Karnataka High Court Upholds Injunction Against ACC Steel's Use Of 'ACC' Trademark

The Karnataka High Court has dismissed ACC Steel Pvt. Ltd.'s appeal against a commercial court decree restraining it from using “ACC” as a trademark or as part of its company name in the cement company's plea.

A Division Bench of Justice D.K. Singh and Justice H. Shanthi Bhushan held that ACC Steel could not reduce the dispute to the fact that its steel products fall under the trademark classification for metals and metal goods, while ACC Limited's cement products are classified separately, particularly after “ACC” was recognised as a well-known trademark.

“Once those circumstances are considered along with the statutory recognition of 'ACC' as a well-known trade mark, the defendant cannot reduce the controversy to a comparison of Class 6 and Class 19 alone,” the Bench observed.

ACC Limited, which manufactures cement and ready-mix concrete, has used the “ACC” trademark since 1938. It approached the Bengaluru Rural commercial court in 2020 after coming across an advertisement for ACC Steel's TMT bars being sold under the mark “ACC”.

ACC Limited alleged that ACC Steel had incorporated “ACC” into its company name. It also alleged that the steel company used a colour combination, font and presentation similar to those associated with its mark and logo.

It sought a permanent injunction, amendment of ACC Steel's corporate name, destruction of infringing material and rendition of accounts. It also sought ₹10 lakh in damages and alleged copyright infringement and passing off.

The commercial court granted the injunctions and directed ACC Steel to amend its trade name, deliver infringing material for destruction, and render accounts of profits. It did not award the ₹10 lakh damages, finding insufficient material to quantify the damages or establish the profits earned.

Before the High Court, ACC Steel relied on the difference between the two businesses. It argued that its steel products fell under Class 6, while ACC Limited's relevant registrations principally covered cement and allied products under Class 19.

The High Court rejected the argument that the difference in classification, by itself, settled the dispute.

“Even assuming that cement and TMT steel are to be treated as dissimilar goods, the difference in classification by itself does not conclude the matter,” the Bench observed.

The Bench referred to Sections 11(2) and 29(4) of the Trade Marks Act, 1999, which provide protection in certain circumstances even where the later mark is used for dissimilar goods.

The court noted that “ACC” had been included by the Trade Marks Registry in the list of well-known trademarks under Rule 124 of the Trade Marks Rules, 2017. It observed that the recognition was based on factors including the mark's long use, publicity, sales and distribution, registrations in several classes, and reputation in the construction industry.

The two businesses also had an overlap, the Bench found. Cement and steel are both used in construction, move through overlapping trade channels and are directed towards substantially the same class of persons connected with construction activity.

The commercial court had also considered actual inquiries from people who believed ACC Steel's products had some association with ACC Limited. This assumed significance because ACC Steel had adopted “ACC” in its entirety and used it on its product as well as in its corporate name.

“The use of 'TMT 500' after 'ACC' does not remove the appropriation of the distinctive feature which identifies the plaintiff,” the Bench observed.

The High Court held that ACC Steel's own trademark registration was not an independent defence. Section 28 begins with the words “subject to the other provisions of this Act”, while Section 31 gives registration prima facie evidentiary value.

The Bench noted that ACC Steel's registration had been stayed by the Intellectual Property Appellate Board in rectification proceedings on October 26, 2020. It therefore could not be treated as determinative of ACC Steel's right to continue using the mark.

Sections 51 and 122 also did not assist ACC Steel. The Bench observed that neither provision creates a substantive right to use another proprietor's registered trademark.

The use of “ACC” in the corporate name provided a further basis for the injunction under Section 29(5), the Bench held. ACC Steel carried on business as “ACC Steel Private Limited."

The bench also noted that ACC Steel had not identified any misapplication of law, procedural irregularity, violation of natural justice, or specific error in appreciation of evidence that would justify interference with the decree.

The High Court found no ground to interfere. It dismissed the appeal with no order as to costs and disposed of the pending applications.