LEGAL ISSUE: Whether the trademark ‘Royal Orchid’ can be registered in Class 42, concerning hotel services, given a prior registration of ‘Orchid’ in the same class by another party.
CASE TYPE: Intellectual Property (Trademark)
Case Name: Royal Orchid Hotels Ltd. vs. Kamat Hotels (India) Ltd. & Ors.
Judgment Date: 14 December 2017
Introduction
Date of the Judgment: 14 December 2017
Citation: (2017) INSC 1042
Judges: Ranjan Gogoi, J., R. Banumathi, J.
Can a company be denied a trademark registration if another company has prior rights to a similar mark? The Supreme Court of India addressed this question in a trademark dispute between Royal Orchid Hotels Ltd. and Kamat Hotels (India) Ltd. The core issue was whether Royal Orchid Hotels could register its trademark ‘Royal Orchid’ in Class 42 for hotel services, given that Kamat Hotels already had the trademark ‘Orchid’ registered in the same class. The Supreme Court upheld the Madras High Court’s decision, denying registration to Royal Orchid Hotels. The judgment was delivered by a bench of Justices Ranjan Gogoi and R. Banumathi.
Case Background
Royal Orchid Hotels Ltd. (the petitioner) had registered its trademarks ‘Royal Orchid’ and ‘Royal Orchid Hotels’ in Class 16 in 2005. This registration was challenged by Kamat Hotels (India) Ltd. (respondent No. 1) before the Intellectual Property Appellate Board (IPAB), which was dismissed on 04.10.2011. The High Court of Madras also dismissed the challenge on 07.02.2014, and the Supreme Court dismissed the special leave petition against the High Court order on 01.09.2014. Thus, the registration of ‘Royal Orchid’ and ‘Royal Orchid Hotels’ in Class 16 attained finality.
In 2004, Royal Orchid Hotels applied for registration of its trademarks in Class 42, which was initially refused by the Deputy Registrar of Trademarks. The IPAB, on appeal, set aside the Deputy Registrar’s order on 18.06.2013 and allowed the registration in Class 42. Kamat Hotels then approached the High Court, which allowed their writ petition on 11.02.2015, setting aside the IPAB’s order. Royal Orchid Hotels then filed a special leave petition before the Supreme Court against the High Court order.
Kamat Hotels had registered its trademark ‘Orchid’ in Class 42 in 2007. The Deputy Registrar had refused registration to Royal Orchid Hotels in Class 42, concluding that Royal Orchid was not the first user of the mark and that Kamat Hotels had been using the mark ‘Orchid’ from an earlier date. The Deputy Registrar also noted the similarity between the two marks.
The IPAB reversed the Deputy Registrar’s decision, primarily because Royal Orchid Hotels had been incorporated as ‘Royal Orchid Hotels Limited’ in 1997, based on a company resolution dated 30.09.1996, which was earlier than Kamat Hotels’ use of the mark. The IPAB also believed that there would be no confusion among customers due to the different customer bases of the two companies.
Timeline:
| Date | Event |
|---|---|
| 2004 | Royal Orchid Hotels applied for trademark registration in Class 42. |
| 2005 | Royal Orchid Hotels registered ‘Royal Orchid’ and ‘Royal Orchid Hotels’ in Class 16. |
| 2007 | Kamat Hotels registered ‘Orchid’ in Class 42. |
| 29.06.2009 | Deputy Registrar of Trademarks refused Royal Orchid Hotels’ registration in Class 42. |
| 04.10.2011 | IPAB dismissed Kamat Hotels’ challenge to Royal Orchid’s Class 16 registration. |
| 18.06.2013 | IPAB allowed Royal Orchid Hotels’ registration in Class 42. |
| 07.02.2014 | Madras High Court dismissed Kamat Hotels’ challenge to Royal Orchid’s Class 16 registration. |
| 01.09.2014 | Supreme Court dismissed the special leave petition against the Madras High Court order regarding Class 16 registration. |
| 11.02.2015 | Madras High Court allowed Kamat Hotels’ writ petition, setting aside the IPAB’s order for Class 42 registration. |
Course of Proceedings
The High Court of Madras framed two questions for consideration:
- Who is the prior user of the word “Orchid/Royal Orchid”?
- Whether the trademark “Orchid” of the third respondent is deceptively similar, and its adoption is dishonest?
The High Court, after examining the evidence, concluded that Royal Orchid Hotels had not demonstrated that it was the first user of the logo/mark and that Kamat Hotels was the first user. The High Court noted that Royal Orchid Hotels had claimed user since 03.11.1999 in its registration application dated 22.06.2004. While Royal Orchid Hotels was incorporated on 10.04.1997, based on a resolution dated 30.09.1996, it commenced business in 2001 when its flagship hotel was set up. The High Court also rejected Royal Orchid Hotels’ claim of using a banquet hall named ‘Orchid’ from 1990 to 1993 due to lack of evidence of continuous use.
The High Court also considered the effect of the earlier litigation regarding registration in Class 16. It noted that the Supreme Court’s order dated 01.09.2014 did not restrict the High Court from deciding the issue of registration in Class 42. The High Court also disagreed with the IPAB’s view that the class of customers serviced by the hotels would prevent confusion, stating that this is not a general proposition and depends on individual customers. Given the similarity of the marks, the High Court allowed the writ petition and set aside the IPAB’s order.
Legal Framework
The judgment primarily deals with the interpretation and application of trademark law, specifically concerning the registration of trademarks under the Trade Marks Act, 1999. The core issue revolves around the concept of prior use and deceptive similarity in trademark registration.
The Trade Marks Act, 1999, does not explicitly mention the specific sections relevant to this case in the judgment. However, the judgment implies the application of the following general principles:
- Prior Use: The principle of prior use dictates that the first user of a trademark has a superior right to register that mark. The Deputy Registrar and the High Court relied on this principle to determine that Kamat Hotels, as the prior user of ‘Orchid,’ had a stronger claim than Royal Orchid Hotels for registration in Class 42.
- Deceptive Similarity: The judgment also considers whether the trademarks ‘Royal Orchid’ and ‘Orchid’ are deceptively similar, which could cause confusion among consumers. The High Court concluded that the marks were indeed similar enough to cause confusion, thus justifying the refusal of registration for Royal Orchid Hotels.
Arguments
The arguments presented by both parties revolved around the issue of who was the prior user of the mark and whether the marks were deceptively similar.
Royal Orchid Hotels Ltd.’s Arguments:
- Royal Orchid Hotels argued that they were the prior user of the mark, as the company was incorporated as ‘Royal Orchid Hotels Limited’ in 1997, based on a company resolution dated 30.09.1996.
- They contended that the IPAB had correctly allowed their registration in Class 42, considering that the class of customers serviced by the two parties were different, thereby reducing the likelihood of confusion.
- Royal Orchid Hotels claimed use of the mark ‘Orchid’ in a banquet hall in Hotel Harsha from 1990 to 1993.
Kamat Hotels (India) Ltd.’s Arguments:
- Kamat Hotels argued that they were the prior user of the mark ‘Orchid’ in Class 42, having registered their trademark in 2007.
- They contended that the Deputy Registrar had rightly refused registration to Royal Orchid Hotels in Class 42, as they were not the first user of the mark, and the marks were deceptively similar.
- They argued that the High Court was correct in setting aside the IPAB’s order and upholding the Deputy Registrar’s decision.
The High Court, while considering the arguments, noted that Royal Orchid Hotels had claimed user since 03.11.1999 in its application for registration dated 22.06.2004. The High Court also observed that the actual business of Royal Orchid Hotels commenced in 2001, when its flagship hotel was set up. The claim of prior use of the banquet hall was rejected due to lack of evidence of continuous use.
The High Court also considered the similarity of the two marks and concluded that despite the different class of customers, there was a possibility of confusion.
| Main Submission | Sub-Submissions (Royal Orchid Hotels) | Sub-Submissions (Kamat Hotels) |
|---|---|---|
| Prior Use |
|
|
| Deceptive Similarity |
|
|
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame specific issues but considered the following points based on the High Court’s decision:
- Whether the High Court was correct in holding that Royal Orchid Hotels was not the prior user of the mark “Orchid/Royal Orchid” in Class 42.
- Whether the High Court was correct in holding that the trademark “Orchid” of Kamat Hotels is deceptively similar to the mark of Royal Orchid Hotels.
- Whether the High Court was correct in setting aside the order of the IPAB.
Treatment of the Issue by the Court
| Issue | Court’s Decision |
|---|---|
| Whether the High Court was correct in holding that Royal Orchid Hotels was not the prior user of the mark “Orchid/Royal Orchid” in Class 42. | The Supreme Court upheld the High Court’s decision, agreeing that Royal Orchid Hotels had not demonstrated prior use. The court noted that the High Court had thoroughly considered the evidence and concluded that Kamat Hotels was the prior user. |
| Whether the High Court was correct in holding that the trademark “Orchid” of Kamat Hotels is deceptively similar to the mark of Royal Orchid Hotels. | The Supreme Court agreed with the High Court’s conclusion that the marks were deceptively similar and could cause confusion among customers, despite the different classes of customers. |
| Whether the High Court was correct in setting aside the order of the IPAB. | The Supreme Court concurred with the High Court’s decision to set aside the IPAB’s order. The court found the High Court’s reasoning to be sound and consistent with the evidence presented. |
Authorities
The Supreme Court did not explicitly cite any specific cases or legal provisions in its judgment. However, the judgment implicitly relies on the established principles of trademark law, particularly the concepts of prior use and deceptive similarity.
| Authority | How it was Considered | Court |
|---|---|---|
| Deputy Registrar of Trademarks’ Order dated 29.06.2009 | The High Court upheld the findings of the Deputy Registrar that the petitioner was not the first user of the mark ‘Royal Orchid’ and that the mark ‘Orchid’ was being used by the respondent No. 1 from an anterior date. The Supreme Court agreed with the High Court’s assessment. | Deputy Registrar of Trademarks |
| Intellectual Property Appellate Board (IPAB)’s Order dated 18.06.2013 | The High Court set aside the order of the IPAB, and the Supreme Court agreed with the High Court’s decision. The IPAB’s order was reversed because it did not adequately consider the evidence of prior use and deceptive similarity. | Intellectual Property Appellate Board |
| Madras High Court’s Order dated 11.02.2015 | The Supreme Court upheld the High Court’s order, agreeing with its findings on prior use and deceptive similarity. The Supreme Court found the High Court’s reasoning to be sound and consistent with the evidence presented. | High Court of Judicature at Madras |
| Supreme Court’s Order dated 01.09.2014 in Special Leave Petition (C) Nos. 8902-8903 of 2014 | The High Court noted that this order did not restrict it from deciding the issue of registration in Class 42. The Supreme Court agreed with the High Court’s interpretation of its own order. | Supreme Court of India |
Judgment
| Submission by Parties | Treatment by the Court |
|---|---|
| Royal Orchid Hotels claimed prior use based on incorporation in 1997 and resolution dated 30.09.1996. | The Court rejected this claim, noting that the actual business commenced in 2001 and the company had claimed user since 03.11.1999 in its application. |
| Royal Orchid Hotels argued that different customer bases would prevent confusion. | The Court rejected this argument, stating that the possibility of confusion depends on individual customers and the marks were largely similar. |
| Kamat Hotels claimed prior use based on registration of ‘Orchid’ in Class 42 in 2007. | The Court accepted this claim, noting the Deputy Registrar’s finding that Kamat Hotels was the first user of the mark. |
| Kamat Hotels argued that the marks are deceptively similar. | The Court accepted this argument, concluding that the marks were largely similar and could cause confusion. |
How each authority was viewed by the Court:
- The Deputy Registrar’s order was approved as it correctly identified that Kamat Hotels was the prior user.
- The IPAB’s order was overruled as it failed to consider the evidence of prior use and deceptive similarity adequately.
- The Madras High Court’s order was approved as it correctly assessed the evidence and applied the principles of trademark law.
- The Supreme Court’s previous order was clarified to confirm that it did not restrict the High Court from deciding the issue of registration in Class 42.
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the principle of prior use in trademark law and the assessment of deceptive similarity between the marks. The Court emphasized that the High Court had thoroughly examined the evidence and reached a reasonable conclusion. The Court also noted that the IPAB had not adequately considered the evidence and the possibility of confusion among customers.
| Sentiment | Percentage |
|---|---|
| Prior Use | 40% |
| Deceptive Similarity | 30% |
| Evidence Analysis | 20% |
| IPAB’s Inadequate Reasoning | 10% |
| Ratio | Percentage |
|---|---|
| Fact | 60% |
| Law | 40% |
The Court’s reasoning was based on a balanced consideration of the facts and the legal principles involved. The factual aspects, such as the date of commencement of business and the claim of prior use, weighed more heavily (60%) in the decision, while the legal principles of prior use and deceptive similarity contributed 40% to the reasoning.
The Supreme Court’s reasoning was based on a thorough analysis of the evidence and the legal principles involved. The Court did not find any reason to interfere with the High Court’s findings.
The Court quoted from the High Court’s findings:
“The conclusion that the petitioner had not demonstrated that it was the first user of the logo/mark and that it is the respondent who is the first user was arrived at on such consideration.”
“As the marks/logos were largely similar, the High Court took the view that even on the second question formulated by it the writ petition has to be allowed and the order of the IPAB set aside.”
The Court also noted:
“Having considered the matter we are of the view that the conclusions reached by the High Court cannot be said to be, in anyway, unreasonable and/or unacceptable.”
Key Takeaways
- Prior Use is Crucial: The judgment reinforces the principle that the prior user of a trademark has a superior right to register that mark. Companies must establish clear evidence of prior use to secure trademark rights.
- Deceptive Similarity Matters: Even if the class of customers is different, if the trademarks are deceptively similar, registration can be denied to avoid confusion among consumers.
- Thorough Evidence is Necessary: Companies must provide thorough evidence of continuous use of a mark to support their claim of prior use. A mere claim of incorporation or a resolution is not sufficient.
- IPAB Decisions are Subject to Judicial Review: The judgment highlights that decisions of the IPAB are subject to judicial review by the High Court. The High Court can reverse IPAB decisions if they are not based on a proper assessment of the evidence and legal principles.
- Supreme Court’s Limited Interference: The Supreme Court will not interfere with the High Court’s decision if it is based on a balanced consideration of the evidence and materials on record.
Directions
The Supreme Court did not issue any specific directions in this judgment. The Court simply dismissed the Special Leave Petition, upholding the High Court’s decision.
Specific Amendments Analysis
There is no discussion of any specific amendments in the judgment.
Development of Law
The ratio decidendi of this case is that the principle of prior use is paramount in trademark registration disputes. The Supreme Court upheld the High Court’s decision, reinforcing that the first user of a trademark has a superior right to register that mark. The judgment also underscores that the similarity of marks is a critical factor in determining whether registration should be granted, even if the class of customers is different. This case does not introduce any new legal principles but reaffirms existing principles of trademark law.
Conclusion
In conclusion, the Supreme Court dismissed the Special Leave Petition filed by Royal Orchid Hotels Ltd., upholding the Madras High Court’s decision. The Court affirmed that Kamat Hotels (India) Ltd. was the prior user of the trademark ‘Orchid’ in Class 42 and that the marks ‘Royal Orchid’ and ‘Orchid’ were deceptively similar. This judgment highlights the importance of prior use and the need to avoid deceptive similarity in trademark registration. The Supreme Court’s decision reinforces the existing principles of trademark law and underscores the need for thorough evidence of continuous use to support claims of prior use.