The case IMS Learning Resources Pvt. Ltd. vs. Young Achievers was a trademark dispute concerning the use of the term “IMS” in the coaching industry. The plaintiff, IMS Learning Resources Pvt. Ltd., sought a permanent injunction to restrain the defendant, Young Achievers, from using the mark “IMS” or any similar name for its coaching services. The primary legal issue was whether the defendant’s continued use of “IMS Young Achievers” after the termination of its agreement with the plaintiff amounted to trademark infringement and passing off under Indian law.
Background of the Case:
IMS Learning Resources Pvt. Ltd. is a leading provider of coaching for management entrance exams and has used the “IMS” brand extensively since 1977. It holds trademark registrations for “IMS” across multiple classes and operates over 100 coaching centres across India. The plaintiff initially entered into a franchise agreement with Young Achievers in 2007 and renewed it in 2010. Under this agreement, the defendant was permitted to use the “IMS” trademark for its coaching centre in Meerut, Uttar Pradesh.
By mutual consent, the IMS Meerut centre was closed on February 1, 2011, and the defendant signed an Exit Paper, agreeing to stop using the “IMS” trademark. However, despite this agreement, Young Achievers continued using “IMS” in its branding and advertising. The defendant even published an advertisement in a newspaper on March 30, 2011, promoting itself as “IMS Young Achievers” and claiming that “Old IMS is now more vibrant & effective under new leadership.” This prompted the plaintiff to issue multiple legal notices, demanding that the defendant cease using its trademark.
Arguments by the Plaintiff:
IMS argued that the defendant’s continued use of the “IMS” brand name after the termination of the franchise agreement was a clear case of trademark infringement and passing off. The plaintiff contended that Young Achievers misled students and parents into believing it was still associated with IMS. The plaintiff also emphasised that “IMS” is a well-known trademark in the education sector, and its unauthorised use diluted the brand’s reputation and goodwill.
Defence by Young Achievers:
The defendant, Young Achievers, argued that “IMS” was a commonly used acronym for “Institute of Management Studies”, and the plaintiff could not claim exclusive rights over it. The defendant also contended that its “IMS Young Achievers” branding was sufficiently distinct and that students could differentiate between the two brands. Furthermore, Young Achievers claimed that the plaintiff had no significant presence in Meerut before the franchise agreement and had built its own goodwill in the city.
Court’s Observations and Findings:
The Delhi High Court observed that the marks were phonetically and visually similar, and an average consumer with imperfect recollection could easily associate “IMS Young Achievers” with the “IMS” brand, leading to confusion. The court rejected the defendant’s argument that “IMS” was a generic acronym, emphasising that the plaintiff had registered trademark rights over the term, making it legally protectable. Furthermore, the court found that the defendant had intentionally continued using the IMS brand even after signing the Exit Paper in 2011, agreeing to cease usage, which demonstrated bad faith. The court applied the initial interest confusion doctrine, ruling that even momentary confusion in consumers’ minds was sufficient to establish infringement. Additionally, it dismissed the argument that price differentiation negated confusion, affirming that students could still mistakenly associate Young Achievers’ coaching services with IMS, leading to unfair advantage and dilution of brand reputation. The court also considered the Local Commissioner’s report, which revealed that IMS branding was still prominently displayed at the defendant’s premises, reinforcing the claim of continued unauthorised use.
Judgment and Relief Granted:
The Delhi High Court issued a permanent injunction restraining Young Achievers from using “IMS” or any deceptively similar mark in connection with coaching services. The court ruled that IMS Learning Resources Pvt. Ltd. had exclusive rights over the “IMS” brand in the education sector and that its long-standing reputation warranted strong legal protection. The court also dismissed the argument that price differentiation negated confusion, stating that students could still associate Young Achievers with the IMS brand, leading to an unfair advantage.