Madras High Court protects the well-known trade mark ‘LEGO’ from dilution

Facts

Lego Juris A/S, (hereinafter “Petitioner”) is a world-renowned manufacturer and seller of toys, games under the registered trademark “LEGO” since 1934. The word Lego, coined by the Petitioner, is a combination of words ‘leg’ and ‘godt’ which means ‘play well’ in the Danish Language. The Petitioner brought rectification petitions under Section 57 of the TradeMarks Act, 1957 against Leo Foods, which stood transferred to the Hon’ble High Court of Judicature at Madras, hereinafter “Respondent” for their use of the mark “LEGO CUTEHEART” and “LEGO COFFYBOND” in respect of confectionary products.

Prior Litigation

The Petitioner had filed a suit in 2003 before the City Civil Court at Secunderabad and the Court held that the Petitioner enjoys a transborder reputation and the LEGO mark is a well-known mark. The Respondent preferred an Appeal before the Telangana High Court which is pending adjudication.

Submissions of the Petitioner:

1. That the LEGO mark has been used in India ever since 1987 and that in 1994, the manufacturing and selling division of the Petitioner entered into association with a local Company for sale of their products in Mumbai and Delhi. The Petitioner has expanded its sale in various other parts of India and their products are available in many premium toy stores as well as online platforms like Amazon, Flipkart and others.
2. The sales of the Petitioner’s LEGO products is very high and in India alone, as of March 2023, it was to the tune of about Rupees 61.7 Crores.
3. The Petitioner’s trade mark LEGO has been declared as well-known trade mark in Taiwan, South Korea, Portugal, England, Germany, France etc. and that the trade mark LEGO stands registered India under Registration No.240430 which dates back to 1967.
4. The target audience of both the parties is common i.e., children and therefore, confusion between the two marks is very likely.
5. The Petitioner’s trade mark LEGO has also been declared as well-known in India and it would relate back to the date of the cancellation petition and that in any event the Respondent has not disputed the prior use of the Petitioner.
6. The Petitioner must succeed as the Respondent has adopted a near identical mark, incorporating the Petitioners prior, distinctive, registered and well-known trade mark LEGO and thus by the application of Section 11 (2) of the Act, the Petitioner must enjoy protection across all classes of goods and services including those of the Respondent under Class 30 (confectionary).

Arguments of the Respondent:

1. The Respondent claimed that they have coined the word “LEGO” combining two words “LE” meaning take in Hindi and “Go” meaning to leave in the year 2000 in respect of confectionary goods and that they have not copied the Petitioner’s trade mark and that they even conducted a search/survey on the database of the Trade Marks Registry and did not find any person, manufacturer or trader using LEGO in respect of confectionary in Class 30 and hence their adoption of the impugned marks in the course of their business was in good faith.
2. They further contend that the injunction granted by the Civil Court has been suspended in appeal and that the suit was only laid in respect of the word, LEGO and not the mark impugned in the present proceedings, which are composite label marks of “LEGO CUTEHEART” and “LEGO COFFYBOND”.
3. That the Petitioner deals in goods under Class 28 which cover toys and the Respondent is registered in respect of goods in Class 30, which relate to the food industry with both dealing in different streams of business and that the trade channels are wholly different and the statutory right of the Petitioner was limited to its goods in Class 28.
4. That the trade mark LEGO was not a well-known mark as per Section 11(6) of the Act as on the date of the filing of the rectification petitions, and hence cannot be given the protection across different classes and that when compared as a whole there is no possibility of confusion or deception.
5. That their confectionary products are sold across the country while the Petitioners toys are only sold in major cities and that there is a vast difference in the selling prices of the rival goods and that their trade channels are different and thus there is no likelihood of any confusion.

Issues framed by the Court:

“1) Whether the impugned marks of the 1st Respondent are liable to be removed from the register of the 2nd Respondent?

2) Whether the Petitioner is entitled to claim ‘well- known’ mark in India ?

3) Whether the impugned marks of the 1st Respondent are near identical marks likely to cause confusion and deception in the minds of the consumer ?

4) Whether the adoption of the impugned marks, by the 1st Respondent is honest and bonafide?”

Decision:

The Petitioners mark is a ‘well-known’ mark and it is entitled to protect its registered trade mark across different classes.  Both parties deal with the same target audience of young minds and children across ages and thus can cause confusion in the minds with similar identical marks. There is identical adoption of the Petitioner’s trade mark LEGO, including style and colors which suggests a dishonest intention on the part of the Respondent. While the Court agreed that LEGO was not held to be a well-known trade mark in India as on the date of the rectification petitions, it has established within the meaning of the ‘Explanation’ to Section 11 read along with Section 11(2) and Section 11(6), that it was entitled to be granted the status of ‘well-known’ trade mark on the date of the filing the Petitions. Therefore, the Court held that the Petitioner is entitled to the rectification of the Register by removal of the Impugned Marks.

Analysis:

Well known trade mark

• While the Respondent did not dispute that the Petitioner was the prior user of the mark it had challenged the Petitioner’s entitlement to claim the status of a well-known trade mark as on the date of filing the rectification petitions.
• The Court observed that even if on the date of the filing of the rectification petition, the petitioners mark was not declared well known in India, it was still a well-known declared mark in other jurisdictions of the world. The Court looked into Section 2(1)(zg), Section 11 (2) and the Explanation to Section 11 to hold that if a trade mark is entitled to be protected as a well-known trademark such as the mark LEGO, it would be an ‘earlier trade mark’ even on the date of the application for registration of the impugned registrations, in context of Section 11 (2) of the Act. Therefore, in present case, ‘LEGO’ was treated as an earlier trademark and was given the benefits of Section 11(2).

Mala fide intent

• The Court also observed that the fact that the Respondent claimed to have searched and found nothing similar in the confectionary category, also suggests that they somewhere knew the presence of the mark LEGO in a different category which further establishes the mala fide intent of the Respondent.

• The Court further observed that it is settled law that registration under different classes is only for the convenience of the Registrar and it cannot be extended as a defence in an action for infringement or passing off.

• The fact that the Respondent had copied the dominant features of the Petitioner’s mark along with the identical ‘LEGO’ word mark establishes the dishonest adoption of the Respondent. Furthermore, since their adoption was in bad faith it was not open to the Respondent to contend that they are entitled to retain their registration as their area of business is restricted to only the city of Hyderabad/State of Telangana

Likelihood of Confusion

• Only a likelihood of confusion is to be considered when considering similar marks, and in the present case, where children are the target customers, who only use visual aids to differentiate between their favourite goods, it is highly likely that they would fall prey to confusion and believe that the Respondent’s confectionary are also goods of the Petitioner.

Authored by: S. Majumdar & Co.