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Exxion Corporation, ... v. Exxon Packing System...

Madras High Court
Jun 27, 1988
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Judgment Summary — Mohan, J.

Factual and Procedural Background

This opinion consolidates three appeals (O.S.A. Nos. 17, 18 and 19 of 1988) arising from interlocutory orders in a suit under Section 120 of the Trade and Merchandise Marks Act, 1958. The respondent, Exxon Packing Systems Pvt. Ltd., had filed multiple applications in the suit seeking interim reliefs: (a) Appn. No. 4971 of 1986 — an injunction restraining the appellants from claiming any exclusive right in the trade mark "EXXON" in respect of packing machines and spare parts pending disposal of the suit; (b) Appn. No. 4972 of 1986 — an injunction restraining the appellants from threatening the respondent by notices, advertisements, circulars, etc.; and (c) Appn. No. 542 of 1987 — an order directing the defendant to produce documents for inspection and copying. The appellants countered and sought vacatur of the ad-interim injunction, challenged the jurisdiction of the High Court (contending the appellant did not carry on trade within the court's jurisdiction), and argued that Section 120 did not cover lawyer's notices or a passing-off claim in the manner urged by the plaintiff. The learned Single Judge (K.M. Natarajan, J.) held that the Court had jurisdiction, continued the injunction restraining threats in the absence of a suit by the appellant, and ordered production of documents. The learned Judge dismissed the appellant's application to revoke leave to sue but noted the appellant could raise the same points in the main suit. The present appeals challenge those interlocutory rulings.

Legal Issues Presented

  1. Whether the word "otherwise" in Section 120(1) of the Trade and Merchandise Marks Act, 1958, is to be construed ejusdem generis with "circulars" and "advertisements" or whether it also covers a lawyer's notice/threat addressed to the respondent (i.e., whether a lawyer's notice can constitute a "threat" within Section 120(1)).
  2. Whether the High Court had jurisdiction to entertain the interlocutory applications (particularly where the appellants asserted they did not carry on trade within the court's territorial jurisdiction).
  3. Whether the learned Judge was justified in ordering production of documents (Appn. No. 542 of 1987) on the basis that jurisdiction had been established — i.e., whether jurisdiction automatically rendered the requested documents relevant.
  4. Whether the application for revocation of leave to sue (Appln. No. 543 of 1987) should have been finally decided at the interlocutory stage or left open to be decided in the main suit.

Arguments of the Parties

Appellant's Arguments (as presented through Mr. Dulip Singh)

  • The word "otherwise" in Section 120(1) should be construed ejusdem generis with "circulars" and "advertisements"; it should not be held to include lawyer's notices. If "otherwise" were read to include lawyer's notices, the scope of Section 120(1) would be broadened improperly.
  • Because Section 120(1) is descriptive, the ejusdem generis rule of construction should apply, excluding lawyer's notices from the ambit of "otherwise."
  • The existence of a separate suit in the Delhi High Court (Suit No. 503 of 1988) filed by the appellant for passing off renders the respondent's prayer for injunction in the present proceedings infructuous.
  • The learned Judge gave no reasons showing the relevancy of the documents whose production was ordered; jurisdiction alone does not establish the relevancy of those documents.
  • The question of revocation of leave to sue could be left to the main suit and need not have been finally decided at this interlocutory stage.

Respondent's Arguments (as presented through Mr. U.N.R. Rao)

  • Counsel relied on authorities and commentary (including RUSSELL CLARKE ON COPYRIGHT and reported case law) to submit that the word "otherwise" in Section 120(1) is not confined by ejusdem generis and does include a lawyer's notice or solicitor's letter threatening proceedings.
  • Authorities such as Skinner & Co. v. Perry and Benmax v. Austin Motor Co. were cited to support the proposition that a solicitor's letter or other communications threatening proceedings fall within a statutory phrase including the words "or otherwise."
  • Because the respondent had received an allegedly unjustifiable lawyer's notice, the cause of action arose within the jurisdiction of the Court and Section 120 furnished an appropriate remedy for unjustifiable threats.
  • There was no serious opposition to production of the documents in the counter, and once jurisdiction was upheld the learned Judge was justified in directing production (subject to the court's ultimate determination on relevancy).
  • The revocation of leave to sue could be left for decision in the main suit; the learned Judge's approach on this point was appropriate.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Skinner and Co. v. Perry, 10 R.P.C. 5 Authority for treating an intimation addressed to a third person or in answer to inquiry still as a "threat" — language supporting a broad reading of "threats" in statutory provisions. The Court cited Bowen L.J.'s statement to reject the argument that "otherwise" must be confined by ejusdem generis and to support the view that lawyer's notices can constitute "threats" under S. 120(1).
Benmax v. Austin Motor Co., 70 R.P.C. 284 Authority holding that the words "or otherwise" should not be construed ejusdem generis so as to exclude letters written by a patentee's solicitor threatening suit; such communications fall within "or otherwise". The Court relied on this decision to hold that a solicitor's letter or lawyer's notice is covered by the word "otherwise" in S. 120(1), reinforcing the conclusion drawn from Skinner & Co.

Court's Reasoning and Analysis

The Court's analysis proceeded from the text of Section 120(1), which permits a person aggrieved by threats "by means of circulars, advertisements or otherwise" to bring a suit for a declaration that the threats are unjustifiable and for an injunction against continuance of the threats. The appellant urged that "otherwise" should be read ejusdem generis with "circulars" and "advertisements" and therefore should not include lawyer's notices. The Court examined prior authority addressing the construction of comparable statutory language.

The Court relied on the reasoning in Skinner & Co. v. Perry, where Bowen L.J. explained that an intimation remains a threat irrespective of whether it is addressed to a third person or directly to the person threatened. The Court also relied on Benmax v. Austin Motor Co., which held that "or otherwise" should not be narrowly construed so as to exclude solicitor's letters threatening action. Applying these authorities, the Court concluded that the word "otherwise" in Section 120(1) includes a lawyer's notice.

The Court emphasized that accepting that a lawyer's notice falls within S. 120(1) does not end the inquiry: the court must still determine whether, on the facts and evidence, the threats were "unjustifiable." That factual and evidentiary determination was a matter for the main suit.

On the question of document production (Appn. No. 542 of 1987), the Court examined the learned Judge's reasoning that once jurisdictional objections were negatived, the documents sought could not be objected to as irrelevant. The appellate court disagreed: jurisdiction alone does not render documents relevant. Because the learned Judge had not independently considered relevancy, the appellate court set aside that specific finding and directed that relevancy be determined in the main suit.

With respect to the application to revoke leave to sue (Appln. No. 543 of 1987), the learned Judge had dismissed that application while noting the defendants could raise the point in the main suit; the appellate court declined to express any view on that issue, leaving it to be determined in the principal proceedings.

Holding and Implications

Core Holding:

The Court held that the word "otherwise" in Section 120(1) of the Trade and Merchandise Marks Act, 1958, includes a lawyer's notice (solicitor's letter) threatening proceedings; however, whether particular communications amount to "unjustifiable threats" must be decided on the evidence in the main suit.

Consequent orders and practical effects:

  • The Court dismissed O.S.A. No. 17 of 1988.
  • O.S.A. Nos. 18 and 19 of 1988 were disposed of in the terms indicated in the judgment (including setting aside the finding that jurisdiction alone established document relevancy and directing that relevancy be decided in the suit).
  • There will be no order as to costs in all these appeals.

Implications beyond the parties: The opinion applies established authorities to interpret S. 120(1) to include lawyer's notices within "or otherwise." The opinion directs that factual determinations (whether threats are unjustifiable) and the relevancy of documents are to be examined in the main suit. The judgment does not purport to announce any novel precedent beyond its application of the cited authorities.

Show all summary ...

Mohan, J.

1. All these appeals can be dealt with in a common judgment.

2. O.S.A No. 17 of 1988 is filed against an order dated 10-4-1987 in Appn. No. 4972 of 1986 in C.S 797 of 1986 on the Original Side of this Court. O.S.A 18 of 1988 is against an order of even date in Appn. No. 542 of 1987 in the above said suit. O.S.A 19 of 1988 is against an order of even date in Appn. No. 548 of 1987 in the above said suit.

3. The short facts leading to these appeals are: — The matter arises under S. 120 of the Trade and Merchandise Marks Act, 1958. The respondent before us, viz., Exxon Packing Systems Pvt. Ltd., filed three appli cations for the following reliefs. Appn. No. 4971 of 1986 was to grant an injunction res training the appellants before us from claim ing any exclusive right with respect to the trade mark ‘EXXON’ in respect to the goods specified in respondent's trade mark Appn. dated 25-11-1986 for packing machines and for spare parts for such machineries pending disposal of the suit. Appln. No. 4972 of 1986 was for an injunction restraining the appel lant before us from threatening the respon dent herein directly or indirectly in any man ner by notices, advertisements, circulars, etc., and harm the respondents business pending disposal of the suit. Appn. No. 542 of 1987 was for a direction to the defendant (appel lant before us) to produce for inspection and permit the taking of copies of the documents mentioned in the application. Appln. No. 543 of 1987 was preferred by the appellant be fore us to order revocation of the leave grant ed in Appln. No. 4922 of 1986 dated 23-12-87 and to grant leave to sue the respondent herein — plaintiff as no cause of action has arisen within the jurisdiction of the High Court.

4. Appln. No. 4971 and 4972 of 1986 were filed as said before for injunction pen ding disposal of the suit filed under S. 120 of the Trade and Merchandise Marks Act 1958. An interim injunction and notice was ordered on 24-12-1986. Thereafter, the appellant before us filed a counter praying for vacating the ad interim injunction. In the course of the counter, an objection was raised that this Court had no jurisdiction to try the suit as the appellant before us does not carry on any trade within the jurisdiction of this court. Further, the suit filed by the plaintiff is not maintainable as it is beyond the scope of S. 120 of the Trade and Merchandise Marks Act, 1958 (hereinafter referred to as the Act), and the said section is not intended to prevent a person from instituting a suit alleging passing off. As a matter of fact, the respondent-plaintiff has not filed an application for registration of the trade mark EXXON in respect of packing machines and for spare parts for such machines and had made a false statement to mislead the court. The appellant through their Trade Mark Attorneys in India issued a lawyer's notice dated 24-10-1986 to the plaintiff, who on receipt of the notice, surreptitiously made an application for registration of the trade mark ‘EXXON’ on 25-11-1986, and the same is pending with the Deputy Registrar of Trade Marks, Madras, The pendency of the application does not confer any right on the plaintiffs. Hence, the plaintiffs have no locus standi to claim the declaration injunction.

5. The trade mark ‘EXXON’ is an invented word, coined by the defendants and registered in several countries all-over the world including India. The said trade mark ‘EXXON’ word per se and label have been registered in 20 classes in India covering a wide range of goods and the registration has been with effect from 1967. The appellant had regularly exported to India under the trade mark ‘EXXON’ lubricating oil, industrial process oil, aviation oil, industrial grease and chemical products worth several million American Dollars. The said trade mark has enjoyed a good reputation and goodwill all over India. The use of an identical trade mark ‘EXXON’ by the plaintiff (respondent herein) amounts to passing off. Hence, the appellant prayed for the dismissal of the application and vacating the order of injunction already granted.

6. A reply affidavit came to be filed by the respondent herein, stating that since unjustifiable threat came to be issued through lawyer's notice, the cause of action had arisen within the jurisdiction of this Court, and, therefore, resort had been made to S. 120 of the Act. The alleged export of petroleum products by the defendant in the suit from America cannot be treated as business in India as a foundation for an action for passing off. In the absence of actual trade in India by the defendant, there cannot be any justification for filing passing off action against anybody. The grant of interim reliefs are absolutely necessary for the continued business of the plaintiff. Otherwise, the plaintiff's business would be ruined. In any event, the defendant had not claimed that it had registered the trade mark with respect to the type of goods manufactured by the plaintiff. The defendant had not registered the trade mark word per se and label in 20 classes covering a wide range of goods. The only business of the defendant in India is trafficking in trade mark. It is not entitled to complain of any infringement. Hence, the application for vacating injunction is liable to be dismissed.

7. As stated above, the other applications came to be filed in the suit under S. 120 of the Act.

8. The learned Judge (K.M Natarajan, J.) was of the view that this Court had jurisdiction to deal with the matter. Concerning injunction, he was of the view that such a relief could be claimed. Admittedly the defendant had not filed any suit pursuant to the notice dated 6-11-1986, till this date. In the absence of the suit having been filed, the injunction restraining the defendant from threatening the plaintiff directly or indirectly by notice, advertisement, circular, etc, ought to continue. The application filed in Appln. No. 542 of 1987 was ordered on the ground that once the point relating to jurisdiction was decided against the defendant, the plaintiff would be entitled to the application being allowed, and accordingly, a direction to the defendant to produce the documents was ordered. As regards the application for revocation of the leave, the learned Judge held dismissing the said application that the order of dismissal of application would not in any way prevent the defendant from raising the same in the main suit and seeking a decision on merits, after evidence is recorded at the time of disposal of the suit.

9. Mr. Dulip Singh, learned counsel for the appellant first and foremost argued before us that, having regard to the language of S. 120 of the Act, the word ‘otherwise’ occurring in S. 120 (1) cannot take within its fold a lawyer's notice, and in such an event, if it is not so held, it will be impossible to check any infringement that will hamper the growth of this branch of law. Continuing the line of arguments, learned counsel would say, that when S. 120 (1) prescribes ‘circulars, advertisements, or otherwise’ it should be construed ejusdem generis, that is the normal construction, because it is descriptive in nature. If this argument is accepted, then there is no scope for grant of injunction and the present suit itself will not lie. In any event in the Delhi High Court, the appellant has filed suit No. 503 of 1988 for passing off and hence, the prayer for injunction has be come infructuous and the appeal may be ordered accordingly. The learned Judge has not given any reason for deciding the rele vancy of the documents. Merely because there is jurisdiction that does not mean that the documents are relevant. Lastly, it is submit ted that the question of revocation of leave to sue could be left open to be decided in the suit.

10. In opposition to these contentions, Mr. U.N.R Rao, learned counsel for the res pondent herein, has produced before us a wealth of materials. The first one is RUSSELL CLARKE ON COPYRIGHT in Industrial Designs (By Michael Fysh-1974, 5th Edn page 113) wherein a similar provi sion was considered, and the word ‘otherwise’ was held not to be confined to ejusdem generis as laid down in Skinner and Co., v. Perry1. Learned counsel also relies on Justice Rajagopala Ayyangar's Report on the Revision of the Patents Law, wherein the two cases in Skinner and Co., v. Perrv and Ben-max v. Austin Motor Co. Ltd. 70 R.P.C 284., have been cited which are clearly in favour of the respondent. Therefore even a lawyer's notice would fall within the ambit of ‘otherwise’. In such an event, of course, the court will have to go into the question whether the threat is an unjustifiable threat or not. That is a matter for decision by the Court. As regards the relevancy of the documents, of course, since no serious opposition is raised, in the counter statement, the learned Judge was inclined to give a direction for production of the documents. Concerning the revocation of leave to sue/that could be left open to be decided by the court as indicated by the learned Judge in the Original Side proceedings.

11. As regards the first point, it is necessary for us to quote S. 120 (1) of the Act, which reads as under —

“Where a person, by means of circulars, advertisements or otherwise, threatens a person with an action or proceeding for infringement of a trade mark which is registered, or alleged by the first mentioned person to be registered, or with some other like proceeding, a person aggrieved may, whether the person making the threats is or is not the registered proprietor or the registered user of the trade mark, bring a suit against the first mentioned person and may obtain a declaration to the effect tha t the threats are unjustifiable, and an injunction against the continuance of the threats, and may recover such damages, (if any), as he has sustained, unless the first mentioned person satisfies the court that the trade mark is registered and that the acts in respect of which the proceedings were threatened constitute, or if done, would constitute an infringement of the trademark.”

The word ‘otherwise’ should be construed ejusdem generis is the argument of the appellant. Our task has been made lighter, if a reference is made to the following two decisions. In Skinner and Co. v. Perry 10 R.P.C 5., Bowen L.J stated as follows —

“Using language in its ordinary sense, it is difficult to see that an intimation ceases to be a threat because it is addressed to a third person in answer to an inquiry or because it is addressed to the person himself — If I threaten a man that I will bring an action against him, I threaten him nonetheless because I address that intimation to himself.”

12. The words ‘or otherwise’ also came for consideration in Benmax v. Austin Motor Co. 70 R.PC 284., wherein the learned Judge held as follows: —

“It seems, however, to be established that the words or otherwise' must not be construed ejusdem generis so that the letter written for example, by a patentee's solicitor before action brought and threatening to bring an action for infringement of the patent, must be regarded as within the formula' where any person otherwise threatens any other persons.”

13. Having regard to these ruling, we find no difficulty in upholding the argument of Mr. U.N.R Rao, learned counsel for the respondent, and, therefore, we are of the view that the word ‘otherwise’ would take within its fold a lawyer's notice also. Of course, havin g regard to the language of S. 120 (1), the court will have to find out, as of fact, whether these threats are unjustified or not. That is a matter which could be decided ultimately in the suit on an analysis of the evidence. The pendencv of the suit in Suit No. 503 of 1988 in Delhi' High Court filed by the appellant herein will not render the relief of injunction infructuous.

14. Concerning the relevancy of documents, learned Judge has stated as follows: —

“As regards application No. 542 of 1987, for directing the defendants to produce the documents for inspection by the plaintiffs, in view of the fact that the preliminary objection regarding the jurisdiction raised by the defendants is negatived the defendants cannot have any tenable objection for allowing the said application. Further, it cannot be said that those documents for which production is asked for inspection, cannot be said to be irrelevant for the purpose of this suit. Hence the application No. 542 of 1987 is allowed…”

We are not satisfied with this finding. Merely because the Court has jurisdiction, that does not mean that the documents became relevant. The learned Judge ought to have So uad out the relevancy of the documents which he has not done. Therefore, we set aside that finding and direct the same to be decided in the suit.

15. As regards the last point, viz, the appeal arising out of Appln. No. 543 of 1987, we have already quoted the finding of the learned Judge. Since the matter has been left open, we say nothing about it. Consequently, that again is a matter to be relegated to the main suit.

16. Accordingly, we dismiss O.S.A 17 of 1988. O.S.A 18 and 19 of 1988 are disposed of in the terms indicated above. There will be no order as to costs in all these appeals.

VCS/RR.