Rolex Sa v. Alex Jewellery Pvt. Ltd.

After reading this case analysis, the readers will become aware of the law of trademark, the ingredients and thereof and how the Delhi High Court in the present case decided upon the infringement of mark 'ROLEX'.
CITATION2014 (60) PTC 131(Del)
COURTDelhi High Court
JUDGES/CORAMJustice Manmohan Singh
DATE OF JUDGEMENT15.09.2014

Introduction

The subject matter in the present case of Rolex SA v. Alex Jewellery Pvt. Ltd. is Intellectual Property Rights (IPR). In simple terms, IPR are the rights over intellectual property, which in turn refers to creations of the mind: inventions, literary and artistic works, symbols, names and images as used in commerce. Copyrights, trademarks, geographical indications, patents and trade secrets are few types of IPR. With ever-increasing boundaries of countries and expanding markets, we every day comes across imitation of names and products; and infringement of trademarks by domestic market players and that is what exactly happened in the present case.

Facts

The facts of the case are as follows: It was a dispute between Rolex SA (Plaintiff/Appellant) and Alex Jewellery Private Limited (Defendants/Respondents). The plaintiff was a Switzerland based company and since 1908 was engaged in business of manufacturing and distribution of clocks, chronographs, time-pieces and watch cases etc. by the name of ‘ROLEX’. Thus, the trademark and name ROLEX was generally associated with the plaintiffs. The plaintiff operated across the world through its numerous affiliates and was internationally reputed for quality goods and impeccable after-sale services. ROLEX had occupied top-rankings and featured in prestigious and famous magazines in various countries over the years. Throughout the globe, the trademark and name ROLEX was associated with the plaintiff for their superior quality, brand image, innovative designs, updated technology and on-time customer services. The trademark had been used by the plaintiff in India since 1912, after submission of a Declaration in Kolkata; and it was duly registered by them in India under different Classes beginning 1949. The plaintiff also operated its business through the website www.rolex.com and has numerous registered domain names related to ROLEX.

On the other hand, the defendants were an Indian business. They were engaged in business of manufacturing, selling, trading, distributing and retailing artificial jewellery, also by the name of ‘ROLEX’. Additionally, the defendants had a registered domain name and operated the same through their website www.rolexjewelleryhouse.com. The defendants had applied to register the name ROLEX for their goods in 2008. The use of ROLEX by the defendants to market their products caused the dispute, which started way back in 2007-08.

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As and when any third party applied to register ROLEX and/or any deceptively similar marks, name or domain name, it was opposed by the plaintiff. The same was done by the plaintiff when attempts were made by the defendants to register ROLEX for their artificial jewellery businessin 2008 and consequently the latter’s registration was refused by the Trade Marks Registry.

An application was filed by the plaintiff, to obtain a permanent injunction against the defendants, from infringing the registered trademark of the plaintiff by passing off, unfairly competing, etc. The injunction was granted by learned single judge, Justice Manmohan Singh and damages were also awarded to the plaintiff.

Issues

The main issues in the case were:

  1. Whether or not, the plaintiff is entitled to a decree of permanent injunction against the defendants.
  2. Whether or not the defendants are liable for infringing the plaintiff’s trademark under Section 29 of Trade Marks Act, 1999.
  3. Whether or not the defendants are guilty of passing off the plaintiff’s trademark.
  4. Whether or not the suit is barred by the law of Limitation.
  5. Whether or not, the amount of damages payable to the plaintiff should be Rs. 25,00,000/- , as prayed for by the party.

Summary of court decisions and judgment

The plaintiff applied to Delhi High Court in the year 2008, to obtain a permanent injunction against the defendants, along with a prayer for temporary injunction until the disposal of the suit[1]. The single-judge order, given under Order XXXIX of the Code of Civil Procedure 1908, restrained the defendants from using ROLEX in any manner or form, whatsoever, pending the suit disposal. But the defendants did not comply with the orders of the Court and continued the usage of the trademark as well as the domain name ROLEX.

Subsequently, on a Contempt Petition being filed by the plaintiff in the Delhi High Court, the Court appointed Local Commissioners to inspect and seize the defendants’ goods bearing the trademark ROLEX. In consequence, the defendants tendered an unconditional apology to the Court for its contempt. After a date being set by the High Court for the hearing, due to the non-appearance of defendants, the suit proceeded ex-parte and finally a permanent injunction was granted to the plaintiff because the defendants dishonestly used the plaintiff’s trademark to en-cash the latter’s reputation and profits.

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Analysis

In the international domain, IPR is protected by virtue of Article 27 of the Universal Declaration of Human Rights. With the establishment of the World Trade Organisation (WTO), intellectual property was protected through the Trade-Related Intellectual Property System (TRIPS) Agreement, to which India is a signatory.

The law specifically relating to infringement of a registered trademark in India is provided under Section 29 of the Trade Marks Act, 1999. In the present case, the registered trademark ‘ROLEX’ was infringed by the defendants. The defendants used an identical trademark in their business of artificial jewellery. As the infringement was in relation to a different class and type of goods, Section 29(4) of the Trade Marks Act is attracted in this case. Furthermore, for Section 29(4) to apply, the registered trademark has to have a reputation in India; be well-known; and, the use of the mark, without due reason, should cause detriment to the reputation of the registered trademark’s owner. Thus, it is to be analysed and defined what constitutes ‘well-known trademarks’. Section 2(1)(zg) of the Trade Marks Act defines a ‘well known trademark’. Along with that, various precedents help define what well-known trademarks are[2]. Hence, it can be said that the defendants had infringed the plaintiff’s trademark according to Section 29 of the Trade Marks Act.

To establish the offence of passing off, the ingredients of the same have to be studied at first. Passing off is constituted when,

  1. Misrepresentation is done of a disputed name, trademark or sign,
  2. By person(s) in course of his trade,
  3. To current as well as prospective customers,
  4. Causing confusion and deception, and
  5. Causing injury to business and goodwill of another trader to whom the mark originally belongs and commands high reputation and name thereof.

The trademark and name in dispute in this case, ‘ROLEX’, had not been registered by the defendants, though they claim otherwise. The flaw in fact is caused due to erroneous registration which was cancelled later. Yet, the defendants continued use of the same to market their products. The reason given by the defendants for use of ROLEX was that the word was a combination of their raw material (rolled gold) and the owner’s son, named Alex. The reasoning is prima facie baseless and absurd. Evidently, the defendants used the name to cause injury to the plaintiff by causing confusion among customers. Hence, the defendants had clearly passed off the goods and business of the plaintiff.

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One of the defences taken by the defendants was that the suit was barred due to limitation. But there exist various precedents to refute the defence, like the Midas Hygiene case[3] wherein it was held that mere delay in instituting suit is insufficient to refuse grant of injunction.

Since the defendants had infringed the trademark ROLEX, belonging to the plaintiff; passed off their goods and business and could not prove their defence, the plaintiff was rightly entitled to permanent injunction against the defendants, as given by the High Court. The plaintiff had prayed for rendition of accounts and damages to the tune of Rs. 25,00,000/-. To determine the amount and type of damages to be paid, reference has to be made to previous court judgements where compensatory as well as punitive damages are granted in ex-parte matters[4] and the Court reasoned that the damages were given with a view to deter law breakers from violating and infringing trademarks, copyrights, patents, etc. The court in the present case, awarded Rs. 5,00,000/- as compensatory damages, as well as Rs. 3,00,000/- as punitive damages to the plaintiffs. Additional costs of Rs. 50,000/- were awarded. Overall, the Court’s decision was correct with appropriate and sufficient reasoning and after having considered arguments of both parties.

Conclusion

This case is a very important precedent because of the peculiarity of its facts and number of angles involved. Lapses on the part of Trade Mark Registry, ignorance of businesses, dishonest and malicious intentions of rivalry were a few things that were highlighted through this case.

It is no doubt that since the introduction of IPR regime in India, people have become more aware and protective of their marks, names, publications and allied rights. But that has led to a big increase in number of patent infringement, copyright infringement, and other such cases being brought to the courts and boards. The increase causes immense delay in all suits, which was seen even in this case- started in 2007 and ended in 2014.


[1] Rolex SA v. Alex Jewellery Pvt. Ltd. and Ors., 41PTC 284, (Del: 2009).

[2] Bloomberg Finance LP vs. Prafull Saklecha & Ors., 56 PTC 243, (Del: 2013)

[3] Midas Hygiene Industries Pvt. Ltd. vs. Sudhir Bhatia &Ors., 28PTC 121, (SC: 2004)

[4]Time Incorporated Vs. Lokesh Srivastava & Anr., 30 PTC 3, (Del: 2005)