Defendant Distributing Franchise When No Authorisation Was Granted Is Also Trademark Infringement: Delhi High Court Grants Injunction To Wow Momo Against Franchisebyte
The Delhi High Court allowed an application for an interim injunction by Wow Momo against Franchisebyte for allegedly distributing a franchise without authorization, which is also considered trademark infringement.
The Court allowed an application for the institution of suit for trademark infringement in a plaint filed by Wow Foods Limited against Franchisebyte. The Court emphasized that if an injunction is not granted, the Defendant will continue to defraud the public at the expense of the plaintiff.
“Inasmuch as the assertions in the plaint indicated that a is calculated fraud being perpetrated by the defendant, by luring persons into applying for becoming franchisees of the plaintiff, where no such franchises actually extended by the plaintiff and, in the process, is also infringing the plaintiff’s registered trade mark by making unauthorised use thereof, a case for grant of interlocutory injunction is made out”, Justice C. Hari Shankar observed.
“In a case such as this, if injunction is not granted ex parte, it would result in the defendant continuing to defraud the public at the expense of the plaintiff. As such, the balance of convenience is also in favour of grant of ex parte injunction. Failure to grant ex parte injunction would also result in irreparable prejudice to the plaintiff”, the Court noted.
Advocate Ankur Sangal appeared on behalf of the Plaintiff.
WOW Foods Pvt. Ltd. in 2015, transferred the rights of the the trademark "WOW! MOMO" to the Plaintiff through a Business Transfer Agreement. Plaintiff presented a video clip from YouTube as evidence, which showed Defendant's claim to offer franchises for Plaintiff's business. Plaintiff also argued that Defendant operated a website that provided franchises for various Indian start-ups, including Plaintiff, without proper authorization.
The Plaintiff approached the Court by way of a Commercial Civil Suit seeking to institute a trademark infringement suit with a set of Interlocutory Applications under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure 1908 (CPC) seeking multiple reliefs including a decree of permanent injunction, an order restraining the Defendants as well as all others acting on its behalf from directly or indirectly using the trade mark WOW! MOMO or any other mark that would be similar and directions to take down the aforenoted posts on YouTube as well as on its website www.franchisebyte.com.
The Court instituted the suit for trademark infringement and issued summons to the Defendants to file a written statement within 30 days. The Court held that a case for grant of interlocutory injunction is made out as the Defendants allegedly lured people into applying for a franchise of the brand where no authorization was granted.
The Court further issued notice to the Plaintiff to file any rejoinder application within four weeks from the date of the order. The Court also granted exemption from the requirement of pre-institution mediation under Section 12A of the Commercial Courts Act, 2015 (Act).
The Court laid down the following directions:
“(i) The defendant as well as all others acting on its behalf shall stand restrained from directly or indirectly using, advertising or publishing any video reflecting the trade mark WOW! MOMO , or any other mark which is identical or deceptively similar to the plaintiff’s registered trade mark, for any purpose whatsoever.
(ii) The defendant is directed, forthwith, to take down all videos relating to the plaintiff or making any reference to the plainiff’s registered trade mark WOW! MOMO from its YouTube channel available at https://www.youtube.com/watch?v=hRsogzUfpJw&t.
(iii) The defendant is further directed to take down all contents relating to plaintiff, and all references to the plaintiff or to its mark WOW! MOMO on its website www.franchisebyte.com.
(iv) The defendant is further directed, in its reply, to disclose all persons to whom, by the above method, it has granted purported franchises of the plaintiff, as well as the amounts that it has earned from such activities.
Compliance with Order XXXIX Rule 3 of the CPC be effected within a period of one week”.
Accordingly, the Court allowed the application.
Cause Title: Wow Momo Foods Private Limited v Franchisebyte
