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  • F.S GILL, J.
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Smart Summary

Court Opinion Summary

Factual and Procedural Background

The plaintiff, Shri Sham Lal, trades as M/s. Anil and Co. and alleges he has manufactured and marketed artist and paint brushes under the trade mark "Anil" since 10 May 1965. He claims continuous use, sales aggregating about Rs. 6,41,374.21, reputation and goodwill in relation to that mark and that his application for registration of the mark was pending with the Trade Marks Registry.

Defendant No. 1 is a private limited company and Defendant No. 2 is described as its export division (Interads Export Division). The plaintiff alleges that defendants purchased his "Anil" brushes from 18 April 1974 and exported them to the USSR, but ceased buying on 21 April 1977. Thereafter the plaintiff learned the defendants were manufacturing or sourcing brushes from others and affixing the mark "Anil" without permission. The plaintiff instituted a suit seeking, among other reliefs, perpetual injunctions, passing off relief and accounts, and filed an interlocutory application (I.A. No. 2048 of 1977) under Order 39 Rules 1 & 2 and Section 151 CPC for a temporary injunction restraining the defendants from manufacturing, marking and selling brushes with the mark "Anil".

The defendants opposed the application, contested the plaintiff's claim of prior use and asserted that they had been using the mark since 1973, exporting brushes bearing "Anil", and getting goods manufactured by multiple suppliers (including the plaintiff). Both sides produced documents and affidavits and witnesses were cross-examined. An ex parte injunction had been granted on 1 July 1977; the court was asked to decide whether to confirm that interim injunction.

Legal Issues Presented

  1. Whether the plaintiff is entitled to an interim injunction restraining the defendants from manufacturing, marking and selling artist and paint brushes bearing the trade mark "Anil".
  2. In the absence of registration, which party is the prior user of the unregistered trade mark "Anil" and thereby entitled to protection (i.e., determination of rights based on prior user)?
  3. Whether the defendants' offer to maintain and furnish accounts would be an adequate protective measure in lieu of granting an interim injunction.

Arguments of the Parties

Plaintiff's Arguments

  • The plaintiff (Shri Sham Lal, M/s. Anil and Co.) has used the trade mark "Anil" since 10 May 1965 and has sold brushes under that mark continuously, producing carbon copies of vouchers showing sales from 1965 onward.
  • From 18 April 1974 to 21 April 1977 the plaintiff significantly supplied the defendants (worth Rs. 4,78,894.10 of his total sales), indicating a long commercial relationship in which defendants ordered goods bearing "Anil".
  • On discovering that defendants had stopped placing orders and were affixing "Anil" to brushes they manufactured or procured elsewhere, the plaintiff alleged infringement and passing off.
  • The plaintiff emphasized his vulnerability as a small manufacturer whose livelihood depends on these sales and argued that monetary accounts would not be adequate protection; if defendants were permitted continued use for months, they could ruin his market position. He relied on authorities (National Carbon and Ralli v. Fleming) for the proposition that accounts alone may not prevent the damage the injunction seeks to avert.
  • The plaintiff pointed to documentary support (vouchers, a telegram and subsequent correspondence) and submitted that defendants had not produced credible pre-1974 evidence of use of the mark.

Defendants' Arguments

  • The defendants denied the plaintiff's claim of use since 1965 and asserted that the trade mark "Anil" belonged to the defendants, who had used it openly since 1973 and exported goods bearing that mark.
  • They contended that on receiving export orders they procured brushes from multiple manufacturers (over ten) including the plaintiff and affixed "Anil" on all such brushes; hence there was no infringement.
  • Defendants relied upon various documents (many dated after 18 April 1974) and affidavits to show their usage, and suggested that, instead of an injunction, they could be directed to maintain and furnish accounts to protect the plaintiff's interest.
  • It was pointed out by defendants' counsel that the plaintiff had not produced a label/design/logo or advertisements, and that the plaintiff was a small manufacturer without the advertising resources of the defendants; implicit in this was an argument that plaintiff's asserted reputation might be limited.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Corn Products Refining Co. v. Shangrila Food Products Ltd., AIR 1960 SC 142 Authority relating to a registered trade mark (principles applicable to registered marks). The court observed this case relates to a registered trade mark and therefore is not applicable where the mark is unregistered; in the present dispute only prior user (in absence of registration) is the determinative criterion.
Nestle's Products Ltd. v. Milkmade Corporation, AIR 1974 Delhi 40 Case law on trade mark issues (context involving different goods). The court noted the goods in that case were entirely different and therefore the authority was not helpful for the present dispute over the same mark on the same goods.
National Carbon Co. (India) Ltd. v. Raj Kumar, AIR 1954 All 218 Used in argument to show situations where accounts insufficient and an injunction is necessary to prevent irreparable harm. The plaintiff relied on it to support the proposition that permitting continued use while keeping accounts would not prevent the mischief the injunction seeks to prevent; the court found substance in that contention when assessing balance of convenience and risk to plaintiff.
Ralli v. Fleming, (1877-78) ILR 3 Cal 417 (observations of Garth, C.J.) Passage cited that keeping accounts may not be adequate protection because continued use allows the defendant to establish market presence, causing the injury the injunction aims to prevent. The court quoted this passage and treated it as persuasive on the inadequacy of accounts as protection in circumstances where reputation and market position could be irreparably harmed by continued usage.
Other cases (unnamed) Various authorities cited by the defendants in support of their contentions. The court reviewed the other cited authorities and concluded they had no application since the present dispute turns on prior user in respect of an unregistered mark.

Court's Reasoning and Analysis

The court's analysis proceeded on the following textual lines and evidential findings (expressed in the opinion):

  1. Preliminary legal principle: The trade mark "Anil" was not registered; therefore the rights between the parties had to be determined by prior user. The court explicitly treated prior user as the decisive criterion.
  2. Documentary and testimonial evidence was examined. The plaintiff produced carbon copies of sales vouchers showing use of "Anil" from 1965 onwards; he also produced an April 1974 telegram (Ex. RW2.B) and a subsequent letter (Ex. RW2.C) which showed an original order referencing "AMN" that was changed to "Anil" after plaintiff contacted the defendants—this was treated as supporting the plaintiff's position that "Anil" was the plaintiff's mark and "AMN" was connected with defendants.
  3. The defendants' documentary proof of use prior to 18 April 1974 was weak in the court's view: many documents were photostat copies (bills dated in 1973) without production of originals; certain invoices lacked contract/L/C/package details expected in export invoices; letters mentioning "Anil" (dated April and May 1973) were also produced only as photostats and without corroborating affidavits from addressees. Consequently the court found limited value in those defendant documents at the interlocutory stage.
  4. The court noted procedural facts relevant to assessing weight: the plaintiff filed his own affidavit and underwent cross-examination, whereas no director of the defendant company gave affidavit evidence and only an export manager filed an affidavit and was cross-examined; the court considered this in assessing discretionary interim relief.
  5. The court also noted questionable aspects of some defendant affidavits (two affidavits containing identical language drafted by a common person) and took that into account when weighing credibility.
  6. On the point that the plaintiff had not produced a label/logo or advertising material, the court accepted the submission that as a small manufacturer the plaintiff could not be expected to have advertising comparable to a large exporting house; the court indicated that only prior user need be assessed for unregistered marks.
  7. On the defendants' proposal to keep accounts instead of granting an injunction, the court applied the principle (as articulated in authorities cited by the plaintiff) that maintenance of accounts may not be adequate protection because continued use by a larger rival could destroy the plaintiff's market position; the court found this contention had substance given the prima facie case and the plaintiff's vulnerability.
  8. Balancing considerations: the court found that the plaintiff had made out a prima facie case of prior use, that defendants' evidence of prior use before 18 April 1974 was not cogent at this stage, and that the balance of convenience and risk of irreparable harm favored the plaintiff.
  9. Conclusion on interlocutory relief: for these reasons (prima facie case on prior user, weak defendant documentary evidence of earlier use, credibility and balance of convenience), the court held the plaintiff had established entitlement to interim injunction and thus confirmed the ex parte injunction granted on 1 July 1977.

Holding and Implications

Application allowed. I.A. No. 2048 of 1977 is disposed of accordingly.

Direct effect on the parties:

  • The court confirmed the interim (ex parte) injunction previously granted on 1 July 1977 in favour of the plaintiff and against the defendants restraining the defendants from manufacturing, marking and selling artist and paint brushes with the trade mark "Anil" for the period of this interlocutory order.
  • The defendants' alternative proposal (to keep and furnish accounts as protection) was not accepted as an adequate substitute for injunctive relief in the circumstances then shown.

Broader implications: The opinion applied established principles that in the case of an unregistered mark the prior user is determinative; the court did not purport to lay down new law or broader precedent beyond applying those principles to the facts and evidence before it.

Show full summary ...

    Sham Lal v. Interads Advertising (P) Ltd

    Shri Sham Lal, plaintiff, has alleged that he is trading as M/s. Anil and Co. since 10th May, 1965 and doing business as manufacturer of artist and paint brushes. Defendant No. 1 is stated to be a Private Limited Company, which has its export division under the name and style of Interads Export Division (defendant No. 2).

    2. The plaintiff has further stated that the brushes, which he manufactures and markets, are affixed with the trade mark ‘Anil’, depicting a key portion of his trade style; that from the date he had started manufacturing, he has sold brushes valuing about Rs. 6,41,374.21 and that on account of the superiority of brushes and skill in sale promotion, the brushes affixed with the trade mark ‘Anil’ have achieved recognition and reputation with the trade and the general public. It is further added that the application of the plaintiff for the registration of the trade mark ‘Anil’ in respect of brushes is also pending with the Trade Marks Registry.

    3. It is further averred that on account of the continuous and extensive user during the last 12 years, the plaintiff's brushes affixed with the trade mark ‘Anil’ are exclusively associated and identified with the plaintiff's brushes. The plaintiff has thus earned reputation, goodwill and name with the trade and users of the brushes.

    4. It is further alleged that from 18th April, 1974 the defendants had been purchasing his brushes affixed with the trade mark ‘Anil’ and exporting the same to USSR. The purchase had been worth lakhs of rupees. But from 21st April, 1977 the defendants had stopped buying his brushes. It is further added that in the first week of May, 1977, the plaintiff had come to know that the defendants were themselves manufacturing and also purchasing artist brushes from other sources and were affixing the trade mark ‘Anil’ thereon without the permission and consent of the plaintiff. In this way the defendants have marked and sold the brushes with the trade mark ‘Anil’ worth several lakhs of rupees. The plaintiff has thus alleged that the defendants have committed infringement of his rights and have passed off a large quantity of brushes with the trade mark ‘Anil’. He accordingly instituted a suit for the grant of perpetual injunction, passing off, rendition of accounts, etc.

    5. Along with the plaint, the plaintiff also made an application (I.A 2048 of 1977) under O. 39, Rr. 1 and 2 and S. 151 of the Code of Civil Procedure and prayed for the grant of temporary injunction restraining the defendants from manufacturing, marking and selling the brushes - artist and paint - with the mark ‘Anil’.

    6. This application has been resisted by the defendants. It is denied that the plaintiff had been using the impugned trade mark from 1965. It is, however, added that the trade mark ‘Anil’ belongs to the defendants, who have been openly using the same since 1973. The defendants had also been exporting the brushes with the same trade mark. It is also stated that on receipt of the orders for export, the paint brushes were got manufactured from more than ten manufacturers including the plaintiff and that trade mark ‘Anil’ was affixed on all those brushes. It is, therefore, stated that there has been no infringement of the alleged trade mark. In his rejoinder, the plaintiff has re-asserted the allegations made in the application.

    7. Both the parties have produced, some documents and have also filed affidavits to support their respective assertions. On the request of the parties the persons, who had given their affidavits, were summoned for cross-examination. They were duly cross-examined. The learned counsel for the parties have also addressed their arguments for a considerable time.

    8. It may be stated in the very outset that the trade mark ‘Anil’ appearing on the brushes is not a registered mark. So it is the prior user, which would, determine the rights claimed by the contesting parties.

    9. The learned counsel for the plaintiff has submitted that his client had started manufacturing brushes with the trade mark ‘Anil’ as back as 10th May, 1965. In support of this fact he has produced carbon copies of his vouchers indicating the sale of ‘Anil’ brushes right from the year 1965 to the date of the filing of the suit. It is contended that the defendants have not produced any documents showing the sale prior to 8th April, 1974. It was on this date that the defendants wrote to the plaintiff-firm M/s. Anil and Co. about the supply of sample of Artist Brushes as their Director Shri Avasthi wanted to take them on his visit to Europe. Then there is the second letter of 18th April, 1974 (Ex. RW2.C) written by the defendants to M/s. Anil and Co. placing an order for 3600 dozen each of artist brushes Nos. 4 and 5. It is submitted that the plaintiff is a manufacturer, whereas the defendant is an exporter. The order was placed with the plaintiff for the supply of the brushes to USSR and the plaintiff supplied the brushes with the trade mark ‘Anil’ to the defendants according to the orders placed.

    10. It is submitted that the plaintiff had been supplying the brushes to the defendants from the date of their very first demand order. The trouble arose when all of a sudden on 21st April, 1977 the defendants stopped placing further orders. It is alleged that when the plaintiff made an enquiry into the causes, it came to light that the defendants had either themselves started manufacturing the brushes or were getting them manufactured from others and were getting the impugned mark ‘Anil’ put thereon.

    11. It is further stated that the plaintiff had been supplying the brushes mostly to the defendants; so much so, that from 18th April, 1974 to 21st April, 1977, out of his total sale of Rs. 6,41,374.21, the plaintiff had supplied brushes to the defendants worth Rs. 4,78,894.10. The Various supplies were made to the defendants after obtaining necessary orders from them.

    12. The learned counsel for the plaintiff has further submitted that the trade mark ‘Anil’ is associated with the goods of the plaintiff and that the plaintiff had started using this trade mark ‘Anil’ from May, 1965 when the defendants were nowhere in the picture. It is the long user on which the plaintiff bases his claim.

    13. It is further contended that the defendants had been exporting the brushes and had not been selling them locally. No evidence showing the local sale has so far been produced by them.

    14. It is also pointed out that the plaintiff has filed his own affidavit and has also subjected himself to cross-examination by the other side. On the other hand, no Director of the defendant-company has filed his affidavit nor any one of them has appeared in the Court. Only Shri Tara/Chand, their Export Manager, had filed his affidavit and was cross-examined. This fact has also to be taken into account while considering the question of a discretionary interim relief.

    15. The learned counsel for the defendants has argued that the plaintiff had never used the trade mark ‘Anil’ and that this trade mark was chosen by the defendants as Anil Kumar Sharma is one of the Directors and is also the son of the Managing Director. It is not denied that the sole proprietor of the firm Anil and Co. is Shri Sham Lal. The learned counsel for the plaintiff has submitted that even the correspondence which had passed between the parties shows that the plaintiff was being addressed as Anil and Co. It is contended that the name ‘Anil’ was not unconnected with the plaintiff as he started using the trade mark ‘Anil’ to Indicate the name of his firm.

    16. The learned counsel for the defendants has placed on record a number of documents in support of their case but most of them relate to the period after 18th April, 1974. Out of more than 76 documents filed by the defendants, only photostat copies of bill forms bearing numbers 1, 3 and 4, copies of invoices Nos. 30, 32, 33 and letters marked numbers 63 and 64 pertain to the period prior to 18th April, 1974. It is necessary to consider these documents to gauge their value.

    17. Documents Nos. 1 and 3 and 4 are photostat copies of the bill forms dated 8th Jan. 1973, 7th April, 1973 and 18th June, 1973 respectively. These are the bills of the defendant company itself. The originals have not been produced. At this stage, it is difficult to place any reliance on these copies.

    18. Documents bearing numbers 30, 32 and 33 are invoices showing that paint ‘Anil’ had been supplied to M/s. Sojuzpushnina, Moscow, USSR. These invoices are dated 12th Jan. 1073, 4th July, 1973 and 11th July, 1973 respectively. Interestingly they do not bear any contract number, L/c No. G.R.I No., No. of packages etc. although there are specific columns in the printed forms. Such information has, however, been recorded in several other similar invoices, copies of which have been placed on the record. When the goods are exported, copies of the invoices are sent to the Airport Authorities, Reserve Bank and the other concerned bank. If these invoices had really been sent, there could have been no difficulty for the defendant to obtain the copies from any of these authorities as these copies are very relevant to show that prior to the supply of the goods by the plaintiff to the defendants, the defendants had already been exporting brushes with the trade mark ‘Anil’.

    19. Copies of letters marked 63 and 64 written of M/s. Super Bristle Brushware Mfg. Co. Kishan Ganj, Delhi are the next documents requiring scrutiny. These letters are dated 3rd April, 1973 and 15th May, 1973 respectively. There is a mention of the trade mark ‘Anil’ in these letters. Both these are photostat copies. The originals have not been got produced nor the affidavits of the persons to whom these letters had been addressed, have been obtained and filed.

    20. Thus all the above documents are not of any consequence at this stage. However, at the trial, the defendants would have an opportunity to produce further evidence to prove the facts stated in these documents.

    21. The learned counsel for the defendants has next referred to the printed catalogue and other documents in which the trade mark ‘Anil’ is mentioned. All these documents relate to the period after 18th April, 1974 and are, therefore, not helpful.

    22. The plaintiff has also produced telegram Ex. RW2.B dated 2nd April, 1974. In this telegram brushes with the trade mark ‘AMN’ had been ordered by the company at Moscow. On its basis' letter dated 18th April, 1974 (Ex. RW2.C) was sent by the defendants to M/s. Anil and Co. and the mark mentioned was ‘AMN’ and not ‘Anil’. It has been stated by the plaintiff that after the receipt of the said order he had approached the defendants stating that brushes with the trade mark ‘Anil and not ‘AMN’ could be supplied by him. Consequently the order was changed for the supply of ‘Anil’ brushes. This shows that the trade mark of the plaintiff was ‘Anil’ and that the mark ‘AMN’ was connected with the defendants.

    23. It is pertinent to observe that the affidavits of Abdul Mateen and Satish Bhagat, filed to support the case of the defendants, contain identical facts in the same words. They had been drafted by Shri Bahl and were obtained from these persons. The learned counsel for the plaintiff has contended that no value be attached to such prepared affidavits.

    24. The learned counsel for the defendants has further pointed out that the label, design or lobo of the trade mark has not been produced by the plaintiff nor any advertisement in this regard has been got published by him. In this connection it is submitted by Shri Anoop Singh that the plaintiff is not an established concern like the defendants but is only a manufacturer, who does work himself and also by employing 3/4 persons. On the other hand, the defendant company is a big exporting house and that the plaintiff could not, therefore, be expected to advertise his goods as could be done by the defendants. It is submitted that only prior user has to be seen in this case and that there is ample evidence to prove such user by the plaintiff.

    25. Apart from the affidavits and oral evidence, the plaintiff has produced copies of his vouchers right from 1965 to the date when the defendants stopped placing orders in April, 1977. On the other hand, the defendants have not so far produced any cogent evidence to show the actual user of the trade mark ‘Anil’ prior to 18th April, 1974 i.e prior to the date when the orders were placed with the plaintiff.

    26. The learned counsel for the defendants has cited a number of authorities, which on scrutiny, show that they are of no assistance to the defendants. Corn Products Refining Co. v. Shangrila Food Products Ltd , AIR 1960 SC 142 relates to a registered trade mark. In the present case, the mark ‘Anil’ has not been registered in the name of either party and, therefore, only the prior user is the criterion to determine the rights. In Nestle's Products Ltd. v. Milkmade Corporation, AIR 1974 Delhi 40, the goods were entirely different; whereas in the present case it is the same trade mark ‘Anil’ on the brushes which is the subject matter of dispute.

    27. The other cases cited, have also no application as only the prior user of the mark ‘Anil’ has to be seen in the absence of registration of the trade mark.

    28. It has been argued by the learned counsel for the defendants that his clients be allowed to use the trade mark ‘Anil’ and that they would maintain accounts which would safeguard the interest of the plaintiff in case he ultimately succeeds. It is accordingly submitted that prayer for interim injunction be declined and the defendants may be ordered to keep and furnish the accounts. In this connection, the learned counsel for the plaintiff has submitted that his client is a manufacturer and that the sale of goods is his only source of income. In case the interim injunction is not granted against the defendants, by the time the suit is finally decided, he would practically starve. To reinforce his contention, the learned counsel has relied on National Carbon Co. (India) Ltd. v. Raj Kumar, AIR 1954 All 218. In particular the observations of Garth, C.J in Ralli v. Fleming, (1877-78) ILR 3 Cal 417 at page 427 recited therein have been stressed. They are :—

    “In this particular case, I do not think that their keeping an account of sales would be a sufficient protection to the plaintiffs, because if the defendants were allowed to use these marks in the market for several months in order to sell their cloth, they would become as well known in the market as importers and sellers of the cloth as the plaintiffs; and so the very mischief which the injunction is intended to guard against would have been effected.”

    On the strength of this authority, it is argued by Shri Anoop Singh that the plaintiff is a poor person and that he would be out of the market if the defendants are given free hand to use the mark ‘Anil’ as they have ample resources at their disposal to completely ruin his client. There seems substance in the contention of the learned counsel, more so, when a prima fade case has been made out with regard to the impugned trade mark.

    29. The plaintiff is manufacturer, who exclusively lives on the income of the goods he produces. I think it will be quite harsh if the defendants are not restrained from using the impugned trade mark, which the plaintiff is stated to be using since 1965. Thus balance of convenience too stands in favour of the plaintiff.

    30. For the reasons stated above, I hold that the plaintiff has succeeded in making out a case for the grant of interim injunction. I accordingly confirm the ex parte injunction granted in favour of the plaintiff and against the defendants on 1st July, 1977.

    31. I.A No. 2048 of 1977 is disposed of accordingly.

    Application allowed.
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    Comments

    Sham Lal v. Interads Advertising (P) Ltd
    (May 4, 1978)