August 8, 2020

Delhi High Court bars Intex from selling Aqua phones, accessories

In a major setback to Intex, the Delhi High Court barred India’s second largest handset maker from selling its Aqua brand of mobile phones and delhi-high-court-bars-intex-from-selling-aqua-phones-accessoriesaccessories in the local market, acting on a trademark infringement petition filed by smaller rival Aqua Mobile.

The interim injunction was issued on December 24. It will come into force after two weeks to enable the company to dispose of its current stocks, Justice GS Sistani said, according to a copy of the order. Intex has decided to appeal the order before a division bench of the high court.

“Defendants, their directors, officers, franchisees, agents, employees, servants, and/or any other person acting for and on their behalf are restrained from using the infringing trademark ‘Aqua’ or any other deceptively similar trademark in respect of mobile phones/cellular phones and their accessories, till the disposal of the suit,” the judge said.

The order comes as yet another shock to Intex, which has been grappling with inte rnal management issues and falling market shares amid heightened competition.

The company now stares at delaying its fundraising and public listing plans beyond this fiscal year. At nearly 2 million phones, the Farhan Akhtar-endorsed Aqua series makes up for 90% of Intex’s quarterly shipments, and implementation of the order means a crash in the company’s sales.

Such a move could also severely impact Intex’s position in the market, which has of late taken a hit, especially in the smartphone segment. According to market research firm International Data Corporation, Intex had fallen out of the top 5 smartphone players club in the quarter through September.

But Intex still had a strong position – with a 9.8 per cent share at the end of September – in the overall mobile phone market, thanks to large shipments of featurephones. Aqua Mobiles filed the case against Intex in 2013, claiming customer confusion on account of the use of an identical trademark by the rival, and had asked for an interim injunction.

The company claimed it had been selling “Aqua” trademarked phones in India since 2009 and had expanded into earphones, mobile chargers, USB cables and mobile batteries under the same brand. According to Aqua Mobiles, Intex adopted an identical mark in 2012, to have a free ride on its goodwill.

Intex argued that the ‘Aqua’ mark was arbitrary, and was incapable of distinguishing the goods of Aqua Mobiles. Therefore, Aqua Mobiles was not entitled to trademark protection, it said.

The court rejected this argument.
It said several documents including invoices, bill of entries, supplier contracts and social media entries established a strong prima facie case that Aqua Mobiles had been using the mark prior to Intex, and had therefore established goodwill.