Manju Goel, J.

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 Boars 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 candidates 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.2s President became a member of the first defendants 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 defendants programmes and provided programme material and other assistance relating to the first defendants 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 defendants programme was not as rigorous as the plaintiff No.2s programme and there was likelihood of a disparity between the plaintiff No.2s charters and the charters granted under the first defendants programme. Plaintiff No.1 had accordingly requested the first defendant to add in the first defendants 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 defendants 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.2s 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 defendants institute and routine working of first defendants 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 defendants 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.

4. The defendants in an additional affidavit submitted that certain states have passed enactments for creation of universities bearing the acronym ICFAI and, therefore, an injunction to stop the defendants from using such an acronym cannot be granted. This apart it is alleged that a suit is already pending in Hyderabad and, therefore, the present suit is liable to be stayed under section 10 of the CPC.

5. The parties rely upon the same pleadings for the purpose of injunction application and its counter. Mr.Sanjay Jain, Senior Advocate and Mr.Sudhir Chandra, Senior Advocate have extensively argued for the plaintiffs and for the defendants respectively.

Findings

Territorial jurisdiction

6. The first question that needs to be tackled is that of territorial jurisdiction. Section 20 of the Code of Civil Procedure, 1908 – prescribes which court can have territorial jurisdiction over a subject matter of a suit. The defendant can be sued where he resides or carries on business or personally works for gain. The suit can also be instituted where the cause of action arises. An explanation to section 20 says that a corporation shall be deemed to carry on business at its sole or principal office in India or in respect of any cause of action arising at any place where it has also a subordinate office at such place. The plaintiffs say that the first defendant has a learning centre at Delhi and as per a book called Let There be a Light: The Genesis of ICFAI the defendant has a Chapter in Delhi and so the defendant should be deemed to be carrying on business in Delhi by virtue of section 20 read with the explanation. The plaintiffs have stated in the plaint that the defendant institute operates testing and learning centres in New Delhi at CSKM Educational Complex, Satbari, Mehrauli, New Delhi-110030 and Malhotra House, 1/36, Tilak Nagar, New Delhi-110018. In the written statement the defendants allege that the suit is liable to be dismissed for lack of territorial jurisdiction but there is no denial that the defendants operate also from these two centres in New Delhi. It is alleged in the plaint that the defendants carry on weekend workshops in Delhi and host annual conference and also hold admission test in Delhi. It is claimed that apart from this since the defendants have also been operating in Delhi and have been using the impugned trademark in Delhi and, therefore, the cause of action has also arisen in Delhi. The defendants have placed reliance on the judgment in the case of Dhodha House and Patel Field Marshal Industries vs. S.K. Maingi and P.M. Diesel Ltd., 2006 (32) PTC 1 (SC). My attention is drawn to paragraph 49 of the judgment in which distinction is made between expression carries on business and the expression personally works for gain. This judgment does not in any way reflect on the facts of the present case. Where the defendant carries on business and where the cause of action arises is a question of fact in each case. The arguments have been only heard on the application under Order 39 Rules 1 and 2 CPC and the question of fact will be determined only on trial. On the basis of pleadings it can be said, prima facie, that the defendants fulfil the condition carries of business in Delhi. Further on the basis of the pleadings, prima facie, the cause of action has arisen in Delhi and, therefore, for the present order it can safely be concluded that the court has territorial jurisdiction to try the suit.

Section 10 CPC.

7. For a suit to be stayed under section 10 of CPC, several conditions are required to be fulfilled. Filing of a suit itself will not suffice to stay a subsequent suit. At the time of arguments, the defendants counsel made no effort to show that the matter in issue in this suit is directly and substantially in issue in the previously instituted suit. Accordingly I hold that the present suit is not liable to be stayed under section 10 of CPC.

Whether marks in question have acquired secondary meaning.

8. The next question that comes for determination is whether the term CFA or Chartered Financial Analyst and other ancillary terms mentioned earlier are descriptive and generic or have acquired any secondary meaning or have become distinctive of the plaintiffs. According to the defendants, various organizations have been using this mark and, therefore, this mark has become indicative of a class of qualified professionals trained in investment management. A list of several organizations in the business of training investment management has been given by the defendants. The list is as under:

-The Austrian Association for Financial Analysis and Investment Advisory Services

-The Society of Belgium Financial Analysts

-The Society of Finnish Financial Analysts

-The French Society of Financial Analysts

-The German Society of Investment Analysis and Asset Management

-The Society of Hungarian Investment Analysts

-The Society of Investment Analysts of Ireland

-The Italian Financial Analysts Society

-The Luxembourg Association of Portfolio Managers and Financial Analysts

-The Dutch Analysts Association

-The Norwegian Society of Financial Analysts

-The Polish Association of Brokers and Investment Advisers

-The Portuguese Association of Financial Analysts

-The Guild of Investment and Financial Analysts

-The Spanish Institute of Financial Analysts

-The Swedish Society of Financial Analysts

-The Swiss Society of Financial Analysts

-The Society of Investment Analysts of Ukraine

9. It is clear that none of the aforesaid organizations used the mark or acronym CFA or Institute of Chartered Financial Analysts or the term Chartered Financial Analysts. The list only indicate that there are several organizations and institutions training people in investment management and giving certificates to financial analysts. The list does not prove the case of the defendants that the marks are generic and distinctive and have not acquired any secondary meaning. It is pointed out by the plaintiffs that the defendants themselves have applied for registration of the mark which itself destroys the stand of the defendants that the mark is generic. Mr.Sudhir Chandra, learned senior counsel appearing for the defendants, attempted to brush aside this act of the defendants of applying for registration by saying that it is a mistake on the part of the defendants to have done so. Nonetheless the application of the defendants is indicative of the fact that defendants itself considered it useful to register the mark and to prevent others from using the same.

10. Mr.Sudhir Chandra has attempted to interpret the mark CFA and the Chartered Financial Analyst into three distinct words Chartered Financial and Analyst and have said that all the three words are dictionary words having meanings commonly understood and, therefore, there is nothing unique about the term CFA or Chartered Financial Analyst which can make it a trademark. There can be no dispute that the common dictionary words used in a particular sequence can develop into a secondary word or term depicting or indicating the product of a particular nature.

11. Several judgments have been quoted at the bar in this behalf. The one that goes very close to the facts of the present case is that of Society of Accountants and Auditors vs. Goodway, Vol.XXIV No.7 Reports of Patent, Design and Trade Mark Cases 159. The society of accountants and auditors was incorporated in the year 1885 with a view to provide a central organization for accountants and auditors to elevate the status of the profession and to provide for its better definition and protection by a system of examinations and certificates and to encourage a greater degree of efficiency in book-keeping. The society published Incorporated Accountants Year Book containing a list of its members and the Incorporated Accountants Journal and it claimed that the title of Incorporated Accountant had become identified with its members. Another company called London Association of Accountants Limited was incorporated in 1905 with similar objects. It also claimed a right for its members to use the term Incorporated Accountant claiming that the use of the term was open to the members of the company. On an action to injunct the company the court held that Incorporated Accountant was not a descriptive term but meant a member of the plaintiff society and that what the defendant, a member of the company, was doing was calculated to lead people to believe that he was a member of the plaintiff society and that the unauthorized use of the expression inflicted a legal injury on the plaintiff society because it was a matter of pecuniary value to the plaintiff society that it should have as many members as possible. The court further held that the plaintiff society was entitled to injunction against both the defendant member and the company.

12. In a similar case, The Diabetic Society was restricted from using the word society when the plaintiff brought an action against The Diabetic Society. The case of The British Diabetic Association vs. The Diabetic Society and Ors. is reported in Fleet Street Reports (1996) at page 64. Similarly in the case of Legal and General Assurance Society Limited vs. Daniel and Others, the words legal and general were found to have become especially associated with the plaintiff, Legal and General Assurance Society Limited, and were rarely used in combination except by them and the defendant was prevented from running a private investigating agency under the name Legal and General Enquiry Bureau. This is a case decided by the court of Justice Chancery and is reported as 1968 Reports of Patent, Design and Trade Mark Cases 253.

13. The opinion of the Indian courts is no different. The plaintiffs have referred to a number of decisions of Indian courts expressing the same view. Suffice it to refer to the judgment of the Supreme Court in the case of Godfrey Philips India Limited vs. Girnar Food and Beverages (P) Ltd. 2005 (30) PTC 1 (SC) [LQ/SC/2004/566] in which the question involved was whether super cup simply meant a cup of good quality tea as super referred to quality and cup referred to a cup of tea or whether these descriptive words had become a trademark entitled to protection. The Supreme Court observed that a descriptive trademark may be entitled to protection, if it has assumed a secondary meaning and is identified with a particular product or of as being from a particular source and it remanded the matter back to the High Court which had opined that super cup was only laudatory of the product and could not have become a trademark. There are several instances where commonly used words put in a particular sequence get a distinctive meaning or identity. Indian Airlines for example may mean the airlines operating from India but all airlines operating from India cannot describe themselves as Indian Airlines. There is no need to burden this judgment with any more examples. Thus, it is clear that the marks CFA or Chartered Financial Analyst are distinctive marks and even though the words Chartered Financial and Analyst are three generic and descriptive terms their use in the given sequence and on account of their use for a long time have acquired a secondary meaning and have become a trademark entitled to protection. Same is true about the Institute of Chartered Financial Analyst.

Licence or acquiescence.

14. In the present case there is no dispute that the plaintiffs are the first users of the mark CFA and the defendants started using the mark only after they entered into a kind of collaboration with the plaintiffs and claimed to be imparting the same kind of education and training as that provided by the plaintiffs. The first defendant has been using the marks CFA and ICFAI or Institute of Chartered Financial Analyst of India now for quite sometime. While the plaintiffs claim that the defendants user has its origin in a license granted by the plaintiffs, the defendants contend that the plaintiffs have acquiesced in the user of these acronyms and, therefore, are estopped now from seeking an injunction against the defendants. The question of acquiescence and license are thus related questions. The plaintiffs rely upon a document dated 14.8.1985 as the one by which the plaintiffs expressed their consent to the defendants using the mark. As the facts are disclosed in the plaint, the representatives of the defendants visited plaintiff No.2 at its headquarters at Charlottesville, Virginia, USA sometime in the year 1985 to discuss the establishment of an education and testing programme for investment professionals in India by the first defendant. Shortly thereafter in August 1985 the President of the plaintiff No.2 went to India and met the first defendants representatives to discuss the project. It was during this visit that plaintiff No.2 and the first defendant reached an agreement which was recorded in the minutes signed by the respective parties on 14.8.1985 which is claimed to be a license agreement.

15. The plaintiffs also rely upon certain other documents regarding the incident of meetings between the parties particularly involving the plaintiffs representative Mr.Morley. The document dated 14.8.1985 described itself as minutes and is inscribed on the letterhead of Institute of Certified Financial Analysts. It is the claim of the plaintiffs that while the defendants named itself Institute of Certified Financial Analysts or ICFA, it was eying the reputation of the plaintiffs. The minutes are signed by Mr.V.Sankaran of the defendants and Mr.Alfred C.Morley of the plaintiffs. The minutes open with the following words,

These notes summarise and confirm the thoughts and decisions arising out of discussion between and among M/s.Alfred C.Morley, Mr.N.J.Yasaswy, Dr.Besant Raj, Dr.Prasanna Chandra and Mr.V.Sankaran, during the period August 12-14, 1985 in Bombay, Hyderabad and Bangalore, India.

16. The salient features of the minutes are extracted below:

1. The ICFA (USA), now better understanding and accepting the purpose and mission of the proposed ICFA (INDIA), is willing to assist and encourage in a variety of ways the development and success of ICFA (INDIA).

2. Assistance and encouragement as identified above is subject to approval of ICFA (USA) Trustees, and it is expected that the Trustees will take action at their September 1985 meeting.

3. Details of assistance and encouragement include, but are not limited to the following:

a) Use of the ICFA and CFA initials by ICFA (INDIA) after it has been determined by the ICFA (US) that the admissions standards, study programme and materials and examination process are and continue to be of the highest caliber relative to conditions and circumstances in India........

f) The ICFA (USA) is willing to countersign the CFA certificate awarded by ICFA (INDIA) subject to the conditions outlined in a) above having been met.

4. ICFA (US) has no intention of its collaboration and other involvement with ICFA (INDIA) generating for its unrealistic profits. However, direct cost of assistance and encouragement as defined above will be borne by ICFA (INDIA).

Such direct cost would include applicable travel to and food and lodging in India, expense of creating and/or delivering study programme material and related documents for use by ICFA (INDIA), and the like. In addition, to be negotiated is a Time Cost of ICFA (US) assistance and encouragement, possibly in the form of a minimum base amount and/or a fee per candidate accepted by ICFA (INDIA). Whatever is negotiated in this respect will be subject to approval by appropriate governmental authorities in India.

17. The document, unmistakably shows collaboration between the plaintiffs and the first defendant. It also indicates by para 3(a) extracted above that the use of the initial ICFA and CFA were approved of by the plaintiffs. While permitting the user of the marks the plaintiffs ensured that the marks/acronyms are not devalued in any way and, therefore, they insisted that the standards of the study programmes and material, examination process are of highest caliber relative to the conditions and circumstances in India. The collaboration actually put the plaintiffs on the top as clause 3(f) extracted above shows that the defendants and the plaintiffs agreed that all CFA certificates awarded by the defendants would be countersigned by ICFA (US). Obviously the defendants were encashing upon the goodwill and reputation of the plaintiffs. The defendants, it appears, persuaded the plaintiffs in entering into this kind of collaboration by undertaking and promising to maintain the highest of the standards in the training to be given to the financial analysts to be trained by their institute or organization. It is true, as pointed out by Mr.Sudhir Chandra, that the document is not drawn up in the legal form of a collaboration agreement. Nonetheless the nature of the document has to be ascertained from the contents and not from the form. The document is clearly indicative of the origin of relationship between the two parties. It shows beyond doubt that defendant No.1 wanting to establish itself as a institute of good standard wanted to, in some way, associate or collaborate with the plaintiffs and persuaded the plaintiffs to give consent to the user of the name in order to project its image in India as a counterpart or the Indian Chapter of the Institute of Chartered Financial Analysts, US.

18. A subsequent document captioned memo of agreement dated 8.9.1989 shows that the activities of the defendants were not independent of the consent and assistance of the plaintiffs. The following parts of the memorandum of agreement will establish the nature of collaboration between the two parties:

WHEREAS the Institute of Chartered Financial Analysts of India (ICFAI) was organized in 1984 as a non-profit society registered under Societies Registration Act (Telengana Areas) (originally under the name of the Institute of Certified Financial Analysts of India) for the purpose of providing training for financial analysts and carrying out other objectives as indicated in the Memorandum of Association. WHEREAS the Institute of Chartered Financial Analysts (ICFA-USA) was organized in 1959 as a non-profit institution under the relevant American laws at Charlottesville, Virginia, USA, and from 1963 continuously has been offering the CFA Candidate Study and Examination Program (the Chartered Financial Analyst Program) in USA, Canada and many other countries, worldwide. WHEREAS ICFAI approached ICFA-USA for help and guidance in designing and evolving a suitable educational program reflective of circumstances and conditions in India for training financial analysts in India.

WHEREAS Mr.Alfred C.Morley, President of ICFA-USA visited India in August 1985 and held a discussion at Bombay, Hyderabad and Bangalore with Dr.A.Besant C.Raj, Dr.Prasanna Chandra and Mr.N.J.Yasaswy, representatives of ICFAI, to explore the possibility of an academic collaboration between ICFAI and ICFA-USA for organizing the CFA Programme in India.

WHEREAS during the visit of Mr.Alfred C.Morley in August 1985, various points about assistance, encouragement and collaboration between ICFAI and ICFA-USA were agreed upon and minuted.

WHEREAS ICFAI launched the CFA Programme in April 1986 and successfully developed the body of knowledge, study material and examinations relevant to the Indian situation with the assistance from ICFA-USA and completed the training for the first batch of candidates who received the designation of Chartered Financial Analysts from ICFAI at the first convocation held on August 13, 1989.

WHEREAS Mr.Alfred C.Morley indicated the possibility of awarding the CFA-USA designation to CFAs qualifying from ICFAI, subject to their successful completion of qualifying examinations which will be conducted by ICFA-USA in India, and an indication of this information is being provided in the prospectus of ICFAI released from time to time.

WHEREAS ICFA-USA is satisfied with the development of the CFA Programme in India on sound lines and with the necessary infrastructure, ICFAI and ICFA-USA hereby agree to formalize the academic collaboration arrangement between both the Institutes through this document.

19. One cannot lose sight of the words, proposed ICFA India in the minutes of 14.8.1985 drawn on the letterhead of Institute of Certified Financial Analysts. The minutes indicate the anticipation of another organization called ICFA (India). Although the full name of ICFA (India) is not disclosed in this document the second document, namely, the memorandum of agreement clearly indicates the full form of ICFAI as the Institute of Chartered Financial Analysts of India. Obviously when the minutes were drawn the masters of Institute of Certified Analysts were aspiring to call their institute a partner or associate and draw on in some way on the plaintiffs marks of Chartered Financial Analyst or Institute of Chartered Financial Analysts. Attention of the court is drawn by the defendants at the document dated 9.2.1990 which is a letter written by the Chairman of ICFA, Board of Trustee to Dr. A. Besant C. Raj, Chairman of Chartered Financial Analysts of India congratulating the defendants on the sound development of a programme designed to measurably enhanced standard of professional and ethical practice in India. At the same time this document intimates concern of CFA in respect of some conflict between the ICFAI and a professional accounting body in India because the name of CFA was involved and the publicity of the conflict was not confined to India. The portion of the letter from which the defendants are seeking support is penultimate sentence which says, We look forward to a continuing strong relationship between our two organizations and to further progress of our programme in India. In my opinion there is nothing in this line which in any way can be of any support to the defendants. It is not the claim of the plaintiffs that the defendants are a part of the plaintiffs. The plaintiffs have recognized the first defendant as a separate institute. What is indicated here is that the plaintiffs are only interested in securing that the standards of CFA remain intact and whenever the name is used it should be indicative of a high standard.

20. Be that as it may, pursuant to the agreement of 1985 the representative of plaintiff No.2 Mr.Morley signed the Charters granted by the first and second defendant and continued to serve on the first defendants Board until 28.12.1991. Mr. Morley informed the first defendant sometime before he left the organization of plaintiffs in 1991-92 that he would no longer serve on the first defendants Board nor would sign Charters issued by the first and second defendant but that the plaintiffs would continue to provide the technical assistance for further development of first defendants curriculum via exchange of information and documents. The plaintiffs alleges that between 1992 to 1995 the plaintiffs exercised a relationship of cautious observation, encouraging the first defendant to consider options and alternatives to enable the first defendant to make smooth transition away from the plaintiffs Marks to Marks that the first defendant could claim as their own. It is alleged in the plaint that plaintiff No.1 came to the realization that because the first defendants programme was not as rigorous as plaintiff No.2s programmes, there would be a disparity between plaintiff No.2s charter and the charter granted under the first defendants programme. The concern was expressed in the letter dated 28.9.1992. The relevant part of the letter of 28.9.1992 is as under:

On behalf of the ICFA Board of Trustees and senior staff, I am writing to make you aware of the concern we have over the confusion of our respective organizations and designations. We note that in your literature as well as in the ASAC Directory, there are several references to the ICFAI being established as a non-profit educational society with the active collaboration of the Institute of Chartered Financial Analysts, Virginia, USA. In addition, as the investment profession become truly global in scope, we can envision growing confusion over the Chartered Financial Analyst designation, which we have been awarding for the past 31 years, and your own CFA designation. Thus, we respectfully ask that you give consideration to adding language in your descriptive materials indicating that the two organizations are distinct and separate having no common affiliations, and that the respective CFA designations are in no way related to one another.

21. This was the first time that the plaintiffs started distancing themselves from the defendants in the matter of user of the mark CFA and ICFAI. The letter was replied to vide the letter dated 16.12.1992. This letter acknowledges with gratitude the cooperation provided by the plaintiffs during the period 1985 to 1990 when Alfred C. Morley, the then President of plaintiff No.2, provided counsel and guidance and during those days when the Institute of defendants had been set up with active collaboration of the Institute of Chartered Financial Analysts, Virginia, USA. The defendants, however, contended. After Mr. Morleys retirement from your Institute and subsequently his resignation from our Board, our literature does not make any reference to your Institute except to the extent that it was initially set up with your help. The defendants sent a copy of the prospectus to know if the plaintiffs agree to the description of the Institute. It is alleged in the plaint that by 1994 the plaintiffs had uncovered major differences in the topic coverage as well as in the examination contents as set forth in a letter dated 22.11.1994 and called upon 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. The relevant part of the letter is reproduced below:

As we have indicated to you in the past (please see attached letter to Dr.Raj dated September 28, 1992), the Board of Governors of AIMR, as well as the Trustees of the Institute of Chartered Financial Analysts, have been concerned about what is seen to be growing confusion over the study and examination program leading to the award of the Chartered Financial Analyst designation as sponsored by the Institute of Chartered Financial Analysts and the study and examination program which your organization sponsors leading to a designation of the same name. Indeed, the ICFA Board of Trustees voiced its concern and asked Mr.Morley to report back to you as far back as 1986 when your were considering changing your name from the Institute of Certified Financial Analysts of India to the Institute of Chartered Financial Analyst of India. A review of our respective programs reflects major differences in topic coverage as well as in examination content, and we believe that by naming the respective designations the same will only contribute to growing and unnecessary confusion as the years go on. We would view any discussions regarding increased cooperation between our organizations to be contingent upon your willingness to change the name of your organization and of the designation you award. In the absence of any consideration for this change on your part, with all due respect we see no reason to meet with you to discuss any cooperative initiatives since to do so would only further exaggerate the existing problem.

22. It appears that defendant No.1 attempted to enlarge its activities also in US and Canada which was resisted by the plaintiffs which resulted in an agreement dated 18.12.1995 whereby the defendants agreed not to use the mark CFA and Chartered Financial Analyst in United States and in Canada. In the years 1995 and 1996, the plaintiffs allege in the plaint, discussions between the parties continued over the disparities between the plaintiffs programme and that of the defendants and the plaintiffs started looking for some amicable solution to the problem. However, since the defendants did not agree to stop using the marks the plaintiffs vide letter dated 13.1.1997 revoked the license agreement, i.e., minutes and called upon the first defendant to stop using plaintiff No.2s marks. The relevant part of the letter dated 13.1.1997 is reproduced below:

I have been studying the relationship between our two organizations. In summary, your organizations use since September 1985 of the ICFAs trade name and trademarks is pursuant to a license granted by the ICFA in a memorandum of understanding dated August 14, 1985, and continued by AIMR (See Attachment 1). On September 28, 1992, by way of letter, I requested that your organization include additional language in its materials to clarify the fact that the charter awarded by your organization is not the same CFA charter awarded by AIMR and the ICFA (See Attachment 2). On November 22, 1994, I again wrote to voice my concern over the growing confusion caused by your organizations use of the ICFAs trade name and trademarks (See Attachment 3). Revocation of license Recently, I was provided with evidence that your organization filed in 1991 with the India Trademark office for trademark protection of the ICFAs CFA mark (See Attachment 4). Filing for trademark protection contravenes the permission granted to your organization by the ICFA in 1985. As a licensee, you do not own the mark and your acts of filing for trademark protection and using the mark without permission violate our agreement.

In addition, I have received a copy of the book titled Let There Be Light (The Genesis of the ICFAI), written by V.Pattabhi Ram and published by Tata McGraw-Hill Publishing Company Limited. The book, which appears to be a product authorized or encouraged by your organization, contains inaccuracies and untruths. AIMR plans to address this matter later with your organization and the publisher.

The purpose of this letter is to focus on the primary issue. The license granted by the ICFA in 1985 has been revoked and this letter confirms the fact that the license is no longer in effect. This means that legally the ICFAI can no longer call itself the Institute of Chartered Financial Analysts of India and it can no longer award charters bearing the CFA mark. Failure of the ICFAI to cease the unauthorized use of AIMRs and ICFAs marks will be viewed very seriously by the AIMR and the ICFA. Please understand that AIMR must protect the ICFA tradename and trademaks at all costs, as the name and marks are the most valuable assets held by the AIMR and the ICFA. Our policy of trademark protection and enforcement is applied consistently throughout the world. Without a license to use our marks, your organizations continued use thereof is an infringement of our property rights and will thus be subject to legal action by AIMR, whose legal rights are nonetheless reserved.

23. The defendants response was a proposal to settle the matter amicably as expressed in the letter dated 16.1.1997. The agreement which the plaintiffs had offered to execute was, therefore, kept on hold. The plaintiffs sent a draft proposal for amicable settlement whereby the defendants would change the name and its designation from CFA to CIFA. The defendants by letter dated 13.3.1997 asked for atleast a couple of months to give any definite reply to the letter of 19.2.1997. The plaintiff No.1 vide letter dated 27.3.1997 agreed to extend the time provided the defendants could outline the steps its organization was going to take in the next two months. The defendants finally refused to comply with the demands of the plaintiffs vide letter dated 10.4.1997 after indicating that some students have filed cases against the defendants to refrain them from changing the designation and the name of the Institute. It stated, We regret that we are not in a position to take any further action in the matter till these cases are settled.

24. It appears that no amicable settlement could be possible thereafter and the plaintiffs presented the suit on 19th December, 1997. The defendants deny that the defendants ever agreed to change the designation and name of the Institute as proposed by the plaintiffs. Nor do the defendants admit that the defendants ever considered the plaintiffs demand. It is submitted on behalf of the defendants that the agreement dated 18.12.1995 restricted the defendants from using the designation and name of the Institute only in US and Canada showing that the plaintiffs did not object to the user of the designation and name in India and that the plaintiffs continued to allow the defendants to use the name. From the above facts the court has to infer as to whether the defendants have been using the designation CFA and the name of the Institute ICFAI on account of a license from the plaintiffs and whether the plaintiffs are estopped from seeking an injunction on account of the plaintiffs continued acquiescence to the use of the mark by the defendants. Thus, the two are actually questions of fact. Prima facie, the defendants have been using the mark only on account of the license from the plaintiffs. The plaintiffs closely associated with the defendants in the initial days and the plaintiffs representative Mr.Morley was actually on the Board of the defendants. There was cooperation between the two in the development of the study material. In the initial days even the charter was signed by Mr.Morley. Only when Mr.Morley left the Board of the plaintiffs as well as of the defendants that the defendants Charters were no more being signed on behalf of the plaintiffs. The arrangement, however, continued till the plaintiffs expressed some reservation vide letter dated 28.9.1992. The suit is filed in 1997. For five years as described above the parties corresponded with each other and the question of user of the marks constantly appeared in this correspondence. Prima facie, the parties were in negotiation with each other over the use of the marks. The plaintiffs concern, as the plaintiffs say, was the need to maintain the highest standards of the marks and of the name of the Institute which they felt was being diluted on account of the difference in the study material and the course contents offered by defendant No.1. The defendants always acknowledged the contribution of the plaintiffs in establishing the institute called ICFAI and in providing the course for the designation of CFA. The defendants, however, deny that defendant no.1 ever projected itself as a part of the CFA. The plaintiffs have filed the book called Let There be Light: The Genesis of the ICFAI by one Mr. V. Pattabhi Ram, which the plaintiffs claim, was published with the consent of the defendants. The book, inter alia, says that in 1984 inspired by the ICFA tag the Institute of Certified Financial Analyst of India was registered as a society under Andhra Pradesh (Telengana areas) Public Societies Registration Act in Hyderabad. It is also mentioned in the book that ICFA was the role model for the Institute set up by Mr.Yasaswy. The book visualises the effort of Mr.Yasaswy who persuaded plaintiff No.2 and how eventually when in August, 1985 Mr.Morley visited India the dream of ICFAI collaborating with ICFA become a reality. The facts written in the book Let There Be Light: The Genesis of ICFAI tallies with the allegations made by the plaintiffs. Prima facie, the defendants always had an eye on the designation CFA and the name Institute of Chartered Financial Analyst and even the very first name The Institute of Certified Financial Analyst was chosen keeping in view the CFA tag. As the collaboration ripened as indicated in the minutes of 14.8.1985 the Institute could rename itself as Institute of Chartered Financial Analyst of India. Thus, clearly the genesis of ICFAI lay in the license granted by the plaintiffs.

25. So long as the defendants work under the license there is no question of any acquiescence. Acquiescence starts only when the license is revoked and the unauthorized continuance of the mark continues. Here it appears that although the plaintiffs had started expressing concern over defendants using designation and the name sometime in 1992 it did not immediately snap the relationship with the defendants and started looking for some amicable solution. In the beginning the effort was to make the defendants publicise that they were different from the plaintiffs. The defendants do not seem to have taken any satisfactory steps in this regard. The plaintiffs, therefore, started insisting upon changing the name to CIFA which the defendants did not accept. The categorical withdrawal of the license took place in the year 1997. It is clear also from the reproduction of the correspondence between the parties that the defendants did not straightway take a categorical stand of denying to give the plaintiffs proposal any thought. The defendants also gained time for considering the proposal of the plaintiffs. When the plaintiffs first expressed their reservations in the defendants user of the name and the mark, the defendants also made a cautious reply instead of coming out sharply protesting against the plaintiffs observations in the letter of 28.9.1992. The plaintiffs having already granted the license to use the name were, perhaps, hesitant in snapping the relationship all of a sudden. It appears that both parties proceeded cautiously on account of which the ultimate withdrawal of license took place only in the year 1997. In my opinion, it cannot be said that the plaintiffs had acquiesced in the use of the name and the marks by the defendants. Although the plaintiffs had expressed reservations in the defendants using the name and the designation, the license continued to remain in existence and, therefore, the user of the defendants till 1997 can only be viewed as user on account of consent or license. Acquiescence will start after the license is revoked. The license being revoked in 1997, the acquiescence would start only in 1997. However, the suit is filed in 1997 itself. The theory of acquiescence cannot be invoked to defeat the suit.

26. A very interesting feature of the developments that take place subsequent to the withdrawal of the license and during the pendency of the suit is the establishment of certain universities by certain State Legislatures. The ICFAI University Act of 2003 of Uttaranchal in its Preamble says An Act to establish and incorporate an University in the State, with emphasis on providing high quality and industry relevant education in the areas of Applied Financial Management, General Management, Applied Science and Technology, sponsored by The Institute of Chartered Financial Analysts of India (ICFAI), Hyderabad, Andhra Pradesh and to provide for matters connected therewith or incidental thereto. Similar legislations are passed by the State of Sikkim and Tripura. The Act of Sikkim also acknowledges the role of Institute of Chartered Financial Analysts of India (ICFAI), Hyderabad in sponsoring the legislation. Mr.Sudhir Chandra submits that it is not possible to injunct a Legislature from using any particular term in its legislation or to declare that the name of ICFAI University is not permissible in law. Nonetheless, it is true that all the universities have been created during the pendency of the suit. The defendants have been able to go ahead and sponsor the acts. This will not, however, create a right in them to violate the trademarks of the plaintiffs. Their right to use the trademarks came to end in 1997. If they have gone ahead to obtain legislative sanctions to their trademarks they have done so at their own peril. The rights of the plaintiffs cannot be defeated by the act of the defendants during the pendency of the suit. For the present the attention of the court can be confined to the averments in the plaint and the right claimed by the plaintiffs against the defendants. It is for the plaintiffs to decide if and when the plaintiffs would seek redressal of their grievance against those legislations. The plaintiffs have been able to establish that they are entitled to an injunction. This right cannot be defeated by the defendants sponsoring Acts to convert their institutes into universities.

Balance of convenience.

27. The last question that remains to be determined is whether the balance of convenience lies in favour of the plaintiffs. A large number of students have undertaken the course with the fond hope of getting a CFA charter. It is submitted by the defendants that those students would be very adversely affected if the defendants are not allowed to use the acronym CFA or ICFAI. In my opinion, the balance of convenience is still in favour of the plaintiffs. The defendants are not required to close down their institutes or to stop giving the charters to their students. All that the plaintiffs want is that the defendants should use some other name for their programme and for their institute which is not deceptively similar to that of the plaintiffs. The defendants can carry on with their programme of imparting education to financial analyst and of giving them a charter to indicate the level of their training and learning. The defendants can do so by appropriately renaming themselves.

Irreparable loss.

28. Another important aspect is whether the plaintiffs will suffer any irreparable loss or injury in case the injunction prayed for is not granted. As per the discussion above, the plaintiffs have a prima facie case and the balance of convenience also lies in their favour. The plaintiffs are likely to suffer irreparable loss in the reputation if the defendants who have been using the marks and, as alleged by the plaintiffs, not keeping up the standards set by the plaintiffs. The business of the plaintiffs is not limited to the United States of America. As mentioned earlier, the plaintiffs have got their marks registered in several countries. Accordingly, it is important for the plaintiffs that these marks are associated with very high standards. If the defendants are allowed to continue using the marks, the plaintiffs are likely to suffer loss in their reputation and such loss may be irreparable.

29. Further, if the defendants are allowed to use the marks, the plaintiffs will lose the exclusive right to use the marks and their valuable right in the marks will be lost or substantially damaged. There is no way of assessing the damage suffered. Further, the nature of the damage which the plaintiffs are likely to suffer is not such as can be compensated in terms of money.

ORDER

30. In view of above, I allow the application under Order XXXIX Rules 1 and 2 Code of Civil Procedure, 1908 – and restrain the defendants, during the pendency of the suit, from using any of the trademarks or service marks 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 their programmes or business as that of the plaintiffs. However, this order of injunction will not come into effect till the end of current academic session of the CFA programme run by the defendants. Nor will anything said herein will mean final expression of opinion of this Court.