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Written by Nasreen Serji, a student at Government Law College, Thrissur.
BROAD PEAK INVESTMENT HOLDINGS V. BROAD PEAK CAPITAL ADVISORS LLP [CS (COMM 405/2024]
The Delhi High Court applied the territoriality principle to reject the argument of international reputation in a trademark infringement case. In Broad Peak Investment Holdings v. Broad Peak Capital Advisors LLP, the Court held that sporadic use of a mark in India is insufficient to establish passing off of services.
FACTS
The plaintiffs, Broad Peak Investment Holdings Ltd and its subsidiary, incorporated in 2006 in the Cayman Islands and Singapore respectively, are investment advisers/managers for clients investing in equities and credit. They have registered the mark ‘BROAD PEAK’ in various jurisdictions worldwide and have provided services in India under the same name since 2008. Plaintiff 1 (Broad Peak Investment Holdings Ltd) is the registered proprietor of the word mark ‘BROAD PEAK’ in India since February 2017. The trademark application was filed on a ‘proposed to be used’ basis as documents from 2008 were not traceable.
The defendants, Broad Peak Capital Advisors LLP, are an asset management company incorporated in 2016. They have been conducting business in India continuously and received trademark registration in 2017, claiming prior use of the mark since 2016. Subsequently, this suit was filed before the Delhi High Court seeking a permanent injunction to restrain the defendants from using the trademark.
CONTENTIONS
The plaintiffs argued that they have substantial goodwill and reputation both internationally and in India. They claimed that the defendants’ use of the trademark would amount to passing off services under their name, alleging that the defendants intended to confuse customers and trade channels.
The defendants countered that there is a significant difference in the business activities of the parties and that their clients are highly qualified individuals, making it unlikely to cause confusion. They also noted that the plaintiffs filed for a ‘proposed to be used’ trademark application because they lack a proper presence in India.
FINDINGS & DECISION
To determine if the defendants’ actions constituted passing off, the Court cited S. Syed Mohideen v. P. Sulochana Bai [(2016) 2 SCC 683], where the Supreme Court established a triple test. The three elements are the plaintiff’s goodwill, the defendant’s misrepresentation, and the damage to the plaintiff’s goodwill resulting from such misrepresentation. Thus, one of the first requirements that the plaintiffs are required to fulfil is to establish their goodwill and reputation in the mark ‘BROAD PEAK’. In this case, the plaintiffs applied for a trademark on a ‘proposed to be used’ basis, indicating they had not used the mark in India before the application date. On the other hand, the defendants were granted trademark registration due to their prior use of the mark.
In response to the plaintiffs’ claim of international trademark registrations and presence, the Court applied the territoriality principle and rejected the argument. The documents submitted by the plaintiffs were insufficient to prove a ‘spillover’ of reputation and goodwill, showing very limited transactions in their name. The Court was not convinced that they had established goodwill in India. In the landmark judgment of Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries [(2018) 2 SCC 1], the Hon’ble Supreme Court held that substantial reputation and goodwill of the mark in India must be established to maintain an action for passing off. Trans-border reputation alone does not constitute passing off in India. The Court also cited Toyota Jidosha Kabushiki Kaisha v. Tech Square Engineering [2023 SCC OnLine Del 583] in which Toyota failed to show goodwill for the mark ‘ALPHARD’ in India, as they had limited sales and no advertisement in the country.
The plaintiffs failed to demonstrate that the defendants had dishonest intentions or knowledge of the impugned mark. Additionally, the Court emphasized the nature of the businesses and their clients. In Cadila Health Care v. Cadila Pharmaceuticals [4 (2001) 5 SCC 73], the Supreme Court observed to determine deceptive similarity between marks, the purchaser’s education, intelligence and degree of care exercised is important. Since both the plaintiffs and defendants offer services to qualified corporate entities, it was unlikely that their clients would be confused by the marks, as the businesses provide entirely different services.
The Court dismissed the application for an injunction as the plaintiffs failed to establish ‘passing off’ or that the defendants had dishonest intentions. Sporadic use of a trademark in India is insufficient to establish goodwill and reputation, and an international presence alone does not suffice to prove passing off in such cases.
