Trademark Battle: Karnataka High Court Upholds ‘HOTEL SPECIAL’ Validity In Asafoetida Case

Trademark Battle: Karnataka High Court Upholds ‘HOTEL SPECIAL’ Validity In Asafoetida Case

The Karnataka High Court recently dismissed an appeal filed by a partnership firm challenging a trial court’s temporary injunction order. The injunction restrained the firm from infringing the original plaintiff’s registered trademark, "Hotel Special", specifically in relation to the marketing of asafoetida (commonly known as Hing).

In a ruling by a single judge bench, Justice Anant Ramanath Hegde held that trademark registration is granted after careful consideration by the relevant authority. The court held that Section 31(1) of the Act of 1999 confers prima facie validity to a registered trademark. While this presumption can be rebutted, when an interim order seeks to prevent alleged infringement of a registered trademark, the burden lies on the defendant to challenge the prima facie validity of the mark.

The plaintiff claimed exclusive rights to selling asafoetida under the trademark "Hotel Special" since 1993, and the mark was officially registered in January 2002.

The defendant (appellant), on the contrary, asserted that they have been the prior user of the trademark "SVT Hotel Special" for Asafoetida since 1990. Their argument centred around the fact that the disputed trademark comprises generic words, and therefore, lacks distinctiveness.

Upon reviewing the records, the bench acknowledged that the Trademarks Act not only facilitates trademark registration for protection against unauthorised use but also safeguards users who can demonstrate prior usage of a mark in contrast to the claims of the registered owner. However, the court clarified that Section 34 of the Act of 1999 places the burden of proving prior use squarely on the person (in this case, the defendant) who asserts a defence based on prior use.

In this context, the court scrutinised the invoices submitted by the defendant and found that they did not reveal any transactions. Consequently, these documents could not substantiate the defendant’s claim of having appointed a distributor. As a result, the court concluded that, at this stage of proceedings, the defendant’s assertion of being the prior user of the trademark "SVT HOTEL SPECIAL” remains unestablished.

The defendant also contended that the phrase “Hotel Special” conveys its intended purpose, implying that the product is specifically designed for bulk use in hotels. Consequently, they argued that the registration of the trademark is invalid.

The court observed that while “HOTEL” and “SPECIAL” individually may lack distinctiveness and seem generic, their combination as “HOTEL SPECIAL” could be perceived as distinctive by an average consumer. The court further clarified that when evaluating an application for a temporary injunction, if there is uncertainty regarding whether a trademark is distinctive or non-distinctive, and upon initial consideration of the evidence, even if conflicting viewpoints exist, the court must favour the registered trademark and presume its prima facie validity.

The court asserted that unless there is evidence demonstrating that the registration of the trademark in question is ex-facie impermissible or granted in gross violation of the provisions of the Act, it must consider the registered trademark as prima facie valid. "In the present case, no such materials are placed to hold that the registration of the trade mark is ex-facie impermissible,” the court stated.

In response to the question of whether the trademark solely indicates its “intended purpose” and whether its use by others is protected under Section 30 of the Act, the court stated that merely because asafoetida is sold in large jars by itself does not automatically imply that the expression merely speaks about intended use without any distinctiveness. Whether the expression “HOTEL SPECIAL” found on the plaintiff’s asafoetida tin is exclusively associated with use by hoteliers, as alleged by the defendant, remains a matter of evidence.

The court further said that, given the presumption regarding its prima facie validity, and the absence of any evidence showing that the registration of the trademark is ex-facie untenable, it cannot accept the contention that the trade mark “HOTEL SPECIAL” only speaks about the intended purpose without any distinctive character and dismissed the appeal.