The David-Goliath tussle in the trademark world is an unending one. It is a scenario where a big company is suing a small company and most often, the big company is made out to be a trademark bully. Though that might be true, in my opinion, it has more to do with protecting one’s trademark rights keeping in mind the business interests and the losses that the company is likely to incur as a result of such use by a third party. So if the actions of the smaller company are likely to affect the big company, it really isn’t a case of David-Goliath, as much as it is a case of infringement.

So if a fast fashion clothing brand (very well-known of course) takes action against a restaurant (well-known in a particular city), does that amount to infringement? The Delhi High Court thinks it is.

The Zara trademark is in question and the parties involved are Zara and Zara Tapas Bar. The Plaintiff arguments are that it is an international brand and has been using the mark since 1975. Further, that they have been carrying out operations in India through Inditex Trent Retail India Private Limited with whom they have a joint venture. Though the first store was opened in India only in 2010, they have been using the mark in India since 1986-87 and even filed trademark applications.

They became aware of the Defendant’s business activities when their mark was advertised and made available to the public in April 2005 and filed a notice of opposition against the mark. The opposition proceedings are still pending. Meanwhile, in July 2011, the Defendant approached the Plaintiff to enter into a coexistence agreement and agreed not to claim protection in classes 24 and 25 (related to textile), confine their services to restaurant services and only use their mark as a composite mark (as depicted in the picture above). However, the Plaintiff rejected this offer made by the Defendant.

The Defendants argued that the Plaintiffs have come to the Court with unclean hands and cited two reasons – that they haven’t taken against the other Zaras existing in the market and also because they didn’t disclose the fact that their mark had been challenged in Europe and India. Further, that their rejection of the offer to co-exist made it clear that they had the tendency to create a monopoly over the term Zara.

The Court considered many factors before granting the interim injunction in this case. Some of the key factors were:

Nature of use of the mark/Deceptive Similarity –

The Defendant was mostly using the mark ZARA per se and promoting the brand with emphasis on Zara rather the entire mark Zara Tapas Bar. The Court looked into screenshots from their Facebook page and other advertisements and for this reason held that the mark is deceptively similar to Zara.

Zara as a Publici Juris –

The Defendant contended that since the mark Zara is being used by many entities, it has become publici juris (public right) and also listed out marks containing the word Zara. The Court cited a case where it was held that the Plaintiff is not expected to sue all types of infringers who may not be affecting his business and also said that even if the mark was used by others and the Plaintiff hasn’t taken action against them, it doesn’t disentitle them to seek relief if it is entitled otherwise.

Trans-border Reputation –

At the outset, the Court took into consideration only those documents submitted by the Plaintiff evidencing use of the mark Zara in India before 2003 since the Defendants had had been able to show usage since 2003. The Court mostly relied on articles discussing the brand, documents evidencing that Zara was getting the fabrication done from various exporters in India. Interestingly, to quote the Court “We are living in the 21st century. At least since the beginning of this century, there is widespread dissemination of information through the internet and television. ZARA was catering to the middle class and higher middle class. Consumers in India cannot be unaware of the Plaintiff’s company and its product.”

Delay –

The Court did not accept this argument of the Defendant since the Plaintiff was corresponding with the Defendant for amicable resolution of the matter since atleast February 2011. Also, since the Plaintiff had filed the opposition, this delay of 3 years will not amount to acquiescence.

Impact of suppression of facts as a ground for disentitlement for injunction –

On this issue, the Court opined that though it is imperative for a party seeking ex- parte ad interim injunction to make a full disclosure of facts, when the matter is heard on merits such misstatement of facts will not disentitle the Plaintiff the relief they have sought.

Off late there has been a great degree of change in the perspective with which the Courts look at usage in India and also trans-border reputation and we hope that Courts keep this trend going. On a completely different note, I think people from Chennai may be disappointed to know that Zara Tapas Bar may not survive for too long, if Zara manages to get a permanent injunction. For now, their website is down but seems like the restaurant is still open.

This article has been authored by Nikita, an IP Law practitioner.