Rachna Sagar Vs Sovereign Mercantile Trademark Dispute

20th June, 2023 - 6:42 am Categories: Legal Issues 0 Comments

The ongoing legal dispute between Rachna Sagar Pvt. Ltd. (Plaintiff) and Sovereign Mercantile Pvt. Ltd. & Ors. (Defendant) has highlighted significant issues in the trademark act, specifically with Sections 103 and 104, which outline the penalties for trademark infringement. Particularly the manner in which problems were caused upon a prior user owing to a fraudulent registration by another party. A Passing Off suit has been filed by Khurana & Khurana, Advocates & IP Attorneys on behalf of Rachna Sagar Pvt. Ltd. and that the said dispute is currently pending adjudication before Hon’ble Delhi High Court wherein Khurana & Khurana, Advocates & IP Attorneys managed to get a relief of interim injunction before the Hon’ble Delhi High Court in favour of Rachna Sagar Pvt. Ltd.

The Plaintiff, Rachna Sagar Pvt. Ltd., established in 1995 and registered in 1996 has been using the tradename/mark of Rachna Sagar along with device mark  since 1996. They have ventured into e-learning through Forever Books Pvt.  Ltd., introducing the self-learning portal Swa- Adhyayan aligned with the National education policy, of 2020. They also launched Goweb, a multimedia-based online support system offering e-learning resources and test generators. With numerous awards and partnerships with prestigious institutions like the National Skill Development Corporation, Air Force schools, and Army Schools (Italy), Plaintiff has established a strong presence as a leading publisher in domestic (India) and also internationally. These activities made the plaintiff’s trade mark  as widely known and to be associated with high-quality educational resources.   They currently possess around 4,000 educational books circulated nationwide, and their trademark enjoys widespread recognition and market penetration.

The Defendant is a company incorporated under the Laws of India having its registered office at Delhi, engaging in a similar business as the Plaintiff. The Defendant has wrongfully registered the impugned mark under the Trademark registration number 4058431 in class 16, falsely claiming to have been a user of the impugned mark since 1995. The documents submitted by them for trademark registration on the face of it were completely fabricated and forged in nature.

CHRONOLOGY OF EVENTS: The legal battle between Rachna Sagar Pvt. Ltd. and Sovereign Mercantile Pvt. Ltd. & Ors.

 On January 1, 1996, Rachna Sagar (the plaintiff) was registered and was engaged in the educational publishing business in India. Over the years, the plaintiff gained recognition both domestically and internationally for providing superior educational resources, including teaching and learning materials, to students and teachers across various levels of school education. Since its inception, Plaintiff has been actively using the tradename “Rachna Sagar” and device mark . The plaintiff has openly, continuously, exclusively, and extensively used these trademarks since 1996. Furthermore, from January 1, 2004 onwards, the plaintiff commenced using of another mark .

On November 27, 2007, the plaintiff consequently applied for the registration of the trademark and subsequently obtained registration under Application No. 1624801, with a valid certificate until November 27, 2027. Additionally, on November 29, 2021, the plaintiff applied for the registration of the wordmark “RACHNA SAGAR”, claiming prior usage since 1996. The application is currently pending for registration and awaiting further processing.

In the first week of March 2022, Plaintiff comes to know about Sovereign Mercantile Pvt. Ltd & Ors. (defendants) was using the impugned mark  , which had been wrongfully registered by Defendant No. 1 under Trademark No. 4058431, falsely claiming usage since 1995. Consequently, On March 10, 2022, the plaintiff filed a rectification petition under Section 57 of the Trademark Act, 1999, before the trademark registry. The petition sought rectification of Defendant No. 1’s Trademark Registration No. 4058431.

On December 28, 2022, the Defendant lodged a complaint against the plaintiff, alleging trademark infringement under Sections 103 and 104 of the Trademark Act, 1999. The Defendant’s complaint was baseless and without merit. The Plaintiff had not infringed on the Defendant’s trademark in any way.

Despite the lack of merit in the Defendant’s complaint, the Police authorities registered an FIR against the Plaintiff on April 28, 2023. The authorities from Delhi Investigation Unit (DIU) also conducted a search and seizure exercise at the Plaintiff’s Premises on May 2, 2023. As a result of the search and seizure exercise, all of the Plaintiff’s goods were seized and sealed causing severe financial loss to Rachna Sagar Pvt. Ltd.

The Defendant’s actions, in this case, were clear misuse of the law. The Defendant filed a baseless complaint against Plaintiff in order to mentally harass and intimidate Plaintiff.

In response to Defendant’s unjust activities and to stand for his rights, on May 3, 2023, the plaintiff filed two applications before the learned Additional Chief Metropolitan Magistrate (ACMM) at Tis Hazari Court. These applications sought the release of seized goods and stay on further investigation in relation to FIR No. 189/23.

Additionally, on May 8^th, 2023, Rachna Sagar Pvt. Ltd., (Petitioner/Plaintiff) filed a petition for quashing the aforementioned FIR in the name “Rachna Sagar Pvt. Ltd. Vs. State of NCT of Delhi & Anr”, before the Hon’ble Delhi High Court. The purpose of this petition was to request the Hon’ble High Court to declare FIR null and void as it was based on false allegations and lacked merit.

Furthermore, in meanwhile on May 4, 2023, Plaintiff initiated a passing off suit against Defendant, named “Rachna Sagar Pvt. Ltd. Vs. Sovereign Mercantile Pvt. Ltd. & Ors.”. The suit, filed under sections 134 and 135 of the Trademarks Act, 1999, as well as Section 27 of the Trademark Act, 1999, and Section 151 of the Civil Procedure Code (CPC), sought a permanent injunction, rendition of accounts, and delivery up, among other remedies and additionally an interim injunction application was also filed by Rachna Sagar Pvt. Ltd.

Additionally, Rachna Sagar Pvt. Ltd. had also filed a writ before the Hon’ble Allahabad High Court in purview of the Complaint filed by the Defendant before Noida Police Station, seeking prohibition against the police authorities for taking any coercive steps against Rachna Sagar Pvt. Ltd.

After detailed examination, on May 9, 2023, and May 31, 2023, in the case “Rachna Sagar Pvt. Ltd. Vs. State of NCT of Delhi”, the petitioner, Rachna Sagar Pvt. Ltd., was granted protection from arrest in relation to FIR. No. 189/2023 and also granted a stay on further prosecution until the next scheduled hearing date.

In the passing off suit filed titled “Rachna Sagar Pvt. Ltd. Vs. Sovereign Mercantile Pvt. Ltd. & Ors.”, on May 12, 2023, the Hon’ble Delhi High Court granted an interim injunction against the defendant from manufacturing, selling, advertising, or dealing in any products using the impugned mark “RACHNA SAGAR” until the next scheduled hearing, which is set for September 5, 2023.

Meanwhile, the Hon’ble Allahabad High Court diposed off the Writ filed on account of a report from the police authorities that upon the complaint filed by the Defendant, no case was made out against Rachna Sagar Pvt. Ltd.

The chain of events surrounding the legal dispute between Rachna Sagar Pvt. Ltd. and Sovereign Mercantile Pvt. Ltd. & Ors. demonstrates the complexities and challenges faced in protecting trademark rights. Throughout the proceedings, the Hon’ble Court has consistently upheld the principles of justice and safeguarded the rights of citizens against arbitrary actions by enforcement authorities.

Author: Marishwar (Intern), Co-Author: Rajat Sabu – Senior Associate Litigation, in case of any queries please contact/write back to us via email to rajat@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.