Delhi High Court restrains private entities from using ‘KHADI’ in trademark infringement lawsuit

“Resultantly, the defendants as well as all others acting on their behalf shall stand restrained, during the pendency of the suit, from using, directly or indirectly, the mark KHADI, either as a word or as part of its trade name or name of its business concern, as well as from using the impugned marks, or any other mark identical or deceptively similar thereto,” the court ordered.

It also restrained the defendants from operating any social media page, including Facebook, Instagram and YouTube, using their names or from reflecting the ‘KHADI’ mark on their website.

Justice Shankar noted that the defendants had admittedly used the ‘KHADI’ mark “to designate its activities relating to use, display and promotion…of the Khadi fabric and the Khadi culture” with the activities of KVIC.

“The submissions advanced by the defendants in their defence, therefore, themselves vouchsafe their intent to create an association with the plaintiff KVIC, by using the impugned marks. The fact that the use of the impugned marks by the defendants would lead to an impression of association between the defendants and the plaintiff, therefore, stands conceded by the defendants,” the court said.

On the issue of trademark infringement, the court said that the activities of the defendants in relation to the use of the mark were similar to the activities of the plaintiff “as the defendants themselves admit that their activities are interlinked; in fact, that the defendants’ aim is to promote the use of Khadi, in which the plaintiff is admitted by the defendants to be the nodal organisation”.

The court observed that once the very intent to create an association is acknowledged by the defendants, “the likelihood of inference of such association, thereby, in the minds of the consuming public, and the possibility of confusion thereby, also stands admitted. Section 29(2), thereby, squarely applies, and a prima facie case of infringement, under the said provision, therefore, exists”.

On the issue of passing off, the court noted that the defendants claimed that they were sourcing fabric manufactured by KVIC bearing its mark from “authorized outlets and stockists” and used it in designer clothing, beauty pageants etc. The intent to associate the activities of the defendants with those of the plaintiff is, therefore, not only apparent but admitted, the court noted. The court further said that KVIC did not grant the defendants the authority to do so and hence these attempts “prima facie” amount to passing off by the defendants, of their services as those of the plaintiff or at the very least drawing an association between the two. The court also noted that no written consent had been taken by the defendants from KVIC to use the trademark.

According to KVIC, the right to use the ‘KHADI’ mark for textile products requires the person or organisation to be enlisted as an authorised user of the ‘KHADI’ trademarks for which it has to apply for recognition through the Khadi Institutions Registration and Certification Sewa. KVIC is a statutory body formed in 1957 by the central government under the Khadi and Village Industries Commission Act of 1956 to plan, promote, facilitate, organise and assist in the establishment and development of khadi and village industries in rural areas. It further argued that it is the nodal agency to implement the Prime Minister Employment Generation Programme (PMEGP).

The KVIC moved the high court claiming that they became aware of the infringement of their mark in December 2019 when the defendants organised the National Khadi Designers Awards, 2019 and the Miss India Khadi event at Goa, in which they were using the word mark KHADI as well as the charkha logo. The KVIC sent them a legal notice following which the defendants removed the mark and logo from their banners, posters and hoardings. KVIC subsequently came to know that the defendants infringed on their KHADI and charkha trademarks through various other methods. KVIC also alleged that defendants were falsely claiming to be associated with the PMEGP by providing, on their website, a hyperlink which redirects to the PMEGP page of KVIC.

It was the defendants’ case that the intellectual property rights over the term ‘Khadi’ would vest with every person who is associated with Khadi. They said that being publici juris (belonging to the public), the Khadi mark cannot be appropriated exclusively by the KVIC.

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