Exide Technologies (“Exide USA”) had been locked in a legal battle with Exide Industries Ltd. (“Exide India”) for nearly two decades over rights in the trade mark ‘EXIDE’. The matter, which finally culminated in a settlement, raised several pertinent issues before the Courts during the course of arguments. The matter revolved around the international rights of Exide US in the trade EXIDE mark vis-à-vis the domestic rights of Exide India in the same trade mark. While the international company relied heavily on common law rights, the Indian company claimed statutory rights and protection. The decision of the division bench of the Delhi High Court, though challenged before the Supreme Court until the matter was finally settled, addresses the issue of concurrent rights being claimed in a trade mark by an international company and its Indian counterpart. While re-affirming that trade mark law is indeed domestic in nature and a registration is deemed valid so long as the trade mark subsists on the Register, the Court took cognizance of transborder and trans-national reputation and recognized that the same has a significant bearing in such cases and can lead to conferring of concurrent rights of use, if such use is otherwise bonafide.
It began in the year 1997, when Exide India filed a suit before the Delhi High Court against Exide USA claiming infringement of the trade mark EXIDE and passing off on the grounds that Exide India was the registered proprietor and owner of the trade mark ‘EXIDE’ in India under Trade Mark No. 366539. In response, Exide USA filed a counter-claim also alleging infringement of the trade mark EXIDE and passing off on the grounds that it was (i) the registered proprietor of the trade mark ‘EXIDE’ in about 130 countries; (ii) the prior user of the trade mark ‘EXIDE’ internationally and in India; and (iii) the global owner of the trade mark EXIDE.
In a single-bench judgment dated 5th September 2012, the Delhi High Court decreed the suit of Exide India and dismissed the counter-claim of Exide USA on the grounds that (i) Exide India was the registered proprietor of the trade mark ‘EXIDE’ in India; (ii) Exide India had been continuously using the trade mark, in its own right, atleast since the year 1960 and hence became the owner of the said trade mark; (iii) despite being the prior user of the trade mark EXIDE in India, Exide USA failed to prove use of the trade mark from 1950 to 1997 and failed to plead and prove existence of ‘special circumstances’ for not using the same in India for the said period; (iv) non-use of the trade mark over a prolonged period and the absence of ‘special circumstances’ led to abandonment and extinguishment of Exide USA’s rights in the said trade mark and amounted to Exide India being deemed the prior user of the said trade mark in India. Accordingly, Exide India was held to be the prior user, registered proprietor and owner of the trade mark EXIDE in India and Exide USA was permanently restrained from selling goods under the trade mark EXIDE or any other mark deceptively similar thereto or using the same or any name deceptively similar thereto as a part of its trade name.
Following the aforesaid judgment, Exide USA filed an appeal before a Division Bench of the Delhi High Court on the following grounds:
- Exide India indulged in gross and material suppression of facts before the Single Bench inter-alia including the history of the trade mark EXIDE and the past relationship between Exide USA and Exide India;
- Predecessors-in-title of Exide India had acquired rights in the said trade mark from the predecessors-in-title of Exide USA and hence Exide India had no independent right in the said trade mark;
- Exide USA was the prior user of the trade mark EXIDE globally and in India;
- Exide USA did not abandon its rights in the said trade mark in India and it could not use the same in India from 1947 to 1991 in light of special circumstances;
- Exide India fraudulently obtained registration of the said trade mark in India and the said registration ought to be cancelled; and
- Under trade mark law, if there is more than one owner of the trade mark in different jurisdictions, the goodwill is deemed to be shared by the two entities and there cannot be a situation where one entity has a superior right over the other entity.
Exide India set-up the following defence:
- There was clear abandonment of rights in the said trade mark on the part of Exide USA because Exide USA did not challenge the use of the said trade mark by Exide India’s predecessor-in-title from 1902 till 1947. There was also clear-cut acquiescence on the part of Exide USA in the use of the said trade mark by Exide India since Exide USA never challenged such use until the suit was instituted against it;
- From 1942 till 1978, use of the said trade mark in India was by Exide India’s predecessor-in-title and such use stood attached to Exide India upon assignment of the said trade mark to Exide India. Thus, the single judge was erroneous in holding that Exide USA was the prior user of the said trade mark in India;
- The claims of trans-border reputation and existence of special circumstances were beyond the pleadings of Exide USA and hence could not be urged as grounds of appeal;
- The goodwill attached to a name or mark is territorial in nature; and
- Merely because the holding company has a particular corporate name, use by a subsidiary of the said name / mark does not authorize the holding company to invade in the local territory with its corporate name and dilute the trade mark and reputation attached to the local company.
The conflicting claims of both parties were duly considered by the Court and the judgement pronounced in the matter is an interesting one. Re-affirming the well-established position that the jurisdiction to decide validity of the registration of a trade mark is exclusively that of the IPAB or the Registrar, the Court declined to enter a finding as to the validity of the registration of Trade Mark No. 366539. Citing the same ground and to avoid impinging on the IPAB/ Registrar’s jurisdiction, the Court refrained from ruling on the issue of prior user and the issues concerning abandonment of rights and special circumstances. Hence, the Court proceeded on the assumption of a valid registration and without determining priority of use.
In determining Exide India’s rights in the registered trade mark EXIDE, the Court gave due consideration to the documentary evidence on record which established that though title to the said trade mark was assigned to Exide India, the goodwill attached thereto was not transferred and hence held that Exide India could not claim exclusive rights over the said trade mark.
Despite disallowing Exide India to claim exclusive rights over the trade mark EXIDE, the Court dismissed Exide USA’s counter claim of passing off and upheld Exide India’s rights in its registered trade mark.
While recognizing Exide India’s rights in the trade mark EXIDE, the Court simultaneously took cognizance of the significant trans-national and transborder reputation garnered by Exide USA in the said trade mark and held that Exide USA had proved the right to use the said trade mark even in India. In view thereof, the Court held Exide USA’s use of the said trade mark was bonafide and legitimately concurrent - Exide USA did not infringe the said trade mark or attempt to pass off a mark in which it had no right.
The Division Bench held that both Exide India (by virtue of registration) and Exide USA (by virtue of transnational reputation) had concurrent rights to use the said trade mark in India. The Court, while disallowing either party to oust the rights of the other, recognized the significance of both registration and reputation and placed them on equal footing. The decision shall provide a guiding light in cases where common law rights are squarely pitted against statutory rights and where use, being bonafide and legitimate, is not a deciding factor.
Appeal to Supreme Court and subsequent settlement:
The decision of the Division Bench was appealed by Exide India before the Supreme Court. However, reportedly, Exide India has entered into an agreement with Exide USA and the two decade long legal battle has culminated with a settlement being arrived at between the two parties.