Trademark Infringement Suit: Delhi High Court Grants Injunction to Infosys, Citing Principle of Acquired Distinctiveness

The Delhi High Court, recently, granted an injunction to Infosys in a trademark infringement suit against a company using ‘Southern Infosys’ as its mark. The court highlighted that while ‘Infosys’ might have started as a potentially descriptive term, it had undoubtedly ‘acquired a distinct secondary’ meaning linking it indelibly to the plaintiff.

The bench of Justice Sanjeev Narula said, “The defendant’s argument that the term remains merely descriptive is, therefore, not persuasive.”

Infosys, represented by advocate Peeyoosh Kalra, argued that the company, a global leader in information technology and consulting services with a market capitalisation of approximately 93.6 billion USD, was established in 1981. The trademark ‘Infosys’ coined and adopted in 1981, had been in continuous and uninterrupted use. Through relentless and extensive publicity and promotional efforts, their trademark had amassed formidable goodwill and an outstanding reputation both within India and internationally. Consequently, the term became exclusively associated with the company, particularly recognised as a hallmark in the technology sector.

Upon discovering the unauthorised use of its trademark, Kalra told the court that the company promptly issued a cease-and-desist notice, which the defendant did not respond to. He argued that no amount of time elapsed could legitimise the defendant’s use of the infringing mark, as its initial adoption was dishonest and in bad faith.

Advocate Piyush Kaushik, representing Southern Infosys (defendant), opposed the grant of an injunction on several grounds. He argued that Infosys deliberately concealed crucial facts, such as an earlier cease-and-desist notice, and its failure to mention this notice in their plaint. When confronted, Infosys could not justify this omission, suggesting it was a tactic to secure an ad-interim injunction based on incomplete disclosures.

Additionally, Kaushik asserted that the term was deemed generic and descriptive. He further argued that there was no deceptive similarity between the trademarks, and the substantial differences in the nature of the businesses further eliminated the likelihood of confusion.

The court referred to the scope of infringement under Section 29(5) of the Act, noting that the section deals with instances where a defendant used a trademark identical or similar to the plaintiff’s registered trademark. These sub-sections apply to goods or services that are the same as, similar to, or different from those offered by the plaintiff.

The HC clarified that sub-section (5) of Section 29 addresses a distinct issue. “Section 29(5) stipulates that trademark infringement occurs only when the registered trademark is used by the Defendant as part of their trade name and the Defendant engages in commerce concerning the goods or services for which the trademark is registered,” the court highlighted.

The court further examined the trademarks of the parties and noted that although the prefix ‘Southern’ suggested some differentiation, ‘Infosys’ remained the dominant element. The HC therefore concluded that the combination of visual, phonetic, and conceptual similarities between the marks significantly raised the likelihood of consumer confusion, suggesting that ‘Southern Infosys Limited’ might be mistakenly associated with Infosys.

The court, while assessing the generic nature of the term ‘Infosys’, noted that the critical test for determining whether a mark was descriptive did not hinge solely on its original, generic usage but rather on its association in the public mind over time. The court emphasised, “Acquired distinctiveness occurs when a term, initially considered generic or descriptive, evolves through extensive and sustained commercial use, advertising, and public recognition to signify a specific source rather than just the product or service itself.”

Accordingly, the court allowed the application and refrained defendants from using the term ‘Infosys’.