India High Court Gets 20-Year `Exide’ Trademark Dispute

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By Madhur Singh|

Oct. 4 — The Supreme Court of India will hear a two-decade-long trademark dispute between U.S.-based Exide Technologies (Exide U.S.), a global battery manufacturer and recycler, and India-based Exide Industries Ltd. (Exide India) next year.

The court on Sept. 30 agreed to hear the case over which company has the right to use the “Exide” trademark in India. Milton, Ga.-based Exide Technologies, which provides batteries and associated equipment and services for transportation and industrial markets, has over 8,900 employees, according to Bloomberg Law. It emerged from a bankruptcy filing as a privately held company in 2015.

Exide India appealed to the Supreme Court after a Delhi High Court division bench in August 2016 lifted a nearly four-year-old injunction against Exide U.S. that had been imposed by a single high court judge.

Reversing the single judge, the division bench found that the U.S. company had coined the term “Exide,” had let a previous U.K.-based prior owner of Exide India use the mark, and was itself prevented from using the mark in India due to extenuating circumstances. Also, the case warranted consideration of Exide U.S.’s transborder reputation, it said.

The court asked Exide U.S. to approach the Intellectual Property Appellate Board to have Exide India's trademark revoked. Exide India then appealed; the Supreme Court is scheduled to hear the case Jan. 11, 2017. The Supreme Court issued a stay so that Exide U.S. cannot use the “Exide” trademark until the case is finally decided.

Exide Companies' Background

Electric Storage Battery Company (ESBC), a U.S. company, was incorporated in 1888. A U.K. subsidiary, Chloride Electric Storage Co. Ltd. (CESCO), was incorporated in 1891 to manufacture and sell batteries under the “Exide” mark.

The companies cut ties in 1947 as the fallout from a U.S. antitrust case, but CESCO was allowed to continue using the mark in the U.K. In 1946, CESCO set up a factory and two group companies in India to manufacture batteries for sale under the Exide mark, which it had registered in India in 1942. In 1947, Chloride Group Ltd acquired CESCO, started using the “Exide” mark and got itself assigned the rights in the mark in 1978.

When Exide U.S. tried to enter the Indian market, Exide India filed suit in 1997 to prevent it from using “Exide” or suggesting any relation with the mark. Exide U.S. countered that it was the trademark's rightful owner and prior user, and that Exide India had gotten the trademark fraudulently registered in India. Exide U.S. also filed a counter suit.

Single Judge Decision

At the Delhi High Court, Justice Valmiki J. Mehta determined that plaintiff Exide India owned the registered trademark and was a prior user. Mehta also said his court did not have jurisdiction to assess whether Exide India had fraudulently gotten the mark registered; that was the domain of the IP appellate board.

Mehta ruled that Exide U.S. was not the mark's prior user in India because, as a parent company, it didn't issue a common law license to the entity that eventually became Exide India. Exide U.S. didn't have a controlling stake in Exide India nor in its predecessors after the U.K.-U.S. split and didn't receive royalties from Exide India, he said.

The question of whether Exide India had committed fraud by concealing facts wouldn't bar it from getting an injunction, said Mehta, who issued the injunction in September 2012 to prevent Exide U.S. from using the mark in India. He dismissed a charge that Exide India had acquiesced and delayed filing suit, saying Exide U.S. had not sold the goods in India for a long time.

Division Bench Decision

Before the division bench, Exide U.S. argued that ESBC had coined the word “exide” as a composite of “excellent” and “oxide” in 1900. U.K.-based CESCO's use of the mark in India had been on behalf of Exide U.S., it said. CESCO was under the control and ownership of majority shareholder Exide U.S. and had enjoyed trademark rights in “Exide” and other marks exclusively for the U.K. and the British Empire, of which India was a part until 1947. Its use of the mark in India from 1927 until 1947 established common law rights, Exide U.S. said.

The U.S. company further argued that it never intended to stop doing business in India. It was prevented from making batteries there and using the “Exide” trademark from 1947 to 1991 due to special circumstances: a 1947 U.S. District Court ruling that compelled it to give up its stake in CESCO and India trade, it said. India's foreign direct investment policy also severely restricted foreign ownership of business. By the time the economy was liberalized starting in 1991, the court's ruling had been vacated.

Exide U.S. argued that Exide India was liable for passing off and should be made to pay damages. Exide India had fraudulently obtained a trademark in “Exide” by failing to mention that the trademark had been reassigned to the original owner through an agreement in 1978, so the trademark should be canceled, it said.

The division bench agreed with Exide U.S., concluding in an Aug. 2, 2016, order that there was “sufficient material on the record” to show that Exide U.S. “had a bona fide use claim to use of the mark.”

That bench, comprised of Justices S. Ravindra Bhat and Najmi Waziri, held that Exide India's omission of facts was “fatal to its suit,” and that Exide U.S., “by reason of the transnational reputation pleaded and proved,” had a right to use the trademark in India. It dismissed the suits and counter suits, lifted the injunction and said the IP appellate board would decide if Exide U.S. had a right to the registered trademark “Exide.”

By Madhur Singh

To contact the reporter on this story: Madhur Singh in Chandigarh at By Madhur Singh

To contact the editor responsible for this story: Mike Wilczek at mwilczek@bna.com

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