Intellectual property rights: Savior for Franchise

M/s Copenhagen Hospitality and Retails & Ors v/s M/s A.R. Impex and Ors. (2021)

In the present case, the Plaintiff is the Franchise Holder of “LA PINO’Z PIZZA,” which has about 175 franchised outlets throughout India. They have one of the franchises outlets in Ahmedabad. This outlet has removed Plaintiff’s franchise name and hoardings and replaced it with “LA MILANO PIZZERIA,” which has the same logo as Plaintiff’s Franchise. Since the defendants have violated the master franchise agreement, which was executed between the parties to operate and manage the “LA PINO’Z PIZZA” franchise and sub-franchise in Gujarat, the IP rights of the Plaintiff is at stake.

The plaintiff and the defendant agreed upon to manage and operate the LA PINO’Z PIZZA in the state of Ahmedabad as a sub-franchise, including their social media handles. But the Defendant’s conduct has created confusion as it took advantage of Plaintiff’s Franchise by producing similar products and marketing tools similar to the franchise name of Plaintiff.

Upon conducting an investigation, Plaintiff found that Defendant was breaching their trademark rights and filed a suit before the Hon’ble High Court of Delhi. The Court stated that Defendant is infringing the Plaintiff’s trademark and the goodwill associated with the mark using it for his benefit. The Court also restrained the Defendants from infringing the Plaintiff’s registered mark and using the Plaintiff’s social media accounts for unfair advantage. 

The Court concluded that the plaintiff has made out a prima facie case and stated that there is no ground that Plaintiffs’ allegations are mis-founded or could be construed as false. Further, the defendants were restrained from using the plaintiff’s registered trademark in any manner whatsoever.

Comments:

Intellectual property rights act as a tool against any breach of intellectual properties and brand values attached to the franchise for the Franchise holder. Franchise holders often execute franchise agreements to engage with different outlets in different areas to expand their franchise. In any circumstance, if the franchise outlets owner violates the terms and conditions of the franchise agreement, the franchise holder can claim relief for the same. Here, in cases like this, IPR plays an essential role in safeguarding the interests of the Franchisor.

Reference: http://delhihighcourt.nic.in/dhcqrydisp_o.asp?pn=137562&yr=2021