Hennes & Mauritz AB (H&M), the famous clothing and accessories company was embroiled in a mega trademark dispute with HM Megabrands (Megabrands) before the Delhi High Court. The parties had a cross litigation in Bombay and Delhi courts. Megabrands brought groundless threat proceedings in Bombay and H&M filed a suit for trademark infringement and passing off at the Delhi High Court. The note discusses the decision of the Delhi high Court that reinforces the principle that a brand can have global reputation and spill over of reputation in India without actual business presence.
The issues before the court were:
- Whether Delhi High Court has territorial jurisdiction with megabrands alleging they are based in Bombay with no store in Delhi.
- The impact of groundless threat action in Bombay filed by Megabrands on the present proceedings.
- Can rights be claimed over acronym/two letter mark 'HM' or 'H & M'; considering the two letter marks are not registrable under the Trade Marks Act, 1999 being inherently not distinctive.
- The impact of Megabrands:
a) challenging the validity of the H&M mark;
b) claiming honest adoption of letters HM and its use since 2011;and
c) alleging H&M had no business and reputation in India when Megabrands adopted the mark HM Megabrand.
The court after considering the pleadings, arguments and written submissions ruled in favour of H&M granting an injunction restraining HM Megabrands. The court held:
- Megabrands in the suit filed at Bombay had pleaded that they are carrying on business on a global scale and their products are sold via interactive e-commerce website www.hmmegabrands.com all over the country and carrying on business and selling products in Delhi, thus, objection to the territorial jurisdiction is misconceived.
- The contention that the instant suit is to be stayed on account of pendency of the suit filed by Megabrands at Bombay has no merit. The said suit is admittedly to prevent H&M from meting out threats of infringement. Once H&M have commenced suit for infringement of their trade mark proceedings cannot be kept pending decision of Bombay suit.
- With regard to adoption of the mark HM Megabrands it is a settled principle that law does not permit anyone to carry on his business in such a way as would persuade the customers or clients in believing that the goods or services belonging to someone else are his or are associated therewith. Addition of the word ‘Megabrands’ does not make it any distinctive more so when the parties are dealing in the same business.
- It is not disputed that H&M were in the market at least over two decades prior to Megabrands. The suffix 'Megabrands' to the alphabets 'HM', rather than distinguishing, reinforces the impression of a connection between the two and thus, confusion is imminent.
- With regard to registration, the court noted that 'H&M' or 'HM' are not generic or publici juris to the trade or business for which they are being used by the parties. A word, even if generic, if applied to a business with which the word is unrelated is to be protected and merely because it is alphabets or acronym, is immaterial. Moreover, it is not the case of Megabrands that 'H' and 'M' or 'HM' are generic to the trade.
- On the contention regarding reputation the court observed that for a mark/brand to have a reputation or goodwill in India, setting up a shop or sale in India is no longer a necessity. Web based sales enable people to shop for whatever brands/goods available where so ever and has increased the familiarity in India with the marks/brands essentially sold/marketed outside.