The Delhi High Court in an action filed by Groupon Inc (Groupon), a USA based company against Mr Mohan Rao and his company, Value Net Ecommerce Pvt. Ltd (Value Net) restrained them from using the mark GROUPON and/or any deceptive variations thereof. The Court in this case had on 27th May, 2011 granted an interim injunction ex parte. Value Net applied for setting aside the injunction order. The Court after hearing the submissions of both parties confirmed the injunction granted in favour of Groupon on 19th March, 2014. The case highlights the role of internet in dissemination of information and goodwill not being bound by territorial boundaries.
Groupon in support of its case submitted:
- That their predecessor in interest adopted the mark GROUPON in 2002 coined from a combination of “group” and “coupon”. From 2008, they have offered online audiences daily discounts on products and services under the name and brand GROUPON through their website www.groupon.com which features daily deals on products and services in more than 40 countries.
- The mark GROUPON is registered in the USA since September, 2009.
- In addition to www.groupon.com they own hundreds of other domain names which incorporate the mark GROUPON and its formatives, including several country specific domain names such as groupon.de, groupon.jp, groupon.sg, groupon.kr amongst others. In India, Groupon is the registrant of the domain name www.groupon.co.in created on 22nd September, 2009.
- Groupon’s website www.groupon.com receives a significant amount of traffic from India and in the fourth quarter of 2010 alone, over 30,000 visitors with Indian IP addresses visited their website which evidences of its popularity. The application for registration of the trademark GROUPON in India is pending.
- In September 2010, Groupon became aware that Value Net has registered the domain name www.groupon.in and had also applied for registration of the mark GROUPON. Subsequent discussions between the parties for amicable settlement did not materialize.
- They are the prior user of the mark GROUPON since 2008 and it was only on September 12, 2009, that the Value Net through Mr Mohan for the first time sought to adopt the mark GROUPON by registering the domain names www.groupon.in, www.grouponindia.com, www.groupoff.in and www.groupoff.com - by which date, GROUPON already had a huge subscriber base and had been operating under the mark GROUPON for over a year.
- By the time the Value Net sought to sell its first coupon in February 2011, Groupon had already acquired considerable amount of trans-border reputation in India that had spilled over into India on account of the plaintiff’s coverage in various international magazines and websites.
Therefore, on account of prior adoption, use as well as trans-border reputation of the mark, Groupon is entitled to seek a restraint against Value Net from adopting the GROUPON mark.
Value Net in its Defence argued that:
- They are the prior user of the mark GROUPON in India, the domain names www.groupon.in and www.grouponindia.com were registered on 12th September, 2009, which is much prior in time to when the mark GROUPON was adopted by the Plaintiff in India in 2011. The GROUPON mark is registered as a trademark in their favour.
- As per Groupon’s own averment it had no use - actual or otherwise, of the mark GROUPON in India in September 2009, when the defendants started using the mark.
- The Groupon applied for registration of the mark GROUPON in India in March, 2010 and that too on "proposed to be used" basis, therefore, even as in March, 2010, they were not clear about its intention to extend its services to India.
- Groupon has failed to prove that they had strong goodwill and reputation in India prior to September, 2009, which is when Value Net commenced its business under the mark GROUPON. Therefore in September, 2009, Value Net cannot be said to have been passing off its services as those of Groupon. The latter did not enjoy any goodwill or reputation in India.
- As the Groupon has failed to place on record any substantive evidence in the form of advertisements, journals, coverage in magazines, brochures etc. Therefore, no trans- border reputation can be inferred.
After detailed hearing the court held:
- The documents on record show that Groupon is the prior adopter and user of the mark GROUPON globally.
- Until September, 2009, Value Net Mohan was undisputedly not in the business of offering online discount vouchers.
- By the time Value Net sold its first coupon on www.groupon.in in February 2011, the Groupon had already been offering its services for over two years.
- Groupon offers its services in cyber space, and not through physical products. In the era of internet technology, the dissemination of information is instant as it is not constrained by territorial boundaries.
- The presence of social networking websites have made it possible for an organization to advertise its services and products online thereby reaching thousands of people world over instantaneously, as opposed to conventional modes of advertising through journals and magazines.
- Groupon has established that in addition to prior use, its goodwill had spilled over into India prior to Value Net adoption of the trade mark in question.
In view of the above findings the court dismissed the application filed by the Value Net for setting aside the injunction and confirmed the injunction granted in favour of Groupon.