Delhi High Court grants relief to Yves Saint Laurent in trademark infringement suit

The Delhi High Court recently temporarily restrained a Delhi-based company from using the 'YSL' and 'Yves Saint Laurent' marks belonging to fashion company Yves Saint Laurent (YSL). [Yves Saint Laurent vs Brompton Lifestyle Brands Pvt Ltd].Justice Sanjeev Narula held that the balance of convenience was in favour of the plaintiff (YSL) and if the defendants were not restrained, the plaintiff (YSL) would suffer irreparable loss..The suit was moved by YSL for infringement of its trademarks, copyrights and for passing off, seeking permanent and mandatory injunction against Brompton, which was allegedly unauthorisedly operating a boutique under plaintiff’s brand name in a mall in New Delhi.YSL informed the Court that it had entered into a franchise agreement with one Beverly Luxury Brands Ltd where the latter was granted a franchise to open and operate a Saint Laurent boutique. YSL stated that although the agreement stood terminated, the boutique was still operational under its name and was being run by one Brompton Lifestyle Brands Pvt Ltd..Senior Advocate Akhil Sibal for YSL contended that Beverly was permitted to use the YSL marks only in accordance with terms and conditions stipulated in Franchise Agreement, which was terminated in 2021.Sibal further informed the court that in 2022, YSL received an arbitration notice from Brompton claiming that pursuant to Franchise Agreement, Beverly had executed a supply agreement in July, 2019 with an undertaking to supply ‘designer clothes and apparel’ designed by the YSL. The notice also alleged that Beverly had not been performing its obligation under the said Supply Agreement which included delay in delivery of goods and eventual cessation of delivery of goods altogether.Sibal argued that as per the Franchise Agreement, the right to use YSL marks was given only to Beverly, on a non-exclusive basis for operating a boutique and selling products, merchandise and items bearing YSL marks. He claimed that YSL neither had knowledge of alleged Supply Agreement nor was Beverly permitted by YSL to enter into such an agreement at any point of time without prior consent. Therefore, he argued that the agreement is violative of Franchise Agreement and is not legally binding on the Plaintiff.Sibal then argued that permitting Brompton to continue as unauthorised user of YSL mark even after termination of Franchise Agreement would cause serious dent and damage to YSL’s reputation and goodwill..Senior Advocate Sandeep Sethi for Brompton claimed that YSL was fully aware of Brompton's association with Beverly as the store was taken on lease by Brompton and was operating since 2019 with YSL's knowledge.He pointed out that Brompton invested heavily in setting up the boutique and thus, the plaintiff was well informed of its involvement in the boutique's operations and never objected.He further said that despite Brompton’s authorisation for the boutique being within YSL's knowledge, YSL labelled Brompton as ‘Logistics Partner’ of Beverly with the intent to keep the association 'at arm’s length'. Hence, he alleged that there was active concealment and complete non-disclosure of material and essential facts, because of which the suit deserved to be dismissed..The Court noted that the boutique was set-up under an franchise agreement to which only YSL and Beverly were parties."Brompton is clearly not a signatory to the said agreement, yet it is operating the Boutique under Plaintiff’s brand as an authorised store by prominently displaying YSL marks at the entrance of the Boutique," the Court recorded..Further, it noted that the supply agreement between Beverly and Brompton did not unconditionally transfer or convey any rights, title or interest to the latter."The rights conveyed are restricted, circumscribed and co-terminus with Beverly’s rights. Brompton fully aware of limitations, willingly and knowingly entered into the Supply agreement, agreeing to use YSL marks till such time the Franchise Agreement was in force," the Court added.Thus, it held that irrespective of the question pertaining to legality, validity and binding effect of the Supply Agreement on YSL, license granted in favour of Brompton to use YSL marks, stood terminated, given that Franchisee agreement was terminated.The Court also observed that Brompton also admitted that the supply agreement stood terminated after the termination of franchisee agreement. "Therefore, in view of the Court, Supply Agreement, which forms the sheet anchor of Brompton’s claim of being an ‘authorised operator’ cannot sustain. There is thus no legal basis to allow Brompton to use YSL marks," it recorded.Therefore, till pendency of the suit, the Court restrained Brompton from using the 'YSL' and 'Yves Saint Laurent' marks..Advocates Nirupam Lodha, Shivangi Narang, Gautam Wadhwa, Asavari Jain and Sanya Kumar appeared for YSL.Advocates Nikhil Kohli, Gaurav Gupta and Akshaya Ganpath appeared for Brompton Lifestyle..[Read Judgment]