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WHITEHAT JR: TRADEMARK INFRINGEMENT OR FAIR USE?

Introduction

BYJU’s owned Whitehat Education Technology Private Limited, commonly known as WhiteHatJr, has recently been involved in a series of controversies surrounding defamation, criticism and trademark infringement. What began with the taking down of a critical YouTube video created by Jihan Haria, a 12-year-old from Pune for copyright infringement, ended with two consecutive lawsuits against critics for defamation and copyright infringement. In the former case, Karan Bajaj v. Pradeep Poonia, initiated by the CEO of WhiteHatJr for tweets criticizing the company along with a YouTube Channel, the Delhi Court directed the defendant to comply with the appellant’s demands in an interim order. The court, after going through the arguments of the parties, which took the court through the factual matrix of the case along with principles of intellectual property, right to privacy and normative fair use, ruled in favour of the appellants and directed the respondent to take down a host of content which criticized the appellant from the internet. Consequently, the court refused to accept the principles of denominative fair use, which allow trademark infringement for non-commercial purposes. The succeeding sections of this piece discuss the background, contentions and decision in this case.

Background

WhiteHat Education Technology Private Limited, owned by BYJU’s and founded by Karan Bajaj in 2016 is a virtual education providing platform teaching coding to children, the scope of which extends to building games, animations et cetera. The platform has developed a Proprietary Coding Curriculum and offers live online classes. The company is the registered owner of the word mark and device mark, ‘WhiteHat Jr.’ The defendant, who was slapped with a two million dollar lawsuit, was criticising the company on Twitter using the marks ‘WhiteHatPoonia’ and ‘WhiteHat Sr’, and further created a YouTube channel under the name ‘WhiteHat Sr’ for criticising the company, its business model and certain advertisements. Since the marks used by the defendant were similar to the company’s registered trademark, the latter claimed trademark infringement along with defamation. Further, the appellants also claimed that Pradeep Poonia was sharing their curriculum on his YouTube channel, which may be categorized as copyright infringement. The tweets and videos uploaded by Pradeep Poonia targeted various aspects of WhiteHat, including employment of unqualified teachers and an advertisement campaign concentrating on a fictitious child named ‘Wolf Gupta’ who landed a lucrative job at Google after learning coding through the platform. These advertisements were a subject of criticism from a number of parties other than Poonia, and the Advertising Standard Council of India had even ordered the appellants to pull down seven advertisements after receiving fifteen complaints against the same.

Based on these criticisms, the appellant filed a suit for defamation, infringement of trademarks and copyright, passing off, dilution and tarnishing of trademark, torts of inducing breach of contract, mischief and invasion of privacy, damages, etc. Through an interim order dated 23rd November, 2020, the appellants namely, Karan Bajaj and WhiteHat Education, sought an injunction against Poonia.

Appellant’s Contention

The appellant made a series of contentions, starting with trademark infringement for usage of the name ‘WhiteHat Sr’ by Poonia for his YouTube channel and tweets. Further, the appellants alleged that Poonia hacked into their internal business communication platform, SLACK, to access confidential information including passwords of the CEO, and released them in public domain.

They complained against defendant’s comments terming their business model as a pyramid scheme and a Ponzi scheme. Similar claims of defamations were made against posts by the defendant commenting on the qualifications of the teachers employed by the plaintiff wherein Poonia claimed that, “these teachers are housewives who don’t understand coding.”

The appellants further argued that the defendant tweeted about people holding a misguided perception that the appellant pre-targets the rich when in reality the policies of the appellant put struggling parents in debt. Claims for copyright infringement were also made against the defendant against downloading and circulating the curriculum of the plaintiff. These actions, namely copyright and trademark infringement, hacking into the plaintiff’s servers and defamatory practices of the defendant had allegedly caused personal injury to the victim. In order to substantiate their claims of hacking and password stealing, the plaintiffs placed on record screenshots and other material to exhibit that personal details of the plaintiffs were in the possession of a number of groups.

The plaintiffs relied on the decision of the Supreme Court in K.S. Puttaswamy v. Union of India, where the court accorded ‘Right to Privacy’ the status of a fundamental right under Article 21 of the Constitution of India. They further distinguished the precedents placed on record by the defendant.

Defendant’s Contention

Relying on Tata Sons Limited v. Greenpeace International, the defendant contended that he did not infringe the plaintiff’s trademark since he was not carrying any commercial activity by using the name ‘WhiteHat Sr’, among others. The usage of the marks similar to the trademarks of the appellant was not aimed at financial gain and was only in furtherance of his cause of criticising the appellant. With respect to the claim for defamation, the defendant contended that the allegations in the plaint are not severe enough to reach the threshold of defamation. In the case of Tata Sons, the defendant had created a game to draw the attention of public towards the habitat destruction of Olive Ridley Turtles owing to the activities of the defendant. The defendant claimed that the plaintiffs were infringing their trademark since the game displayed turtles escaping the Tata logo, and demanded an interim injunction. The court observed that whilst balancing the principles guiding free speech and Intellectual Property Rights, factors such as ‘parodic usage’ of trademark for ‘communicative’ rather than ‘commercial’ aims guide the court to rule in favour of free speech. In deciding cases such as these, the court should not look into whether means other than parody were available or whether parody was favourable since these are irrelevant factors. Mere usage of trademark for critiquing the policies or activities of the appellant Tata Sons was not seen as infringement by the court here, and the application for injunction was rejected. The court relied on the principles of normative fair use, an exception to trademark infringement which allows commentators, newspapers and other critics to use such marks for non-commercial purposes. Although the court didn’t use the term ‘Normative Fair Use’ explicitly, it applied the doctrine and observed that the usage of the trademark was merely ‘denominative’ because the intention of the user was to draw attention to the activities of the owner. Such usage, in the opinion of the court, does not amount to infringement. The principle seems to be accepted by Section 29 of the Trademarks Act, 1999 which limits trademark infringement to commercial usage and does not cover criticisms, as in the instant case.

The defendant also argued that the plaintiffs were concealing material documents. He contended that the advertisement strategies of the appellant, especially the advertisement using fictitious character ‘Wolf Gupta’ were the subject of criticism from other organizations, including the Forbes Magazine. The defendant also claimed that the plaintiffs were not refunding fee to children who wanted to leave the classes despite making express policy of refunding the fee in one day when a child quits the courses.

In order to refute the claims of copyright infringement of the curriculum, the defendant agreed to an interim injunction on this ground and undertook on himself to not release any copyrighted curriculum or material in public domain. Similarly, the defendant agreed to an interim injunction to strengthen his claims of never having hacked into the system of the plaintiff, or having stolen passwords and other confidential material.

The defendant also relied on the decision in the judgement of the Delhi High Court in Pushp Sharma v. D.B. Corp, wherein the court dealt with the powers of granting injunctions, especially ex-parte injunctions. The court here ruled that an injunction should not be granted, especially an ex-parte injunction on publishing material meant for public information, unless the offending content is malicious or palpably false. It was further observed that the court should record reasons for passing an injunction, since a democracy thrives on healthy public debates and arbitrary injunctions tend to stifle these debates. According to the court, the appellant had successfully distinguished this case from the instant case.

Court’s Direction

Justice Mukta Gupta observed that the present suit entailed prima facie adjudication on several questions of fact which were in dispute, and the resolution of the same required an affidavit by the defendant. It was, however, noted that the material presented by the appellant, including the tweets, were sufficient to establish a prima facie case in favour of the appellants, and an interim injunction was granted to them since balance of convenience lay in the favour of the plaintiff and they would suffer irreparable loss in the absence of such injunction.

Accordingly, the court ordered the defendant to take down a series of eight tweets and YouTube posts, and restrained the defendant from:

· Using the name ‘WhiteHat Sr’ for his YouTube channel

· Downloading and circulating appellant’s curriculum

· Hacking or unlawfully accessing plaintiff’s internal systems or circulating information therein in public domain.

· Commenting on the quality of plaintiff’s teachers without adequate details regarding their qualifications

Based on this order, it can be concluded that the court recognized trademark infringement on part of the defendant and didn’t provide him with the benefit of denominative usage, a concept similar to the doctrine of normative fair use. The court has also accepted the claims of defamation and copyright over the curriculum made by the appellant. Definite reasoning was not provided by the court, but the reliefs sought by the appellant were allowed.[1]

Conclusion

The interim order of the Delhi High Court, which has admitted the criticism of WhiteHat Jr by Mr. Poonia as defamation has implications in the field of not only free speech, but also Intellectual Property Law. The doctrine of normative fair use, which has been gaining increasing acceptance with judgements such as Tata Sons Limited v. Greenpeace International was rejected in the instant case. However, the direction in this order was given by Justice Gupta without providing any lucid line of reasoning, and may be vulnerable to challenges in the future.



Title Image Source: Boom


This article has been written by Kashish Agarwal. Kashish is a second year student of law in National Law University, Delhi.