UFO clothing licensee restrained from use of acronym “Under Fourteen Only” (UFO) 

The Plaintiff, UFO Contemporary, INC, filed action against the Defendants, Creative Kids Wear (India) Pvt. Ltd. and Ors, alleging trademark infringement and passing off to restrain the latter from using the mark UFO in relation to manufacturing and marketing of clothing. The suit is a result of falling out between the parties on use and ownership of the mark UFO. 
The Plaintiff sought a preliminary injunction restraining the Defendants from using the mark UFO.

Plaintiff in support of its case:

1. The mark UFO is registered in India in Class 25 since 1982 for shirts, pants and blouses for men, women and children. UFO is an arbitrary mark adopted in the year 1968 and registered in several countries of the world.
2. The Defendants were engaged by the Plaintiff to manufacture on their behalf clothing under the trademark UFO in India until 2011. Further they were granted license by the Plaintiff for use of the mark UFO for domestic sales.
3. In March 2011, Defendants’ requested for a full ownership of the UFO mark in India instead of licensed use. This was refused by the Plaintiff which resulted in a rift in the relation. The Plaintiff thereafter started getting its products manufactured for export through another manufacturer until 2017.
4. In January 2019, Plaintiff came across Defendants’ trademark application for the mark  in class 25 which was promptly opposed. Inquiries revealed that Defendants were manufacturing and selling products containing the mark UFO through online shopping websites.
5. Plaintiff’s warning letter was not acted upon by the Defendants which led to the filing of the suit.

Defendants’ counter to the injunction application:

1. Plaintiff has no locus standi to file the suit as they are a USA based company and UFO branded products are not sold in India.
2. In 2012, 1^st Defendant launched exclusive kids’ wear brand “Under Fourteen Only” with the mascot “Oodle”  .  Due to their efforts, “Under Fourteen Only” has flourished as a popular brand for kids-wear.
3. Plaintiff’s UFO branded products have been manufactured in India from 1970 till 2017 for export and not for sale in the Indian sub-continent.
4. The rival marks are not similar as Defendants use the letters “U, F & O” as acronym for “Under Fourteen Only”, to save space, thus, even prima facie case of infringement is not made out.
5. There is acquiescence, laches and delay as the suit is filed after eight years since the launch of the brand “Under Fourteen Only”.

Court’s findings:

• The contention that Plaintiff’s mark “UFO” does not fulfil the mandatory requirement of ‘use’ as they have no sales in India and thus, not acquired distinctiveness will not succeed. As per Section 56 of the Trademarks Act, application in India of the trade mark, although to goods to be exported, is deemed to constitute use of the mark in relation to the said goods. Thus, Plaintiff’s UFO branded products manufactured in India for export amounts to use and it is inconsequential there is no sale of goods in India.
• Plaintiff is justified in contending that Defendants adoption of the mark UFO as acronym for “Under Fourteen Only” is mala fide. Defendants in the past were manufacturing products for the Plaintiff for almost 22 years. Plaintiff refused Defendants request for full ownership of the mark and their request to cease use was not complied with by the Defendants. Thus,  use of the mark   containing the letters UFO is an attempt to encash the goodwill and reputation of the Plaintiff as an international brand which is impermissible.
• Delay and acquiescence is not a sustainable argument. It is judicially settled that in trademark infringement and passing off which is a recurring cause of action and delay being a defence in equity, it would not be available to a party whose conduct is fraudulent. With regard to acquiescence it is settled that a mere failure to sue, without some positive act of encouragement, is not enough to constitute a defence. A person who is guilty of infringing or usurping somebody else’s right cannot claim to continue misuse of the usurped right.
• Defendants contention that their brand “Under Fourteen Only” has acquired distinctiveness as Plaintiff’s products are not sold in India is a matter of record. That said Defendants cannot be permitted to use the abbreviation as it infringes Plaintiff’s rights in the registered trademark UFO.

In light of the above, the court granted an injunction restraining the Defendants from manufacturing, selling, dealing in children’s clothes or any other goods bearing the trademark UFO. The Court however permitted the Defendant to use the mark “Under Fourteen only” in a manner that it does not infringe upon the mark UFO.