Yogi Ayurvedic Products Pvt. Ltd. v. Vaishali Industries: Bombay High Court rules written Assignment essential to prove continuous of the Trademark
Author: Adv. Kavita Srivastav Sharan
Adv. Mittal Nor Patel
In Yogi Ayurvedic Products Pvt. Ltd. v. Vaishali Industries, the Bombay High Court ruled that trademark rights require a written assignment under Section 2(1)(b) of the Trade Marks Act, 1999. The Defendant’s prior use claim, based on 1997 invoices from M/s. D.V. Deo Aromatics Pvt. Ltd., was rejected due to the absence of a formal assignment. The court upheld the Plaintiff’s trademark and confirmed the injunction, reinforcing that prior use without legal assignment is invalid
Introduction
The case revolved around the alleged infringement and passing off of the registered trademark “YOGI,” where the Plaintiff, Yogi Ayurvedic Products Pvt. Ltd., sought interim relief against the Defendant, Vaishali Industries, for unauthorized use of the mark. The Order highlights the critical role of trademark registration, continuous commercial use, and the necessity of a legally valid trademark assignment in establishing ownership and exclusive rights.
Background of the Case
Yogi Ayurvedic Products Pvt. Ltd., incorporated in 1999, has held registrations for the trademark “YOGI” since January 15, 1999, under Classes 3 and 5, covering cosmetic, medicinal, and pharmaceutical products. The Plaintiff contended that it had established substantial goodwill and commercial usage of the mark over the years, supported by trade licenses for the year 1999 and invoices dating back to 2006.
On August 2, 2022, the court granted ex-parte ad-interim reliefs in favor of the Plaintiff, preventing the Defendant from using the mark “YOGI.” Vaishali Industries, in response, sought to vacate the order under Order XXXIX Rule 4 of the Civil Procedure Code, 1908 (CPC), arguing that the Plaintiff had misrepresented material facts while obtaining the interim reliefs.
Plaintiff’s Contentions
The Plaintiff argued that it was the registered proprietor of the “YOGI” trademark and had consistently used it in commerce since 1999. They contended that their exclusive rights were supported by trademark registrations, trade licenses, and sales records. The Plaintiff also cited previous court rulings affirming their proprietary rights over “YOGI” and its formative marks.
Additionally, the Plaintiff emphasized that the Defendant’s use of “YOGI” created consumer confusion and commercial harm, amounting to trademark infringement and passing off. Most importantly, they highlighted the absence of any legally valid assignment of the mark to the Defendant, as required under Section 2(1)(b) of the Trade Marks Act, 1999, rendering the Defendant’s claim of prior use unsustainable. The Plaintiff contended that “assignment of a trade mark under the provisions of the Trade and Merchandise Marks Act, 1958, as per Section 2(1)(a) thereof and under Section 2(1)(b) of the Trade Marks Act, 1999, is mandatorily required to be in writing by an act of the parties concerned”. Since no such assignment existed in favor of the Defendant, the alleged transfer of the mark was legally invalid. The Plaintiff further argued that in the absence of a written assignment, there was “no question of the Defendant claiming that use of the mark ‘YOGI’ in the invoices issued by M/s. D.V. Deo Aromatics Pvt. Ltd. in the year 1997, would inure to the benefit of the Defendant.”
Defendant’s Contentions
Vaishali Industries relied on Section 34 of the Trade Marks Act, 1999, claiming prior use of “YOGI” since 1997 through its predecessor, M/s. D.V. Deo Aromatics Pvt. Ltd., run by their family members. The Defendant argued that the business transitioned to Vaishali Industries, where the wife and daughter of the managing director became partners, through a family arrangement, justifying their continued use of the mark despite the lack of a written assignment deed.
They contended that since the mark was unregistered, no formal assignment was necessary, and rights passed informally with the business.
Court’s Observations and Ruling
The Hon’ble Bombay High Court, examined the evidence presented and reaffirmed the validity of the Plaintiff’s trademark rights. Key observations included:
The court held that the Plaintiff’s trademark registration dating back to 1999 established statutory rights under Section 28(1) of the Trade Marks Act.
Lack of Prior Use by the Defendant: The court noted that the Defendant’s reliance on two invoices from 1997 issued by a third-party entity (M/s. D.V. Deo Aromatics Pvt. Ltd.) did not substantiate continuous use. Furthermore, there was no written assignment of rights between this entity and the Defendant, as required under Section 2(1)(b) of the Trade Marks Act.
Failure to Establish Protection under Section 34: The court emphasized that a claim under Section 34 requires clear evidence of continuous use prior to the registered proprietor’s trademark rights. The Defendant failed to produce any substantial evidence beyond the 1997 invoices, which were insufficient to demonstrate uninterrupted commercial use.
Importance of Written Assignment: The court underscored that trademark rights cannot be transferred informally. “Once this link is snapped, there is no question of the Defendant claiming that use of the mark ‘YOGI’ in the invoices issued by M/s. D.V. Deo Aromatics Pvt. Ltd. in the year 1997, would inure to the benefit of the Defendant.” The ruling clarified that mere familial or business relationships do not establish legal ownership of a trademark in the absence of a formal transfer document.
Commercial Loss and Dilution: The court acknowledged that the Defendant’s use of the “YOGI” mark posed a risk of dilution of the Plaintiff’s brand and potential commercial harm, strengthening the case for maintaining the injunction.
Consequently, the court dismissed the Defendant’s application to vacate the interim relief and confirmed the ex-parte ad-interim injunction in favor of the Plaintiff.
Conclusion
The ruling underscores the necessity of a formal, written assignment for the valid transfer of trademark rights. The absence of such documentation led to the rejection of the Defendant’s claim under Section 34. This case reaffirms that trademark ownership cannot be informally inherited or transferred and must comply with statutory requirements to be legally enforceable.