Asus has emerged as the most direct competitor to Xiaomi in the entry-level and mid-range price segment with its Zenfone series in India. The Taiwanese consumer electronics company has challenged with Xiaomi with devices like the Zenfone Max Pro M1, Zenfone Max Pro M2 and Zenfone Max M2. All these devices with their aggressive price and competitive specifications have sold well for the company. However, that run is now under threat due to a trademark infringement case. The Delhi High Court has issued an order that restrains Asus Technology Pvt Ltd from selling and advertising mobile phones, accessories and any other related products under the ZEN, ZENFONE or similar branding.
The court order was passed by a single judge bench of Justice Manmohan in a lawsuit files by Telecare Network India Pvt Ltd against Asus Technology Pvt Ltd. The lawsuit alleged that Asus infringed the trademark owned by the company. Telecare Network India Pvt Ltd claims that it is the registered proprietor of the trademarks ZEN and ZENMOBILE under the Trade Marks Act of 1999. According to Bar and Bench, the lawsuit adds that the company has extensively using these trademarks for selling its feature phones, smartphones, tablets and accessories under Zen brand since 2008.
The plaintiff claimed that Asus had adopted an identical trademark in the form of ZENFONE for selling its own smartphones, which are allegedly identical to those sold by Telecare Network India Pvt Ltd under its own brand. The lawsuit also argues that since both the brands sell devices under the same price segment, the use of ZENFONE trademark by Asus could cause confusion in the minds of public and consumers could perceive that the two brands are associated. The plaintiff thus argues that Asus adopted “ZEN” brand in India with mala fide intent and take advantage of its “goodwill and reputation”.
Asus informed the court that the Zen branding was spearheaded by Jonney Shih, who the company claims is a believer of the ancient Zen philosophy and use of Zenfone branding is a reflection of his belief. The Taiwanese company also argues that use of ZEN branding was common to trade and should be deemed generic in nature. The company also cites a search report conducted on the Trade Marks Registry website showing that various third-party manufacturers had the mark ZEN registered.
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According to media reports, Asus also argued that there is no scope for confusion or deception regarding the Zen branding. Senior Advocate Sandeep Sethi with Advocates Daksh Kumar and Sumit R Sharma, representing Asus, told the court that the Zenfone branding was coupled with its house mark Asus, which identifies the origin of the product. The advocates also contended that the plaintiff was disentitled from claiming exclusivity or monopoly over a part of the label or device under Section 17 (2) of the Act.
After hearing both the parties, the Court said that trademarks and trade names are meant to ensure that people do not get confused about the source of goods and services. It also contented Asus’ argument of the term “Zen” being generic in nature. The Court agreed that Zen word is generic but it cannot be a generic mark with regards to mobile phones. “…a word may be generic qua a specific business or trade or industry but not across the board for all business or trades or industries. Consequently, though ZEN is a generic word qua a school of Buddhism, yet it is not a generic mark with regard to mobile phones and tablets as the said word has no connection or correlation with mobile phones or tablets,” the Court said.
The Court thus observed that the plaintiff was entitled to protection for the trademark even without proof of it having acquired secondary signature. It dismissed the search report showed by Asus saying that mention of the mark in the report does not prove that it is being used by third parties. The Court also added that Asus itself had applied for the trademark ZENFONE and it cannot be “permitted to approbate and reprobate” and was stopped from arguing that the mark is generic or common to trade.
The Court, citing facts shown in the form of evidence, noted that the plaintiff had shown prior use of the mark since 2008 while Asus began selling devices under Zenfone brand only in 2014. The Justice Manmohan concluded that Asus’ adoption of the Zen mark was in bad faith. It further directed Asus to stop selling directly or indirectly, offer or advertise for “mobile phones and/or mobile accessories and/or any other related products or any other goods under the trademark ZEN, ZENFONE and/or any other trademark identical and/or deceptively similar to the trademark ZEN and ZEN Mobile, after eight weeks starting May 28.
“The ASUS legal team is currently working with the Delhi High Court in India to resolve the Zen Mobiles and ZenFone trademark lawsuit. The supply of ASUS smartphones, notebooks and other products, as well as technical support and after-sales service for all ASUS products remain unchanged for all consumers,” the company said in a statement. It needs to be seen whether the verdict by Delhi High Court affects Asus’ plan to launch the Zenfone 6 in the country. The next hearing for the case is scheduled for July 10.