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Informist, Monday, Feb. 24, 2025

 

--HC bench junks order to bar Adyar Gate from using Dakshin name in ITC case 

--HC bench to Adyar Gate Hotels: Reply to ITC plea before single-judge bench 

--HC: Single judge to hear ITC suit for injunction vs Adyar Gate on Mar 18 

 

NEW DELHI – A division bench of the Delhi High Court on Monday set aside the order of a single-judge bench which temporarily restrained Adyar Gate Hotels Ltd. from using or dealing in restaurant and food business under the trademark 'Dakshin' or any other name similar to the registered trademark of ITC Ltd. On Feb. 13, the single-judge bench had passed an ex-parte ad-interim injunction against Adyar Gate Hotels in a suit filed by ITC. 

 

The division bench asked Adyar Gate Hotels to file a response to the interim injunction plea filed by ITC before the single judge. The division bench said that ITC's suit shall be listed before the single judge for consideration on Mar. 18. "The learned single judge could not have granted an ex parte order without giving a notice," remarked the division bench.

 

The single-judge bench's verdict came on a plea filed by ITC and its associate company ITC Hotels Ltd. to restrain Adyar Gate Hotels from infringing on the trademarks and copyright of the plaintiffs. In October, the hotels and hospitality business of ITC was demerged through a scheme of arrangement, and transferred to ITC Hotels. Pursuant to the merger, ITC granted an exclusive licence to ITC Hotels to use several of its well-known trademarks, including the 'Dakshin' mark, for the operation of premium restaurants. 

 

ITC had said that it held various trademark registrations in respect of the mark 'Dakshin'. The earliest registration granted to ITC was dated Dec. 13, 2000, with use claimed from Apr. 1, 1989. ITC had said that the highly stylised and unique mark 'Dakshin' was adopted by it for using in the restaurant on the premises of Welcomgroup Park Sheraton Hotel, Chennai in 1989. Since the launch of that restaurant in 1989, ITC has garnered immense goodwill and reputation in respect of the aforesaid restaurant, said the petitioner.

 

In view of the success of the first restaurant, ITC subsequently launched branches of the aforesaid restaurant in various other hotels run by it across India. It is one of the conglomerate's most awarded restaurants, said ITC. The petitioner said it was operating 'Dakshin' in Mumbai, Hyderabad, Delhi, Visakhapatnam and Bengaluru, and the revenue generated by these under the mark for 2023-24 (Apr-Mar) was to the tune of INR 123.8 million.

 

ITC said it had entered into an operating services agreement in 1985 with Adyar Gate Hotels and a hotel under the name 'Welcomgroup Park Sheraton' was launched in the same year in terms of the agreement. As per the agreement, the present as well as future trademarks, trade names, service marks and other intellectual property were to belong to ITC and Adyar Gate was only conferred limited right to use the same. The agreement also provided that Adyar Gate shall have no right to use the aforesaid trademarks after the expiry of the agreement.

 

In 2015, the agreement expired. Thereafter, the petitioners withdrew from the hotel and the hotel was transferred to a third party and was renamed 'Crowne Plaza, Chennai, Adyar Park'. ITC had said that even though Adyar Gate did not have any right to use 'Dakshin' name after the expiry of the terms of the agreement, the petitioner on account of their long relationship with the defendant, did not object to the restaurant under the given name, which continued to operate even though the plaintiffs had withdrawn from the hotel after 2015. Therefore, the restaurant under the name 'Dakshin' continued to operate till Dec. 31, 2023, when the hotel shut down.

 

ITC said that in October, the petitioners were shocked to learn about Adyar Gate opening a standalone restaurant at a new location using an identical mark 'Dakshin'. Further, the defendant was using the mark in an identical style and get-up as used by the plaintiffs and serving a similar cuisine as the plaintiff's restaurants, said ITC and ITC Hotels.

 

On Monday, shares of ITC ended 0.3% higher at INR 401.90 on the National Stock Exchange, while those of ITC Hotels ended 1.4% lower at INR 160.44.  End

 

Reported by Surya Tripathi

Edited by Tanima Banerjee

 

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