February 22 2024 0Comment

Khadi and Village Industries Commission (KVIC) vs Girdhar Khadi

Khadi and Village Industries Commission (KVIC) filed a suit seeking relief against a perceived trademark infringement by Girdhar Industries. 

Plaintiff submission

The Khadi and Village Industries Commission was created in 1957 under the Khadi and Village Industries Commission Act 1956. Since then, it has implemented programmes to boost Khadi and allied industries in rural areas. The complainant promotes products with the “Khadi” trademark. The plaintiff implements the Prime Minister’s Employment Generation Programme (PMEGP) to support artisans, weavers, and small-scale rural industries.

The plaintiff registered the trademark KHADI, which is also part of its business name, on 25th September 1956. The plaintiff has consistently used the trademark KHADI for various goods and services.

Girdhar Industries started selling several similar products to the plaintiff under the trademark “GIRDHAR KHADI”. 

The plaintiff filed applications under Section 57 of the Trademarks Act to cancel registrations that they claim breached Sections 9 and 11 of the Act. 

To which Giridhar Industries, the defendant, filed a counter-statement to the plaintiff’s applications.

The counsel for the plaintiff referred to the invoice submitted by one customer that described goofs as “Khadi Class” and “Khadi Pure” and insisted reliance that the defendant relates to the goods as “Khadi Soap”, “Khadi Pure”, “Khadi Supreme Set”, “Khadi Plus”, “Khadi Pouch” and “Khadi Cake Soap”. 

The counsel submits that it is misleading despite the defendant having obtained a trademark registration on “GIRDHAR KHADI”, a combination not using KHADI singularly. The defendants’ “Khadi Pure” detergent powder is marketed as “Khadi” detergent powder, with the name “Girdhar” reduced to a little image above “Khadi.”

Defendant’s Submission

Mr. SK Bansal argued that the plaintiff applied on a “proposed to be used” basis for all applications. The plaintiff must prove that they used the trademark “KHADI” for soaps before Defendant 1 registered the word mark “GIRDHAR KHADI”. Defendant 1’s registration date is 4th March 2005, and he claims to have been a user since 2001. In contrast, the plaintiff’s expired 2000 registrations were based on “proposed to be used” criteria.

Mr. Bansal argues that the plaintiff can only use their “KHADI” mark registrations for other items if they demonstrate market reputation and goodwill, as Section 29(4) requires. He argues that there is insufficient proof. Paragraph 10 of the plaint states that the plaintiff has used the mark “KHADI” for various goods since 1956. There are currently no details available about these commodities. According to the evidence presented, the plaintiff did not utilise the “KHADI” mark before 2001. The plaintiff has not filed any invoices or orders for such use.

Before May 2015, the plaintiff had no domain name with “khadi” in it. The plaintiff’s advertising and promotional expenses for the “KHADI” mark are only available for 2018-2019. Section 29(4) requires proof of reputation.

According to Mr. Bansal, the defendant owns copyright registrations for several GIRDHAR KHADI labels. The defendant holds copyright registrations for these labels. According to Mr. Bansal, the plaintiff’s claim in paragraph 2 of the complaint that they have been using the KHADI mark for soaps and cosmetics “since the 1980s” lacks supporting documentation. He argues that this allegation contradicts the plaint.

As there was no evidence of use of the said mark by the plaintiff before registering the trademark, “GIRDHAR KHADI”, the defendant should benefit from Section 34 of the Trademarks Act rather than being injuncted. 

Mr. Bansal argues that obtaining an injunction against using a registered trademark requires a high bar and relies on this.

He also pointed out that despite the trademark being registered for a broad spectrum of goods but used for only a few, the monopoly can be claimed only concerning the goods for which the trademark is being used and not for the rest. He submitted that in this case, the plaintiff could not provide any evidence of reputation for the concerned mark “KHADI” for soaps. In contrast, it is clear that the defendant desires to use the impugned GIRDHAR KHADI mark only for soaps and detergents.

Under the purview of the longevity of usage of the mark “GIRDHAR KHADI” by the defendant and delayed submission of the plaintiff before the Court for an injunction, Mr. Bansal submits that the balance of convenience would also be against the grant of any interim injunction at this stage.

Court’s Decision

The plaintiff is not eligible for an interim remedy for four reasons, not including misleading likeness or infringement as defined by Section 29 of the Trade Marks Act, 1999:

  1. The defendant holds the registered trademark GIRDHAR KHADI. A registered trademark cannot be found to be infringing unless the Court invalidates the registration. The defendant’s registration of the GIRDHAR KHADI mark appears to be valid.
  2. Passing off cannot be used against the defendant prima facie. To support an allegation of passing off, the plaintiff must demonstrate goodwill and reputation in the asserted mark for the asserted products before the defendant adopts the competing mark. There is no evidence that the plaintiff’s mark KHADI had an excellent reputation for soaps before 2001, when the defendants claimed to have used the GIRDHAR KHADI mark, or before 2005 when the mark was registered in the plaintiff’s favour.
  3. Despite the plaintiff’s claiming that they got to know about the registration of the GIRDHAR KHADI mark in favour of the defendant in December 2020, the defendant showed in its counter statement the document of opposition for the registration of the GIRDHAR KHADI mark in class 29, filed on 24th December 2017, i.e. three years prior that.
  4. The plaintiff’s delay in initiating action against the defendant and the sales volume under the disputed GIRDHAR KHADI mark suggests an injunction should not be granted at this late stage.

 The Court agreed that Mr Bansal correctly points out that no numbers represent the plaintiff’s returns from sales of KHADI soaps or detergents and their advertising or promotional expenses. KHADI’s reputation may not necessarily extend to all products sold under the name. The plaintiff may still be able to claim goodwill and reputation for a product that only recently began using the KHADI mark. That cannot be the situation.

There is no indication of the plaintiff using the KHADI mark before 2001 or 2005 when the GIRDHAR KHADI mark was registered on behalf of the defendant.

Before 2005, the plaintiff could not demonstrate the goodwill and reputation associated with the KHADI mark for soaps or detergents, as the defendants had already adopted the GIRDHAR KHADI mark.

Pre-existing reputation and goodwill before the defendant’s use of the disputed trademark. The plaintiff failed to establish a prima facie case of passing off against the defendants, which is required for a passing off action to be valid.



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