Kerala High Court’s Judgment on CALLUNA Trademark Dispute

Author: Sayali Yashwant Loke, KES’ Shri Jayantilal H. Patel Law College, Mumbai

Case Title: C.K. Chandran v. Manju Chandran

Court: High Court of Kerala at Ernakulam

Bench: Hon'ble Mr. Justice Devan Ramachandran and Hon'ble Mrs. Justice M.B. Snehalatha

Date of Judgment: October 10, 2024

Citation: OP (FC) No. 591 of 2024

Introduction

Usually, the commercial courts or the other specialized IF IP tribunals settle disputes concerning intellectual property. The Kerala High Court, however, dealt with an uncommon sort of legal question, one that asked whether a family court can decide trademark disputes. The case regarding the trademark "CALLUNA" involved some family law issues between the husband and wife. The following appeal has arisen from the interim order of the Family Court Kottayam of July 10, 2020, in OP (FC)No.591 of 2020, which is pending before the Kerala High Court. These matters came up for hearing on October 10, 2020, before a Division Bench comprising honorable Mr. Justice Devan Ramachandran and honorable Mrs. Justice Snehalatha M.B. There arise constitutional issues of special significance with respect to the family law procedure, justice, and discretion of the Family Court. The judgment is likely to create a big influence on family law jurisprudence both in Kerala and beyond. The balance between judicial intervention and freedom of the family courts to decide the disputes of matrimony is also discussed.

Facts of the Case

The original suit filed before the Family Court followed a plaint by the petitioner, Mr. C.K. Chandran, seeking a permanent injunction against his wife, Mrs. Manju, restraining her from entering two shops situated at Changanacherry in the State of Kerala. Respondent's counterclaim, the wife said that the shops were running under the name "CALLUNA" to which she possesses rights of a valid registered trademark. A permanent injunction was sought allowing the petitioner to cease using the trademark in any way.

The Family Court dismissed the petition and confirmed the counterclaim of the respondent. The petitioner was directed to take down the trademark from the signage and all social media and further restrain him from using the name "CALLUNA" concerning any shop. Aggrieved by this order, Mr. Chandran moved a petition before the Kerala High Court contending that Family Court had no jurisdiction over a trademark matter.

The High Court sent the matter back to the Family Court to see if a far-reaching injunction against Mr. Chandran might be granted under the provisions of the Trademark Act with respect to shops not included in the plaintiff's suit. The High Court also mandated the Family Court to address the issues of jurisdiction and maintainability raised by Mr. Chandran.

Legal Issues

Do Family Courts have jurisdiction to hear trademark disputes?
Can Family Courts issue injunctions outside the realm of the subject matter of the petition?
Does the dispute revolve around family property or commercial intellectual property?

Court’s Decision

The Kerala High Court did not pronounce upon the question as to whether the Family Court had jurisdiction to entertain trademark laws, but directed the case back to the Family Court for reconsideration. The High Court, therefore, directed the Family Court to consider:

The maintainability of the counterclaim concerning the shops which have not been included in the petitioner's original suit.
The petitioner's objections to jurisdiction and the propriety of the injunction under trademark law.

Legal Reasoning

Jurisdiction of Family Courts in Trademark Matters

By virtue of provision No.7 of the Family Courts Act, 1984, Family Courts have jurisdiction over suit cases concerning the property of the parties to a marriage. Given that trademarks are deemed to be a form of intangible property, the argument in favor of the Family Court's jurisdiction is that it can decide disputes involving property between spouses. However, the Commercial Courts Act, 2015 directs commercial disputes, including intellectual property matters, to be tried by designated commercial courts. The overriding effect of Section 21, Act implies that commercial disputes ought to be exclusively tried by commercial courts. If the dispute is claimed to be a commercial matter, the Family Court will lack jurisdiction altogether.

Nature of Trademark Dispute- Family or Commercial?

It was held at the Family Court in the first instance that the respondent was the trustee of the shops and that the petitioner held the rights of trademark exclusively. The inference arising from an interpretation of all these disclosures is that the dispute does not rest on that of co-ownership of family property, which rather is a commercial characterization of an individually owned trademark. Thus, this shifts the case into commercial law questioning whether such matters would even fall to be settled in Family Courts.

Scope of Injunction Issued by Family Court

The High Court asked whether the Family Court's order was valid within the Trademark Act in that it orders the petitioner not to use "CALLUNA", even in shops not sued in the original case. The Family Court had not examined whether such sweeping of injunction was justified under the law.

Impact of the Case:

This case has significant implications for IP and family law doctrines in India:

Its likely wideness for family court jurisdiction: If the family court decides to exercise jurisdiction over the trademark dispute, it would be the first to do so, which could open the doors for similar claims wherein spouses contest IP rights as part of matrimonial disputes.
Conflict between family and commercial courts: Should the family court refuse jurisdiction over the matter, it might further cement the Commercial Court's place as final arbiter to decide trademark disputes, reiterating the proprietary character of the Commercial Courts Act.
Clarity for trademarks that are family owned: This case has elucidated the need for clarification on when a trademark would be a family asset as opposed to commercial property belonging to an individual.
The stage for the crowd of all overt cases: The resultant outcome might well become the guiding star for any number of future cases engaging family clashes over business assets, trademarks, and other IP rights.

Personal Analysis

This case highlights the evolving nature of trademark disputes and their intersection with family law. The Family Courts Act allows property disputes between spouses to be dealt with by family courts, while trademarks are commercial in nature and ought preferably to be settled by an IP or a commercial court. The reasons for this are as follows:

True Expertise of Commercial Courts: IP disputes require specialized knowledge of principles involving trademark laws, distinctiveness, goodwill, and passing off, which may not be available to family courts.
Potential for Misuse of Family Law Provisions: Family courts having jurisdiction over IP disputes could constitute a potential strategic misuse by litigants precisely trying to camouflage commercial conflicts as family disputes to gain tactical advantage against others.
Legislative Intent: The Commercial Courts Act, 2015, was initiated in order to fast-track the relevant provisions to guarantee quick and effective resolution of the case. This will go against the very legislative intent of the Act if all trademarks disputes were to be considered by family courts.

Though the High Court still hasn't definitively settled the question of territorial jurisdiction, the remand order seems to point to the gist of a thorough legal examination to decide what family courts ought to do in such cases.

Conclusion

Kerala High Court's treatment of the "CALLUNA" trademark dispute raises some significant questions as regards the demarcation of jurisdictions between family courts and commercial courts. The remanding of the case to the Family Court ensures a revisit into the issue, especially as regards whether or not the injunction issued should be proportional to the trademark law. The pertinent question is, do family courts allow IP disputes? While trademarks may be property, often their commercial character calls for specialized courts to handle the matters. If the Family Court eventually rules on the matter, it will prove as a precedent, determining whether the issues of matrimonial disputes with respect to intellectual property should be handled inside a family law framework or be categorized as full-blown commercial disputes. Until then, this case remains a significant reference for the cross-section of IP law and disputes involving family in India.