Topland Engines Pvt. Ltd. v. Toplad Pvt. Ltd. & Anr.

What happened

Topland Engines Private Limited, incorporated on 11 April 2021, makes and services diesel engines, generators and parts, and Toplad Private Limited (respondent 1), incorporated on 18 June 2020, provides online and offline education in company secretaryship, accountancy and cost accountancy. Topland applied under section 16 of the Companies Act, 2013 for a direction to Toplad to rectify its name as closely resembling Topland's registered trade mark, saying that it had earlier succeeded in similar applications against Topland Ceramics and Topland Mineral and Logistics before the Regional Director at Ahmedabad and, by a judgment of 30 March 2022 of the Calcutta High Court, against Topoland India Private Limited. By an order of 15 May 2023 the Regional Director (respondent 2) rejected the application, noting that the name of Toplad is neither identical nor too nearly resembles the trade mark phonetically or otherwise. Topland argued that the names, taken as a whole, are too close under section 16(1)(b) and that the test is likelihood of deception or confusion. The Regional Director's counsel argued that the names must be compared as a whole, that the common word TOP gives no exclusivity, that LAND and LAD are distinct, and that the businesses, trade channels and customers are wholly different, so that there is no likelihood of deception.

Questions before the court

• Does the name TOPLAD too nearly resemble the registered trade mark TOPLAND within section 16(1)(b) of the Companies Act, 2013, so that the company must change its name?

Why the court ruled this way

Section 16(1)(b) allows the registered proprietor of a trade mark to apply to the Central Government, exercised through the Regional Director, within three years of the incorporation or change of name of the company, on the ground that the name is identical with or too nearly resembles the registered trade mark, and the Regional Director is only required to ascertain whether the name is identical or too nearly resembles it, not whether there is a likelihood of deception or confusion, so the power is wider and stricter than the standard in a trade mark dispute (paragraphs 10–13). The Regional Director erred in separating TOPLAND and TOPLAD into two words, for the question is whether TOPLAD, as a whole, is identical with or too nearly resembles the registered trade mark, as the Court had held in CGMP Pharmaplan v. Regional Director that the names are to be compared as a whole (paragraphs 12 and 16). Compared as a whole, the terms are phonetically and structurally similar, as they are alike except for the letter N, the omission of which a person of average intelligence would not see as making them visually or phonetically dissimilar and which is more likely to be slurred over in pronunciation, as in Essco Sanitations v. Mascot Industries, which found ESSCO and OSSO similar (paragraph 17). The Court should have a realistic consciousness that the names are to be used in the Indian market and judged through the perception of an Indian consumer, including how they would be pronounced and written in Indian languages (paragraph 18). The name therefore too nearly resembles the registered trade mark, and although interference under article 226 is limited and the Court does not sit in appeal over the authority's findings, the finding of the impugned order could not be sustained (paragraphs 19–20).

Controlling point

Under section 16(1)(b) of the Companies Act, 2013 the names are compared as a whole, the test is whether the company's name is identical with or too nearly resembles the registered trade mark and not whether deception or confusion is likely, and TOPLAD too nearly resembles TOPLAND.

Order and next steps

The Court set aside the Regional Director's order of 15 May 2023, directed Toplad Private Limited to change its name to any other name that does not resemble the expression TOPLAND, directed the Regional Director to take the steps specified in law within four weeks, and disposed of the petition.

Practical implications

A trade mark owner that finds a similar company name registered can apply to the Regional Director within three years of the incorporation or change of name of the company, relying on the resemblance of the whole name to its registered mark, and a promoter choosing a company name should check registered trade marks as well as the register of companies.

Limits of this ruling

• The Court dealt only with similarity under section 16(1)(b), and did not decide infringement or passing off or any question of confusion between the businesses. It noted that its review under article 226 is limited, and the period of three years under section 16(1)(b) was not in issue in the judgment.