The case of Black Diamond Track Parts Private Limited & Ors. Vs. Black Diamond Motors Private Limited revolves around a dispute over the use of the trademark "BLACK DIAMOND" in relation to the manufacture and sale of industrial vehicles and machinery. The plaintiff, Black Diamond Motors Private Limited, sought an injunction against the defendants, Black Diamond Track Parts Private Limited and others, restraining them from using the trademark "BLACK DIAMOND" for their business. The dispute originated from a family business arrangement in which the right to use the trade name was allegedly settled. The core issue before the court was whether the defendants' use of the trademark was in violation of a family settlement and whether the plaintiff was entitled to an injunction.

Detailed Factual Background:
The plaintiff, Black Diamond Motors Private Limited, was engaged in the manufacture and sale of industrial vehicles such as trippers, tip-trailers, flatbed trailers, ash handling bulkers, and tailor-made carriers since 2005. The trademark "BLACK DIAMOND" was allegedly being used by the family of the plaintiff's directors since 1983 across various businesses, including mining machinery, spare parts, hotels, and civil construction. The plaintiff claimed that under an oral family settlement dated March 31, 2014, the right to use the trademark "BLACK DIAMOND" in relation to industrial vehicles was exclusively assigned to the plaintiff, while other members of the family were allotted different business segments.

Despite this arrangement, the defendants, who were also part of the family, allegedly started using the name "BLACK DIAMOND" in relation to industrial vehicles in 2018, violating the family settlement. The plaintiff contended that the defendants applied for registration of the trademarks "BLACK DIAMOND TRACK PARTS" and "BLACK DIAMOND TRAILER TECH" in 2018, claiming prior use since 1991, which was opposed by the plaintiff. The plaintiff further claimed that the defendants' actions caused confusion in the market and sought an injunction to restrain them from using the disputed trademarks.

Detailed Procedural Background:
The plaintiff initially filed a suit in 2018 before the District Judge in Bilaspur, Chhattisgarh, seeking an injunction against the defendants. The court declined to grant an interim injunction, and the High Court of Chhattisgarh upheld this decision. The plaintiff then withdrew the suit with liberty to file a fresh suit. Subsequently, the plaintiff refiled the case before the Commercial Court in Delhi in July 2020, where the court granted an ex-parte ad-interim injunction restraining the defendants from using the disputed trademarks. The defendants challenged this decision, arguing that the plaintiff engaged in forum shopping by re-filing the case in Delhi after failing to secure an injunction in Bilaspur.

The Commercial Court later confirmed the injunction against the defendants. Dissatisfied with this decision, the defendants filed an appeal before the Delhi High Court under Section 13(1A) of the Commercial Courts Act, 2015, and Order XLIII Rule 1(r) of the Code of Civil Procedure, 1908. The appeal was heard by a division bench of Justices Rajiv Sahai Endlaw and Amit Bansal.

The primary issues before the Delhi High Court were:
Whether the plaintiff was disentitled from seeking an injunction due to engaging in forum shopping? Whether the plaintiff had an exclusive right to the trademark "BLACK DIAMOND" for industrial vehicles? Whether the defendants' use of the trademark "BLACK DIAMOND" was in violation of the family settlement? Whether the defendants were entitled to use the trademark under Section 34 of the Trade Marks Act, 1999, which protects prior users of a mark?

Detailed Submission of Parties:
The plaintiff argued that the family settlement of 2014 allocated the exclusive right to use "BLACK DIAMOND" for industrial vehicles to the plaintiff, and the defendants were bound by this agreement. The plaintiff contended that allowing the defendants to use the name would cause confusion among consumers and dilute its brand reputation. The plaintiff also emphasized that it had applied for registration of the trademark in 2009 and obtained registration in 2014, whereas the defendants only applied for registration in 2018.

The defendants contended that the plaintiff engaged in forum shopping by withdrawing the suit from Bilaspur and refiling it in Delhi after failing to secure an injunction. They argued that they had been using the "BLACK DIAMOND" name since 1983 and that the plaintiff's claim to exclusive use was unfounded. The defendants also pointed out that the plaintiff's claim of an oral family settlement was unsupported by any documentary evidence or board resolutions. Additionally, they argued that under Section 34 of the Trade Marks Act, their prior use of the trademark protected them from being restrained by the plaintiff's registration.

Detailed Discussion on Judgments Cited by Parties:
The plaintiff relied on Power Control Appliances vs. Sumeet Machines Pvt. Ltd. (1994) 2 SCC 448, arguing that mere delay in seeking an injunction does not amount to acquiescence. The plaintiff also cited Kamat Hotels (India) Ltd. vs. Royal Orchid Hotels Ltd. 2011 (4) Mh.L.J. 71, supporting its claim that a prior registered user has superior rights over subsequent users.

The defendants relied on Union of India vs. Cipla Ltd. (2017) 5 SCC 262, where the Supreme Court condemned forum shopping and held that litigants cannot switch courts to obtain a favorable order. The defendants also cited Allied Blenders and Distillers Pvt. Ltd. vs. Amit Dahanukar (2019 SCC OnLine Del 8898), where the court rejected an injunction when a party had previously failed to obtain one in another jurisdiction.

Detailed Reasoning and Analysis of the Judge:
The court found that the plaintiff engaged in forum shopping by withdrawing the case from Bilaspur and refiling it in Delhi to obtain a favorable order. The court held that while withdrawal with liberty to file afresh is legally permissible, it does not erase the prior proceedings, and courts can consider such conduct when deciding on equitable relief.

The court also held that the plaintiff failed to provide sufficient evidence of the alleged family settlement and noted that the defendants had been using the "BLACK DIAMOND" name for various businesses since 1983. The judges observed that even though the plaintiff had a registered trademark, it could not claim exclusivity over a family name without clear evidence of an agreement restricting its use.

The court ruled that the defendants' prior use of the trademark gave them protection under Section 34 of the Trade Marks Act. The court also noted that both parties had distinct business identities, and the likelihood of consumer confusion was low, especially since the defendants agreed to add "Raminder Singh Bhatia Group" and "Parvinder Singh Bhatia Group" to their labels to distinguish their products.

Final Decision:
The Delhi High Court allowed the appeal and set aside the injunction granted by the Commercial Court. The court ruled that the plaintiff was not entitled to an injunction due to its forum shopping and lack of conclusive evidence of exclusive rights to the trademark. The plaintiff was directed to pay costs of Rs. 50,000 to the defendants.

Law Settled in This Case:
A party that engages in forum shopping by refiling a case in a different jurisdiction after being denied relief elsewhere may be disentitled from seeking an injunction. Prior use of a trademark can be a valid defense under Section 34 of the Trade Marks Act, even against a registered proprietor. A family business name used collectively by multiple parties cannot be claimed exclusively by one party without clear and documented evidence of an agreement restricting its use. Courts will consider equitable factors such as clean hands and good faith when granting discretionary relief such as injunctions.

Case Title: Black Diamond Track Parts Private Limited & Ors. Vs. Black Diamond Motors Private Limited
Date of Order: May 28, 2021
Case No.: FAO (COMM) 41/2021
Citation: AIRONLINE 2021 DEL 896
Name of Court: High Court of Delhi
Judges: Hon'ble Justice Rajiv Sahai Endlaw and Hon'ble Justice Amit Bansal

Disclaimer:
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Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: ajayamitabhsuman@gmail.com, Ph no: 9990389539