“Trademark Turmoil | Bolt Technology vs. UJOY Technology | A Pivotal Case or a Potential Pitfall?”

2nd January, 2024 - 7:23 am Categories: Trademark Infringement 0 Comments

Introduction

The cases of transborder trademark infringement based on goodwill and reputation is nothing new in the world of IP litigation. The courts often find themselves at crossroad when dealing with such matters because of the moral dilemma that the case presents to them; whether to protect the domestic entities who are trying to make a name for themselves in cut throat competition or to set a precedent wherein the law provides for a conducive environment for protection of international entities when it comes to IPR related matters.

The case of BOLT TECHNOLOGY OU v. UJOY TECHNOLOGY PRIVATE LIMITED & ANR[i] is a clear example of how the courts veered towards the protection of domestic entities when it came to the denial of passing an ad interim injunction order against Ujoy Technology Private Ltd.  When it comes to matters of trademark infringement and passing off, one of the crucial aspects that can make or break the case is- ‘Reputation’. An attempt to define reputation as made in the case of Allergan Inc. Vs. Milmet Oftho Industries[ii], wherein it was established by the court that reputation is the connection of the product’s source and the particular product or service in the eyes of the public who use the product/service. Thus, a product and its trademark are closely associated with their reputation since it is the reputation which surpasses  itself over and above a geographical border and renames itself as extraterritorial reputation.[iii] Often times it is the trademark which acts as the vessel through which the embodiment of such extraterritorial reputation can be observed, which is why it is important that it is protected not only domestically but internationally too.Top of Form

Brief Facts Of The Case

The appellant, BOLT TECHNOLOGY OU, formerly known as ‘Taxify OU’ is an Estonia incorporated company which launched its humble beginnings in August 2013 as a ride hailing service. It underwent a rebrand and adopted the name ’BOLT’  in 2018 to signify itself as an electric ride sharing/hailing platform with fast kickstand scooters to beat the commute/travel.

The respondents, Udyog Technology Private Ltd and Anr are involved only in the business of making electric charging docks/stations in India and adopted the word ‘BOLT’ in 2018 with a  formal introduction to the public at large in 2020 through social media platforms. They were formerly known as ‘Revos’, but adopted tha name ‘BOLT’ to signify fast charging stations/docks all over the country.

The dispute between the two stemmed from their similar brand names, which could harm their goodwill and recognition internationally with respect to issues with consumer engagement and recognition. Additionally, the adoption of the mark “BOLT” violated the trademark of BOLT Technology Ou because it could be misinterpreted given the existence of allied/cognate goods in this particular case.

Arguments From Appellant Side

The main arguments that were relied upon by the appellant pertained to the situation of app downloading and revenue earning through the trademark as the threshold for presence in India. It was argued in the court that significant presence could be established as the app of the appellant was downloaded over 2 lakh times along with targeted marketing campaigns in various Indian cities. Thus, it was argued that the usage of the mark by respondents amounts a gross violation of ‘passing off’, which in turn would lead to confusion among consumers and cause harm to appellant’s reputation.

[Image Sources: Shutterstock]

Not only this but the appellant relied on various registrations of the mark (amounting to 92 in totality) around the world and newspaper headlines about its product to establish presence of an international image and reputation amounting to a substantial goodwill.  The case of Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Ltd. & Ors.[iv] plays an important role here and was also relied on by the appellant in the proceedings. It was argued that transnational goodwill and reputation is an important and much emphasized concept in the multilateral world due to which the companies can trust the global world to protect their brand and allow for free trade all over the world. This importance of granting recognition to a company’s brand value/reputation and goodwill subsists, even when there is no physical presence of the brand in the specific country where the alleged infringement has happened.

Additionally, the appellants tried to demonstrate that there was a spillover of their image/reputation in India due to recognition through Internet and global communication means.Spill-over reputation arises when a positive image associated with a trademark in one country spreads to another, creating questions about the trademark’s eligibility for legal protection in that new location.[v] Thus, a reliance was placed on Laxmikant V. Patel v. Chetanbhai Shah[vi] to show that even if there was an innocent registration of a mark that already can be calculated to cause confusion and deceive or divert a person from the rightful owner’s business, an injunction is an absolute must to solve the problem of probability of any confusion.

Arguments From Respondent Side

The respondents argued from the point of view of priority use and adoption along with lack of substantial presence and consumer base of appellants in India. An interesting thing that arose in the arguments was the prior use of charging docks/stations by both appellants and respondents for charging purposes. It was reasoned that while the scope of charging by appellant was limited to only their own electric scooters and appliances, the respondents had a vast array of network catering to all in a universal manner. Not only this but the trademark ‘BOLT’ was intriguingly registered by both the parties in the same year i.e. ‘2018’  and it was claimed that respondents were the first ones when it came to the matters of charging docks/stations in India.

The lack of substantial presence and consumer base was established by citing newspaper articles and app downloads as irrelevant while emphasizing on the fact that there was a very limited rollout of appellant’s own branded electric chargers in India. Thus, it was claimed that such a stark contrast to the charger base of respondents makes it clear that there is no sizeable consumer base which is alleged to have been affected by the usage of name ‘BOLT’ by the respondents. The case of Starbucks (HK) Ltd. v. British Sky Broadcasting Group Plc. & Ors.[vii] was extensively used to answer the question of substantial goodwill. It was reasoned  that when deciding whether to protect someone in a passing-off case, the court should be convinced that the person making the claim has a good reputation for their business in that particular area. Not only this but it should also be seen that a situation does not arise wherein granting extensive monopoly over a mark, tip the scales too much in favour of protection, whether or not intention to launch in the country exists.

Court’s Decision And Reasoning

The court resolved the trademark conundrum by considering the rollout coverage of EV charging stations by both appellants and respondents. The evidence given by both parties regarding adoption and promotion of the mark “BOLT” in connection with respective services was deemed important in demonstrating substantial and recognized presence in India.

However, the court was of the view that the appellants did not make a good case of substantial and recognized presence in India and their presence does not amount to a trans-border spillover/percolation of image in India. It was opined that foreign companies having no intent to come to India should not be allowed to throttle the spirit of Indian entrepreneurs by using the stick of trademark protection (as substantiated in renowned cases of Toyota[viii] and Milmet Oftho[ix]) . The court reaffirmed the views of the learned first judge and dismissed the application for the petitioner citing no market exposure as one of the reasons.

Conclusion

The present case presents a very flawed view of trademark protection when it comes to matters of international entities. The judgement ignites a fear in the minds of international businesses who might see it as an anti-globalism move to protect domestic vendors even though such vendors are resorting to infringement for fulfilling their purposes. The court failed to take into notice the landmark judgement of MAC Personal Care Private Limited & Anr. V Laverana GmbH and Co. Kg & Anr[x]which held that the product doesn’t require a “commercial” presence in India to initiate legal action but a mere emphasis towards acknowledging the significance of an international reputation along with its impact extending into India as the crucial factors in substantiating a passing off claim. The above case clearly falls into the same criteria indicating there was indeed a spillover of image in India which the court failed to take into consideration.

The court also did not account the territorial principle and presence of allied/cognate goods in the present case. The territorial principle states that a true test of goodwill could only be noted when it is also present in disputed territory where the dispute lies, which in this case is India. The advent of global communications and online websites play a major role in influencing and shaping public opinion. The celebrated case of N.R. Dongre v. Whirlpool[xi], helps establish that such spillover is possible through internet and global communication means also and physical presence of the company through offices and other standards is not necessary. This aspect was ignored by the court,

Lastly, the angle of allied/cognate goods was not taken into account while delivering the above judgement. Allied or cognate goods can be defined as those goods which may not be considered as identical in nature but their use case scenarios arise from the same genus of goods/services.[xii] In other words, these are those goods which can be said to have the same trade connection due to their common origin of use with each other. Chargers, electric motors and charging stations fulfil the criteria for allied/cognate goods[xiii] when looked upon from a commercial point of view in an interconnected environment.[xiv]Thus the test of similarity was fulfilled due to the presence of such allied/cognate goods, but was not given much heed in the ratio decidendi.

The case represents a very prejudicial direction towards the approach of dealing with trans border goodwill and reputation effects due to spillover. In this case spillover was not recognized despite solid proof. Thus,this precedent should be overturned to restore the faiths of international businesses in the IP protections system of India.

Author: Harjas Singh Gulati, in case of any queries please contact/write back to us via email chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.

[i] 2023 SCC ONLINE DEL 1122

[ii] 1997 SCC Online Cal 337

[iii] J.N. Nichols (Vimto) Ltd. v. Rose & Thistle, 1994 PTC 83 (DB)

[iv] (2018) 2 SCC 1

[v] Srividhya Ragavan, Spill-Over Reputation: Comparative Study Of India & The United States, U. PA. ASIAN L. REV. , 326, 326-362, (2019)

[vi] (2002) 3 SCC 65

[vii] (2015) UKSC 31

[viii]Supra n. 4

[ix]Supra n. 2

[x] 2016 SCC ONLINE DEL 530

[xi] 1996 SC 7 555

[xii] FDC Limited v. Docusuggest Healthcare, 2017 SCC OnLine Del 6381

[xiii] Sona Blw Precision Forgings Ltd v. Sonae EV Private Limited4 2022 SCC OnLine Del 2321

[xiv] Assam Roofing Ltd. v. JSB Cement LLP 2015 SCC OnLine Cal 6581