Citation Codes

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Case Number

O.S.A No. 49 to 51 of 1997

Attorney(S)

Mr. CA. Sundaram, Senior Counsel for M/s. Mohan Associates for Petitioner. Mr. U.N.R Rao, Senior Counsel for Mr. C. Daniel for Respondents.

Judges

Shivaraj Patil
P.D Dinakaran, JJ.

Acts

provisions in the Trade and Merchandise Marks Act and the Copyright Act,
Merchandise Marks Act, 1958,

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Smart Summary

Structured Summary of the Opinion delivered by Shivaraj Patil, J.

Factual and Procedural Background

The plaintiff filed C.S. No. 6 of 1997 seeking, among other reliefs, permanent and perpetual injunctions restraining the defendants from infringing the plaintiff's copyright and trade mark in the artistic work and trade mark "SEAGULL", orders for surrender and destruction of infringing materials, and other consequential reliefs. The plaintiff alleged that the trade mark and artistic work SEAGULL had been created for it, that the plaintiff first published the artistic work in March 1996, and that in November 1996 it discovered the defendants marketing identical goods (vests and briefs) under the SEAGULL mark.

The plaintiff filed O.A. Nos. 7, 8 and 9 of 1997 for interim and ad interim injunctions in terms of the plaint; interim injunctions were granted on 8.1.1997. The defendants filed Applications 284 to 286 of 1997 to vacate the interim injunctions and Applications 287 to 289 of 1997 for suspension of the interim order. The learned single Judge, by a common judgment and order dated 18.2.1997, dismissed the plaintiff's O.A. Nos. 7 to 9 of 1997 and allowed O.A.s 284 to 286 (thereby vacating the interim injunctions). Applications 287 to 289 were closed as unnecessary. The plaintiff appealed against that common judgment and order; these appeals challenge the learned single Judge's order dated 18.2.1997.

Legal Issues Presented

Whether the interim injunction granted in favour of the plaintiff should be continued (made absolute) or vacated.
Whether the plaintiff is entitled to injunctive relief for passing off or infringement when the plaintiff had not yet launched the products bearing the disputed trade mark and artistic work.
Whether this Court has jurisdiction to entertain the suit in view of a bill (Document No. 13) obtained from a shop at West Tambaram, which the defendants contend lies outside the Court's territorial jurisdiction.
Who is the proprietor of the disputed trade mark and artistic work (a factual dispute as to proprietorship) and whether that dispute should be resolved at interlocutory stage or in the suit on evidence.
Whether the learned single Judge's exercise of discretion in vacating the interim injunction was proper or whether it was arbitrary, capricious or perverse such as to warrant appellate interference.

Arguments of the Parties

Plaintiff's Arguments

The plaintiff asserted ownership of the artistic work and trade mark SEAGULL; the trade mark was created for the plaintiff and the artistic work was handed over to the plaintiff (created by Trikaya Gray Advertising India Limited under contract of service in Feb–Mar 1996), so copyright vests in the plaintiff.
The plaintiff alleged that Defendant No. 2, an ex-employee who left in July 1996, clandestinely took the artwork and confidential documents and started a rival business manufacturing and selling vests and briefs using the plaintiff's trademark and artistic work.
Because the defendants launched products under the disputed trademark, the plaintiff postponed its own launch, causing harm and prompting the suit and applications for interim relief. The plaintiff sought an injunction to prevent infringement and misuse.
At the hearing of the appeals, senior counsel for the plaintiff submitted that the plaintiff was not pressing the passing off claim at that stage (because it had not yet launched) but sought that the interim injunction for copyright infringement ought to have been made absolute, given the conduct of the second defendant and the material placed before the learned single Judge.

Defendants' Arguments

The defendants denied the plaintiff's averments and asserted that they themselves are proprietors of the trade mark SEAGULL and that they possess the copyright in the artistic work.
They contended that the first defendant commissioned Alwin Commercial Printers to design the artistic work on 15.12.1994 and that the printers produced it on 9.1.1995; thereafter the defendants approved and accepted that design.
The defendants pointed to instances where the plaintiff had purchased goods bearing the defendants' SEAGULL mark and argued that this conduct precluded the plaintiff from asserting proprietorship or seeking injunction.
They challenged the Court's jurisdiction to entertain the suit on the short ground that Document No. 13 (a bill accompanying the plaint) was obtained from a shop at West Tambaram outside the Court's territorial jurisdiction; they also contended there was no cause of action and that the plaintiff had no business in India in respect of the disputed products.
Before the appellate court, senior counsel for the defendants supported the single Judge's discretionary vacatur of the interim injunction and urged that the suit was not maintainable in this Court for jurisdictional and cause-of-action reasons.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The appellate court reviewed the material and submissions and explained its approach as follows:

The rival contentions raise serious disputed questions—particularly regarding proprietorship of the trade mark and artistic work—that are factual and are to be resolved in the suit on the basis of evidence. The court observed that these disputed questions "could be effectively and properly decided in the suit itself based on evidence."
The court noted that the plaintiff had not yet launched its products bearing the disputed trade mark and artistic work (an admission reflected in paragraph 16 of the plaint). Because the plaintiff had not commenced marketing the products, the balance of convenience did not favour granting an injunction in its favour at the interlocutory stage.
The court reiterated the ordinary purpose of an injunction: it is "normally" to maintain the status quo as existing on the date of the suit as far as possible. Given the plaintiff's non-launch and the existence of a continuing trade by the defendants under the mark, maintaining the status quo did not support an interim injunction for the plaintiff.
Considering all aspects, including the serious disputed questions as to proprietorship, the learned single Judge exercised discretion to vacate the interim injunction. The appellate court found that this exercise of discretion was within judicial bounds and was neither perverse, arbitrary, nor capricious.
The single Judge, while vacating the injunction, provided a procedural safeguard for the plaintiff by directing that the defendants file monthly statements of accounts before the Court after serving a copy on plaintiff's counsel; the Judge also observed that if the plaintiff succeeds in the suit it would be entitled to damages. The appellate court regarded these measures as adequate protection of plaintiff's interests.
The appeals court emphasized the settled appellate principle that discretionary interlocutory orders are not ordinarily interfered with on appeal unless shown to be arbitrary, capricious or perverse; applying that standard, the court found no valid ground to disturb the single Judge's order.

Holding and Implications

Holding:

The appeals are dismissed.

Implications:

Direct effect on the parties: The interim injunctions previously granted in O.A. Nos. 7, 8 and 9 of 1997 were lawfully vacated by the learned single Judge and that vacatur is upheld on appeal; the plaintiff remains obliged to pursue its substantive remedies in the suit where disputed factual questions (including proprietorship of the trade mark and artistic work) will be decided on evidence.
The learned single Judge's procedural safeguard (monthly filing of defendants' statements of accounts and the possibility of damages if the plaintiff succeeds) stands as the interlocutory framework while the suit proceeds.
The court explicitly stated that it was not setting any new precedent; it applied settled appellate principles concerning interference with discretionary interlocutory orders. No broader legal principle beyond the application of those settled principles is announced in this opinion.
No costs were awarded: the judgment states "No costs."

This summary is strictly limited to the matters and statements contained in the provided opinion and does not add or infer facts or holdings beyond that text.

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Ttk Textiles Ltd. No. 6 Cathedral Road, Madras 86. Petitioner v. Seagull Clothing (Pvt.) Ltd., And Another S

Shivaraj Patil, J.

1. The plaintiff in C.S No. 6 of 1997 has filed these appeals aggrieved by the judgment and order dated 18.2.1997 passed by the learned single Judge dismissing O.A Nos. 7, 8 and 9 of 1997 and allowing application Nos. 284 to 289 of 1997. The parties will be referred to in this Judgment as they are arrayed in C.S No. 6 of 1997 for convenience.

2. The facts briefly stated, for the purpose of disposal of these appeals, are the following:-

The plaintiff has filed the said suit C.S No. 6 of 1997 seeking the relief of -

(a) Permanent injunction restraining the defendants by themselves, their directors, servants, agents, heirs, legal representatives, assigns, distributors, stockists, representatives or any of them from in any manner infringing the plaintiffs copyright in artistic work ‘SEAGULL’ by use of an identical artistic work SEAGULL or any other artistic work which is a substantial reproduction of plaintiff's artistic work SEAGULL or in any other manner whatsoever;

(b) grant of perpetual injunction restraining the defendants or others claiming under them from in any manner passing off or enabling others to pass off the defendants goods as and for plaintiffs goods by use of trade mark SEAGULL or any mark similar to plaintiffs mark SEAGULL, or in any other manner whatsoever;

(c) grant of perpetual order and injunction restraining the defendants or claiming under them from in any manner selling, assigning, licensing, disposing of and/or in any manner dealing with artistic work and trade mark SEAGULL including their stylized script which exclusively belongs to plaintiff or any other artistic work or trade mark deceptively similar thereto or in any other manner whatsoever:

(d) ordering to surrender to plaintiff for destruction of all goods, containers, cartons, labels, prints, blocks, dyes, plates, moulds, stencils and other materials bearing the artistic work and trade mark SEAGULL or any artistic work which is a substantial reproduction of plaintiff's artistic work SEAGULL;

and for other consequential reliefs.

3. O.A.S Nos. 7, 8 and 9 of 1997 were filed by the plaintiff seeking grant of temporary injunction and ad interim injunction restraining the defendants in terms of the prayers made in the plaint. Applications 284 to 286 of 1997 were filed by the defendants for vacating the interim injunction granted in O.A Nos. 7 to 9 of 1997 on 8.1.1997, and applications 287 to 289 of 1997 were filed by the defendants for suspension of interim order granted in O.A Nos. 7 to 9 of 1997.

4. The learned single Judge, after hearing both the parties, by the common Judgment and order dated 18.2.1997, dismissed O.A Nos. 7 to 9 of 1997, and ordered O.As 284 to 286 of 1997. In other words the interim orders of injunction granted in O.A Nos. 7 to 9 of 1997 were vacated. In the light of the said order, no orders were considered necessary in Application Nos. 287 to 289 of 1997, and they were closed by the common Judgment and order dated 18.2.1997 It is this common judgment and order which is called in question in these appeals.

5. The plaintiff states that they are manufacturing and selling furnishing fabrics, under garments, hosiery, wearing apparel and other articles under several trade-marks and artistic works. Several of their trademarks and artistic works are registered under the Trade and Merchandise Marks Act, 1958, as well as the Copyrights Act, 1957. Their undergarments sold under various artistic works and trade marks are very popular amongst the trade and public in India and abroad. They are the proprietor of the artistic work and trade mark SEAGULL with the devise of Seagull bird and wavy lines. The trade mark was created by Trikaya Gray Advertising India Limited under a contract of service and instructions. Along with the trade mark SEAGULL an artistic work was given by the plaintiff to Trikaya in February, 1996 and the Artistic work was created and handed over to the plaintiff in March, 1996. The trade mark was invented by the plaintiff, and Trikaya created the artistic work under a contract of service for valuable consideration, and thus the copyright in the artistic work Seagull vests in the plaintiff.

6. The plaintiff first published the said artistic work and trade mark in March, 1996, and the same was meant for use in under-garments, vests and briefs for Indian market, and markets abroad, especially Gulf countries, Sri Lanka, Malaysia and Maldives. In November, 1996 the plaintiff came to know that the defendant was marketing identical goods as that of the plaintiff i.e, its briefs and vests under the artistic work and trade mark SEAGULL identical in all respects compared to the artistic work and trade mark Seagull of the plaintiff. This amounted to infringement of the plaintiff s copyright.

7. Defendant No. 2 was employed as Senior Executive with the plaintiff between September, 1992 to July, 1996. He left the services of the plaintiff company clandestinely taking away with him the art work created for the plaintiffs artistic work SEAGULL in addition to various other confidential documents. He has also misused powers vested in him as a senior executive of the plaintiff company. Now he has started a rival business to manufacture and sell vests and briefs using the plaintiffs trademark and artistic work. The second defendant is behind the establishment of the first defendant of which his wife is the Managing Director. The plaintiff was about to market their products under the trade mark and artistic work SEAGULL but had to keep it in abeyance because the defendants were passing off their products as that of the plaintiff. Hence the suit was filed. As already stated above, O.A Nos. 7 to 9 of 1997 were filed for grant of interim injunctions pending the suit. Interim injunctions were granted on 8.1.1997 in O.A Nos. 7 to 9 of 1997.

8. The defendants filed common counter affidavit denying the averments made by the plaintiff. They submitted that they are the proprietors of the trade mark SEAGULL and they have copyright of the same. The first defendant requested Alwin Commercial Printers to design the artistic work of SEAGULL on 15.12.1994 The said printers produced the artistic work on 9.1.1995, and thereafter the defendants approved and accepted the same, and the plaintiffs themselves have purchased the defendants products with the trade-mark SEAGULL. Hence it was not open to the plaintiff to claim proprietorship. The defendants took up a contention that this Court has no jurisdiction to entertain the suit on the short ground that the bill, Document No. 13, filed along with the plaint was obtained from a shop at West Tambaram which is not within the jurisdiction of this Court.

9. The defendants further contended that when the plaintiff has stated in paragraph 16 of the plaint that they had to keep in abeyance its launch of vests and briefs bearing the trade mark and artistic work SEAGULL, and when they are not carrying on any business with the disputed trademark, they are not entitled for an order of injunction. On merits also they contended that the first defendant is the proprietor of the trade mark by virtue of the documents dated 8.11.1995 and 23.4.1996; the plaintiff had purchased the goods from the defendants with their trademark and as such it is not open to the plaintiff to seek an order of injunction. Further the plaintiff has no business in India, and as such it is not open to the plaintiffs to seek an order of injunction.

10. The plaintiff contended that they have their office at Madras and they are having business in India in respect of other wearing apparels except vests and briefs; In fact in the plaint it has been pleaded that the plaintiff's undergarments sold under various artistic works and trade marks are very popular amongst the trade and public in India and abroad. Because the defendants have launched their products under the disputed trade-mark the plaintiff kept launching their products in abeyance. Hence the suit was maintainable. It was also contended that the second defendant was originally employed by the plaintiff and as already stated above, he started the rival business by using the trade mark that had been designed for plaintiff. He himself had acted on behalf of the plaintiff in getting the trade mark approved.

11. The learned single Judge, after considering the contentions and submissions made on behalf of the parties, passed the impugned Judgment and order.

12. The learned counsel for the parties made similar submissions before us elaborating the contentions raised before the learned single Judge.

13. Shri C.A Sundaram, learned senior counsel, at the outset, submitted that the plaintiff is not pressing at this stage, the order of injunction in regard to passing off, inasmuchas this plaintiff has not yet launched its products. He further submitted that having regard to the conduct of the second defendant and the material placed before the learned single Judge, interim injunction granted in favour of the plaintiff ought to have been made absolute restraining the defendants from infringing the plaintiffs copyright and artistic work SEAGULL by use of an identical artistic work SEAGULL. He took me through the various documents in support of his submissions.

14. On the other hand Shri. U.N.R Rao, learned senior counsel submitted that the suit itself is not maintainable as this Court has no jurisdiction in view of the Bill, document No. 13, obtained from a shop at West Tambaram which place is not within the jurisdiction of this Court; even there was no cause of action for filing the suit and on that ground also the suit is not maintainable. In his arguments he supported the Judgment and order under appeal, adding that the learned single Judge, having regard to all aspects, in his discretion, has vacated the interim injunction granted rightly.

15. Both the learned senior counsel made elaborate submissions pointing out to various provisions in the Trade and Merchandise Marks Act and the Copyright Act, and also referred to the pleadings and documents. In our view, the rival contentions of the parties will have to be essentially dealt in detail in the suit on the basis of the issues that arise for consideration. Hence we do not think it necessary to deal with them elaborately in these appeals. It is not disputed that the plaintiff has not yet launched its products in vests and briefs bearing the trade mark and artistic work SEAGULL as is clear from the averment made in paragraph 16 of the plaint itself. It is also admitted that the defendants are already selling their products by using the disputed trademark.

16. There is a serious dispute between the parties as to the proprietorship over the trade mark. The disputed questions as to the trade-mark could be effectively and properly decided in the suit itself based on evidence. When the plaintiff has not yet launched its products bearing the disputed trademark and artistic work SEAGULL, it cannot be said that the balance of convenience is in favour of the plaintiff. Normally the purpose of granting an order of injunction is to maintain the status-quo as existing on the date of the suit as far as possible. More so, in this case, when the serious disputed questions as to proprietorship of trademark and artistic work have arisen, it may not be appropriate to grant an order of injunction in favour of the plaintiff when the plaintiff has not yet launched its products.

17. The learned single Judge having regard to all aspects, in his discretion, has vacated the interim injunction granted earlier. The learned Judge has also safeguarded the interest of the plaintiff by directing the defendants to file statement of accounts with regard to their business once in a month before this Court after serving a copy on the learned counsel for the plaintiff. In case the plaintiff succeeds in the suit he will be entitled for damages as observed by the learned single Judge. The exercise of discretion by the learned single Judge in vacating the interim injunction granted earlier cannot be said to be either perverse or arbitrary or capricious so as to interfere with the said discretion.

18. Even assuming that two views are possible, it is well settled that in matters like this, in appeals, the discretionary orders are not interfered with unless the orders are shown to be either arbitrary, capricious or perverse. In this view, having regard to the Judgment and order appeal, we do not find any good or valid ground to interfere with the same.

19. In the result, for the reasons stated, the appeals are liable to be dismissed, and accordingly they are dismissed. No costs.

Ttk Textiles Ltd. No... v. Seagull Clothing (Pv...