Contributed by: LexOrbis
Recently, the Bombay High Court decided a case of an ad-interim injunction sought by the Plaintiff, Plex Inc, against the Defendant’s use of the mark PLEX for an online movie streaming service which was scheduled to be launched on 2nd October 2020. The action to seek injunction was taken on 1st October 2020, a day before launch the service. The case highlights the importance of close contact between sales/marketing and IP departments as well as being on top of the likelihood of winning.
The Plaintiff company allows its users to store organize and stream movies and TV shows online including videos, photos, and audio from a user’s collection. In May 2008, they adopted the mark PLEX in the USA. Subsequently, they obtained an international trademark registration in several other countries, except India. The Plaintiff claimed that they have built a subscriber base of 550,000 users in India till date, which started from their first registered user on 23rd July 2008. They further submitted their international revenue to show reputation and goodwill, however, no submission was made with respect to the earnings in India. The Plaintiffs also argued that both businesses were of a similar nature which might cause confusion among consumers and sought action against passing off.
The Defendant, Zee Entertainment Enterprises Limited, is a multi-media entertainment company which offers several TV channels in different languages and online pay-per-view entertainment streaming services through its OTT platform Zee5. In September, the company announced to launch a movie-on-demand service ZEEPLEX to rent new releases to the subscribers. They argued that they used the term PLEX to signify the niche service now being offered, i.e. multiple movie offerings on a single channel.
The Court held that both the services were fundamentally different thereby removing the possibility of passing off and the likelihood of deceit and confusion among users. While the Plaintiff is essentially a media server allowing quick access to videos, images, and music from anywhere, the Defendant is offering a cinema-to-home pay-per-view movie service. This led to the conclusion that the users of different services behave differently with the content offered to them. The likelihood of causing confusion among consumers or passing off as PLEX service was invalidated.
The Court disagreed with another argument of the Plaintiff wherein they complained that the Defendant used the terms ZEE & PLEX disjunctively in some advertisements and together in some. To this, the Court responded by stating that the focus should not be on how the impugned term is being used, as a suffix or a separate word, especially when the Defendant had clarified that the term PLEX was not used separately.
On whether the Plaintiff could successfully establish a prima facie case of trademark infringement, the Court opined that no actual harm to reputation or goodwill was proven by the Plaintiff. The accusation against the Defendant of having duped and misled users stood futile since Plex could not establish brand recognition and awareness at par with Zee’s reputation in India which could lead to the possibility of consumers associating ZEEPLEX with PLEX Inc. While the international earnings shown by the Plaintiff were US$ 24,000 to 30,000 in any given year, the Defendant had spent INR 110 million solely on marketing- which is more than Plex’s five-year revenue in India.
The Court held that the Defendant’s reputation and standing amongst Indian consumers exceeded that of the Plaintiff by leaps and bounds. The Plaintiff even insinuated that its reputation is at par with other entertainment platforms available in India. This was again rejected by the Court.
The Defendant’s contention that the Plaintiff had caused undue delay in filing the suit was accepted by the Court. It was established that the Plaintiff had a month to seek urgent relief, yet they waited till the eleventh hour i.e. a day before the launch of the Defendant’s service. Moreover, the Plaintiff had not obtained the registration of the impugned trademark until the date when the Defendant made the announcement. The mark PLEX was not in use, rather it only had an anticipated use.
The balance of convenience lay in the favour of the Defendant. The Court found against the Plaintiff which failed to show anticipated losses, registration or use of the impugned trademark, lack of information on domestic revenue. It was established that an ad-interim injunction would cause immense loss to the Defendant.
Consequently, the Court refused to grant an ad-interim injunction in this passing off action. The Plaintiff may have succeeded if they had proven an established user base, brand recognition, brand identity, and reputation in the country. Trademark infringement and passing off cases are never decided without verifying that an actual loss is being caused to the trademark owner because of the actions of another. This order is one such example where the Defendant succeeded due to its long-established goodwill and reputation. The fact that the Plaintiff’s mark was not protected in India highlights the importance of close contact between marketing and IP departments to ensure that your registered rights reflect the actual sales. It would appear that the case should not have been initiated if the evidence for India was not stronger. It is recommendable to check if your evidence will be sufficient to win the case before entering into a dispute.
Contributed by LexOrbis
The above article is authored by Ms. Manisha Singh(Managing Partner) & Ms. Simran Bhullar(Associate)