The Threshold for Determining Dishonest Adoption of Trademarks: Revisiting Tata Sia Airlines v. Vistara Home Appliances

Introduction

In a recent case, Tata Sia Airlines v. Vistara Home Appliances[1], the Divisional bench of the Delhi High Court determined that mere awareness of the appellant’s mark is adequate to establish bad faith. This case comment will argue that a) the threshold for determining dishonesty is set very low, and the defendant didn’t dishonestly register their mark, and b) the defendant’s mark was liable for the exception of concurrent honest use.

Facts of the case

The appellant, a joint venture between TATA Sons and Singapore Airlines operating a major airline under the ‘VISTARA’ brand, has used the mark since 2014. VISTARA comes from the Sanskrit term “Vistaar” for “limitless possibilities” and the Supreme Court declared it a well-known mark. The appellant promotes VISTARA heavily across its website, app and advertisements while winning awards recognizing the brand’s services. VISTARA boasts trademark registrations across classes and globe covering its arbitrary and distinctive logo.

In September 2020, the appellant discovered the respondents were using VISTARA for their home appliance company’s name, domain, logos and device marks without authorization. Respondents sold home appliances under a VISTARA device mark online and on social media since December 2018. Despite cease and desist notices in September 2020 and March 2021, the respondents failed to respond. This led the appellant to file an infringement and passing off suit, the current case.

• Arguments before the court
• Appellant

The Appellant argued that the respondents’ use of the mark “VISTARA” for home appliances resulted in confusion among the consumers and caused significant damage to the Appellant’s business and goodwill and the adoption of the impugned mark by the Respondents lacks justification and is dishonest in nature, causing the dilution of the trademark “VISTARA”. The Appellant is the prior adopter and user of the trademark “VISTARA,” which has been declared a well-known mark. The competing marks are phonetically similar. The registration of the impugned mark was invalidly obtained under Sections 9[2] and 11[3] of the Trademarks Act, granting the Court the power to issue interlocutory orders restraining the Respondents. The Appellant approached the Trial Court without any delay, laches, or acquiescence.

• Respondent

The respondents argued that as they began using the mark within one year (2016) after the Appellant, there is no passing off. They contested that they had taken cautious measures to ensure that their mark is distinct from the Appellant’s mark, including using different color combinations, fonts, styles of writing, and overall representation. They pointed out that “VISTARA” is not a coined or invented word but a word found in Sanskrit. They also contended that their goods are unrelated to those of the Appellant, and they are not unauthorized users under Section 29 of the Trade Marks Act. The impugned mark is a device mark compared to the Appellant’s word mark.

Holding by the court(s)

Trial court

The court held that the term “VISTARA” has a dictionary meaning and thus, cannot be monopolized by the Appellant. The Appellant’s trademark “VISTARA” is declared a well-known mark but is deemed irrelevant as it was declared so after the registration of the Respondents’ mark. The Respondents are entitled to use the mark “VISTARA” for goods in Classes 7, 9, and 11, as the customers, trade channels, and industries of both parties are different and easily distinguishable.

Divisional bench of High Court

The Delhi High court rejected the argument that VISTARA is a common dictionary word. The word only resembles the Sanskrit word “VISTAAR”. The appellant coined the trademark “VISTARA”[4] based on this and the respondent’s use of the same word “VISTARA” instead of “VISTARA” proves that they were aware of the value attached to it. The Trial Court erred in denying the relief of injunction based on the argument that the Respondents adopted and used the impugned mark in different classes/products.[5] The respondents never gave any convincing explanation for choosing the name VISTARA. The Respondents’ claims of contracts, business networks, and potential loss of customers lack proof. Even if assumed true, dishonest adoption cannot be protected under Section 12 of the Trademarks Act.[6] The Division Bench held that the defendant’s use was in bad faith and would cause confusion in the market.[7]

Analysis of the case

In this case, the Delhi High Court took a different stance from the trial court. The trial court based its decision on the fact that the customers of both businesses were different and would not be confused by the phonetic similarity in the trademarks, as they belonged to different classes. The High Court however, concluded that the class discrimination and/or class distinction is irrelevant when the adoption of the mark by a party, such as respondent in this case, is inherently deceptive and tainted by suspicious circumstances, lacking any apparent justification. It did not consider the argument that the respondent adopted the trademark when the appellant’s mark was not well-known. The interesting point, in this case, is that the court found the respondent’s adoption dishonest for three reasons:

1. The respondent knew about the appellant’s trademark when they registered it.[8]
2. The respondent registered a device mark instead of a word mark to avoid registration problems.[9]
3. The respondent did not give any plausible reason for their adoption.[10]

The author of this paper will compare this case with other judgments to see if the standard of dishonestly deceiving applied here is higher or lower.

Bad faith and Dishonesty in trademark cases.

The Delhi High Court, in the case of Bpi Sports LLC vs Saurabh Gulati & Anr.[11]  addressed the issue of bad faith adoption of a trademark under section 11(10)(ii) of the act[12]. They defined it as “an unfair practices involving lack of good faith on the part of the applicant towards the Office at the time of filing, or unfair practices based on acts infringing a third person’s rights.” The court further went on to say that dishonesty, deception, the desire to mislead or deceive another person, and unjust actions that infringe upon the rights of a third party are typically indicative of bad faith.[13]

Furthermore, the Supreme court in the case of National Sewing Thread Co. Ltd. v. James Chadwick and Bros. Ltd.[14] laid down the test of Deceptiveness/Confusion as “a question to see as to how a purchaser, who must be looked upon as an average man of ordinary intelligence, would react to a particular trade mark, what association would he form by looking at the trade mark, and in what respect would he connect the trade mark with the goods which he would be purchasing.” The test was further upheld by the supreme court judgement in Nandhini Deluxe v. Karnataka Cooperative Milk Producers Federation Limited.[15] similarly, various courts in other cases also have understood dishonesty as trying to deceive or create confusion in the minds of public.[16]

Actions that constitute as deceptiveness and confusion.

In Kamal Trading Co. And Ors. V. Gillette U.K. Ltd., Gillette U.K. Ltd.[17], a subsidiary of the Gillette Company sued Kamal Trading Co. and others for using the ‘7 O’CLOCK’ trademark on toothbrushes. Gillette and its subsidiaries had used the mark for shaving products worldwide since 1913, registering it in many countries. In 1985, Gillette discovered Kamal Trading selling ‘7 O’CLOCK’ toothbrushes in India. Despite being a different product, Gillette argued this could confuse customers into thinking it was associated with their established 7 O’CLOCK shaving brand. The court agreed, citing Gillette’s longstanding use and registration of the identical trademark for related shaving products, finding Kamal Trading’s use likely to deceive customers.

Similarly, in N. R. Dongre v. Whirlpool Corporation[18], The American company Whirlpool Corporation and the Indian company TVS Whirlpool filed a lawsuit against N. R. Dongre and others in the Delhi High Court. The defendants used the “Whirlpool” trademark in India to manufacture and sell washing machines. Whirlpool claimed they had prior rights to the mark and that it had a reputation across borders, such that any products sold under the Whirlpool name would be assumed to be made by Whirlpool Corporation. The court ruled that the Whirlpool trademark had acquired a significant reputation and goodwill in India, becoming strongly associated in the minds of Indian consumers and potential buyers, specifically with the goods of Whirlpool Corporation.

Applying the standards set by the Courts in the present case.

In the previous cases mentioned, the infringing parties intentionally sought to unfairly capitalize on the goodwill of the prior users by dealing in similar products. Similarly, there have been many instances where the courts have provided criteria for determining deceptiveness. [19]

Additionally, in the Cadila Healthcare[20] case, the court laid down factors to consider regarding deception:

1. The nature of the marks 
2. The degree of resemblance between the marks 
3. The nature of the goods which they are used on as trademarks.  
4. The similarity in the products of the rival traders.
5. The class of purchasers, their education, intelligence and degree of care in purchasing/using the goods
6. The mode of purchasing or ordering the goods
7. Any other relevant surrounding circumstances and extent of dissimilarity between the competing marks.

If we consider these criteria, the only valid point the appellant can make is there was phonetic similarity, but none of the other factors are met in this case. The respondent here sought protection under section 12[21], and should have been granted it since they adopted the mark honestly.

In London Rubber Co.[22], despite the phonetic similarity, the court still granted the respondent protection under section 10(2)[23], saying there is no statutory requirement for large, substantial use. The court further said volume need not surpass competitors but should show genuine, ongoing commercial presence. The court also provided special circumstances that could indicate honest concurrent use[24], and in the present cases, VISTARA Home Appliance does meet them.

The divisional bench’s decision in this case raises concerns for various reasons. Firstly, the goods involved are entirely unrelated—the defendant’s trademark is exclusive to home appliances for lower-middle-class consumers, while the plaintiff’s mark is for upper-class-focused air travel services. There is no similarity or connection between them, eliminating any potential for confusion in purchasers’ minds. Despite the plaintiff holding a well-known mark, there is no evidence of blurring or tarnishment resulting from the defendant’s adoption.

The threshold set in this case for determining dishonest adoption and public deception appears unusually low compared to established precedents[25]. These past judgments have applied a significantly higher standard for proving deceptive similarity and trademark infringement. The injunction was primarily granted based on the defendant’s awareness of the mark, disregarding the respondent’s efforts to differentiate it, which is a cause for concern.

Conclusion

Every business, regardless of its size and influence, should be allowed reasonable freedom to operate without unwarranted interference from unrelated entities. This ruling, however, goes against this and favors an unjust power dynamic. The respondents took significant steps to prevent confusion, which should have been acknowledged before issuing the order. Despite the appellant’s mark being well-known, the court should have considered that it wasn’t recognized as such at the time of adoption. Additionally, there is no evidence of any harm, dilution, or tarnishing experienced by the appellant due to the respondent’s adoption. If this precedent is followed, large brands could exploit their advertising power to gain well-known status and subsequently seek injunctions against smaller businesses.

[1] 2023 SCC OnLine Del 3343

[2] The Trademark act, 1999

[3] The Trademark Act, 1999

[4] ¶18

[5] ¶ 20

[6] ¶ 22

[7] The court reached this conclusion mainly on three grounds: (a) strength: the plaintiff’s mark is an arbitrary mark making it conceptually strong; (b) similarity: the defendant’s mark is ‘phonetically identical’ to the plaintiff’s mark (Vistara and Vistara); and (c)bad faith: the plaintiff is the prior user, the defendant had knowledge of the plaintiff’s mark, and the plaintiff’s mark is well-known, making the defendant’s adoption dishonest.

[8] ¶ 17

[9] ¶ 19

[10] ¶ 16

[11] 2023 SCC OnLine Del 2424

[12] The Trademark Act, 1999.

[13] Ibid.

[14] AIR 1953 SC 357.

[15] 2018 SCC Online SC 741.

[16] Kaviraj Pandit Durga Dutt Sharma v Navratna Pharmaceuticals Laboratories, [1965] AIR 980

[17] 1998 (8) PTC (Bom)

[18] 1996 PTC 16 (583) SC

[19] National sewing thread co. Ltd v James Chadwick, Corn Products Refining Company v. Shangrila Food Products Ltd., Campbell Products v John Wyeth.

[20] 2001 (2) PTC 541 SC

[21] The Trademark Act, 1999.

[22] London Rubber Co. v. Durex Products, AIR 1963 SC 1882

[23] The Trademark Act, 1940.

[24] 1) The name of the company and product were the same. 2) The product has been in the market for a considerable period of time 3) The products are different for both the appellant and the respondent.

[25] Cadila Healthcare, N.R. Dongre, and National Sewing Thread .