M J Antony: The battle over injunctions

OUT OF COURT

Though the courts are enjoined to weigh the balance of convenience while passing interim orders, even this takes years in trademark disputes.

The big fight in trademark cases, as in several other spheres of litigation, is for interim injunctions. This is because the courts take too long to decide the legal issues finally. The owner of the trademark loses income all the while, whereas the violator of the right gains during the period of litigation. Therefore, most trademark cases are fought for injunctions, starting from the district court. The battle is often carried up to the Supreme Court.

The role of the appellate courts is, however, limited. They do not normally interfere in the discretion exercised by the subordinate courts. It is in rare cases, as in the recent judgement of the Supreme Court in Ramdev Food Pvt Ltd vs Arvindbhai Patel, that the apex court gets involved in the matter.

The case related to a popular brand of masala, "Ramdev", disputed by three brothers. Some well-wishers tried to settle the differences and a memorandum of understating was signed. However, there was another row over the interpretation of that document and the matter returned to the courts. The trial court, in an interim order, took the position that the company was the owner of the trademark. The rivals had started manufacture of their product later and adopted designs meant to create confusion in the minds of the consumers. However, it allowed the rival brother to sell the product with a similar brand name. The Gujarat High Court also decided against the company on the question of injunction. Therefore, it appealed to the Supreme Court which restrained the rivals from using the disputed trademark.

The judgement dealt with several aspects of the law of trademarks, including the principles to be followed while passing injunctions. The grant of interlocutory injunctions is exercise of discretionary power and, therefore, the appellate courts should not normally interfere with them. However, they may interfere if the discretion was exercised by the subordinate courts "arbitrarily, capriciously, perversely or where the court has ignored settled principles of law regulating the grant or refusal of interlocutory injunctions."

Further, the Supreme Court emphasised that the appellate courts should not reassess the material before them and seek to reach a conclusion different from the one reached by the court below, if the one reached by that court was reasonably possible on material before it. The appellate court would not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage, it would have come to a contrary conclusion.

The vital question to be considered for passing an interlocutory injunction is the balance of convenience and the conduct of the parties. Last year, in another judgement (Transmission Corporation vs Lanco Power), the Supreme Court elaborated this aspect. The court should consider the balance of convenience and irreparable damage. Infringement may easily destroy the value of a trademark or lay waste the expensive advertising. In technical parlance, it has now come to be known as "dilution".

In this context, the courts will also consider the question of likelihood of confusion in the mind of the consumers. Deception and confusion can destroy the value of the trademark. As stated in an English judgement, "deliberate buyers of expensive pianos are not as vulnerable to confusion as to products as hasty buyers of inexpensive merchandise at a news-stand or drug store ... The sophistication of the buyers does now always assure the absence of confusion. The subliminal confusion can transcend the competence of even the most sophisticated consumer."

One way to avoid the hair-splitting which goes on before the courts in injunction applications is to speed up the proceedings in the main dispute. Normally, it takes years to get a judgement on trademarks and passing off actions. In the present case, for instance, the trial court passed the order on the injunction application in 2000. The case travelled to the high court and the Supreme Court in six years. So far only the issue of interim order has been decided. Now, the main issues have to be taken up. In all, it may take more than a decade to decide the questions finally. Sometimes, there are parallel proceedings like charges of unfair trade practices in the Monopolies and Restrictive Trade Practices Commission. This makes the litigation unwieldy and waste of resources. Few gain from this blood-letting except the legal profession.