Court not impressed with Asus finding Zen in mobile phones

Two mobiles companies are at loggerheads over use of ZEN as a brand. Teleecare Network India Pvt. Ltd. (Teleecare) had filed suit for trademark infringement and passing off seeking an injunction against Asus Technology Pvt. Ltd. (Asus) from selling, offering and advertising for sale mobile phones, mobile accessories bearing mark “ZENFONE” and/or any other mark identical and/or deceptively similar to the trademark “ZEN” and “ZEN MOBILE”. The post summaries submission of the parties and Court’s ruling.

Submissions by Teleecare Network India (Teleecare)

• ZEN and ZEN MOBILE are arbitrary and coined words having no relation to mobile phones.
• Teleecare owns registrations for the marks ZEN and ZENMOBILE in classes 09, 21 and 36 with earliest application for ZEN label filed in September 2008.
• Teleecare commenced use of the marks ZEN and ZEN MOBILE for feature phones, smart phones, tablets and accessories in 2008.
• Asus Technology’s adoption of an identical mark ZENFONE for selling identical goods i.e. mobile phones will cause confusion.
• The essential feature of Asus mark is ZEN and suffix FONE was immaterial.
• Asus’s ZENFONE mobile phones have a similar price range and targeted to same class of customers.

Submissions by Asus Technology (Asus)

• The owner of Asus was a staunch believer of the ancient “Zen Philosophy”, from where the mark was adopted.
• Asus launched Ultra thin laptops named as ZENBOOK in 2011 to reflect their belief in Zen Philosophy followed by Zenpad tablets, ZenUI (user interface system), ZenAiO (home entertainment system), Zenear (earphone kits), Zenpower (batteries, power chargers), Zenflash (camera flash lights).
• Asus has already filed a cancellation petition against Teleecare’s registered trademark, ZEN label in Class 09 and which is pending adjudication.
• Teleecare’s registrations are for device/label marks containing ZEN. Thus, they are barred under Section 17(2) of Trade Marks Act, 1999, to claim exclusivity/monopoly over a part of the label/device.
• The mark ZEN is common to trade and generic in nature. A trademark search into Trade Marks Registry’s records showed more than 100 ZEN/ZEN formative marks registered by third parties for mobile phones, mobile handsets etc in class 9.
• Teleecare in response to examination report for ZEN label mark application in class 9 had categorically admitted that the word ZEN was generic in nature and no one could claim exclusivity over it.

Rejoinder arguments by Teleecare

• The dominant part of all its registered marks is the word ZEN.
• None of the third parties identified by Asus were actually using the mark ZEN with respect to mobile phones.

Court’s Ruling

• Out of four categories of trademarks- generic, descriptive, suggestive, and arbitrary or fanciful, “Zen” is a generic word in relation to school of Buddhism. A word may be generic qua a specific business or trade or industry but doesn’t cover all business or trades or industries. ZEN is not a generic mark in relation to mobile phones and tablets since there is no correlation between ZEN mark and mobile phones. Teleecare’s adoption is arbitrary and entitled to protection and no evidence of acquired secondary significance is required.
• Unless the Defendants produce substantiating evidence of use of the questionable marks by third parties, a mere filing of a trademark search report doesn’t prove their case. Mere registration cannot be construed as actual usage. In present case, no such evidence has been filed by the Defendants.
• Defendants are estopped from contending that the mark ZEN is common to trade or generic since they themselves have filed application for ZENFONE in March 2014.
• The pendency of the cancellation petition against Teleecare’s registered trade mark does not preclude this Court from granting an injunction.
• Once a mark is registered, the certificate of registration is final proof of its existence. Post grant of registration, neither the Examination Report nor the applicant’s response are relevant documents. As there is no estoppel against statute, the stand taken by Teleecare in reply to the examination report is not relevant.
• Bar under Section 17(2)can be overcome by filing an action for passing off to claim exclusivity of a part or whole of the registered trademark. A subsequent dishonest user cannot take shelter under Section 17(2). This position would suggest that the statute permits it to commit passing off which is not the intent.
• Teleecare has filed documents in support of its prior user of the mark ZEN since 2008. Teleecare has gained goodwill and reputation with regard to its ZEN products which is prior to the Asus entering the market. It is clear from the record that Asus began use of the identical/similar mark ZENFONE in 2014 vide its first advertisement.
• Asus subsequent adoption of the mark ZEN is in bad faith. Further, triple identity test is satisfied.
• The dominant part of the Asus’s mark is ZEN which is Teleecare’s mark for same product- mobile phones. The likelihood of confusion and damage to the Teleecare’s goodwill is evident and test of passing off is satisfied.

Decision:

The Court thus restrained Asus from using the mark ZEN, ZENFONE and/or any other trademark identical and/or deceptively similar to the trademark ZEN in relation to mobile phones which was suspended for 8 weeks.