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Hasnmkhrai & Co. v. Raj Tea & Co.
Factual and Procedural Background
The plaintiff filed a suit seeking various reliefs, including injunctions restraining the defendants from infringing its registered trademarks “Society” and “Society Tea”, restraining the defendants from passing off their goods as those of the plaintiff (in particular by using the mark “Soyalty” or “Soyalty Tea”), and restraining the defendants from infringing the plaintiff's copyright in the design of its tea packaging. The plaintiff is the registered owner of the word marks “Society” and “Society Tea” for goods in Class 30 of the Trade Marks Rules; registration certificates were annexed to the plaint as Exhibit-B and Bl. The plaintiff's packaging design (distinct tricolour with black and grey shades and distinct designs) is registered as a work of art in the register of copyrights on 20 January 1994.
In February 2005 the plaintiff discovered that the defendants were marketing tea as “Soyalty Tea” in packagings alleged to be deceptively similar to the plaintiff's packaging. The plaintiff produced copies of both parties' packagings (and actual packets were produced at hearing). The suit was filed on 18 March 2005. The defendants deny certain factual claims (including the commencement date of their marketing), and the matter proceeded on a motion heard orally before the Court.
Legal Issues Presented
- Whether the plaintiff's suit for trademark and copyright infringement and for passing off is barred by limitation.
- Whether the defendants are entitled to use the mark “Soyalty” on the basis that it derives from the proprietor's ancestral family name “Soyal”.
- Whether the word “Soyalty” and the defendants' packaging are identical or deceptively similar to the plaintiff's registered mark and packaging (i.e., whether there is a likelihood of confusion/passing off).
- Whether the plaintiff has demonstrated a prima facie case sufficient to grant interim injunctive relief and to appoint a receiver for infringing materials, and if so, on what terms.
Arguments of the Parties
Plaintiff's Arguments
- The plaintiff is the registered owner of the word marks “Society” and “Society Tea” (Class 30) and holds a registered copyright in the packaging design (registered 20 January 1994).
- The defendants are marketing tea as “Soyalty Tea” in packagings that are deceptively similar to the plaintiff's packaging, thereby infringing the plaintiff's trademarks, constituting passing off, and infringing the plaintiff's copyright.
- The plaintiff first came to know of the defendants' alleged infringement in February 2005 and filed suit on 18 March 2005, within the applicable limitation period as argued by the plaintiff.
- The plaintiff produced both documentary and actual samples of packaging to demonstrate similarity.
Defendants' Arguments
- The suit is barred by limitation: for copyright infringement the limitation is governed by Article 88 (three years), and for trademark infringement by Article 113 (three years); the defendants assert they have marketed the product since 1999 and that the plaintiff's claim is therefore time-barred.
- The word “Soyalty” represents the family name “Soyal” of defendant No. 2 (proprietor of defendant No. 1), and the defendants therefore have a right to use the name.
- The word “Soyalty” is not similar, much less deceptively similar, to “Society”; likewise the defendants' packaging is not similar or deceptively similar to the plaintiff's packaging.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Kirloskar Diesel Recon Pvt. Ltd. v. Kirloskar Proprietory Ltd., 1997 (17) PTC 469 (Bom) : AIR 1996 Bom. 149 | Whether a defendant who bears or uses a surname (e.g., "Kirloskar") can be restrained from using that name where the plaintiff holds a registered trademark of the same word. | The Court relied on the authority to reject the defendants' contention that use of “Soyalty” is justified by an ancestral family name “Soyal”, holding that the family-name defence has no merit where the plaintiff holds a registered trademark. |
Court's Reasoning and Analysis
The Court considered the defendants' limitation defence and observed that the suit alleges acts of ongoing infringement. Citing the principle in section 22 of the Limitation Act concerning continuing breaches, the Court held that infringement is a continuing tort and that each continuing act of infringement gives rise to a fresh period of limitation from the date of each infringement. Applying that principle to the pleaded facts (the plaintiff's knowledge in February 2005 and filing on 18 March 2005), the Court found no substance in the contention that the suit was barred by limitation.
On the defendants' family-name defence, the Court relied on the cited Kirloskar authority to conclude that a defendant's ancestral surname does not confer an unfettered right to use a word if that word is protected as the plaintiff's registered trademark. Consequently, the defence that “Soyalty” represents the family name “Soyal” and is therefore permissible was rejected as having no merit.
Regarding similarity, the Court undertook a fact-specific visual and phonetic comparison. The Court found clear phonetic similarity between “Society” and “Soyalty”, and detailed multiple points of visual and overall packaging similarity: an almost identical colour scheme (differences in shade being subtle and not noticeable unless compared side-by-side), the vertical placement of the brand name in silver on the left side of the packet in both packagings, similar placement and presentation of cups/mugs on the front, and similar photographs on the reverse (a cup and saucer with tea; a woman drinking tea), with only minor differences (such as number of mugs vs cups and apparent age differences in the photographed woman). The Court concluded that these similarities are such that a person of average intelligence and imperfect recollection is likely to believe the defendants' product to be the plaintiff's product.
On the basis of the foregoing analysis, the Court concluded that the plaintiff had made out a strong prima facie case for interim relief, and that the appointment of a receiver was warranted. However, the Court modified the plaintiff's requested relief with respect to the receiver: the receiver was to take only the infringing materials and goods into custody and preserve them during the pendency of the motion, and was not to destroy them.
Holding and Implications
Core Ruling: The Court granted ad-interim relief in terms of the plaintiff's motion (specifically prayer clauses (a), (b) and (c)) and appointed a receiver in terms of prayer clause (d) with the modification that the receiver shall take only the infringing materials and goods into custody and shall preserve them without destroying them pending final disposal of the motion. The motion was made returnable early.
Implications: The direct effect is that the defendants are subject to interim injunctions as ordered and that the infringing materials are to be taken into custody and preserved (not destroyed) by the appointed receiver pending further proceedings. The Court's decision was based on established principles (continuing tort/limitation and the cited authority regarding use of family names versus registered trademarks); the opinion does not purport to establish a new legal precedent beyond applying those principles to the facts at hand.
D.G Karnik, J. (Oral):— Heard the learned counsel for the parties.
2. This motion is taken out by the plaintiff in a suit filed by it for various reliefs including relief of injunctions restraining the defendants from infringing its trade marks “Society” and “Society Tea and passing of its goods as that of plaintiff and in particular for preventing the defendant from using the word mark “Soyalty” or “Soyalty Tea” and also for restraining the defendants from infringing the plaintiffs copyright in the design of the packagings under which it markets its product “Society Tea”.
3. The plaintiff is the registered owner of the trademarks “Society” and “Society Tea” which are registered s word marks in relation to class of goods falling under Class 30 of the Trade Marks Rules. Copies of the registration certificates are annexed to the plaint as Exhibit-B and Bl.
4. The plaintiff markets it's product viz. tea leaves in a distinct tricolour packaging which has different shades of black and grey with distinct designs. The distinctive work in the design of the packaging is also registered as a work of arts in the register of copyrights on 20th January, 1994.
5. In February 2005, plaintiff came to know that the defendants are also marketing tea leaves under the brand name “Soyalty Tea” in packagings which are deceptively similar to the plaintiff's packaging. The plaintiff came to know that the defendants are not only infringing its trade mark “Society” and “Society Tea” but are also passing of their goods in a deceptively similar packaging and also infringing their copyright in the design of the packaging. The plaintiff has produced on record copies of the packagings used by the plaintiff as also the copy of the packagings used by the defendant for its product. At the time of hearing, the learned counsel for the parties have handed in the actual packets in which the plaintiffs product and defendants' product are sold. The packets are returned to the respective Advocates after their perusal.
6. Learned counsel for the defendant firstly submits that the plaintiffs suit is barred by limitation. He submits that so far as the infringement of the copyright is concerned, suit falls under Article 88 and so far as action for infringement of trademark is concerned, the suit falls under Article 113 of the Limitation Act. Under Article 88, the period of limitation for filing of a suit for infringement of a suit is three years from the date of infringement and under Article 113, the period of limitation for filing of a suit is three years to be completed from the date when the right to sue accrues. The plaintiff in paragraph Nos. 20 to 22 of the plaint clearly mentions that the plaintiff came to know of the infringement of the trade mark and passing of in February 2005. Suit has been filed on 18th March, 2005 i.e within a period of three years of the knowledge of the infringement. Learned counsel for the defendants submit that the defendants have been marketing its product in the brand name “Soyalty Tea” and in the same packaging and since the year 1999. This fact is disputed and denied by the plaintiff. However, assuming that the defendant had been marketing its product since the year 1999 the every act of marketing a product by identical or by deceptively similar name or by using a deceptively similar packaging would amount to an act of infringement as passing of. Under section 22 of the Limitation Act, every continuing breach of contract or continuing tort gives rise to a fresh period of limitation. In my view, the infringement is a continuing tort and each continuing act of infringement gives rise to a fresh period of limitation from the date of each infringement. Therefore, there is no substance in the contention that the suit is barred by limitation.
7. Learned counsel for the defendants secondly contends that though the present surname of defendant No. 2 is “Choudhary” the ancestral family name of defendant No. 2 who, is the proprietor of the defendant No. 1 was “Soyal” and, therefore, the defendants have adopted the name “Soyalty” to denote that it is a tea manufactured by the Soyal family. The defendant submits learned counsel, has a right to use the name “Soyalty”. In Kirloskar Diesel Recon Pvt. Ltd. v. Kirloskar Proprietory Ltd., 1997 (17) PTC 469 (Bom) : AIR 1996 Bom. 149, this Court has held that even the defendant who had a surname “Kirloskar” could be restrained by an order of injunction from using the word “Kirloskar” in the corporate name of company formed by him as the word mark “Kirloskar” was registered as a trademark by the plaintiff. In the circumstances, the defence of the defendant that their brand name “Soyalty” represents the family name “Soyal” and, therefore, the defendants have a right to use it despite it being similar to the plaintiffs registered trade mark, has no merit. Even assuming otherwise if the defendants have not used the brand name “Soyal” for their product but have used the word “Soyalty” for the branding of their product and that brand name is deceptively similar to the plaintiffs trademark.
8. Learned counsel for the defendant lastly contends that the word “Soyalty” is not similar much less deceptively similar to the plaintiffs registered word mark “Society” and the packaging is also not similar much less deceptively similar. In my view, there is a clear phonetic similarity between the words “Society” and “Soyalty”, and there is also visual similarity both in the packaging as well as manner and mode of writing of the brand name “Soyalty”. The two packagings are deceptively similar. Firstly, colour scheme of the defendants packaging is almost identical with the plaintiffs except for some un-noticeable change in the shades of the colours. The difference between two shades would only be noticed if two packagings are placed side by side and observed very minutely. If the two packagings are seen independently, it is difficult to notice any difference in the shades of colour or the colour scheme of the two packagings. The word “Society” is written vertically on the left hand side in silver colour on the plaintiffs packaging. The word “Soyalty” is similarly written vertically again in a silver colour on the left hand side of the defendants' packaging. On the right hand side of the planitiff's packaging are shown four cups with saucers, while on of the defendants' packaging, there are five mugs without saucers. Saucers is not the distinctive part of the packagings and what strikes one is visual similarity of the placing of the mugs in the same fashion as that of the plaintiffs cups and saucers. On the reverse side of the packaging, there are photographs, one of a cup and saucer with the tea in the cup which is common in both the packagings, the other is a photograph of a woman drinking tea in a sup which is also common in both the packagings. Perhaps the only difference is the difference in the age of the woman shown in two photographs. There is an overall similarity between the two packaging. In my view, a person of average intelligence and imperfect recollection is likely to believe that the defendants' product is the product of the plaintiff.
9. The plaintiff has made out a strong prima facie case for grant of injunction and the appointment of a receiver with the my view, it is also necessary to appoint a receiver in terms of prayer clause (d) of the motion with the modification that the receiver shall only taken the infringing materials in his custody but shall preserve them during the pendency of the motion without destroying them.
10. In the circumstances, there shall be ad-interim relief in terms of prayer clauses (a), (b) and (c) of the motion. Receiver is also appointed in terms of prayer clause (d) with the modification that the Receiver shall only take the infringing material and goods in his custody but shall not destroy them pending the final disposal of the motion.
11. Motion is made returnable early.
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