amit Mehta.