ASSOCIATION FOR INVESTMENT MANAGEMENT AND RESEARCH Vs. INSTITUTE OF CHARTERED FINANCIAL ANALYSTS OF INDIA

JUDGEMENT

(1.) This order is to decide an application for interim injunction to restrain the defendants from using the trademarks or the service marks or trade names CFA, Chartered Financial Analyst, The Institute of Chartered Financial Analysts of India, ICFA and ICFAI or any other name or mark which may be identical or deceptively similar to these marks and from passing off the defendants' programmes or business as that of the plaintiffs. Plaintiff No.1, Association of Investment Management and Research, is a Virginia non-stock corporation with headquarters at 5 Boar's Head Lane, Charlottesville, Virginia, USA having been incorporated in 1986. Plaintiff No.2, The Institute of Chartered Financial Analysts (ICFA), is a subsidiary of plaintiff No.1 with its registered office at 3668, Charlottesville, Virginia, USA. Plaintiff No.2 was incorporated in 1962 to (a) administer the Chartered Financial Analyst (CFA) examination; (b) award Chartered Financial Analyst (CFA) charter; and (c) grant the right to use the Chartered Financial Analyst and CFA marks to successful candidates thereof. The case of the plaintiffs

(2.) The case of the plaintiffs as made out in the plaint can be stated briefly as under: The plaintiffs started their business with the aim to serve their members and investors as global leaders in educating and conducting examination for investment professionals and sustaining high standard of professional conduct. For accomplishing this objective the plaintiffs formed several affiliations, reciprocal relationships and joint efforts with investment associations and investment professionals around the world. Plaintiff No.1 has a membership of more than 70,000 investment professionals including more than 27,000 CFA charter holders and 40,000 CFA candidates spread over the several countries of the world. A number of Asian and European investment professionals have enrolled in the CFA programme and are seeking the right to use the CFA mark. In India the plaintiffs have 82 candidates and two exams sites. Plaintiff No.2 is the proprietor of the trademarks mentioned above which are registered in USA, Canada and other countries. The right to use the marks 'CFA' and the 'Chartered Financial Analyst' is granted by plaintiff No.2 to investment professionals world-wide who have earned and continue to meet their requirements of a CFA charter holder. A series of three rigorous examinations is administered by the plaintiffs to candidates aspiring to become a CFA charter holder. These exams test the candidate's understanding of a global body of knowledge with emphasis on, inter alia, ethics, financial accounting, quantitative analysis, economics, fixed income, security analysis, equity and portfolio management. The employers and clients can expect a CFA charter holder to have a high level of understanding of these fundamental principles. In addition these candidates are required to have three years of qualifying work experience in the investment industry. The CFA candidates and charter holder are required to adhere, throughout, most stringent professional standard in the investment industry and must attest to such adherence in writing each year or have their right to use these Charter Financial Analyst and CFA marks revoked. The marks have become symbols of integrity and professional excellence in the investment profession. Defendant No.1, The Institute of Chartered Financial Analysts of India, Road No.3, Banjara Hills, Hyderabad-500034 was established in Hyderabad in October, 1984 as a non-profit educational society with the purpose of training qualified individuals to become investment professionals. They were previously known as 'Institute of Certified Financial Analysts of India. They changed their name to Institute of Chartered Financial Analysts of India after agreeing to obtain a license from plaintiff No.2 in 1985. The function of defendant No.2 is also to award the CFA charters to successful candidates of CFA programmes purportedly run by defendant No.1. In 1985 defendant No.1 through one of its representatives Mr.N.J.Yasaswy visited plaintiff No.2 at its head quarters at Virginia and thereafter invited the then President of plaintiff No.2 (Mr.Alfred C.Morley) to visit the defendants in India. In August, 1985 the President of plaintiff No.2 came to India and during his visit an agreement was reached between plaintiff No.2 and the defendants, recorded in the form of meeting minutes signed by the respective parties on 14.8.1985 which was in effect a license agreement. Pursuant to the 1985 license agreement plaintiff No.2 granted (a) non-exclusive permission to the first defendant to use the marks only in India, (b) plaintiff No.2 contributed study programme material and technique to the first defendant, (c) plaintiff No.2 retained the right to evaluate and critique the first defendant CFA study programme and educational material and examinations making use of the Chartered Financial Analyst/CFA marks. The first defendant launched its programme in September, 1985. Plaintiff No.2's President became a member of the first defendant's Board of Governors and remained in this position until the end of 1991. During this period, Mr.Morley attended board meeting of first defendant in India and was a second signatory of charters granted by the first or second defendants under the defendants' programmes to qualifying individuals in India. Plaintiff No.2 also evaluated and monitored the first defendant's programmes and provided programme material and other assistance relating to the first defendant's programmes. A memorandum of agreement was entered into in September, 1989 between plaintiff No.2 and the first defendant. At present the plaintiffs have 10 CFA charter holders resident in India. One of these charter holders received the charter from the plaintiffs in 1984 and all of them are members of the organization of plaintiff No.1. Plaintiff No.1 continued to examine the relationship between plaintiff No.2 and the first defendant. Plaintiff No.1 came to realise that the first defendant's programme was not as rigorous as the plaintiff No.2's programme and there was likelihood of a disparity between the plaintiff No.2's charters and the charters granted under the first defendant's programme. Plaintiff No.1 had accordingly requested the first defendant to add in the first defendant's material an indication that the two organizations were distinct and separate. By 1994 the plaintiffs realised that there were major differences in topic coverage as well as in examination contents which were set forth in a letter to the first defendant dated 22.11.1994. The plaintiffs requested the first defendant to voluntarily discontinue the use of the marks by changing the name of their organization and the designation so that the two respective institutes could resume the cooperative relationship that underscore the first defendant's first six years of operation, i.e., 1985-1991. The plaintiffs wanted to maintain control over the marks and other intellectual property rights over which the plaintiffs had over 34 years invested efforts and resources. The first defendant began operation in United States in 1995 called Transworld University by which defendant No.1 purported to offer its own programmes to individuals of United States. On being confronted the first defendant signed an agreement with the plaintiffs recognizing the plaintiffs' rights in the marks including the marks ICFAI. The plaintiffs through letter dated 13.1.1997 revoked the 1985 license agreement and called upon the first defendant to stop using plaintiff No.2's mark and other names or the marks which are deceptively similar to the marks and called upon the defendant to sign an agreement which was enclosed with the letter. The defendants agreed to settle the matter amicably and wanted more time. The parties continued to communicate by letters. The defendants ultimately declined to desist from using the marks. While defendant No.1 was still seeking time from the plaintiffs for discussing the matter with its purported charter holders, students, etc. it filed a suit in the City Civil Court at Hyderabad being O.S.No.1423/97 praying for injunction against first plaintiff from taking any steps hindering the progress of first defendant's institute and routine working of first defendant's institute especially regarding change of the name of first defendant institute and change of the name of 'CFA' designation. It appears that the parties continued their correspondence but no settlement in the matter could be reached between them. Meanwhile, M/s.Tata McGraw-Hill Publishing Company published a book titled Let There Be Light: The Genesis of the ICFAI but on a notice issued by the plaintiffs agreed to remove the copies of the books from circulation. The plaintiffs introduced the mark in India in 1985. The defendant no.1 has sought to obtain the registration of CFA programmes in India which the plaintiffs came to know in 1996. The 'CFA Programme' is clearly not generic and the defendants consider the CFA mark worthy of trademark protection in India. The plaintiffs have filed opposition against the application for registration of the trademark. Plaintiff No.2 has applied for registration of its trademarks 'CFA' and 'Chartered Financial Analyst in about 11 countries and registration has been granted in Canada for 'Chartered Financial Analyst' and in China for 'CFA'. The plaintiffs have been able to enforce their right against several other infringes. The use of the same marks by the defendants have caused confusion amongst the investment professionals in India, South East Asia and South Pacific. The plaintiffs have received documented requests from various individuals in India seeking clarification on the relationship between the plaintiffs and the first defendant and whether the first defendant's programme and/or charter using Chartered Financial Analyst and CFA marks qualifies individuals for membership in the plaintiffs' organizations and/or is recognized by the investment professionals in US and Canada. Using of the mark by the defendants after the revocation and termination of 1985 license agreement amounts to passing off their investment professional educational programme as having a connection with the plaintiffs. The plaintiffs, therefore, pray for a permanent injunction to restrain the defendants from using the trademark, services, service marks or trade names CFA, C.F.A., Chartered Financial Analyst, The Institute of Chartered Financial Analysts, ICFA, Institute of Chartered Financial Analysts of India and ICFAI and passing off the defendants' programme or business as that of the plaintiffs and for other incidental reliefs. Defendants' case.

(3.) The defendants hotly contest the suit and the application for injunction. The defendants claim that the plaintiffs have no cause of action. The defendants deny that any mark other than C.F.A. and Chartered Financial Analyst has been registered for the plaintiff Nos.1 and 2 either in America or Canada. Further it is alleged that nearly 11 organizations had been accorded the certification of CFA as their trademark. Thus the mark is not exclusive to the plaintiffs. The defendants contend that the marks in question are descriptive and generic terms and have not acquired any secondary meaning or have not become distinctive of the plaintiffs. Further they claim that the plaintiffs have earned no goodwill for the marks in India. The defendants claim that the defendants started their business by using the marks since 1985 and now have a well established recognized country-wide service much wider than what the plaintiffs have. Since the plaintiffs do not have any monopoly on the mark they cannot seek any order of injunction against passing off. The defendants deny that there was anything of the nature of license in any agreement between the plaintiffs and the defendants. Even the minutes of the meeting dated 14.8.1985 relied upon merely says that the plaintiffs would assist and encourage the defendants in its programmes which is different from a license being granted for the use of the marks. According to the defendants it was never understood between the parties that the defendants were holders of any license. The defendants have also raised an issue of lack of territorial jurisdiction of this court on the allegation that no cause of action arose within the territory of Delhi. The defendant institute has registered office at Road No.3, Banjara Hills, Hyderabad-500034 and has no administrative office at Delhi or New Delhi. The defendants, therefore, seek dismissal of the suit.