Prior User Rights in Passing Off Actions Prevail Over Subsequent Trademark Registration and Contested Assignment Deeds

The Appellant, a partnership firm, claims to be the prior user of the trademark "JOHNSON" (and variants like JOHNSON CEM) since 1987, initiated by its founder Late Krishna Prasad

The Appellant sought a permanent injunction against the Respondent (incorporated in 2009) for using deceptively similar trademarks, alleging passing off

The Commercial Court, Patna, vide order dated 16.11.2024, refused interim injunction, questioning the Appellant's prior use due to missing sales figures between 1987-1999 and relying on an RTI report suggests Sales Tax numbers were registered later

The Respondent claimed rights through four assignment deeds dating back to 1990

The Appellant challenged this refusal in the present appeal, producing corrected RTI data and questioning the validity of the Respondent's assignment deeds

1. Whether the Appellant established a prima facie case of "prior user" and goodwill to maintain an action for passing off against the Respondent

2. Whether the Respondent’s claim of rights through unregistered assignment deeds outweighs the Appellant’s claim of prior continuous use

3. Whether the balance of convenience and irreparable injury justified the grant of an interim injunction

The court primarily applied Section 27 and Section 34 of the Trade Marks Act, 1999, which protects the "first user" rule and ensures that a registered proprietor cannot prevent the use of a mark by a person who has been using it from an earlier date

It relied on the "Triple Test" for passing off (Goodwill, Misrepresentation, and Damage) as established in American Cyanamid Co. v. Ethicon Ltd. and Pernod Ricard India Pvt. Ltd. v. Karanveer Singh Chhabra

Furthermore, it applied the principle from S. Syed Mohideen v. P. Sulochana Bai, which holds that passing off actions are maintainable even against a registered proprietor because common law rights exist independently of statutory registration

The High Court found that the Commercial Court's reliance on missing sales figures for a specific period was erroneous, as the Appellant produced invoices from 1987 and tax assessment orders from 1988-1989

The Court scrutinized the Respondent's four assignment deeds and found significant discrepancies: they were unregistered, lacked signatures of authorized persons, and featured "assignors" who were not registered proprietors

The Court noted that the Respondent itself admitted to using the mark only since 2009 in its trademark applications

Consequently, the Appellant's use since 1987 established superior common law rights. The Court reasoned that the Respondent's adoption of an identical name for similar products created a high probability of consumer confusion and dilution of the Appellant's brand identity, which cannot be quantified in damages

The Court granted an ad-interim injunction restraining the Respondent from using the trademark "JOHNSON" or any deceptively similar mark/trade dress until the disposal of the suit. The trial court was directed to expedite the hearing.