In the market for a distinctive trademark

By Manisha Singh and Shreyashi Mazumdar, LexOrbis
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In the recent case of Walmart Apollo Llc v Aayush Jain and Anr, the Delhi High Court dealt with allegations that the defendants were not acting in good faith and had not in good faith adopted a mark. The plaintiff alleged that the defendants had made and were using infringing copies of their registered trademark.

In the market for a distinctive trademark Manisha Singh
Manisha Singh
Partner
LexOrbis

The plaintiff, incorporated in the State of Delaware, USA, is a wholly-owned subsidiary of Walmart Inc. and the subsequent proprietor of the trademarks Walmart and Wal-mart in India. Although not mentioned in the court findings, the company’s name is derived from the name of its founder, Sam Walton, combined with a popular variant of the word market. The plaintiff, established in 1962, is one of the world’s largest retailers and runs a chain of large discount department stores, e-commerce stores, and brick-and-mortar retail and wholesale stores all over the world. It sells a variety of goods, including but not limited to, home items, operating in more than 10,500 stores under 48 names in 24 countries under the corporate name and trading style of Walmart and Wal-mart. All rights to the marks Walmart and Wal-mart were assigned to the plaintiff by a deed of assignment in 2018 between the plaintiff and Wal-Mart Stores, Inc.

The plaintiff’s mark, Walmart, is prominently displayed in several stores, was adopted in 2006 and was launched in the market in 2008. That mark was often used in conjunction with a stylised yellow spark or graphical representation of the sun with six symmetrical rays. The plaintiff submitted that the yellow mark was first used in 2008 as a representation of innovation, creativity and diversity. The plaintiff submitted that the yellow spark mark, with or without the marks Walmart and Wal-mart, was exclusive to the plaintiff. The plaintiff’s marks Walmart and Wal-mart have been registered in class 35 for retail and wholesale services in at least 90 jurisdictions all over the world, including India.

In the market for a distinctive trademark Shreyashi Mazumdar
Shreyashi Mazumdar
Senior Associate
LexOrbis

The plaintiff discovered that the defendants had applied in January 2020 to register the mark Wmart in classes 25 and 35, claiming that it had been in use since 2019. The application for class 25 related to such items as hosiery, ready-made garments and undergarments. The defendants were selling in brick-and-mortar stores. They also sold clothes and home accessories by online retail using the address www.wmartretail.com. In both channels the defendants displayed yellow and other coloured stylised half-spark or sun marks similar to those of the plaintiff in conjunction with the mark Wmart. The defendants did not comply with a cease-and-desist letter asserting that the marks were identical to those of the plaintiff and that consumers would be confused. They said that they had adopted the marks in good faith in 2019, but did offer to remove the “flowery graphic” or half spark to resolve the matter. The plaintiff applied for permanent injunctions, alleging infringement of trademarks and copyright.

The court held that the comparison of the sets of marks showed that the plaintiff had a prima facie case and that without the grant of injunctions the plaintiff would suffer irreparable loss and injury. The court therefore granted injunctions to restrain the defendants from using the mark WMart or any other mark deceptively similar or identical to the plaintiff’s trademarks Walmart and Wal-Mart.

The defendants had not been served with documents at the time of the hearing and the case is at an early stage. However, this apparently straightforward case may pose hard questions of law and fact. The injunctions covered only the plaintiff’s marks Walmart and Wal-Mart. Does this mean that the court thought little of the reliance placed by the plaintiffs on the spark graphic? If only the marks consisting of words will be considered at the full hearing, is the mark Wmart sufficiently similar to those covered by the injunctions? Will the court hold that the defendants have proved that they acted in good faith, and, if so, will that provide a sufficient defence?

Most importantly, will the case continue the line of decisions, such as Yahoo! Inc v Akash Arora and Anr and H&M Hennes & Mauritz Ab and Anr v HM Megabrands Pvt Ltd and Ors establishing India as a sympathetic jurisdiction for the intellectual property of multinational companies or will it decide there has been over-reach?

Manisha Singh is a partner and Shreyashi Mazumdar is a senior associate at LexOrbis

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