Licensee's derivative use of a trademark cannot establish independent proprietary rights or defeat the owner's title.

In brief

The question

1. Whether the Plaintiff, as an assignee whose name is not yet recorded for all marks on the Register, has the standing to maintain an action for infringement

The court held

The court allowed the Interim Application, granting a temporary injunction in terms of prayer clauses (a) and (b), restraining the Defendants from using "HAMON" as a mark, corporate name, or domain name

It also directed

The court held that the Plaintiff is the prima facie registered proprietor [para. 70(B)], the Defendant’s use was merely permissive and has expired [para. 70(C), 70(K)], and the continued use constitutes infringement and passing off

A stay on the order was granted for three weeks

01Facts

The Plaintiff, John Cockerill Hamon SA, claims to be the successor-in-title to the registered "HAMON" marks globally, following an assignment from Hamon CIE (International) SA ("HCI") via a Transfer Agreement dated July 25, 2022

¶ 14, 16

Defendant No. 1 was formerly a subsidiary of HCI and was permitted to use the "HAMON" name as a licensee while part of the group

¶ 8-10, 46

In September 2022, Defendant No. 1 was sold to a third party (Mr. Chorasiya) via a Share Sale Agreement (SSA) that did not transfer intellectual property rights

¶ 18-19

The Plaintiff contends that Defendant No. 1 was granted only a temporary "Brand Usage Right" to complete ongoing projects, which has since expired

¶ 15, 19-20

Despite this, Defendant No. 1 continued using "HAMON" in its corporate name and applied for new "HAMON" marks on a "proposed to be used" basis

¶ 22-24

The Plaintiff filed for an interim injunction for infringement and passing off

¶ 3-4

02Issues

i.1. Whether the Plaintiff, as an assignee whose name is not yet recorded for all marks on the Register, has the standing to maintain an action for infringement

¶ 35, 37-38

ii.2. Whether the use of the mark by Defendant No. 1 constitutes "prior use" under Section 34 or "permissive use" that inures to the benefit of the proprietor

¶ 35, 51, 57

iii.3. Whether the Plaintiff established a prima facie case for infringement and passing off, and where the balance of convenience lies

¶ 35, 70

03Law Applied

The court applied Section 29 of the Trade Marks Act, 1999, regarding infringement of registered marks

¶ 37

Section 2(v) defining a "registered proprietor"

¶ 37

It relied on the principle from Skol Breweries Ltd. v. Som Distilleries and J.K. Jain v. Ziff-Davies Inc. that an assignee can seek interim relief even while the registration of the assignment is pending

¶ 29, 70(D)

Regarding permissive use, the court applied the doctrine that a licensee/permissive user cannot claim independent title or prior use under Section 34, as the goodwill inures to the proprietor (Velcro Industries B.V. v. Velcro India Ltd. and Patton International Ltd. v. Patton Electronics (I) Pvt. Ltd.)

¶ 58, 60, 70(N)

The court also invoked Section 33 regarding acquiescence and the necessity of a "positive act" of encouragement for such a defense to succeed (Power Control Appliances v. Sumeet Machines Pvt. Ltd.)

¶ 52, 69, 70(P)

Provisions in the judgment · 9 · Linked ones open on LawLens

Trade Marks Act, 1999 9 provisions

Section 2 Section 11 Section 29 Section 30 Section 33 Section 34 Section 42 Section 48 Section 49

04Reasoning

The court found that the Plaintiff demonstrated a clear chain of title through the Transfer Agreement and Confirmatory Deed, further evidenced by the Registry recording the Plaintiff as proprietor for at least one mark (No. 1836422)

¶ 70(B)

The court rejected the Defendant’s challenge to the assignment’s validity, noting that a third party (not the assignor) cannot impeach a transfer accepted by the contracting parties

¶ 70(G)

Critically, the court observed that Defendant No. 1’s defense was self-contradictory: it claimed "independent prior use" since 1999 while simultaneously admitting its use began with HCI’s "express or implied consent"

¶ 70(J)-70(K)

The court held that once usage is admitted as permissive, the user is estopped from claiming proprietary rights adverse to the owner

¶ 60, 70(K)

Furthermore, Defendant No. 1’s filing of trademark applications on a "proposed to be used" basis in 2022/2024 was deemed a "solemn declaration" that it lacked prior proprietary rights

¶ 22, 70(L)-70(M)

Finding actual instances of confusion in the trade, the court determined that the Plaintiff's statutory rights outweighed the Defendant’s self-created hardship

¶ 70(O), 70(Q)