Delhi High Court’s Ruling on Relaxo vs. XS Brands Consultancy: A Trademark Dispute Unveiled

[Relaxo Footwers Limited v. XS Brands Consultancy Private Limited, 2024 SCC OnLine Del 3434, decided on 03-05-2024]

The Delhi High Court’s recent decision in the case of Relaxo Footwears Limited v. XS Brands Consultancy Private Limited & Ors., decided on May 3, 2024, has captured the attention of trademark law enthusiasts and businesses alike. The case involved a dispute over the use of the ‘X’ mark in the footwear industry, pitting Relaxo Footwears Limited against the HRX brand, associated with Myntra and endorsed by Bollywood actor Hrithik Roshan. This ruling, sheds light on how courts handle trademark infringement claims, especially when similar marks are used in competitive markets.

The Dispute at a Glance

Relaxo Footwears Limited, a prominent player in the Indian footwear industry, sought a permanent injunction against HRX. Relaxo alleged that HRX’s use of the ‘X’ mark on its footwear was deceptively similar to the ‘X’ mark derived from Relaxo’s ‘SPARX’ brand. Relaxo argued that this similarity could confuse consumers and dilute their brand’s distinctiveness, considering their ‘X’ mark had been in use since 1976. On the other hand, XS Brands Consultancy, representing HRX, countered that their ‘X’ mark had been in use since 2010 and was always paired with their principal brand name ‘HRX.’ They claimed that the market was saturated with similar ‘X’ marks and pointed to a prior agreement allowing coexistence of similar trademarks, which weakened Relaxo’s exclusivity claims.

Legal Argument between the parties:

Relaxo, represented by Mr. Saif Khan and his team from Anand and Anand, emphasized several points:

Relaxo has been using the ‘X’ mark since 1976, building significant market presence and consumer loyalty. The plaintiff argued that HRX’s similar ‘X’ mark could lead to consumer confusion, potentially leading to mistaken purchases. Relaxo highlighted its substantial investments in marketing and promoting the ‘X’ mark, underscoring the brand’s established goodwill.

HRX’s defense, led by Mr. Chander M. Lall, where the HRX argued that their ‘X’ mark was distinct and had been used with their ‘HRX’ brand since 2010, predating Relaxo’s formal register. The defense noted that many brands use similar ‘X’ marks, suggesting that Relaxo’s claim to exclusivity was unrealistic. They pointed out a prior agreement between Relaxo and another company, Soccer International Pvt. Ltd., which allowed for the coexistence of similar trademarks.

Court’s Analysis and Decision

Justice Anish Dayal’s decision was thorough, focusing on several critical factors:

1. Similarity and Context: While the marks were visually and phonetically similar, the court noted that both brands used the ‘X’ mark in conjunction with their primary names (‘SPARX’ for Relaxo and ‘HRX’ for XS Brands). This reduced the likelihood of consumer confusion.

2. Market Conditions: The court acknowledged the crowded nature of the market for ‘X’ marks. This environment made it less likely for one company to claim exclusive rights over the mark.

3. Prior Agreements: The existence of the prior coexistence agreement between Relaxo and Soccer International Pvt. Ltd. was crucial. This agreement indicated that Relaxo had already accepted the presence of similar marks in the market, weakening their exclusivity argument.

4. Balance of Convenience: The court considered that HRX had been using the ‘X’ mark for over a decade. Granting an injunction at this stage would disrupt HRX’s established market presence.

The court ultimately concluded that Relaxo had not sufficiently demonstrated a likelihood of consumer confusion or that HRX had dishonestly adopted the ‘X’ mark. As a result, the court dismissed Relaxo’s application for a permanent injunction.

Implications of the Decision

This ruling has significant implications for trademark law and business strategies:

1.Context Matters: The decision underscores the importance of how marks are used in context. The association of the ‘X’ mark with principal brand names (‘SPARX’ and ‘HRX’) was a decisive factor.

2.Crowded Marketplaces: The acknowledgment of a crowded marketplace for similar marks highlights the challenges in claiming exclusive rights to common symbols.

3. Strategic Coexistence: The prior agreement allowing coexistence of similar marks indicates that businesses need to strategically navigate trademark agreements to protect their interests.

The Delhi High Court’s ruling in Relaxo Footwears Limited v. XS Brands Consultancy Private Limited & Ors, provides a nuanced perspective on trademark disputes. By balancing legal principles with market realities, the court demonstrated a pragmatic approach to resolving such conflicts. For businesses, this case highlights the importance of clear brand differentiation and strategic trademark management in a competitive marketplace.

Author:- Vidhi Agarwal (Associate) and Susmita Sarkar (Legal Intern)
Aumirah Insights

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