M/S MIND TREE EDUCATION PRIVATE LIMITED V. MINDTREE LIMITED AND OTHERS

(2019(3)RCR(Civil)780)

Facts: The appellant company is engaged in imparting education since 2006 operating three different schools and has registered with the Registrar of Companies, Chandigarh on 21.07.2009 filed for an application of trademark with the Trademark Authorities on 16.02.2016. The respondent company on the other hand is a midsized International Information Technology consulting and implementation company started in 1999 and later renamed to Mindtree Limited from Mind tree Consulting Limited.

Procedural History: On 23.11.2010, the respondent company filed an application before the Regional Director, North Region for correction of the appellant's name, asserting that the appellant's name resembled the name of the respondent company and endowed an identical registered trademark instructing the appellant company to remediate its name dropping “Mind Tree” and imposed cost of Rs. 25,000/-. After issuing notice to the appellant company and providing both companies with an opportunity to be heard, the application was rejected by order dated 28.05.2013, & held that the appellant trademark, Company's "Mind Tree," could not be considered identical or resembling the trademark of the respondent-company since the former's name encapsulated the term "Education." Aggrieved by the same, the respondent company challenged the above order which was allowed by the Single Judge vide order 22.12.2014.

Hence, this instant appeal has been filed under Clause X of the Letters Patent, by the appellant company against the order passed by learned Single Judge setting aside the order passed by the Regional Director (North-Region, Ministry of Corporate Affairs).

Issues Raised

1. Whether the Respondent-company i.e., Mindtree Limited is similar or nearly resembles the appellant’s trademark or its corporate name to dupe or cause confusion in the minds of a consumer.

2. Whether Sec.20 of the Companies Act, 1956 would be attracted treating the name of the respondent company undesirable.

Rules Applicable

· Sec.20, Companies Act, 1956: This section contemplates that-

(1) no company is to be registered with undesirable names[1]

(2) which is identical with or too nearly resembles[2],

i. the name by which a company in existence has been previously registered[3]or

ii. registered trademark which is subject of an application for registration of any other person under the Trade Marks Act, 1999[4]  and will be deemed to be undesirable by the Central Govt. within the meaning of sub-section (1).

·       Sec.22, Companies Act, 1956:  It provides for the rectification of a company's name if it "too closely resembles" the name of another company in existence which has been previously registered[5] or is identical or too nearly resembles a registered trademark.[6] Through ordinary resolution and with the previous approval of Central Government in writing alter its name or give new name[7] within a period of three months from the date of direction or as the Central Government may deem fit.[8]Failure to which, the company in default shall be fined with Rs.1000/- every day in its continuation. [9]

Application of Law

The Punjab and Haryana High Court, after weighing the arguments of both sides, found no value in the appellant company's claims that that there was a phonetic distinction between the term "Mind Tree" used by them and the term "Mind Tree" used by the respondent company, as well as the difference in how both are written in their respective company names, it was clear that both companies were in different fields of business and bore no resemblance. Taking into account that the appellant company was founded later than the respondent company which was already a registered company with a registered trademark since 1999 and had an international presence with rankings in big company entries, and that allowing the appellant company to use the trademark would be an infringement of the trademark rights and harm the respondent company's reputation and goodwill and additionally applying sec.20 and 22 of the Companies Act of 1956, the Court found that the appellant company's name was identical to and resembled the respondent company's registered trademark under the Trade Marks Act, 1999, and  the finding of the Single Judge was justified and thus dismissed the appeal.

Analysis

Prior to the Companies Act, 2013, law relating to companies were governed by the Companies Act, 1956. Most of the provisions that were in existence under the 1956 law still finds its mention in the 2013 act including sec.20 & 22 of the Companies Act, 1956 as discussed above.

Under the 2013 Act, sec.16 deals with rectification of name of company which was earlier done under sec.22 of the 1956 Act and the provision under sec.20 of the 1956 Act disapproving the registration of company with undesirable name which is identical and closely resembling the name of an already registered company or a registered trademark finds its mention under sec.4(2) of the 2013 Act which prohibits the name of the company from stating an undesirable company name in the opinion of the Central Government whose understanding can be understood from as reflected under sec.20(2) of the 1956 Act.

To throw light upon the judicial evolution on this subject matter, we can discuss a few cases wherein the Courts have dealt on a similar matter like that of our case in hand. In the case of Montari Overseas Ltd.[10],the Delhi HC held that similar trade names were used & there was a chance of misunderstanding and deception, and no reason was given by the default company as to how they came to use a trade name that consisted of a specific attribute and therefore was likely to result in the misappropriation of a competitor's reputation and good will and hence prohibited from using the name of the registered party’s name. In the Vardhaman’s Case[11], the Punjab and Haryana HC held that 'Vardhaman' was the respondent company's registered trade mark since 2007, and so use of the same brand by the appellant-firm, which was in the same business, was objectionable, and thus instructed the appellant company to rename. Additionally, in GMP Pharmaplan Ltd[12]., NNE Pharmaplan (P.) Ltd. submitted a representation before Regional Director under Sec.22of 1956 Act seeking that petitioner-company cGMP Pharmaplan (P.) Ltd., which was formed later with the name cGMP Pharmaplan (P.) Ltd., change its name. The Regional Director concluded that petitioner's use of the word "Pharmaplan" in its name would have a misrepresentative impact on the public and, hence issued a direction under sec.22(1)(b) and directed petitioner to delete the word "Pharmaplan" from its existing name and rename to something else. In a similar way, in Mondelez Pvt. Ltd Case[13], the Delhi HC allowed the petitioner’s petition where they were aggrieved by the order of the RD who allowed the respondent company to alter its name from Nonstop logistic India to Mondelez India Pvt. Ltd. which is identical and resembled the petitioner’s company name as understood under sec.16 of 2013, Act.

On International Comparison, Sec.26 of the United Kingdom’s Companies Act, 1985, a company name must not be insulting or illegal in the judgement of the Secretary of State. Certain names are prohibited by statute and thus cannot be used including the use or copying of the names of the Boy Scouts, the NSPCC, the Red Cross etc. The name cannot be the same as one that already appears in the registrar of companies' index of names [14].  The names of companies registered under the Act, as well as international firms and limited partnerships, are included in the register. If a name is registered by the registrar and it is discovered later that it is identical to an existing name, the Secretary of State has the authority to force the company to alter its name within 12 months of the registration[15]. In R v. Registrar of Companies Ex p. AG[16], Lindi St Claire, the famous prostitute, founded a company to carry out the service of prostitution & was registered as 'Lindi St Claire (Personal Services) Ltd,' and this action was challenged to dispute the company's registration since the firm's purposes were illegal. As a result, the corporation was removed from the register.

Recently, the Government has modified the rules for company incorporation under the Companies Act, 2013.[17] Sec.16 relates to the rectification of a company name wherein the government may direct changing firm's name within a certified period. The ministry of Corporate Affairs has put in place new rules, in which the tag of 'ORDNC' (Order of Regional Director Not Complied) would be attached by the Registrar of Companies in the name of the company that does not comply with the direction within the specified period wherever its name is published, affixed, or imprinted.

Conclusion

Hence in light of the law established and the general norm that is followed while incorporating a company’s name meeting the registered rights of a company already in existence, the judgement of the case in hand is justifiable considering that the Court felt that the legislation itself considers the name of a company that is identical to the name of another pre-existing company to be undesirable, the legislative intent must be carried out by granting injunctive relief to a plaintiff against a defendant who has imitated the aggrieved plaintiff's corporate name. Sec.20 and 22 of the former Companies Act, 1956, allowed remedies for trademark infringement. Sec.20 outlined the requirements for names judged "undesirable for registration" as company names, while Sec.22 outlined processes for company name rectification. Section 16 of the Companies Act of 2013 now provides a streamlined framework for correction.

[1] Companies Act, 1956, Sec.20(1).

[2] Companies Act, 1956, Sec.20(2).

[3] Companies Act, 1956, Sec. 20(2)(i).

[4] Companies Act, 1956, Sec.20(2)(ii).

[5] Companies Act, 1956, Sec.22(1)(i).

[6] Companies Act, 1956, Sec.22(1)(ii).

[7] Companies Act, 1956, Sec.22(1)(a).

[8] Companies Act,1956, Sec.22(1)(b)

[9] Companies Act, 1956, Sec. 22(2).

[10] Montari Overseas Ltd. v. Montari Industries Ltd., (1997) ILR 1 Delhi 64.

[11] Vardhaman Crop Nutrients v. U.O.I, LPA No. 101 of 2015.

[12] cGMP Pharmaplan (P.) Ltd. v. Regional Director, Ministry of Corporate Affairs, (2011) 105 SCL 675 (Delhi).

[13] Mondelez Foods Pvt. Ltd. v. RD, 2017 SCC OnLine Del 9219.

[14] Companies Act, 1985,  United Kingdom, Sec.26.

[15] Companies Act, 1985, United Kingdom, Sec.28(2).

[16] R. v Registrar of Companies Ex p. Attorney General, 1991 WL 838251 (DC).

[17] New rule for allotment of a new name to the existing company, notified via Companies (Incorporation) Fifth Amendment Rules, 2021, (https://www.scconline.com/blog/?p=251699).