The Bombay High Court held that companies and corporate entities can invoke the “surname defence” under Section 35 of the Trade Marks Act, 1999, and that the protection granted under this provision is not restricted to individuals alone. The Court clarified that there is no statutory provision in the Act that prevents corporate entities from relying on the defence when the name used by the company corresponds to the surname of its promoters or predecessors in business. The ruling came while the Court set aside an interim injunction that had restrained a company from using the surname “Kataria” in connection with its business activities.
The dispute arose from a trademark conflict between parties using the surname “Kataria” in their business names. One of the parties approached the court seeking an injunction against the defendant company, alleging that the use of the word “Kataria” by the company amounted to trademark infringement and could lead to confusion in the market. The plaintiff argued that the name had acquired distinctiveness and goodwill in connection with its business operations and that the defendant’s use of the same surname was unlawful.
The matter was first considered by a Single Judge of the Bombay High Court, who granted an interim injunction restraining the defendant company from using the name “Kataria” in connection with its insurance broking services. The order effectively prevented the company from continuing to use the surname in its branding and business operations. The defendant company challenged this decision before a Division Bench of the High Court by filing an appeal.
In its appeal, the defendant company argued that its use of the name “Kataria” was legitimate because the surname belonged to the promoters and was associated with their family and business history. The company submitted that the surname formed part of its identity and had been used in connection with business activities carried on by members of the family. It argued that such use was bona fide and therefore protected under the provisions of the Trade Marks Act.
The company relied on Section 35 of the Trade Marks Act, which protects the bona fide use of one’s own name or the name of one’s place of business. This provision states that the owner of a registered trademark cannot interfere with the honest use by another person of their own name or the name of their predecessor in business. The defence is intended to ensure that individuals are not prevented from using their own names in the course of trade when such use is genuine and not intended to mislead consumers.
The central issue before the Division Bench was whether this defence could be invoked by a company or whether it was limited only to natural persons. The Court examined the wording of the statute and noted that the Trade Marks Act does not provide a specific definition of the term “person” within the context of Section 35. In such circumstances, the Court referred to the General Clauses Act, which provides that the word “person” includes companies, associations, and bodies of individuals.
Based on this interpretation, the Court concluded that the protection provided by Section 35 is not restricted solely to individuals and may also extend to corporate entities. The Court observed that there is no statutory prohibition preventing a company from using the surname of its promoters or predecessors in business as part of its trade name or business identity. Therefore, a company can rely on the surname defence if the name used by the company corresponds to the family name associated with its promoters or business lineage.
While examining the facts of the case, the Court noted that the defendant company had been using the surname “Kataria” in connection with its business operations and that the name corresponded to the surname of its promoters and predecessors in business. The Court observed that the company had used the surname as part of its commercial identity and that the name had been associated with earlier business activities carried out by members of the same family.
The Court emphasized that the crucial question in such disputes is whether the use of the surname is bona fide or whether it has been adopted with the intention of taking unfair advantage of the reputation and goodwill of another business. According to the Court, the determination of whether the use of the name is honest or dishonest is essentially a question of fact that must be examined in detail during the trial.
The Division Bench observed that at the stage of granting an interim injunction, the court must assess whether there is sufficient material to conclude that the defendant’s use of the name is dishonest or intended to mislead consumers. If the available material suggests that the surname corresponds to the family name of the promoters and has been used as part of the company’s genuine business identity, the defence under Section 35 may be available.
In the present case, the Court found that there was no clear evidence indicating that the defendant company had adopted the surname “Kataria” with the intention of exploiting the goodwill of the plaintiff. Instead, the material on record suggested that the surname was genuinely connected to the promoters and their business lineage.
The Court also considered the practical consequences of restraining the company from using the surname. It observed that the defendant company was part of a group of businesses that had used the family name in their commercial activities. Preventing the company from using the surname could therefore have serious implications for its business identity and operations.
The Division Bench noted that the Single Judge, while granting the interim injunction, had not fully examined the question of whether the surname defence under Section 35 could be invoked by a company. The earlier order had also not sufficiently considered whether the use of the surname by the defendant company was bona fide.
After examining the legal framework and the facts presented in the case, the Division Bench concluded that the interim injunction granted by the Single Judge could not be sustained. The Court therefore set aside the order that had restrained the defendant company from using the surname “Kataria.”
At the same time, the Court clarified that the final determination of the dispute would take place during the trial after a full examination of evidence. Issues such as prior use of the name, the extent of goodwill associated with the mark, and the likelihood of confusion among consumers would be examined in detail during the proceedings.
The judgment clarified the scope of the surname defence under the Trade Marks Act and confirmed that the protection provided by Section 35 is not confined only to individuals. Corporate entities may also rely on this defence when the name used by the company corresponds to the surname of its promoters or predecessors in business and when such use is bona fide.
The Court emphasized that the existence of a registered trademark does not automatically prevent another party from using the same surname if the use is honest and connected to the party’s own identity. Whether the defence applies in a particular case depends on the facts and circumstances, including the manner in which the name is used and whether the use is intended to mislead or cause confusion in the market.
Through this ruling, the Bombay High Court clarified that companies, like individuals, can invoke the surname defence under the Trade Marks Act when they use their own family name as part of their commercial identity, provided the use is genuine and not intended to exploit the goodwill associated with another business.
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