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Written by Keerthana M, Lawyer
YAHOO INC V. OMKAR COTTAGE INDUSTRIES CS(COMM) 909/2022.
Did you know that the word “yahoo” (Yahoo!) is a backronym for “Yet Another Hierarchically Organized Oracle” or “Yet Another Hierarchical Officious Oracle.” The term “hierarchical” refers to the arrangement of the Yahoo database in layered subcategories. The term “oracle” means “a source of truth and wisdom,” and the term “officious” describes the numerous office workers who used the Yahoo database while browsing from their workplaces. In this case, the Delhi High Court decided against a mouth freshener manufacturer who was held liable for the infringement of the well-known ‘Yahoo!’ trademark.
Yahoo Inc. (“Plaintiff”) is an American multinational technology company that focusses on media and online businesses. They are also the owner of the well-known mark, ‘Yahoo!’. The millions of people who use their website worldwide is a testament to their popularity. ‘Yahoo!’ is not only used for computer and internet related services but also for clothing, sporting goods, office supplies, magazines, games etc. Being a strong and inherently distinctive trademark, it serves as a global identifier for the plaintiff’s goods and services. The plaintiff also holds the licence to the mark and is the recipient of several industry awards and accolades.
Omkar Cottage Industries (“Defendant”) was found to be manufacturing mouth fresheners under the name, ‘Yahoo! Mouth Freshener’ which were listed on Indiamart, a business-to-business marketplace. The suit was filed because the defendant’s use of the mark amounted to infringing and passing off of the plaintiff’s mark.
This court had granted an ex-parte ad interim injunction in an earlier suit, restraining the defendant from manufacturing and marketing products or services that infringe the plaintiff’s rights in the registered ‘YAHOO!’ marks. An evidence affidavit was then filed by the plaintiff as per court orders. It is adduced as evidence in this present case as well. Its perusal revealed that this court had declared the plaintiff’s mark as well-known in Yahoo! Inc. Versus Akash Arora and Another, 1999 (19) PTC 201 DEL, 1999 SCC OnLine Del 133. It was also listed as a well-known mark by the Indian Trademark Registry. It was deposed that the plaintiff has a large online presence rendering different kinds of services, wherein the ‘YAHOO!’ mark is extensively used.
The evidence affidavit also showed that upon conducting a trademark search, the plaintiff found that the defendant had filed an application for the registration of ‘YAHOO! Mouth Freshener’, but it was rejected. An independent investigation revealed the defendant had listed infringing products under the names, ‘Yaahoo mouth freshener’, ‘Yaahoo khajoor mouth freshener’ and ‘Yaahoo saunf mouth freshener’ on online trade directories. A representative of the defendant also stated that they had been using the mark ‘YAHOO! mouth freshener for the last nine years.
The court after considering the submissions and evidence produced, held that use of the ‘YAAHOO!’ trademarks by the defendant, is a blatant violation of the plaintiff’s exclusive rights in it. It also amounts to infringement and passing off of the plaintiff’s well-known trademarks. The court added that the defendant had dishonestly adopted the plaintiff’s trademark to piggyback on the plaintiff’s reputation and that there is no viable explanation for this and is not a mere coincidence.
The court observed that the facts stated by the plaintiff had not been rebutted by the defendant, as they had not filed a written statement. The court was satisfied with the submissions made by the plaintiff and the evidence adduced.
The defendant had not appeared before the court. The court cited the case, Inter Ikea Systems BV Versus Imtiaz Ahamed 2016 SCC OnLine Del 6717, to establish that a defendant who chooses to stay away from court proceedings should not be permitted to enjoy the benefits of evading court proceedings. (The same point was discussed in Cartier International AG v. Gaurav Bhatia (2016) 226 DLT 662).
Thus, the court decided to grant not just compensatory damages but also punitive damages to the plaintiff against the act of infringement and passing off by the defendant citing Mathias v. Accor Economy Lodging, Inc. 347 F. 3d 672 (7th Cir. 2003) and Lachhman Das Behari Lal v. Sri Ghanshyam Das Jetha Nand (2007) 35 PTC 693 (Del.) The object behind awarding punitive damages was to ‘to ensure that it acts as a deterrent against fence sitters’ who may find it profitable to imitate registered trademarks of established brands in the industry.
The suit was decreed in favour of the plaintiff. The court held that they were entitled to damages of Rs. 27,00,000/- and costs of Rs. 8,92,451/-.
COMMENTS
Section 2(zg) of the Trademarks Act, 1999 defines a ‘well-known trademark.’ It refers to a trademark that is recognized by the general public and has a good reputation. This means that most people associate the mark with the goods or services of a particular company. Infringement of such well-known marks is common. It can be seen as a parasitic survival strategy, where the infringing mark relies on the established reputation of the well-known mark. By imposing huge financial liability, the court through this judgement aims to deter infringers and make them reconsider such actions.
