Prior use trumps later trademark registration

In the recent case of Hatsun Agro Product Ltd v Sri Ganapathy Dairy the Madras High Court dismissed the plaintiff’s suit alleging trademark infringement and passing off. The court held that the defendant was the prior user of the mark ARUN. The plaintiff manufactured and marketed food and dairy products including ice cream, dairy whitener, AGMARK (certification standard) certified ghee, or clarified butter, and butter. The plaintiff had used the ARUN mark since 1970, and the plaintiff had registered the mark in all classes, including class 29, the relevant class in this case. The plaintiff complained that the defendant was selling ghee under the identical mark of ARUN. A cease and desist notice was rejected by the defendant on the grounds that the two trademarks were not identical and that the defendant had used the ARUN trademark since 1989.

The plaintiff alleged that the defendant was dishonestly using a mark for manufacturing and marketing ghee that was similar to the plaintiff’s trademark, ARUN for milk products. The defendant contended that the brand name ARUN was derived from the first four letters of the name of its founder, Mr Arunachalam, and that it honestly adopted the composite label mark ARUN AGMARK GHEE in 1989. As the plaintiff claimed use of their ARUN stylised mark only from January 2006 for ghee, the defendant was the prior user. The defendant also asserted that the plaintiff used their ARUN mark for ice cream only and used the HATSUN mark for ghee.

The defendant adduced evidence that the appropriate certifying authority had certified the quality of ghee manufactured by the defendant as a special grade product, provisionally approved the trade brand label for their product and authorised them to use the word AGMARK with the word ghee. The defendant proved it had been using the ARUN mark for ghee since 1990. The plaintiff had registered the word ARUN as a trademark in January 2013 for class 29 goods, but conceded that it marketed its ghee only under the trademark HATSUN. The court held that the defendant was protected by its rights as a prior user of the label mark ARUN for ghee under the relevant provisions of the Trade Marks Act, 1999 (act) and that such rights could not be abrogated or restrained by any subsequent registration of the trademark for associated or even similar goods. Prior use took precedence.

The court also found against the plaintiff on its argument that the mark had acquired a secondary meaning. The court similarly found against the plaintiff’s argument that the defendant’s use of its label mark infringed the plaintiff’s registration in class 29. ARUN is a common Indian name and could not become a well-known mark. The plaintiff also failed to produce supporting evidence. That the defendant adopted the first four letters of the elder family member’s name did not amount to infringement, particularly when the defendant was the honest prior user of the mark. The plaintiff failed to prove the infringement of its registered mark.

The plaintiff argued that ghee and ice cream were both milk products sold through the same channel and were therefore allied goods. Registration of ARUN in class 29 which included milk products, should confer an exclusive right to use that word. The court dismissed this argument on the well-known principle that a holder cannot monopolise the mark across the whole range of goods when some of them had not been marketed. As to passing off, the court held that there was no similarity between the marks, and the goods themselves were not similar. The plaintiff’s ice cream sold through exclusive outlets, whereas the defendant’s ghee was offered in the retail market.

This case highlights one of the most important provisions in the act protecting the prior user against a subsequent registered proprietor. Under the act, prior user rights prevail over subsequent user rights even if the subsequent user has registered the trademark, a principle that courts have upheld many times. By using its mark for its goods and services, the proprietor of a prior used mark, acquires a proprietary right against subsequent use or registration of that trademark. It is still recommended to register a trademark, however, not merely to rely on prior use. It is easier to prove such a right by possessing a registration certificate.

Authored by Manisha Singh & Akanksha Kar, this articles discusses the latest judgement passed by the Madras High Court in the case of Hatsun Agro Product Ltd v Sri Ganapathy Dairy, dismissing the plaintiff’s suit in its ruling that the rights of prior user prevails over the subsequent registered proprietor.