KD Gold and Diamonds Private Limited v. M/s Khimji & Sons

KD Gold and Diamonds Private Limited v. M/s Khimji & Sons

FAO No.105 of 2023

Decided on: 11/12/2023

Brief Facts of the Case:

The plaintiff is a partnership firm that operates a jewellery business and has registered its trademark "KHIMJI" / "KHIMJI & SONS JEWELLERS", including all logos, which is valid until 2029. With time, the business has gained a great reputation and goodwill. The defendant is a company that started its business in 2020 and used the mark "Khimji Jewels", which is found to be confusingly similar to the plaintiff's brand. Additionally, the defendant has applied for trademark registration, but it is still pending consideration before the competent authority under the Trademark Act. Earlier, the defendant's request for registration of the trademark "KHIMJI DAYABHAI & Co" was refused by the examiner of the trademark because it was deceptively similar to the plaintiff's trademark. The plaintiff claims that the defendant's use of the name infringes its trademark rights.

Contentions of the Appellant:

Both parties, who are cousins from the same family, have been running a partnership firm since April 1, 1992, under the name "Khimji Dayabhai and Brothers". When the partnership dissolved, they agreed to continue using the word "Khimji" with some modifications. They also signed a trade name user agreement, which stated that they had no objection to the use of "M/S Khimji Dayabhai Brothers" with proper prefixes and suffixes, as long as it created a separate identity and did not harm the other party financially. Therefore, according to the dissolution of the partnership agreement and the trade name user agreement, the respondent in the present appeal is not entitled to any equitable relief, and an order for restraining is invalid.

The court order granting a temporary injunction is contrary to the family settlement reached in the dissolution of partnership and trade name user agreement, hence the order is not sustainable in the eyes of the law. Additionally, since the parties previously had a joint family business and were using the brand name "Khimji Dayabhai and Brothers", the mark was in prior use and no case can be made in favour of the respondent for equitable relief. Section 34 of the Trademark Act also protects such use.

Observations by the Court:

Both parties have acknowledged that they belong to the same family, with a common ancestor, Dayabai Ramjibhai Nanda, who had four sons. The plaintiff's business is currently run by the grandsons of Khimji Dayabhai, while the defendant's business was run by the grandsons of Chaturbhuj Dayabhai Nandha. They had a jewellery business since 1936 under the name of Khimji Dayabhai and Brothers. On 1/4/1992, the partnership firm was registered. In 1999, the firm dissolved by agreement, and the partners were free to do the same kind of business, and they could use the word Khimji Dayabhai with addition or subtraction. The father of both the defendant and the plaintiff was a party to the said agreement. A name agreement was executed by the partners, in which the name can be used with proper addition of prefixes or suffixes. The names of the plaintiff's business, the defendant's business, and the refusal of a trademark to the company's business were not in dispute.

Section 29 of the Trade Marks Act prohibits the use of identical, similar or deceptively similar trademarks, where the use of such marks has a likelihood of confusion. The apex court, in Laxmikant v Chetanbhai Sah, held that after some time, a business acquires a reputation/goodwill, which is associated with the name of the business. Anyone using a name that can confuse the mind of the consumer would not be permitted by the law.

The plaintiff has an independent business by the name of Khimji/Khimji and Sons Jewellers, and they have registered the trademark. The defendants also have their independent business. The appellant submitted that the word was in prior use, but it is not convincing because the plaintiff has registered the trademark since 1999, and it is not exclusively that the defendants were using the word Khimji. Therefore, no right accrues in favour of the Defendants. Hence the prima facie case is established in favour of the plaintiff. The defendants have never used the word exclusively, whereas the plaintiff has used the word as Khimji/Khimji Sons. Therefore, utilizing the word now exclusively by the company would cause the plaintiff inconvenience. Since the mark earns a reputation, it is now the plaintiff's property.

The main point of contention is whether the defendant's use of the terms "Khimji" or "Khimji Jewels" would be confusingly similar to the trademarks "Khimji" and "Khimji and Sons Jewellers." It is important to note that the use of a deceptively similar mark need not be identical. According to Section 2(h) of the Trade Marks Act, 1999, a mark is defined as one that nearly resembles another mark in such a way as to be likely to deceive or cause confusion. In this instance, the mark "Khimji Jewellers" with its get-up would undoubtedly fail the test and may be construed as confusing buyers based on how it appears.

It is well established that, in a suit of this kind for infringement, it may not be necessary to prove irreparable harm beyond the loss of goodwill and reputation if the plaintiffs establish a prima facie case and the balance of convenience is in their favour. Irreparable harm may be assumed to have occurred in trade mark cases if the first two requirements are met.

Court Analysis:

The plaintiff's appeal has been dismissed due to the fact that their business has acquired a commendable level of goodwill and reputation. The defendant's use of a certain word could potentially cause irreparable harm to the plaintiff, and as such, the plaintiff has presented a compelling case for an injunction.