Supreme Court Declines To Interfere With HC Order Refusing ITC Interim Relief In 'DAKSHIN' Mark Dispute
The Supreme Court on Friday refused to interfere with the Delhi High Court's order dismissing ITC Limited's appeal seeking to restrain Adyar Gate Hotels Limited from using the “DAKSHIN” trademark for its standalone Chennai restaurant.
A bench of Justices B.V. Nagarathna and R. Mahadevan dismissed ITC's Special Leave Petition, finding no reason to interfere with the Delhi High Court's order.
“The suit is still at large, and the interim order is only an interim order. We do not find any reason to interfere with the impugned order.”, the Court said.
Appearing for ITC, Senior Advocates Shyam Divan, Mukul Rohatgi and Abhishek Manu Singhvi submitted that the marks used by the parties were identical and that ITC had established its rights through the agreements governing use of its trademarks.
“The marks here are absolutely identical. And I'm going to show your Lordships that both as a matter of infringement...”, Divan submitted.
Divan referred to the operating services agreement between the parties and pointed to its provisions dealing with trademarks, trade names and identifying marks.
“Now, what was the bargain between the parties when we were together? And we remained together till 2015.”
He submitted that the agreement contained specific provisions governing ITC's intellectual property rights and the use of its trademarks.
“There's a specific clause with regard to intellectual property rights and logos.”
It was further submitted that ITC held a registered trademark for restaurants and argued that Adyar Gate's continued use of the identical DAKSHIN mark amounted to infringement.
The Bench, however, questioned ITC's case in light of Adyar Gate's long-standing use of the mark and the fact that it operated a standalone restaurant.
“Two people have it. It's a standalone.”, Justice Nagarathna questioned.
The Court also questioned the likelihood of confusion between the two establishments.
Justice Nagarathna asked if, “A person who's accustomed to going to an ITC hotel... He sees another... He won't go to Dakshin.”.
Divan responded that ITC's case was not confined to passing off or consumer confusion, but also concerned infringement of its registered trademark.
“It's a trademark matter, infringement, not a passing off.”
The dispute arose from ITC Limited's challenge to Adyar Gate Hotels Limited's use of the “DAKSHIN” trademark for its standalone Chennai restaurant. Dakshin began operating at the Welcomgroup Park Sheraton in 1989 under an agreement between the parties, which ended in 2015. AGH subsequently continued using the mark and opened a standalone restaurant.
ITC alleged trademark infringement, passing off and copyright infringement and sought interim relief. The Single Judge rejected the plea, following which ITC appealed before a Division Bench.
The High Court held that AGH had used the DAKSHIN mark since 1989 while ITC failed to establish prior goodwill in the mark. It also held that AGH had built its own reputation through long-standing use and ITC's failure to object after 2015.
While the Bench held that Delhi courts had territorial jurisdiction due to AGH's interactive presence on Zomato, it found no prima facie case of passing off or infringement and dismissed ITC's appeal.