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The Role of Goodwill in Passing Off Action

The legal dispute between P M Diesel and Thukral Mechanical Works over the trademark "FIELDMARSHAL" highlights the complexities and nuances inherent in trademark litigation. Following a protracted trial, the court ruled in favor of P M Diesel, emphasizing its extensive adoption and use of the mark since 1963. This article provides a detailed analysis of the court's observations and the legal principles governing trademark disputes, including the significance of evidence, goodwill, passing off, and entitlement to injunctive relief.

Establishing Prior Rights through Adoption and Use:
The court underscored P M Diesel's successful demonstration of its longstanding adoption and continuous use of the mark "FIELDMARSHAL" since 1963, particularly in relation to diesel oil engines and other goods. Supported by substantial sales, turnover, and a widespread network of dealers, P M Diesel effectively established its prior rights to the trademark. This highlights the importance of consistent and genuine use in substantiating ownership claims in trademark disputes.

The Role of Goodwill and Passing Off:
The court reiterated the fundamental legal principle that mere registration of a trademark does not automatically confer goodwill; rather, it is sustained use that engenders goodwill. Thukral Mechanical Works' adoption of the mark "FIELDMARSHAL" for identical goods and trade channels constituted passing off, as it created confusion among consumers due to the triple identity´┐Żidentical mark, identical goods, and identical customer class.

Addressing Dishonest Adoption and Lack of Merit in Claims:
The court found Thukral Mechanical Works' adoption of the mark "FIELDMARSHAL" to be dishonest, especially given its attempt to legitimize its use through an assignment from M/s. Jain Industries, which lacked evidence of using the mark for centrifugal pumps. Thukral's assertion of honest and concurrent use lacked merit, as its use was not genuine and did not predate P M Diesel's established rights.

Entitlement to Injunctive Relief:
Despite the delay in seeking injunction for over 35 years, the court affirmed P M Diesel's entitlement to injunctive relief based on its established legal rights and the satisfaction of the criteria for granting injunctions in trademark disputes. This underscores the principle that delay in seeking relief does not necessarily disentitle a party if it can establish its case and entitlement to relief.

The case of P M Diesel vs. Thukral Mechanical Works provides valuable insights into the legal principles governing trademark disputes and the importance of evidence, goodwill, passing off, and entitlement to injunctive relief. Through its ruling in favor of P M Diesel, the court reaffirmed the significance of genuine adoption and continuous use in establishing trademark rights.

The Case Discussed:
Case Title: PM Diesels P Ltd. Vs Thukral Mechanical Works
Judgment/Order Date: 02.04.2024
Case No: WP (C)-IPD No.28 of 2021
Neutral Citation: NA
Name of Court: High Court of Delhi
Name of Hon'ble Judge: Prathiba M Singh, H.J.

Ideas, thoughts, views, information, discussions and interpretation expressed herein are being shared in the public Interest. Readers' discretion is advised as these are subject to my subjectivity and may contain human errors in perception, interpretation and presentation of the fact and issue involved herein.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: [email protected], Ph no: 9990389539

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