Dispute was over a registered trademark "AUM" in respect of jewellery items for which Goldgem Overseas sued Flawless Diamonds claiming infringement and passing off, came before the Bombay High Court in Goldgem Overseas vs. Flawless Diamonds 2009 (39) PTC 420 (Bom.). Flawless Diamonds had been in the said business for 17 years. Goldgem Overseas though relatively new, had applied for registration of their trademark in May 2000 and obtained the same in 2003. A meeting of the two parties had taken place in April 2006, the particulars and agenda of which seemed to be unclear. But soon after, in June 2006, Flawless Diamonds applied for registration of their trademark and commenced its use in the same year. According to the Annual report of the company, they had never used the mark prior to that.
Goldgem Overseas contended that their use and registration of the disputed trademark pre-dated the use and registration by Flawless Diamonds by 6 and 3 years respectively, which was not permitted by law. Also, since Flawless Diamonds were aware of Goldgem Overseas' trademark being registered, they could not be granted with the trademark sought. Additionally, the use of such trademark amounted to dishonesty.
Flawless diamonds stated that AUM was a generic expression that was equivalent to God, and hence could not be registered. They opined that the target market of their products was the upper stratum of the society who invested great amounts of money in purchasing these goods. Thus, they carefully perused the trademarks before making the purchase and were unlikely to be swayed by the mark or label of another seller. Further, they submitted their sale records, which were extensive both internationally and domestically and had a huge retail market in the form of showrooms and outlets. They also claimed passing off by the plaintiffs since they had established their superior market position.
The Court dismissed the argument of the mark being generic, by opining that after making an application for registration themselves Flawless Diamonds, were too late to be making such an argument. The Court further reasoned that in case of gems (diamond jewellery), it was nearly impossible to understand the quality and genuineness of the product. Thus the brand name and trademark acquired greater significance. The Court used Flawless Diamonds' popularity and long-standing repute as a proof of their flourishing business without using the trademark AUM.
In this view, the Court held that Goldgem Overseas' case of infringement of trademark against the Flawless Diamond was valid under the Trademarks Act and was thus upheld prohibiting defendant from using the said mark or any other similar mark, name, word or style as a part of Flawless diamond' products.
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