Can a registered mark be withdrawn under Trade Marks Act, 1999? IPAB decides “YES” in Lovesac Company, Petitioner Versus Avneet Kaur, Respondents. An important case for all those attorneys seeking rectification of registered trademark.

18 Mar Can a registered mark be withdrawn under Trade Marks Act, 1999? IPAB decides “YES” in Lovesac Company, Petitioner Versus Avneet Kaur, Respondents. An important case for all those attorneys seeking rectification of registered trademark.

IPAB rules: “Section 11(10)(ii) of the Trademark Act, 1999 suggests to take into account of such marks made in bad faith…. The word “LOVE” and “SAC” are descriptive in nature cannot be sustained as the uncommon combination of the word “LOVESAC” for the products are arbitrary and protection to the same cannot be denied.

THE JUDGMENT OF IPAB

1. The Rectification Application is filed under Section 47, 57 and 125 of Trademark Act, 1999 for Removal of the ” ” lable under Reg Na 3910894 in class 20 registered in favor of Respondent No. 1. The present Miscellaneous Petition vide M.P.No. 185 of 2020 for Stay of operation of Registration of Respondent No. 1 for the above impugned mark pending disposal for the main Rectification Application has been filed.
2. In the main petition, two months’ time is granted to the Respondent No. 1 to file the counter statement with an advance copy to the learned counsel for the applicant who may file the response within one month thereafter and main petition is listed for hearing on 03/05/2021. APPLICANT’S CASE:
3. The present Miscellaneous Petition has been filed seeking stay of operation of Registration until the Rectification Application finally decided. Learned Counsel for the Applicant Mr. Neeraj Grover is pressing the interim orders, we propose to consider the said request. We are of the view that given the present urgency, the said request is accepted. This order is passed by taking prima facie view which shall have no bearing when the matter will be decided on merit after filing of the counter statement by the Respondents and completion of pleadings in the matter.
4. It is a matter of fact that the mark (The Impugned mark) is applied for Registration on 08/08/2018 on proposed to be used basis and the said mark has been Registered on 9th February 2019.
5. The learned counsel for the Applicant states that the registered trademark ” ” which is identical with the Applicant’s originally created and prior adopted and used trademark “LOVESAC” in respect of identical goods.
6. The Applicant submitted that in the year 1995, the Applicant’s founder Shawn D. Nelson, built the original eight foot-wide form-filled piece of frameless furniture in the basements of his parents’ home in Utah, USA. Shawn started using the mark LOVESAC mark as he started selling his frameless furniture products. In 2002 Shawn formed “The Lovesac Corporation” a predecessor-in-interest to the present Applicant (The Lovesac Company) and in the same year the Applicant obtained first of many US Registration for the mark “LOVESAC”.
7. The Applicant submitted that the mark “LOVESAC” has been adopted by the Applicant as trading name and style in addition to its use by the Applicant’s most integral brand, and as such, is the most prominent and essential part of the Applicant’s corporate name.
8. The Applicant submitted that the Applicant continued to grow in USA, due in part to the charismatic visionary of its CEO, Shawan Nelson. In the year 2004 Shawan would compete on Richard Branson’s Rebel Billionaire which was aired on national television and he ultimately won the competition further launching Application and its brand “LOVESAC” national and international spotlight.
9. The Applicant submitted that starting from adoption and using the mark “LOVESAC” it has been widely used and advertised in promotional materials as well as everyday sales activities of its frameless furniture products in such a manner so has to create consumer recognition in the minds of the consumers. The Applicant had spent considerable amounts to market and advertise it products under the brand “LOVESAC” which results in substantial revenues from the goods sold under the brand “LOVESAC”.
10. The Applicant submitted that in 2013 and in 2017, the Applicant is named as fast growing furniture company by the Furniture Today magazine. The Applicant stated by 2017 it had grown to operate 70 Company owned-retail showrooms nationwide under the brand “LOVESAC” supporting its ecommerce delivery model. The products are sold in its retail furniture stores as well as through its own website www.lovesac.com. The online retails store is accessible since 2004 and available to customer all over the world, including India.
11. The Applicant submitted that in 2019 it had began successful partnership selling it various furniture products under the mark “LOVESAC” with COSTCO retail stores and through Costco’s website www.costco.com.
12. The Applicant further submits that today, the Applicant is one of the fastest growing American furniture manufacturer and retailer specializing in frameless furniture sold under the Brand “LOVESAC”. The Applicant submitted for past 20 years the Applicant is selling various size and types of frameless furniture (Bean bags) under different marks which include the term “SAC” and created a family of “SAC” marks which tie in with the Applicant’s most popular brand “LOVESAC”.
13. The Applicant submitted that in addition to the presence on the internet courtesy its website www.lovesac.com the mark “LOVESAC” is also encountered by consuming public, including those in India, through a variety of social media platforms including Youtube, Instagram, Twitter and Facebook which in turn aided in garnering immense reputation and goodwill for the brand “LOVESAC”.
14. The Applicant submitted that the mark “LOVESAC” is unique arrangement of terms which has been originally coined and adopted by the Applicant and as such no English Dictionary meaning or usage in common parlance when considered in its entirety and hence is inherently distinctive and Capable of distinguishing its products from other traders.
15. The Applicant submitted that in addition to common law rights, the Applicant has secured statutory rights in its trademark “LOVESAC” in all major jurisdictions such as Australia, Canada, China, Costa Rica, EU, Hong Kong, Mexico, New Zealand, Norway, Republic of Korea, Saudi Arabia, Singapore, Taiwan, United Kingdom, UAE, USA and Vietnam and is awaiting Registration in Argentina, Brazil, Cambodia, Chile, Iceland, Indonesia, Israel, Japan, Kuwait, Morocco, Philippines, Russia, South Africa, Switzerland, Thailand, Turkey and Ukraine.
16. The Applicant submitted that its earliest Registration is in the year 22nd January 2002 in USA and the Applicant had further filed necessary application to register the mark in India through Madrid Route vide IRDI No. 4234845 on 11/09/2018 claiming priority of convention since 14/06/2018 and the same is Registered in favour of Applicant in classes 18, 20, 22,24,25 and 35. That the subsequent application of the applicant under application No. 4201367 in class 20 is awaiting acceptance. 17. The Applicant submitted that the Respondent No. 1 dishonestly and with the apparent malafide intention lifted the applicant mark “LOVESAC” and filed application for deceptively similar and phonetically identical mark ÿ ÿunder application No. 3910894 in class 20 on 24/09/2018. The Respondent No. 2 has not cited the Applicant prior marks in the Examination Report which is an oversight of the Respondent No. 2.
17. The Applicant submitted that a juxtaposition of the Applicant mark with that of the Respondent No. 1 mark clearly reveals that the Respondent No. 1 blatantly used the Applicant trademark “LOVESAC” in its mark and fraudulently affixed the added feature/device thereupon to camouflage its illegitimate acts of imitation. The use of such deceptively similar and phonetically identical mark is bound to cause confusion amongst the consumer and purchasing public. For better evaluation of the Applicant’s submission, the Applicant provided the following comparison table of the both marks: Applicant Mark, Respondent No. 1 Mark LOVESAC,
18. The Applicant submitted that mere perusal of the comparison above indisputably establishes that the Respondent No. 1 has slavishly copied the Applicant trademark, creating a false impression that the Respondent No. 1 has some association, nexus or affiliation with the Applicant, which is not the case. On the contrary, the Respondent No. 1’s adoption of the Applicant’s mark “LOVESAC” is without any authorization or license from the Applicant and the Respondent No. 1 has no locus to adopt the same. The Respondent No. 1 is neither the honest adopter nor the originator of the mark question, which has been registered in favour of Respondent No. 1 by Respondent No. 2 under application No. 3910894 in class
19. 20. The Applicant also relied on the following case citations: i. Amar Singh Chawal Wala v. Shree Vardhaman Rice and General Mills (MANU/DE/0745/2009 : 2009 (40) PTC 417 (Del)) “Adoption and use of a deceptively similar trademark subsequent to the applicant’s adoption cannot be said to be honest”. ii. Hindustan Pencil (P) Ltd., v. India Stationery Products (MANU/DE/0003/1990 : 1989 (9) PTC 61 (Del)). “Adoption if not bonafide, the Applicant’s mark cannot continue”. iii. Kunj Aluminum Pvt. Ltd., v. Koninklijke Philips Electricity on 01st August 2011, reiterated the same principle and held, “If the adoption and use of the mark is dishonest, no amount of subsequent use can legitimate its illegal adoption”. RESPONDENT NO.1 SUBMISSIONS:
20. The Respondent No. 1 appeared and claimed that the marks are different and the Respondent No. 1 is first to use the mark in INDIA.
21. The Respondent No. 1 further submitted that there is no urgency in the matter as the applicant after filing the petition on 14-05-2020 did not pursue his application and suddenly during the winter vacation (when he is aware that most of the advocates will not be available during this period) got listed his interim application for hearing of the application. It is further submitted that no application has been filed for the grant of any interim order/stay/injunction and hence in absence of the same the applicant is not entitled for any interim/urgent relief.
22. The Respondent No. 1 stated that it is malafide on the part of the applicant that without providing complete paper book to the Respondent no.1 got the application listed and further at 12.00 am on 29-12- 2020 the link to join the proceedings was provided to the respondent no.1. It is further submitted that the counsel of the applicant is presently in his native town, despite that he could manage to appear before the Hon’ble Board on 29-12-2020 and after some arguments, the matter got listed for 31-12-2020 for orders. It is submitted that after the Appellate Board order the complete paper book consisting of 645 pages was provided to the counsel of the respondent no.1 by the applicant on 29-12-2020. It is submitted that the respondent no.1 is not provided sufficient time to project her defence in a proper manner and hence this short note has been filed. The Respondent No. 1 sought liberty to file proper response to the petition before passing any final order.
23. The Respondent No. 1 submitted that as the USA is dominating in the entire world, therefore, the Applicant company of the USA is also trying to dominate in the Indian Market without doing any business in India and further without paying any taxes to the Government.
24. The Respondent No. 1 submitted that the application of the applicant is not legally maintainable, as the section 47, 57 and 125 has no application in the present case as the applicant company is neither based on Bonafide Intention as provided under section 47 of the Act and nor it falls in the categories mentioned in section 57(1)(2) of the Act i.e., contravention & wrong entry/defect/error in the entry and if the applicant is aggrieved with the registration of the Trade Mark of the Respondent no.1, in that case the applicant was required to file application before the Registrar under section 58 of Trade Marks Act, 1999. The Respondent No. 1 submitted that if every person is allowed to file the application before the Hon’ble Board without approaching the Registrar, the Hon’ble Board will be flooded with such petitions, hence, bypassing the provisions should not be allowed in any eventuality. And further there is no suit is pending between the parties, therefore, section 125 is also not applicable. 26. The respondent no.1 submitted that it has prior applied for registration of her trade mark(logo) in India i.e 08-08-18, Journal no.1 868 dated 24-09-18 with class 20 for bean bags only and it got registered on 09-02-19, whereas the applicant trade (name) with regard to product bean bags so far is not registered in India. The applicant company applied for registration with IRDI on 11-09-18 Journal no. 1914 dated 12-08- 19, which got registered on 10-01-2020.
25. The Respondent no.1 submitted that no objection of any kind has been filed by any party within 3 months from the date of registration, hence the application of the applicant is totally devoid of any merits.
26. The Respondent No. 1 submitted that as per page no.207 of the petition, the applicant has applied for registration of its Trade Mark “LOVESAC” with IRDI on 11-09-18 with class of goods bearing NO.18, 20, 22, 24, 25 & 35 and in class of goods bearing no.20 nothing has mentioned about bean bags and as per page no.209 of the petition subsequently on 08-06-19 amendment application is being filed with IRDI with regard to category of goods of Class 20 and in which bean bags knowingly and with malafide intentions got included in the list, but so far the amendment application is not being decided and is still pending, hence the contention with regard to using the trade name on the bean bags is totally after thought. It is submitted that as per the petition, the applicant company is in the business of fixed furnitures and sanctionals only, and to take the business from the small business personnel in India, the present petition is being filed.
27. The Respondent No. 1 submitted that moreover as per page no.626 & 627 of the petition, in the notification dated 28-02-19 of WIPO in the categories of goods of Class 20 nothing is mentioned about bean bags, hence it is clear that they had no intention while applying for registration to indulge in the business of manufacturing bean bags.
28. The Respondent No. 1 submitted that as per page no.207 & 209, it is mentioned that “proposed to be used” on user detail while applying for registration by the applicant, hence both the applicant and respondent no.1 stands on same footing.
29. The Respondent No. 1 submitted that as per the documents placed on record, it is confirmed by the applicant company- that they will going to operate/sell their product in India, hence the question of any financial loss does not arise.(page no.201 to 206 of the petition are relevant in this regard). And moreover, the applicant company has not placed on record about the details of their consumers of bean bags in India.
30. The Respondent No. 1 further submitted that there is no similarity in the trade name of the applicant company and the logo of the respondent No. 1. It is submitting applicant company could not produce any document on record that with regard to any sale in India of bean bags. The mark/logo of the respondent no.1 is totally different and is not deceptive. There is symbol of worm over the small letters of L-o-v-e-s-a-c, hence the question of confusion in the minds of educated consumers does not arise.
31. The Respondent No. 1 submitted that Love and Sac are common words and are being used rampantly and that is why over and above worm was used as a symbol. The worm above the lovesac letters is a distinguishing feature to separate from the mark of the applicant company. FINDINGS OF THIS BOARD
32. It is an application in bad faith if the filing of a trademark with the sole purpose of hindering a foreign competitor on the market, as well as the trademark filing made by those who, being aware of the advertising carried out by an foreign undertaking to launch its brand and having had the opportunity to see the mark not on the Registered in India, file the trademark application before such undertaking file and secure registration in its name.
33. And thus we found that the Application for the impugned mark by the Respondent No. 1 has been made in Bad faith and therefore cannot be allowed to be remaining on the Register. Section 11(10)(ii) of the Trademark Act, 1999 suggests to take into account of such bad faith if any in filing Trademark Applications. The acts of the Respondent No. 1 constituted bad faith trade mark registrations and prejudiced to the Applicant’s competitive strength and goodwill and can be termed as unfair competition.
34. The Application of the Applicant though filed after the Application of the Respondent No. 1 but takes the Priority and hence the Application of the Applicant that has been filed through Madrid Route vide IRDI No. 4234845 on 11/09/2018 claiming priority of convention dated 14/06/2018; hence the Applicant’s Application is prior in date and Respondent No. 1 Application though filed on 8th August 2018 is subsequent application. It is inadvertence by which the Respondent No. 2 has not cited the application of Applicant in the examination report issued to Respondent No. 1 pursuant to its application. Section 11 of the Trademark Act read with Rule 33 make it clear that the Registrar (Respondent No. 2) is duty bound to cite all prior applications before according any acceptance to the Applications before him.
35. Further there are plethora of judgments that trans-border reputation is recognized in India and it is not in dispute that the Applicant has used the mark in USA since the year 2002 for the similar products i.e., Bean Bags. With regards to the Respondent No. 1 argument of non-description of Bean Bags in the description of goods of Applicant application in India. The broader terminology “Furniture” in our opinion covers Bean Bags too and in any case the Amendment application is pending before the Respondent No. 2.
36. The argument of the Respondent No. 1 that the word “LOVE” and “SAC” are descriptive in nature cannot be sustained as the uncommon combination of the word “LOVESAC” for the products are arbitrary and protection to the same cannot be denied.
37. At present, we are of the opinion that the Applicant has made out a strong prima facie case of granting the relief prayed for. And since such dishonesty/bad faith factor holds the cardinal principle and thus until the Rectification Application is finally decided the operation of the registration under 3910894 in class 20 Registered under Certificate No. 2095114 in the name of Respondent No. 1 shall remain stayed.
38. At this stage, we have arrived to this conclusion only as prima facie view. Once the pleadings are filed, this Board will deal the matter accordingly on merits on such completion of pleading of the parties and shall not take any of present observations into account while dealing with the main Rectification Application. There shall be no orders as to the costs.