UZDAROJI AKCINE BENDROVE(UAB) BALTIJOS MINERALINIU VANDENU KOMPANIJA vs MR. SAHIL TANDON TRADING AS A AND Z EXPORTS INTERNATIONAL

$~34
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 25th January, 2024
+ C.O. (COMM.IPD-TM) 202/2022
UZDAROJI AKCINE BENDROVE(UAB) BALTIJOS MINERALINIU VANDENU KOMPANIJA ….. Petitioner

Through: Ms. Manisha Singh, Mr. Abhai Pandey, Mr. Varun Sharma, Ms. Swati Mittal, Mr. Gautam Kumar, Ms. Priyanka Anand, Mr. Manish Aryan, Ms. Shivani Singh and Mr. Dhruv Tandan, Advocates.

versus

MR. SAHIL TANDON TRADING AS A AND Z EXPORTS INTERNATIONAL & ANR. ….. Respondents

Through: Mr. Aabhas Dahiya, Mr. Arpan K. Gupta, Mr. Nitish Dahiya, Mr. Akshay Rajput and Mr. Lokesh Yadav, Advocates.

CORAM:
HON’BLE MR. JUSTICE SANJEEV NARULA

JUDGMENT

SANJEEV NARULA, J. (Oral):

1. The Petitioner, Uzdaroji Akcine Bendrove (UAB) “Baltijos Mineraliniu Vandenu Kompanija,” a Lithuanian company specializing in the production of mineral water and soft drinks, has filed the present petition impugning trademark registration of the mark ‘’ (‘impugned mark’) in Class 32 bearing registration no. 3819381. This registration encompasses a range of goods, specifically “beer, mineral and aerated waters, other non-alcoholic beverages, fruit beverages and fruit juices, syrups, and other preparations for making beverages”. The Petitioner asserts their status as the prior adopter of the impugned mark, alleging that the Respondent No.1- Mr. Sahil Tandon, trading as A & Z Exports international, has unlawfully usurped it through a registration procured in bad faith.
CONTENTIONS OF PETITIONER
2. The Petitioner contends as follows:
2.1 They hold ownership over the ‘TICHE’ brand/trademark, along with several other marks, including ‘GAJA,’ ‘TICHE KVASS,’ and ‘MONA PLIUS L – karnitinas. The trademark ‘TICHE’// , (hereinafter ‘Petitioner’s marks’) has been used for a variety of products including mineral water since its adoption in 1998 and has been in continuous use internationally since 1999. The leading product under this trademark is a unique alkaline mineral water, characterized by its protection from contamination and its filtration through numerous geological strata, which endows it with exceptional properties.
2.2 The Petitioner offers a curated range of mineral water under the mark ‘’ including TICHE Natural Carbonated, TICHE Natural Non-Carbonated, TICHE Natural Low-Carbonated, TICHE aerated lemon-flavored lemon water, TICHE Stikle, TICHE for children and TICHE Sport. The mineral water, extracted from a source in Lithuania at a depth of 689 meters, boasts a unique alkaline composition and is safeguarded against contamination by passing through various geological layers. Relevant online extracts from the official website of Petitioner, http://www.tiche.lt/Mineralinis-Vanduo and http://www.tiche.lt/About-Us and a copy of product catalogue of Petitioner showcasing the products and operations under Petitioner’s mark as well as the source and quality of the mineral water are placed on record. Petitioner has also adopted latest technology which has helped it meet European Union standards. The products under the Petitioner’s mark are packed using fully automated German bottling-packaging line, which meets the newest European Union requirements. The quality and food safety management system implemented by Petitioner is certified according to the IS022000 and BRC requirements and thus ensures high quality of production. A copy of the said ISO certification is placed on record.
2.3 Due to Petitioner’s exceptional quality standards, ‘’ mineral water is also amongst the list of mineral waters recognized in Europe. The petitioner has placed official documents on record in support of the same.
2.4 Since 2004, the quality of the natural mineral water sold under the Petitioner’s mark has undergone inspections by a specialized U.S. veterinary institution and auditors. The mineral water under the Petitioner’s mark has been consistently found to meet all European and American requirements, making it suitable for use by NATO’s armed forces. Additionally, various standardization authorities have granted certifications and licenses to the petitioner for its mineral water under the mark.
2.5 Petitioner has received several awards and accolades in relation to its ‘’ products, some of which are tabulated below:

Year
Award Received for TICHE Mineral Water
2000
• At the AgroBalt exhibition natural mineral water TICHE was awarded a gold medal.
• TICHE was awarded the diploma of the Lithuanian Product of the Year 2000 competition.
2004
* Certified for the Russian market as healing-table natural mineral water.
* Certified for sale in all European Union countries and included in the list of European recognized natural mineral waters.
* Certified by the US Department of the Army to supply it to the NATO Armed Forces.
2009
The Lithuanian National Federation of Consumers awarded the natural mineral water TICEIE with the mark “Choose the best product”.
2010
In the international PRODEKSPO competition for the “Best Product – 2010” held in Moscow, TICHE natural mineral water was awarded a gold medal.
2014
* In the International Superior Taste AWARD 2014 competition in the Belgian capital, natural mineral water TICHE received the highest rating of 3 and 2 gold stars.
* At the Asia’s largest beverage and food exhibition in China, the SIAL CHINA Expert Panel awarded TICHE with a modem recognition in the innovation category – the TICHE Still duet soft drink was nominated for “SIAL INNOVATION SELECTION CHINA 2014” for innovation, packaging and quality.
2015
For the second year in a row, natural mineral water TICHE was awarded the highest 3 stars for its taste and quality at the International Superior Taste AWARD competition in Brussels, Belgium.
2016
For the third year in a row, natural mineral water TICHE was awarded the highest rating at the International Superior Taste AWARD.
2017
Lithuanian natural carbonated mineral water TICHE was awarded the highest prize – three gold stars for its exceptional taste and quality for four years in a row at the International Taste Award in Brussels.

2.6. Petitioner claims that their mark has gained reputation and goodwill in India on account of extensive international use since 1999 and the said trans-border reputation has spilled over to India. The said mark has also been actively used in India, at least since 02nd June, 2015. In this regard, they rely upon a news report published on the website of Embassy of Republic of Lithuania to the Republic of India in December, 2015 announcing the launch of their products in India. It is further contended that Respondent No. 1 was himself the purchaser of the products under Petitioner’s mark and entered into a Sale and Purchase Agreement dated 27th July, 2015 in respect of goods manufactured by Petitioner including the ones under Petitioner’s mark ‘TICHE.’ Copy of the said Agreement has been placed on record along with invoices to prove that Respondent No. 1 was the buyer/ purchaser of the products bearing the mark ‘TICHE’ which originated from Petitioner. Petitioner further explains that Respondent No. 1 also negotiated with Petitioner for exclusive right of importation and distribution of their product under the mark ‘TICHE.’ Petitioner did not doubt the intentions of Respondent No. 1, but, as it now transpires, Respondent No. 1 has breached the trust reposed in them and without their knowledge, unlawfully secured registrations of the impugned mark.

RESPONDENT NO. 1’S CONDUCT
3. Respondent No. 1 has demonstrated a marked negligence in these proceedings. Despite numerous opportunities, counsel has repeatedly failed to appear before the court. Furthermore, there has been a conspicuous absence of effort to ensure that their response to the petition is on record. It is pertinent to note that the reply purportedly filed by Respondent No. 1 has not been entered into the court record to date. This pattern of neglect was previously highlighted in several orders of this Court. Consequently, on 1st December 2023, the Court issued a comprehensive order to the following effect:
“…
3. Vide order dated 20th July, 2023, this Court directed the Respondent No. 1 to file their reply to the present petition.
4. Repeated opportunities have been granted to the Respondent No. 1 to file the reply to the present petition and bring the same on record. However, the reply, which is stated to have been filed, have not been brought on record. The rejoinder to the reply dated 7th August 2023 has already been filed.
5. On behalf of the Petitioner it is stated that a Sale Purchase Agreement dated 14th April 2016 was entered into between the Petitioner and Respondent No. 1. According to the Petitioner, Respondent No.1 was the purchaser of products under the Petitioner’s ‘TICHE’ mark.
6. Even today, the matter was passed over in the morning, and the ld. Counsel for the Petitioner was requested to contact the ld. Counsel for the Respondent No. 1. Post lunch, ld. Counsel for the Petitioner informs the Court that she contacted the Respondent and in fact provided him with the link to join the proceedings virtually. However, none has joined for the Respondent No.1.
7. Under these circumstances, the reply, if any, shall now be brought on record subject to payment of Rs.10,000/- costs to the Petitioner’s counsel within a period of two weeks, failing which, the right to file the reply shall automatically stand closed. No further opportunity shall be granted to the Respondent.
8. List for hearing on 24th January, 2024.”

4. Despite the fact that Respondent No. 1’s reply remains formally not on record, currently being under objections with the registry, the Court has chosen to expedite the matter. In the interests of a swift resolution, the Court has reviewed the copy of the reply furnished by the Petitioner’s counsel. This document has been considered across the board and is now taken on record for the purpose of this proceeding. Additionally, the Court has extensively heard from Mr. Aabhas Dahiya, Counsel for Respondent No.1, regarding the merits of the case.
CONTENTIONS OF RESPONDENT NO. 1
5. Respondent contends as follows:
5.1 Mr. Dahiya, counsel for Respondent No.1 argues for the dismissal of the instant petition. He contends that the Petitioner has failed to comply with full disclosure requirements as mandated by the Intellectual Property Disputes (IPD) Rules. He stresses that the Petitioner has neglected to present a crucial document — an authorization dated 1st January, 2018 — thereby withholding material information from the Court. To strengthen his position, Mr. Dahiya refers to a precedent set by this Court in Freebit AS v. Exotic Mile Private Limited.1
5.2 Mr. Dahiya emphasizes the significance of the aforementioned authorization letter, asserting that it unequivocally demonstrates that Respondent No. 1 was authorized by the Petitioner to apply for the trademark registration and to represent the Petitioner before the Trademark Office. He further contends that Respondent No. 1 had informed the Petitioner of the necessity for a Bureau of Indian Standards (‘BIS’) license to commence import, sales, and distribution activities in India. In the absence of this license, sales could not be initiated. Petitioner then advised Respondent No. 1 to undertake all requisite steps to procure the BIS license. The Petitioner also suggested that the customs authorities or port might release the shipment if they were assured that the BIS license application was in process, particularly if the container’s contents were intended for promotional purposes. Following this advice, Respondent No. 1 proceeded to apply for the BIS license, which was subsequently utilized to facilitate the clearance of the shipment. Mr. Dahiya also submits that Respondent No. 1 has been actively engaged in the promotion of the product bearing the disputed trademark within India, thereby demonstrating a significant level of involvement and investment in the marketability of the product.
ANALYSIS AND FINDINGS
6. In view of the afore-noted submissions, the Court posed critical inquiries to Mr. Dahiya regarding the circumstances under which Respondent No. 1 secured the registration of the disputed trademark in his own name. This line of questioning was aimed to clarify the apparent contradiction in Mr. Dahiya’s contention that the trademark registration was initially pursued on behalf of the Petitioner. Despite being given the opportunity to provide a cogent and convincing explanation, Mr. Dahiya offered nothing beyond a mere reiteration of his previous submissions. This lack of substantial clarification from Mr. Dahiya raises serious questions about the credibility and consistency of the Respondent No. 1’s position.
7. In light of these circumstances, Court sought to ascertain Mr. Dahiya’s position, specifically, whether Respondent No. 1 would be willing to relinquish the said mark in favour of Petitioner. In response, Mr. Dahiya expressed an intent to contest the petition rather than accede to the surrender of the mark. This stance necessitates a deeper examination of the legitimacy of the registration of the impugned trademarks and the nature of the authorization provided by Petitioner to Respondent No. 1. It raises fundamental questions about the intentions underlying the registration process and whether it aligns with the principles of good faith. The Court must consider whether the actions of Respondent No. 1 constitute a bona fide exercise of rights granted by the Petitioner or an opportunistic usurpation of these rights for personal gain.
8. In their reply, Respondent No. 1 has averred a range of issues and arguments that are tangential and irrelevant to the central question of prior user rights of the ‘TICHE’ trademark. These issues raised by Respondent No. 1 primarily pertain to commercial and contractual matters, none of which suggest a legitimate transfer of trademark rights from the Petitioner to Respondent No. 1.
9. The Respondent No.1 has not successfully demonstrated that he is the prior user. Respondent No. 1 has, in fact, acknowledged their business relationship with the Petitioner regarding the use of the mark. This is evident in para 4 of their para-wise reply, where they state:

“4. The averment made in the paragraph 9.8 to 9.11 is false and denied. It is incorrect to say that the Petitioner using its trademark TICHE openly , extensively and uninterruptedly in the territory of India individually. The petitioners joins hand with the respondent to make their goods sold in the India, and the respondent was the only authorized person in India doing so, there is no single invoice showing by the petitioner of sale their goods in the India individually, it is partially incorrect to say that the petitioner had promoting and advertising its mark through various media but in India the respondent had did all these things for popularize the product, all the goodwill and reputation earned by this product in India are credited to the respondent only, the exhibit adduced by the Petitioner is false and fabricated the event was launched and booked in the name of Respondents only.”
(Emphasis supplied)

The afore-noted acknowledgment, does not substantiate Respondent No. 1’s claim to the trademark. Rather, it reinforces the view that their role was limited to that of a representative or agent for the Petitioner in India, without any transfer of trademark rights.
10. Furthermore, the authorization letter at no point empowered Respondent No. 1 to file a trademark application or secure a trademark registration in their own name. Instead, the authorization is explicitly limited to representing the Petitioner, Uzdaroji Akcine Bendrove (UAB) “Baltijos Mineraliniu Vandenu Kompanija,” before the relevant authorities for the sole purpose of filing and obtaining a trademark registration in the Petitioner’s name. The text of the authorization letter is as follows:
“AUTHORISATION
2018 01 01
‘Baltic Mineral water company’ (‘The Seller’) delegates and the citizen of India Dr. J.K.Tandon (‘the Agent’) undertakes to perform the following actions of legal significance on behalf of the Seller and his interests: To represent the interest of the company at intellectual property with a purpose the Seller to receive Trademark for export of his production (still natural mineral water ‘Tiche’ and sparkling natural mineral water ‘Tiche’) to India for an infinite period of time and perform all actions related thereto. Authorization is valid till the 25th of December 2018.

Details of visiting person:
NAME: Dr.J.K. Tandon
DATE OF BIRTH: 24/10/1955
ID NUMBER: Z3033837
ADDRESS: EJ – 88, BEHIND RAJ MAHAL HOTEL, MILAP CHOWK, JALANDHAR-144001, Punjab (India)

Sd/-
Export Development Manager
Akvile Ulinskaite”
(Emphasis supplied)
It is clear that Respondent No. 1’s role was confined to that of an agent representing the Petitioner in dealings with the BIS and the Trademark Registry. They however acted beyond the scope of the authority granted by the Petitioner. Consequently, registration of the impugned mark in India under Respondent No. 1’s name was without authorization.
11. Furthermore, ‘Annexure A,’ which Respondent No. 1 has submitted and relied upon, is a Sale Purchase Agreement between the Petitioner and Respondent No. 1. This document incontrovertibly indicates that Respondent No. 1 was, in fact, a purchaser of products bearing the Petitioner’s TICHE mark. Notably, this agreement does not confer any authority on Respondent No. 1 to register the impugned mark and related formative marks under his name. Thus, Respondent No. 1 has exceeded the limits of their purchase agreement and engaged in dishonest and fraudulent behaviour to secure the registration of the impugned mark. Such actions are also in direct violation of Section 57 of the Trademarks Act, 1999 [‘the Act’], which addresses wrongful registrations lacking sufficient cause. This breach not only undermines the trust inherent in commercial dealings but also violates the provisions of the Act. Furthermore, the impugned registration also contravenes Sections 11 and 18 of the Act. It infringes upon the Petitioner’s established prior user rights, as outlined in Section 11, and fails to meet the legal criteria for registration stipulated in Section 18, particularly due to elements of misrepresentation and fraud. Consequently, Respondent No. 1’s registration of the trademark emerges as an act of bad faith, necessitating its cancellation.
12. In evaluating these claims and counterclaims of the parties, in the given facts, the Court has focused on the principles governing prior user rights. Respondent No. 1 failed to furnish any documentation to substantiate their independent claim of using the ‘TICHE’ mark since 22nd October, 2001. It is unequivocally acknowledged by Respondent No. 1 that they facilitated the initial importation of products bearing the impugned mark into India from the Petitioner, and subsequently sold these products after obtaining the requisite BIS certification on behalf of the Petitioner. This admission underscores the fact that Petitioner is the original adopter who utilized the trademark ‘TICHE’ within the Indian market, with Respondent No. 1 playing the limited role of an agent facilitating sales under the said mark. This established prior usage effectively negates any claim Respondent No. 1 might assert over the trademark. Petitioner is thus legitimate and honest proprietor of the mark ‘TICHE’ which was adopted in the year 1998 and has been in extensive international use since the year 1999. The Petitioner’s bona fide and prior adoption and usage of the ‘TICHE’ and related formative marks position them as the rightful registered proprietor. Further, the unauthorized use of the impugned mark by any party other than the Petitioner poses a significant risk of misleading consumers. There is a tangible likelihood that such use could induce customers to erroneously associate the goods with the Petitioner or to believe they have the Petitioner’s endorsement or approval. This potential for confusion not only undermines the Petitioner’s trademark rights but also threatens the integrity of consumer choice. The acts of the Respondent No.1 undermines the foundational principles of trademark law, which are designed to protect rightful owners. Given these circumstances, the registration of the impugned mark by Respondent No. 1 stands on precarious grounds, marred by deception and lack legal validity. It is, therefore, the Court’s conclusion that this registration was procured through fraudulent means and is thus liable to cancellation.
DIRECTIONS
13. In view of the above, the present petition is allowed with following directions:
(a) Registration under a trademark number 3819381 for the trademark ‘TICHE’ (device) ‘’ in Class 32, is cancelled. Trademark Registry shall issue appropriate notification to this effect.
(b) Cost of INR 1,00,000/- is imposed on Respondent No. 1, which is directed to be paid to Petitioner alongwith cost of INR 10,000/- imposed on 01st December, 2023.
14. Registry is directed to supply a copy of the present order to the Trade Marks Registry at llc-ipo@gov.in for compliance.
15. Accordingly, the petition is disposed of.

SANJEEV NARULA, J
JANUARY 25, 2024
d.negi

1 CS(COMM) 884/2023

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