Redstone Consultancy, the promoter of group-buying startup Groffr, has filed a case against online grocery delivery firm Grofers India Pvt Ltd for “passing off “ and using a similar sounding name to confuse consumers in the Delhi High Court.
Mumbai-based Redstone, which helps consumers in big-ticket purchases by aggregating demand in real-estate, cars and electronic items, had approached the Delhi High Court against Grofers on November 4.
The court then directed the entities to put up disclaimers on their website and mobile applications informing consumers that the two are different companies.
“Both parties have a period of three weeks to do the needful for compliance of the present order by giving disclaimer in appropriate language on the websites,“ Justice Valmiki Mehta said in the order dated November 6.
The court will hear the matter again on February 17, 2016. The final ruling will be closely watched since brand recall and consumer acquisition are key essentials to the companies operating in the ecommerce space.
For Gurgaon-based Grofers, the issue has cropped up at a time when it is in the midst of raising over $100 million in fresh funds.
According to the IPR law, “Passing off “ means making a false representation, which is likely to induce a person to believe that the goods or services are those of another.
The court said, “The dispute in the present case is with respect to the trademark service markword mark `GROFFR’ of the plaintiff and `GROFERS’ of the defendants. Both the plaintiff and defendants are engaged in ecommerce business and they do not have any brick and mortar stores.“
Groffr was founded in 2010. Grofers, on the other hand, started operations in 2013, and was initially called `OneNumber Company’ A person familiar with developments at Groffr said, “The word `Groffr’ is an amalgama tion of two words `Group’ and `Offer’ and the company has closed transactions of around Rs 300 crore under the brand name Groffr.“
Kapil Wadhwa, founder of Wadhwa Law Chambers, which is representing Groffr in the case, said, “The suit is at the stage of completion of pleadings and listed for arguments on injunction application in February 2016. By virtue of being a prior adopter of a mark, one has the exclusive rights to exploit the said mark.“
Vineet Wadhwa, managing director of Redstone Consultancy, declined to divulge any details saying the matter is sub judice.
Grofers co-founder and CEO Albinder Dhindsa, too, declined to comment.
Tina Jain Mehta, founder of Mumbaibased boutique branding agency Pineapple Consulting, said, “The unprecedented wave of ecommerce has witnessed multiple players offering similar servicesproducts and continuously expanding their range also. Which is why it is crucial for players to have a long-term view and ensure due diligence in choosing a brand name which is similar neither in sound nor words to any existing player.”