The case of KEI Industries Limited vs. Raman Kwatra & Anr., decided by the Delhi High Court on May 17, 2022, deals with a dispute over trademark infringement. KEI Industries, a well-established manufacturer of electrical cables and wires, alleged that the defendants had unlawfully adopted a deceptively similar trademark, "KEI," to mislead consumers and benefit from KEI Industries' goodwill. The case raised critical issues regarding trademark rights, priority of use, honest concurrent use, and the scope of infringement under the Trade Marks Act, 1999.

Factual Background:
KEI Industries Limited was originally established as Krishna Electrical Industries in 1968 and later incorporated as a public limited company in 1992. The company has been using the trademark "KEI" for its products, primarily electrical wires and cables, for several decades. The plaintiff had registered "KEI" both as a word mark and as a device mark under various trademark classes, including Classes 6, 9, 16, 35, 37, and 42.

In September 2017, KEI Industries discovered that the defendants had applied for registration of the trademark "KEI" under Classes 7, 11, and 35 for electrical goods, including appliances such as fans, geysers, and electrical heating apparatus. The plaintiff issued a cease-and-desist notice to the defendants, demanding that they stop using the mark and withdraw their trademark applications. The defendants, however, continued using the "KEI" mark, prompting KEI Industries to file a suit seeking a permanent injunction and damages for trademark infringement.

The defendants, led by Raman Kwatra, claimed that their business, Kwality Electrico (India), had been in operation since 1966 under the ownership of Om Prakash Kwatra (OPK), the father of Raman Kwatra. They argued that they had inherited the right to use the "KEI" mark and that their usage was honest and concurrent. The defendants further contended that KEI Industries’ trademark registration did not cover the product categories in which they operated, such as electrical appliances under Class 11.

Procedural Background:
KEI Industries filed a suit before the Delhi High Court seeking an interim injunction under Order XXXIX, Rules 1 and 2 of the Code of Civil Procedure, 1908. The plaintiff argued that the defendants were infringing upon its registered trademark and misleading consumers by creating confusion in the marketplace.

The defendants filed a written statement asserting their right to use the "KEI" mark based on prior use and alleged that the plaintiff’s registration under Class 9 did not extend to electrical appliances, which fell under Class 11. They also invoked Section 12 of the Trade Marks Act, 1999, arguing that they were honest and concurrent users of the mark.

The High Court, in its judgment, analyzed the claims of both parties and determined whether the plaintiff had established a prima facie case for an injunction.

Issues Involved in the Case:
The primary legal issues in the case included whether the defendants' use of the mark "KEI" amounted to trademark infringement under Section 29 of the Trade Marks Act, 1999? Another issue was whether the defendants had any legal right to use the "KEI" mark based on prior use or inheritance from OPK? The court also examined whether the defendants could claim honest and concurrent use under Section 12 of the Trade Marks Act? A key question was whether KEI Industries' trademark rights extended to product categories beyond those explicitly covered under its trademark registration? Finally, the court had to determine whether the defendants' use of the "KEI" mark would likely cause confusion among consumers and lead to passing off?

Submissions of Parties:
KEI Industries contended that the "KEI" mark had been in use since 1968 and had acquired significant goodwill and reputation. The plaintiff argued that the defendants’ use of "KEI" was clearly infringing, as "KEI" was the most dominant and essential part of their mark. It was also asserted that the defendants had no legal basis for claiming inheritance of the mark since OPK had transferred the rights to use "Kwality" to his other son, Rajiv Kwatra, and not to Raman Kwatra. The removal of "Kwality Electrico India" from the defendants’ mark was presented as evidence of an intention to mislead consumers and associate their products with KEI Industries. The plaintiff further argued that the defendants’ products, such as electrical appliances, were similar and allied to KEI Industries’ products, thus leading to a likelihood of confusion in the market. The defendants’ claim of honest and concurrent use was rejected on the basis that their usage of "KEI" only started in 2008, long after KEI Industries had secured its trademark registration in 1988.

The defendants countered these claims by arguing that Kwality Electrico (India) was established in 1966 and had been using the mark since then. They contended that they had acquired the right to use "KEI" from OPK and had been using it independently since 2008. It was argued that the plaintiff’s trademark registration was limited to Class 9, covering wires and cables, whereas the defendants’ products, such as electrical fans and heaters, fell under Classes 7 and 11. The defendants asserted that the plaintiff had failed to show that their use of the mark caused any real consumer confusion. They claimed that they were entitled to honest and concurrent use under Section 12 of the Trade Marks Act, as their use was longstanding and in good faith.

Discussion on Judgments Cited:
The court analyzed several judgments to assess whether the defendants’ use of "KEI" constituted infringement. In Midas Hygiene v. Sudhir Bhatia, (2004) 3 SCC 90, the Supreme Court ruled that in cases of trademark infringement, an injunction must be granted if there is prima facie evidence of deception, regardless of delay. The court applied this principle in favor of KEI Industries. In Power Control Appliances v. Sumeet Machines, (1994) 2 SCC 448, the Supreme Court held that honest and concurrent use is a ground for registration, not a defense against infringement. The court rejected the defendants’ reliance on Section 12. In Pankaj Goel v. Dabur India Ltd., 2008 (38) PTC 49 (Del), the Delhi High Court ruled that a trademark owner is not obliged to sue an infringer immediately but can act when the infringement becomes significant. This justified KEI Industries’ delay in filing the suit. In L&T Ltd. v. Lachmi Narain Trades, 2008 (36) PTC 223 (Del), the court emphasized that phonetic and visual similarity between marks is a key factor in determining infringement. The resemblance between "KEI" and the plaintiff’s mark was deemed sufficient for confusion.

Reasoning and Analysis of Judge:
Justice C. Hari Shankar analyzed the case in depth and ruled in favor of KEI Industries, holding that the plaintiff had a valid and subsisting trademark registration for "KEI" since 1988, giving it the exclusive right to use the mark. The court found that the defendants had failed to establish a legitimate claim to inherit or acquire rights to the mark. The removal of "Kwality Electrico India" from the defendants’ mark demonstrated an intent to create confusion. The court rejected the argument that honest and concurrent use could be used as a defense against infringement. It was concluded that the defendants’ products were similar enough to KEI Industries’ goods to cause consumer confusion.

Final Decision:
The court granted an interlocutory injunction restraining the defendants from using the "KEI" mark for electrical goods and appliances. The defendants were barred from using the mark pending the final resolution of the suit.

Law Settled in this Case:
The ruling reaffirmed that prior registration grants exclusive rights to use a trademark in similar product categories. The decision clarified that honest and concurrent use is not a defense against trademark infringement. The judgment also reinforced that phonetic and visual similarity is sufficient to establish infringement. It established that a trademark holder is not obligated to sue immediately but can act when infringement becomes significant.

Case Title: KEI Industries Limited Vs. Raman Kwatra & Anr.
Date of Order: May 17, 2022
Case No.: CS(COMM) 9/2021
Court: Delhi High Court
Judge: Hon’ble Mr. Justice C. Hari Shankar

Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

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