In an agreement before the Delhi High Court Mediation and Conciliation Centre, GrabOnRent entered into a settlement with GrabOn and agreed that it shall refrain itself and its vendors, distributors, sellers, etc. to sell, advertise or deal in goods or services under the mark “GrabOnRent”, “GrabOn” or similar trademark and domain name within the agreed timeframe.
The settlement came in the light of trademark infringement case filed by Hyderabad-based deals and coupons startup GrabOn against Bengaluru-based on-demand product rental marketplace GrabOnRent.
GrabOnRent was founded in September 2015 by Manish S. Sugandhi, Shubham Jain and Aditya Sharma. It helps users in renting products online across categories. GrabOn was founded in September 2013 by Ashok Reddy and offers coupons and deals.
What Went Wrong?
GrabOn filed a lawsuit against GrabOnRent in the Delhi High Court, on the grounds of misusing the former’s goodwill and causing confusion due to the deceptively similar brand names. The company claimed that new users are often confused between the names “GrabOn” and “GrabOnRent”, resulting in the wrong attribution in customer reviews, feedback and queries.
GrabOn further claimed that it has been bearing the brunt of negative customer reviews and complaints which were actually intended for GrabOnRent but diverted to GrabOn due to confusing brand names.
Under the settlement agreement, GrabOnRent agreed to place a disclaimer on each and every page of their website and mobile app mentioning that they have no relation with GrabOn.
The decree further demands that GrabOnRent has to destroy all the article/goods including visiting cards, tags, labels, dies etc., bearing the mark “GrabOnRent” or any other mark deceptively similar to “GrabOn” by July 31, 2020. GrabOnRent has also paid damages to GrabOn.
Inc42 queries on the matter sent to GrabOnRent didn’t elicit any response till the time of publication. Ashok Reddy, founder and CEO of GrabOn said, “I’m pleased with the quick resolution we got out of this lawsuit. It takes an immense amount of effort, time and capital to build a brand like ours.”
Trademark Issues In The Startup Ecosystem
Customers recognise and relate a product through the company’s logo, brand name, slogan, and more. Trademark registration enables a company to secure the legal right to a particular brand name and logo, along with control over how and where these elements are used.
However the bigger a brand, the higher the chances of it being imitated by other companies looking to benefit from the recall value. The Indian startup ecosystem has witnessed several instances of trademark violations, however, it’s not always smaller entities being dragged to court. There have also been instances wherein major companies such as Flipkart have been forced to defend their products.
For instance, in December 2018, MakeMyTrip (MMT) filed a case against five companies for using “deceptively similar-sounding names”. In its complaint, MakeMyTrip reportedly alleged that the five companies — MakeMyYatra, MakeMyJourney, Make My Happy Journey, Pick My Trip and Superb My Trip — have used similar names and some have also copied its logo.
In October 2018, Delhi-based electric appliances maker Marc Enterprises filed a case against ecommerce company Flipkart’s private label MarQ. Prior to this, Metro Shoes, a multi-brand footwear chain in India, accused Flipkart of selling a private label by the brand name of Metronaut, which is deceptively similar to Metro’s eponymous brand.
Most recently in June 2019, the Delhi High Court fined PolicyBazaar INR 10 Lakh after it emerged that the company had concealed facts from the court against Binny Bansal-backed insurance company Acko. PolicyBazaar had obtained an ex-parte injunction in a trademark infringement case against Acko in May.
In the case of keywords for AdWords, in October 2018, ShareChat had dragged Helo to the court accusing it of inappropriately using its name to get a higher ranking on search words and placing bids on the ‘ShareChat’ keyword on Google’s advertising platform. According to legal experts, normally such lawsuits are dealt under trademark law.