David defeats Goliath: Pune court ruling against US ‘Burger King’ in favour of local competitor

Why has the Pune district court ruled against the multi-national Burger King in a case of trademark infringement?

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TRADEMARK law confers upon plaintiffs the exclusive right to use their registered trademarks, offering a theoretical shield against unauthorised use.

Under Section 28 of the Trademarks Act, 1999, corporations are entitled to seek judicial relief for any infringement of their registered marks. This entitlement is bolstered by a statutory presumption of consumer confusion as articulated in Section 29(3) of the Act, thereby alleviating the plaintiff's burden to prove actual confusion in cases of trademark infringement.

However, a recent judgment by the Pune district court serves as a stark reminder that procedural missteps and inadequate evidence can severely undermine even the most well-established trademark rights.

In this instance, Burger King Corporation encountered substantial obstacles in enforcing its trademark due to significant procedural deficiencies. Most notably, the plaintiff's failure to comply with the verification requirements set forth in the Civil Procedure Code (CPC), 1908 resulted in the exclusion of critical evidence, thereby weakening the plaintiff's position.

Procedural deficiencies in the plaintiff's case

Burger King Corporation, the US-based plaintiff, was beset with procedural lapses that marred the integrity of its case. The central issue pertained to the verification of affidavits, particularly those submitted by the plaintiff's primary witness.

Order 19 Rule 3(1) of the CPC mandates that affidavits must clearly distinguish between facts based on personal knowledge and those based on information or belief, with the sources of such information or belief being expressly stated.

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In the present case, the affidavit submitted by the primary witness failed to meet these requirements. The affidavit broadly asserted that the contents were true to the best of the knowledge, information, and belief of the protected witness without adequately delineating which portions were based on personal knowledge and which were derived from information or belief.

Furthermore, the affidavit did not disclose the sources of the information or the grounds for the belief, in direct contravention of the CPC stipulations.

Judicial precedents, including Miraj Marketing Corporation versus Vishaka Engineering and A.K.K. Nambiar versus Union of India, underscore the critical importance of adherence to Order 19 Rule 3(1).

Such cases have consistently held that affidavits failing to comply with these verification requirements are inadmissible as evidence because they lack the requisite credibility and probative value.

The failure to properly verify the affidavit of the primary witness had a profound impact on the plaintiff's case. As a primary piece of evidence, the affidavit was rendered invalid, leaving the plaintiff with insufficient substantiation to support its claims of trademark infringement.

Complicating the plaintiff's case was a dispute over the registration and prior use of the 'Burger King' trademark. The plaintiff's trademark application for hamburgers, filed in 2000, was challenged by the defendant on the basis of prior use dating back to 1992.

Despite the plaintiff's earlier registrations in other classes, the belated registration for hamburgers weakened its claim. The defendant successfully argued that their long-standing use of the trademark should invalidate the plaintiff's claim, particularly in light of the plaintiff's inability to demonstrate a prior continuous use of the mark in the relevant category.

A further significant procedural issue arose from the plaintiff's failure to properly authorise the filing of the suit. The plaint was signed and verified by individuals who were not shown to be authorised under Order 29 Rule 1 of the CPC.

The absence of a board resolution or power of attorney to this effect, coupled with the lack of any testimony establishing the authority of the signatories, resulted in the court deeming the suit improperly instituted. This procedural lapse further weakened the plaintiff's legal position.

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The plaintiff sought ₹20,00,000 in damages and a perpetual injunction against the defendants. However, the court found the plaintiff's claims unsubstantiated.

The plaintiff's trademark registration in India only became effective in 2006, whereas the defendants had been using the trademark since 1991–92. The lack of a pre-existing registration and the evidence of prior use by the defendants significantly undermined the plaintiff's claims for both damages and injunctive relief.

Conversely, the defendants' counterclaim for an injunction to prevent the plaintiff from using the 'Burger King' name in Pune, along with ₹20,00,000 in compensatory damages, was also dismissed.

Although the defendants presented various documents, including trade licences and receipts, their counterclaim failed to establish a specific cause of action or entitlement to an injunction. The claim for damages was similarly dismissed due to lack of concrete evidence.

Lessons drawn?

The Pune district court's decision highlights the critical importance of strict adherence to procedural rules in trademark litigation. Burger King Corporation's failure to comply with the CPC's requirements for affidavit verification and proper authorisation for filing the suit resulted in the dismissal of key evidence, severely compromising the plaintiff's case.

This ruling underscores that even globally recognised entities must rigorously observe procedural formalities to effectively assert their trademark rights.

Despite the statutory protections provided under the Trademarks Act, including the presumption of consumer confusion and relief against infringement, procedural lapses significantly diminished the plaintiff's legal standing.

This case serves as a cautionary tale, emphasising that rigorous procedural compliance is indispensable for the successful enforcement of trademark rights in court.

Case details: Burger King Corporation versus Anahita Irani RCS.