Modi Group barred from using Swedish co trademark

Civil Suit was filed by Morgardshammar AB after its shareholding in a JV with the U K Modi group had been reduced from 40% to 8%

A division bench of the Delhi High Court today dismissed the appeal filed by Modi Group's Morgardshammar India, against an earlier ruling of the court restraining the company from using the Mogardshammar trademark and corporate name ‘Morgardshammar’.

In January this year the high court had restrained the joint venture of UK Modi controlled Modi Group and Sweden’s Mogardshammer AB from using the trademark to which the Mogardshammar India had appealed against.

The ruling was based on the ground that the shareholding of the Swedish partner has plummeted below 25 per cent to 8 per cent from its earlier holding of 40 per cent.

The Civil Suit was filed by Morgardshammar AB, a subsidiary of the Danieli Group of Italy in the year 2010 after it learnt that its shareholding in Morgardshammar India Limited – a joint venture with the U. K. Modi group – had been reduced from 40 per cent to 8 per cent.

The counsel for Mogardshammar AB argued that the trademark Morgardshammar was licensed to Morgardshammar India and in accordance with the Trademark License Agreement it had to stop using the trademark once the shareholding of Morgardshammar AB was reduced below 25 per cent as stipulated by the agreement.

The Swedish firm further argued that it being the proprietor of the trademark Morgardshammar, it had the absolute right to call upon Morgardshammar India to stop using the trademark, trade name and corporate name Morgardshammar.

The JV company (Morgardshammar India) had allotted 750,000 shares to U K Modi in 2009 and the shareholding of Morgardshammar AB was reduced to 8%.

As a result of the change in shareholding pattern, Morgardshammar AB had demanded the JV to discontinue the use of the tradename, since it was the proprietor of the trademark Morgardshammar.

The Indian company had contended that Morgardshammar AB did not have exclusive rights on the tradename Morgardshammar as the trademark was not legally assigned to it.

In its 44 page judgment, the division bench comprised of Justice Pradeep Nandrajog and Justice Manmohan Singh upheld the Judgment and order of the Single Judge, Justice A K Pathak of the Delhi High Court who had decided all issues framed in the Civil Suit in favour of Morgardshammar AB.