Early September, Indian media company Zee Entertainment Enterprises revealed it would soon launch a brand new streaming service with the aim of premiering blockbuster movies directly to people's homes, partly to combat piracy.
Initially reported as the 'Zee Plex' service, the product was set for launch last Friday, October 2, 2020. However, the news didn't sit well with US-based Plex, Inc., the operator of the famous Plex media server software.
According to Plex, Inc., Zee Plex operator Zee Entertainment Enterprises' choice of name meant that its new service would be illegally trading off the hard-earned goodwill of the Plex trademark. Describing Zee Plex as a "competing service", Plex Inc. took legal action to urgently obtain an injunction to prevent the service launching with the infringing mark.
Ad-Interim Application for Injunction
Zee Plex launched as planned October 2, 2020, but not before the matter was heard by the High Court in Bombay via video conferencing just a day earlier.
The Court heard that Zee Entertainment is a large multi-media conglomerate providing entertainment across a broad range of platforms including the Internet, OTT, satellite and cable. It was acknowledged that Plex Inc. had adopted the Plex trademark in May 2008 in the United States for a software/hardware service that allows a user to take content "wherever he goes".
Plex told the Court that it signed up its first Indian user back in July 2008 and now has 550,000 users and "very high sales" in the country.
The Court questioned that, noting that evidence pointed to sales of between US$24,000 to US$30,000. This is important because the volume of domestic business can be used as a factor when considering the value of existing goodwill and reputation.
Court Failed to See Similarities Between Plex and Zee Plex
In the decision handed down on October 1, 2020, the Court found that on first view, the Plex media server and Zee Plex were "fundamentally different". Noting that Zee Plex is a "cinema-to-home pay-per-view movie service" and that Plex carries some of its own "curated content", the Zee Plex service does not have any of the "take your own content with you" services offered by Plex.
At this point it's worth highlighting that Zee says that its service is actually called ZEEPLEX, i.e one word instead of two. According to the Court, this doesn't amount to much since Plex objects to the word 'Plex' being used in any way but from here things didn't get any better for Plex.
No Prima Facie Case of 'Passing Off'
The Court notes that Plex's case is based on allegations of deceit by Zee Entertainment, in that it used the Plex name to dupe or mislead consumers into thinking it had somehow tied up with Plex in business. To show such a case, Plex must demonstrate strong reputation and brand recognition in India among consumers but the Court found that, on the surface, the balance tips away from the US-based company.
"I do not yet see sufficient material from Plex to be able to establish its reputation at least within India, whatever may be its reputation, registrations and sales in other jurisdictions. In contract, there is the much greater reputation and standing of Zee amongst subscribers across the length and the breadth of the country with a large number of channels in various languages," the judge's order reads.
Equally, arguments by Plex that it should receive the same kinds of protection enjoyed by companies such as Sony, Disney or Hotstar, were also dismissed by the Court.
"Merely pointing to other established and reputed players in the field is not enough, and it is hardly a credible argument to say that 'if Sony provides content and has a reputation, since I, too, provide content, I must be presumed to have an equivalent reputation. So if Sony could maintain such an action and get an order, so must I.'
"There is no one-size-fits-all approach in these matters. Every claimant in a passing off action stands or falls on his own merits and case," the order adds.
Issues With Plex Trademark in India
The Court notes that while Plex has registered trademarks in several jurisdictions, those locations do not include India. The Court adds that when the ZEEPLEX service was announced in September, Plex had applied for but not obtained a trademark registration. However, after the announcement, Plex reportedly went to the registry to make an amendment that indicated that it was proposed to be used back in 2008.
"In other words, until it moved the amendment application, its own case in the registry was that at least in India, its mark was not in use, but only had a proposed or anticipated user," the order notes.
Judge Apparently Irritated By Last Minute Injunction Demands
While the Court heard the matter in advance of the ZEEPLEX service's launch, the judge appears to be irritated by companies in intellectual property disputes expecting courts to deal with their cases quickly and at the expense of other matters.
"[I] have said this before — that parties in IPR matters cannot expect Courts to push aside all other cases. This happens repeatedly, whether it is movie releases or otherwise. It must stop," the judge writes in his order.
"It is unfair to courts and it is unfair to other litigants waiting their turn. Where a plaintiff has had enough notice and yet chooses to move at the eleventh hour — and makes no allowance at all for any adjustment that may be required — the plaintiff must be prepared to face the consequences."
Plex Injunction Application Fails At This Stage
In considering whether to grant an early injunction, the Court weighed several factors but ultimately sided with Zee Entertainment. According to the judge, Plex has no prima facie case, cannot show anticipated injury, and its userbase in India is too small to show that Zee tried to pass off its new channel as being in association with Plex.
"The grant of the injunction Plex seeks would, on the other, cause immense and immediate financial loss and harm to Zee. Consequently, I find no reason to grant an ad interim injunction in this passing off action," the order concludes.
While Plex didn't immediately get the result it had hoped for, the matter isn't completely over yet. Plex has been granted leave to amend and will be hoping for a different result.
The order handed down by the High Court of Bombay can be found here (pdf)
From: TF, for the latest news on copyright battles, piracy and more.
Under US copyright law, Internet providers must terminate the accounts of repeat infringers "in appropriate circumstances."
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