Trademark Squatting is a term that has evolved in this era. It is a tactic by unscrupulous entities wherein they apply for trademarks identical to the trademarks of well-known and renowned brands only to sell such trademark applications/registrations to legitimate owners at a higher cost. In general, ‘squatting’ means occupying a right or a property upon which the squatter has no legitimate right or claim.
In Trademark law, the squatter is very well aware of the existence of the prior trademarks of the renowned brands and still files for such trademarks only with the intent to sell them to the rightful and legitimate owners of those trademarks. Such exploitative tactics pose a significant threat to the integrity of the trademark law, underscoring the need for judicial intervention to protect and safeguard the rights of legitimate trademark owners.
In the recent judgement of Volans Uptown LLC vs. Mahendra Jeshabhai Bambhaniya, the plaintiff filed a quia timet suit before the Hon’ble High Court of Delhi seeking various remedies, including a permanent injunction against the defendant from passing off goods under the plaintiff’s trademark “BOTANIC HEARTH” and its formatives. However, the defendant failed to appear before this Court, and the case proceeded ex parte. The factual matrix of this case was that the Plaintiff, i.e., Volans Uptown LLC, was engaged in manufacturing and selling cosmetic, skin and hair care products made from natural ingredients under the trademark “BOTANIC HEARTH”.
They had registered the marks “BOTANIC HEARTH” and 
in 2017 in the United States and had filed applications for its registration in Canada and India. The plaintiff adopted the wordmark “BOTANIC HEARTH” in 2017, and this ownership extended to other forms or derivatives of the mark, including, inter alia, “BOTANIC HEARTH COSMECEUTICALS” and (collectively as “Plaintiff’s marks”/ “said marks”). The plaintiff was the exclusive owner and prior user of these marks and had been selling its products in various countries through e-commerce platforms, including its official website, www.botanichearth.com, since at least 2018, which was accessible by all. Its products have been available in India since at least 2020 on various e-commerce platforms such as Amazon India, Ubuy, etc., and continue to be so, demonstrating the demand and presence of its products/brand in India.
The plaintiff had also advertised, promoted, and marketed its products under the said marks in India, which had also been featured in Indian magazines and publications. The plaintiff further submitted that in September 2022, it learned that the defendant had filed a trademark application no. 5490886 for the mark “BOTANIC HEARTH” in class 3 on a “proposed to be used” basis, which incorporated the plaintiff’s mark in its entirety.
Further, the plaintiff had also found out that the defendant was a habitual infringer and had filed over 160 trademark applications belonging to popular brands owned by third parties, some of which were UrbanBoAt’, ‘MATTEL GAMES’, ‘SIRONA’, ‘SUGAR COSMETIC’, ‘MINMAX’, ‘TINKLE’ etc. The modus operandi of the defendant was to ride upon the goodwill and cachet enjoyed by internationally famous trademarks. In view of the same, the plaintiff had also sent a legal notice to the defendant asking it to cease and desist from using the impugned mark and assign the trademark application to the plaintiff. Later, the plaintiff received a call from the defendant’s representative, who demanded approximately INR 18,00,000/- to relinquish rights in the impugned mark.
It is pertinent to note here that the gap between the trademark application of the defendant and that of the plaintiff in India was merely a period of 3 months. During the conversation, it was also mentioned that the defendant had a similar arrangement concerning another trademark, ‘UrbanBoAt’, and significant details about the defendant’s business operations were further disclosed. The defendant’s representative also claimed that the defendant was a prominent figure in the e-commerce sector, selling sixty to seventy (60-70) thousand units daily, with a turnover of about INR 2 crores. He further revealed that the defendant manufactured various cosmetic and skincare products in China for sale in India and was establishing a manufacturing facility in Maharashtra.
This sequence revealed the modus operandi of the defendant, i.e., filing for registrations of well-known trademarks, including those owned by the plaintiff, to trade them or coerce legitimate owners into paying large sums of money. In case the owners refused such demands, the defendant would then capitalise on the established goodwill of the owners’ marks by selling counterfeit products on e-commerce platforms. It was also revealed that the defendant had not yet commenced using the mark “BOTANIC HEARTH”. However, it was learned that the defendant planned to start a manufacturing plant, which further gave rise to a credible apprehension that he intended to launch counterfeit products commercially.
Thus, the Court relied on Jawahar Engineering Co. and Ors. vs Javahar Engineering Private Ltd., wherein it was decisively held that the actualisation of a threat was not a prerequisite for granting an injunction. The Court also emphasised that injunctive relief could be appropriately granted to forestall an injury ‘likely to occur’. In light of the above facts and precedent, the Court granted an ex parte ad interim injunction in favour of the plaintiff by restraining the defendant from engaging in any activities that involved the direct or indirect use of products associated with the mark “BOTANIC HEARTH” and/or its formatives. Further, the Court held that the plaintiff was the prior user and adopter of the said marks. The Court also held that if the defendant were allowed to use the impugned mark(s), it would cause confusion amongst the public owing to the reputation of the plaintiff’s brand and products.
Further, on the basis of documents on record, including multiple trademark applications filed by the defendant for different renowned brands, the Court held that the defendant had a motive to engage in infringing / violative activities, thereby weakening the rights of such trademark owners. The Court also emphasised the fact that the defendant’s strategy of filing trademarks identical to those of renowned and internationally recognised brands pointed to a deliberate practice of ‘Trademark Squatting’. Thus, the plaintiff was awarded an injunction in its favour and the actual costs of the suit as well. The impugned mark was deemed as ‘Abandoned’ by operation of Section 21(2) of the Trade Marks Act, 1999, on February 6, 2024, as the Defendant failed to file any Counter Statement in reply to the opposition filed by the Plaintiff.
Authors: Manisha Singh and Garima Chopra
First Published by: Lexology here