Anil Dev Singh, J.— This is an appeal against the order of the learned Single Judge dated October 31, 1994 whereby the application of the respondents (who are plaintiffs in Suit No. 1705/94) under Order 39 Rules 1 and 2 CPC seeking an ad interim injunction restraining the appellants(defendants in the abovesaid suit) from passing off their goods as that of the respondents was allowed and the appellants were restrained from manufacturing, selling, advertising or in any way using the trade mark ‘WHIRLPOOL’ in any other trade mark deceptively or confusingly similar to the trade mark ‘WHIRLPOOL’ in respect of their goods. The appeal arises in the following circumstances:—
2. The first respondent, which is the first plaintiff in the suit, is an American Cor-poration, organized and existing under the laws of the State of Delaware, USA. The second respondent, a Company registered in India, is a joint venture company established by the first respondent and a company called Sundram Clayton. A suit was filed by the respondents on 4th August, 1994 against the appellants for permanent injunction, passing off and damages.
3. According to the plaint the first respondent is engaged in the manufacture, sale, distribution and servicing of washing machines under the trade mark WHIRLPOOL. It has, directly or through its subsidiaries, more than 2000 trade mark registrations all over the world. In India its trade mark ‘WHIRLPOOL’ was registered on February 22, 1956 in respect of clothes dryers, washers, dishwashers, vacuum cleaners, air-conditioners, dehumidifiers, freezers etc. in Classes 7, 9 and 11. The registrations were renewed upto the year 1977 but despite instructions of the first respondent for renewal of registration in Class 7 and 9, the registrations lapsed due to lack of proper communication with its counsel. Not withstanding the lapsed registration, the trade mark of the first respondent was used in this country through sale of its washing machines to the U.S Emabassy and U.S AID offices in New Delhi and also through advertisements in various publications having a circulation in India. Besides the products of the first respondent were reaching the Indian consumers in a second hand State or through indirect channels. Plaint also refers to the recent liberal economic policy as a result whereof, in the year 1987, it established a joint venture known as ‘TVS Whirlpool Ltd.’ The respondents thereafter filed 9 applications for registration of trade mark ‘WHIRLPOOL’ in Classes 7, 9 and 11 in respect of their goods including washing machines which are pending in the Trade Mark Registry.
4. The plaint also alludes to the fact that the trade mark ‘WHIRLPOOL’ belonging to the first respondent has acquired global reputation. According to the issue of July 25, 1994 of ‘FORTUNE Global 500’ rated the first respondent as the 207th largest Corporation in the world in terms of sales and the 30th largest Global Corporation dealing in electronic and electrical equipments. It also points out that its name is also included in the 1992 edition of the book ‘World Class Business’—a Guide to the 100 Most Powerful Global Corporations, by Phillip Mattero. It also claims that as a result of extensive' advertising and promotional efforts, its products including washing machines, have acquired immense reputation and the trade mark ‘WHIRLPOOL’ is being associated with the goods of the first respondent.
5. On August 6, 1986 a Trust known as ‘Chinar Trust’ through its trustees, first and second appellants, applied to the Registrar of Trade Marks for registration of trade mark ‘WHIRLPOOL’ in respect of washing machines. In the application it was claimed that the trade mark was being used by it since July 1986. The respondents on coming to know about the application of Chinar Trust from the Mark Journal 945 dated October 16, 1988, filed their opposition on January 16, 1989 under section 21(1) of the Trade & Merchandise Marks Act, 1958 (for short ‘the Act’). On September 21, 1989 the ‘Chinar Trust’ filed their counter statement. Thereafter on December 5, 1990 the respondents in support of their opposition filed an affidavit of one Lawrence John Kremer dated December 5, 1990. On the other hand, the ‘Chinar Trust’ filed the affidavit of one Mr. Pradeep Singhal dated October 3, 1991. The respondents in reply filed another affidavit of Lawrence John Kremer dated December 19, 1991. On August 12, 1992 the Assistant Registrar of Trade Marks at Delhi, however, dismissed the opposition of the respondents and accepted the application of ‘M/s. Chinar Trust’ inter on the ground that knowledge and reputation of the trade mark ‘WHIRLPOOL’ in respect of the goods of the first respondent was restricted to specialised class of people in India and the same was not sufficient to determine the likelihood of confusion by the use of trade mark by the applicant. The respondents not being satisfied with the order of the Assistant Registrar, Trade Marks, filed an appeal to this Court under section 109(2) of the Act which came to be admitted on February 1, 1993 and is still pending for disposal. On November 30, 1992 trade name ‘WHIRLPOOL’ was registered by Trade Marks Registry in favour of the ‘Chinar Trust’, in accordance with the above said order of the Assistant Registrar. On August 4, 1993 the respondents filed a petition under sections 46 and 56 of the Act for cancellation and removal of trade mark registration issued in favour of the ‘Chinar Trust’. Thereafter the respondents came across an advertisement in Hindi Daily Dainik Jagran, Lucknow Edition of July 2, 1994 inserted by Sadhna Electric Company, Chander Nagar Market, Lucknow as principal dealer of ‘WHIRLPOOL’ washing machines, requiring dealers for the said machines. The same advertisement appeared in Hindustan Times (Delhi edition) of July 9, 1994 as well. The advertisement inter-alia mentioned that ‘WHIRLPOOL’ was the registered trade, mark of the ‘Chinar Trust’, New Delhi. The second respondent thereafter purchased a washing machine marketed by the appellants. This machine was examined by an employee of the respondents and found that the product was inferior to the product manufactured by the first respondent. The respondents approached ‘Chinar Trust’ for settlement of the dispute but the latter demanded a large sum of money for giving up its claim to the trade mark ‘WHIRLPOOL’. The respondents then filed a suit, being Suit No. 1705/94, from which this appeal arises. In the suit, the learned Single Judge by a detailed order granted ad interim injunction restraining the appellants from manufacturing, selling, advertising or in any way using the word ‘WHIRLPOOL’ or any other trade mark deceptively or confusingly similar to the trade mark ‘WHIRLPOOL’ in respect of the goods of the appellants but at the same time gave liberty to the appellants to move an application under Order 39 Rule 4 CPC for vacation of the order on the basis of any new material consisting of facts, documents and evidence which they were not able to produce before him. However, the appellants without following the course suggested by the learned Single Judge, have filed the present appeal.
6. We have heard learned counsel for the parties at length. Before us the learned counsel for the appellants has urged as follows:—
7. The first respondent abandoned the trade mark ‘WHIRLPOOL’ by allowing its registration to expire in the year 1977. The respondents did not have any commercial use of the trade mark in India. On the contrary, the appellants had started using the trade mark ‘WHIRLPOOL’ from 1986, and had also filed an application in the same year for registration of the same in its favour when there was not even an application for registration of the said trade mark by the respondents. ‘Chinar Trust’ is the only registered proprietor of trade mark ‘WHIRLPOOL’ in respect of the washing machines etc. The appellants have therefore the exclusive right to use the trade mark in this country. The grant of registration of trade mark on November 30, 1992 with effect from August 6, 1986 gives the appellants exclusive right to use the trade mark under section 28 of the Act. The effect of injuncting the appellants from using the trade mark violates section 28(1) of the Act. The order of the learned Single Judge has led to anamolous results. While the appellants who are the proprietors of the trade mark ‘WHIRLPOOL’ can stop others from using the trade mark ‘WHIRLPOOL’, they cannot use the same themselves. According to section 28(3) of the Act, two registered proprietors of the same trade mark cannot restrain one another from using the trade mark. Therefore, even if the first respondent was the registered proprietor of the said trade mark it could not have maintained an action for restraining the appellants from using the trade mark. The lack of registration of the trade mark ‘WHIRLPOOL’ in favour of the first respondent could not have conferred a higher right than it would have with a registration in its favour. The washing machines manufactured by appellant under trade mark ‘WHIRLPOOL’ is not being associated with the goods of the respondent but are being identified as the goods of the appellants. The respondents have not sold adequate number of machines in India under the trade mark ‘WHIRLPOOL’ so as to have acquired any reputation or goodwill in respect of the said trade mark. The respondents were also not entitled to any relief by way of an ad interim injunction in view of delay, acquiescence and laches on their part.
8. On the other hand, learned counsel for the respondents submitted that the trade mark ‘WHIRLPOOL’ is being used by the first respondent from the year 1941. The first respondent has acquired world wide reputation and goodwill in respect of the trade mark ‘WHIRLPOOL’. Washing machines sold under the trade mark ‘WHIRLPOOL’ are being associated by the general public as the goods of the first respondent. The appellants want to reap the benefit of the reputation and goodwill acquired by the first respondent by using the trade mark ‘WHIRLPOOL’ on their product. The adoption of the mark by the appellants is not honest and bonafide. The learned Single Judge having passed the ad interim order after properly considering the rival claims of both the parties, the discretion exercised by him cannot be challenged by asking the appellate Court to reassess the material and reach a conclusion defendant from the one reached by him. The discretion has been exercised by the learned Single Judge reasonably and in a judicial manner. As regards the question of delay, acquiscence and laches, the learned Single Judge correctly came to the conclusion that there was no substance in the submission of the learned counsel for the appellants.
9. We will first deal with the main questions which arise for our prima facie determination. They are:—
1) Whether the reputation of trade mark ‘WHIRLPOOL’ in respect of washing machines of the respondent has travelled transborder to India?
2) Whether the respondents, who are no the registered proprietors of trade mark ‘WHIRLPOOL’ in respect of washing machines, can maintain an action for passing off against the appellants in respect of the use of the same which has been registered in their favour in respect of the same goods?
10. With regard to these questions, the learned Single Judge held that the first respondent was the prior user of trade mark in the market, the question of geographical reasons apart.
11. On material before him, the learned single Judge also came to the conclusion that the first respondent positively made out a case of actual sales by it of ‘WHIRLPOOL’ products including washing machines in a number of geogaraphical regions around the world. But in so far as India is concerned, it does not make out a case of actual sales in the markets in India, though it has made limited sales to the U.S Embassy and U.S AID office, New Delhi. The learned Single Judge however, found (hat the first respondent had advertised its products under the trade mark ‘WHIRLPOOL’ including washing machines in the following International Magazines having circulation in India:—
Magazine
Issue
National Geographic
August 1980, February 1983, May 1985, April 1986 and July 1986
Life
June 28, 1968 July 18, 1969, August 1983, September 1983 & May 1985
Fortune
June 1957
Redbook
July 1986.
Ladies Home Journal
January 1985, March 1986, April 1986 & July 1986
Woman's Day
July 7, 1987
House Beautiful
August 1985.
Better Home & Garden
July 1984, April 1986, June 1986 and July 1986
Good Housekeeping
October 1983 & April 1985
Family Circle
October 21, 1986
Bon Apetite
November 1983
12. The learned Single Judge was further of the opinion that the respondent hasacquired transborder reputation in respect of its products including the washingmachines bearing the trade name ‘WHIRLPOOL’ and that reputation has alsoreached this country.
13. The learneq counsel for the appellants assailed the findings of the learned Single Judge on the ground that the first respondent has not made out any case of actual sale of its product bearing trade mark ‘WHIRLPOOL’ in India and without actualcommercial use of the same it cannot be said to have acquired reputation and good-will. In this view of the matter, it is urged that the goods of the appellants under thetrade mark ‘WHIRLPOOL’ will not cause any confusion or deception as the trademark ‘WHIRLPOOL’ is not associated in the minds of the public with the goods ofthe first respondent.
14. We have considered the submissions of the learned counsel for the appellants, but we have not been able to persuade ourselves to accept the same.
15. The knowledge and awareness of a trade mark in respect of the goods of a trader is not necessarily restricted only to the people of the country where such goods are freely available but the knowledge. & awareness of the same reaches even the shores of those countries where the goods have not been marketed. When a product is launched and hits the market in one country, the cognizance of the same is also taken by the people in other countries almost at the same time by getting acquainted with it through advertisements in newspapers, magazines, television, video films, cinema etc. even though there may not be availability of the product in those countries because of import restrictions or other factors. In today's world it cannot be said that a product and the trade mark under which it is sold abroad, does not have a reputation or goodwill in countries where it is not available. The knowledge and awareness of it and its critical evaluation & appraisal travels beyond the confines of the, geographical area in which it is sold. This has been made possible by development of communication systems which transmit & disseminate the information as soon as it is sent or beamed from one place to another. Satellite Television is a major contributor of the information explosion. Dissemination of knowledge of a trade mark in respect of a product through advertisement in media amounts to use of the trade mark whether or not the advertisement is coupled with the actual existence of the product in the market.
16. In J.N Nichols (Vimto) Limited v. Rose and Thistle & another 1994 PTC 83 (para 20), a Division Bench of the Calcutta High Court observed that the use of a trade mark does not necessarily imply actual sale of the goods bearing such a mark. Use can be in any form. Mere advertisement without having even the physical existence of the goods in the market can be said to be a use of the mark. In Consolidated Foods Corporation v. Brandon & Co. Private Ltd. AIR 1965 Bombay 35 it was found that the petitioner was the proprietor of the trade mark ‘Monarch’ in respect of its food products in several countries of the world and its products were advertised in American Magazines which had large circulation in several countries including this country. Though the goods of the petitioner had not been imported continuously, the petitioner's right to use the trade mark ‘Monarch’ in this country in preference to the adoption of the mark by the respondent's was recognised on the strength of the advertisement. Accordingly, the order of the Joint Registrar of Trade Marks granting registration of the mark in favour of the latter was set aside by the Bombay High Court and while doing so it held as under:—
“…….Not only that the petitioner corporation's products are widely advertised in American Magazines of common interest, which have a fairly large circulation in this country, but even these products have been imported into this country though not quite continuously. There can, therefore, be no doubt that the petitioner corporation has a right to the use of the mark ‘Monarch’ in preference to the respondent company which sought to introduce that mark for the first time in 1951.”
17. At another place it was observed as follows:—
“……..In this case, however, as I have found that the petitioner corporation was already the sole proprietor of the mark ‘Monarch’ in respect of its food products in several countries of the world and its products were widely ad vertised in various American Magazines having a large circulation in different parts of the world including this country and in view of the fact that the petitioner corporation could have without importing any of its food products into this country bearing that mark applied for registration of that mark as proprietor thereof, prior to 1951 before the respondent company started using that mark, it is difficult to hold that the respondent company had started using that mark quite innoncenlly and without any knowledge on its part about the same being widely used by the petitioner corporation on its food products. On the facts of this case and also in the interest of business morality, it is impossible to exercise my discretion under sub-section (3) of Section 12 of the Act and order concurrent registration of the mark ‘Monarch’ in favour both of the petitioner corporation and the respondent company.”
18. Similarly the High Court of Australia in the The Seven Up Company v. O.T Limited and another (1947) 75 CLR 203 held as follows:
“……..In my opinion the effect of these cases is that in the absence of fraud it is not unlawful for a trader to become the registered proprietor under the Trade Marks Act of a mark which has been used, however extensively, by another trader as a mark for similar goods in a foreign country, provided the foreign mark has not been used at all in Australia at the date of the application for registration. But the position is different if at that date the mark has become identified with the goods of the foreign trader in Australia because those goods have been brought into Australia by the foreign trader himself or by some importer or in some other manner. The court frowns upon any attempt by one trader to appropriate the mark of another trader although that trader is a foreign trader and the mark has only been used by him in a foreign country. It therefore seizes upon a very Small amount of use of the foreign mark in Australia to hold that it has become identified with and distinctive of the goods of the foreign trader in Australia. It is not then a mark which another trader is entitled to apply to register under the the Trade Marks Act because it is not his property but the property of the foreign trader. The registrar is entitled to refuse to register the mark for such goods. If it has been registered the court may rectify the register on the ground that the mark is wrongly entered on the register. Further, if at the date of the application for registration, the mark of the foreign trader, although it has not been used in Australia, has neverthless become associated in the minds of the Australian public with his goods because it has been advertised in publications which have circulated extensively in Australia or in some other manner, the registrar is entitled to refuse to register the mark for such goods because it is likely to deceive. If it has been registered the court may rectify the register on the ground that the mark is wrongly entered on the register.
19. Thus, advertisement of a trade mark of a foreign trader in respect of a product need not be associated with the actual use of the product in order to establish reputation.
20. In Pioneer Hy-Bred Corn Co. v. Hy-line Chicks Pty. Ltd. 1979 RPC 410, the appellant, an Australian company had applied on August 1963 for registration of the mark “HY-LINE” in New Zealand in respect of live chicken and poultry. Similar trade mark in respect of same items had been registered in the United States in the year 1941 in favour of the respondent, an American company. Till August 1963, no sales of poultry had been made either by the Australian company or by the American company in New Zealand because of import restrictions. The Assistant Commissioner of Trade Marks accepted the application of the Australian company for registration of the said trade mark. Thereupon the American company appealed to the Supreme Court of New Zealand, which reversed the decision of the Assistant Commissioner. Against the decision of the Supreme Court, the Australian company appealed to the High Court of New Zealand. The High Court while upholding the decision of the Supreme Court laid down the test to be applied while deciding whether use in New Zealand of the appellant's trade mark was likely to deceive or cause confusion when the use of the American trade mark in New Zealand was not established, but only the awareness through advertisement thereof in the concerned New Zealand market of that mark was proved. In this connection it was held as follows:—
“……..It is the awareness or cognizance of those who are potential buyers in, or otherwise associated with the relevant New Zealand market that is material. If there is a likelihood that they will be deceived or confused as to the origin of goods covered by the applicant's mark, it matters not how they gained the knowledge that gives rise to that deception or confusion.”
“………But in my view it is a fair inference from the evidence that many New Zealand poultrymen with an interest in improving breeding stocks in New Zealand read overseas magazines to expand their knowledge and that New Zealand poultrymen sufficiently interested to subscribe for overseas periodicals had an interest in reading about overseas developments in breeding stock. Not all readers would have read all advertisements in all issues. Having regard to the evidence that the poultrymen specifically referred to associated the trade mark HY-LINE with HY-LINE Poultry Farms from reading literature on poultry matters, I think it probable, as did Cooke, J., that many of the other New Zealand subscribers to the journals would have read many of the advertisements in those trade magazines.”
21. This Court in Apple Computer Inc. v. Apple Leasing & Industries 1992 (1) Arbitration Law Reporter 93 at 137 while dealing with the question of overseas reputation of a trade mark in respect of a product held as follows:—
“………..In other words, it is not necessary in the context of the present day circumstances, the free exchange of information and advertising through newspapers, magazines, video, television, movies, freedom of travel between various parts of the world, to insist that a particular plaintiff must carry on business in a jurisdiction before improper use of its name or mark can be restrained by the court. Similarly, I am also in agreement with the view expressed regarding the meaning of goodwill in passing-off cases. In passingoff cases, the main consideration is the likelihood of confusion and consequential injury to the plaintiff, and the need to protect the public from deception, deliberate or otherwise. Where such confusion or deception is prima facie shown to exist, protection should be given by courts to the name or mark or goodwill of the plaintiff. The reason why all traders and manufacturers of goods, and providers of services, wish to protect their name and build up their name is that they want their name or market to have an impact upon anyone who has need of their goods or services. That impact may take diverse forms, but one of them would certainly be that a name or mark would recall to the mind of a potential consumer or user of such services, the source from where the goods originate, or the person who provides the services. This is the impact of advertising and publicity by whatever means including word of mouth, and the build-up of reputation. It would not be right for courts to permit the persons who have spent considerable time, effort, money and energy in building up a name sufficient to have an impact to lose control over such an impact by improper use of the very same or colourably similar name by another unauthorisedly or even dishonestly.”
22. To the similar effect is the decision of the Bombay High Court in Kamal Trading Co., Bombay and others v. Gillette U.K Limited, Middle Sex, England 1988 PTC 1 wherein it was laid down as follows:—
“………It is necessary to note that the goodwill is not limited to a particular country because in the present days, the trade is spread all over the world and the goods are transported from one country to another very rapidly and on extensive scale. The goodwill acquired by the manufacturer is not necessarily limited to the country where the goods are freely available because the goods though not available are widely advertised in newspapers, periodicals, magazines and in other medias. The result is that though the goods are not available in the country, the goods and the mark under which they are sold acquires wide reputation. Take for example, the televisions, and Video Cassete Recorders manufactured by National, Sony or other well known Japanese Concerns. These televisions and V.C.Rs are not imported in India and sold in open market because of trade restrictions, but is it possible even to suggest that the word ‘National’ or ‘Sony’ has not acquired reputation in this country In our judgment, the goodwill or reputation of goods or marks does not depend upon its availability in a particular country.”
23. Extra territorial reputation of a mark was also recognised in the matter of Vitamins LD's Application for Trade Mark, 1956 R.P.C 1. In that case the respondent applied for registration of mark “Pabalate” in respect of pharmaceutical substance. This was opposed by the appellant, an American Corporation, on the ground that the said mark stood registered in their favour in various countries and the same was advertised extensively in Medical Journals, which had circulation in the United Kingdom as well. The American Company however, did not have any user of the trade mark in United Kingdom as no sale of the goods had been made under the said mark by them in that country. Despite the lack of user in England it was held that the application of the respondent should not be permitted to proceed having regard to the fact that the advertisements of pharmaceutical substances were reaching in that country. In this regard it was observed as follows:—
“……Having regard to the fact that the evidence discloses a genuine business on the part of the Appellants in their country of origin, and that advertisements of such are reaching this country and appearing in libraries or places of reference to which medical men may resort, it seems to me that I am bound to consider the possibility that, with the passage of time, some conflict may occur between the use of the mark by the present Respondents and the advertisement and user of the mark overseas by the present Appellants. Having regard to the international character which medicine and the allied sciences have assumed and increasingly assumed over the last two decades, it seems to me that the Court must be particularly careful to see that in exercising its discretion under the Act the public interest is not in any way imperilled. For my part I am not satisfied that, in allowing to be used by manufacturers in this country as a brand name for a pharmaceutical sub-tance a word which is in fact used by an American Corporation in respect of the same material and advertised in journals, which on the evidence are received into this country and referred to, the public interest will be best served by permitting registration. Accordingly, on both those grounds it seems to me that it is my duty to indicate that in the light of the fuller consideration which the matter has received in this Court the application should not be permitted to proceed.”
24. At this stage we may refer to the animated cinema characters “Mickey Mouse” and “Minni Mouse” invented by Walter E. Disney which have become extremely popular. They are known world over. The popularity is acquired mostly through Motion Pictures which have great impact on the audience. It was because of this popularity that registration of marks ‘Mickey Mouse’ and ‘Minni Mouse’ in respect of radio receiving sets manufactured by a trader, namely, Radio Corporation Propriety Limited were refused to be registered by the Registrar of Trade Marks even though no registration had been obtained in Australia by the inventor and creator of animated cinema characters in respect of the words ‘Mickey Mouse’ and ‘Minni Mouse’ as trade marks. But in Great Britain and other countries the words were registered as trade marks for Motion Pictures. This decision of the Registrar of Trade Marks was upheld by the High Court of Australia in Radio Corporation Proprietary Ltd. v. Disney and others 1937 CLR 448, on the ground that the words were so closely associated with the respondent/opponent, that their use by the appellant/applicant was calculated to deceive and cause confusion in trade and public mind. The names ‘Mickey Mouse’ & ‘Minni Mouse’ were held to be associated or transfixed in the public mind with the respondent. The world wide fame and popularity of the names ‘Mickey Mouse’ and ‘Minni Mouse’ is due to the tremendous impact that films have on the minds of the public. Television has a similar effect on the viewers and so have the advertisements in magazines, periodicals, newspapers etc. having world wide publication. Today advertisements in respect of goods and the trade marks under which they are marketed in one country are taken cognizance of in other countries. Business reputation is gained by the companies even in countries where their product is not used and is merely known through advertisements.
25. Thus a product and its trade name transcends the physical boundries of a geographical region and acquires a transborder or overseas or extraterritorial reputation not only through import of goods but also by its advertisement. The knowledge and the awareness of the goods of a foreign trader & its trade mark can he available at a place where goods are not being marketed and consequently not being used. The manner in which or the source from which the knowledge has been acquired is immaterial.
26. The objection of the appellants based on non-user of the product of the first respondent under the trade mark ‘WHIRLPOOL’ in India therefore, does not appeal to us. Besides, it is not a case where the goods of the first respondent have not been imported in this country. The respondents have asserted that the goods under the trade mark ‘WHIRLPOOL’ were imported in India by the American Embassy & U.S AID office New Delhi.
27. Affidavit of Lawrence John Kremer dated December 5, 1990, filed by way of evidence in respect of the opposition of the first respondent to the application of the appellants for registration of the trade mark ‘WHIRLPOOL’, states that the mark ‘WHIRLPOOL’ was adopted and used by the first respondent in various countries of the world since July 1941. It has also been stated in the affidavit that: (1) the trade mark ‘WHIRLPOOL’ was registered in favour of the first respondent in several countries & (2) the said trade mark is being used by them in more than 65 countries of the world. The affidavit gives the following details of the sale of its goods under trade mark ‘WHIRLPOOL’ in the various countries of the world excluding the United States of America.
Year
Sales in U.S Dollars
1987
33,231.905
1988
32,915,220
1989
115,473.010
28. From the aforesaid facts including the extensive advertisements of the goods of the first respondent & its trade mark ‘WHIRLPOOL’ and the legal position adumberated hitherto we are prima facie of the opinion that the trade mark ‘WHIRLPOOL’ has acquired reputation and goodwill in this country and the same has become associated in the minds of the public or potential buyers with the goods of the first respondent. Even advertisement of trade mark without existence of goods in the market is also to be considered as use of the trade mark. It is also not necessary however that the association of the plaintiff's mark with his goods should be known all over the country or to every person in the area where it is known best. (See: Faulder & Co. Ld. v. O & G. Rushton (1903) 20 RPC 477) Besides the facts prima facie demonstrate that the first respondent was prior user of the trade mark ‘WHIRLPOOL’ as it was using the same since 1941, while the appellants themselves claim the adoption thereof from 1986.
29. Thus, we see no reason to differ with the finding of the learned Single Judge that the first respondent acquired transborder reputation in respect of the trade mark ‘WHIRLPOOL’ and has a right to protect the invasion thereof.
30. We now proceed to consider the question as to whether the respondents can maintain an action for passing off against the appellants who are the registered proprietors of the trade mark “WHIRLPOOL” in India. Learned counsel for the appellants submitted that the appellants have an exclusive right to use the trade mark “WHIRLPOOL” under section 28(1) of the Act as they are the registered proprietors of the same. In order to appreciate the submission of the learned counsel, it will be necessary to set out section 28(1) of the Act. This section reads as under:—
“28(1) Subject to the other provisions of this Act, the registration of a trade mark in Part A or Part B of the register shall, if valid, give to the registered proprietor of the trade mark the exclusive right to the use of the trade mark in relation to the goods in respect of which the trade mark is registered and to obtain relief in respect of infringement of the trade mark in the manner provided by this Act.
31. According to section 28(1) of the Act, registration of a trade mark gives to the registered proprietor thereof exclusive right to use the same in relation to the goods in respect of which it has been registered. But from the opening words of section 28(1) namely, “subject to other provisions” it is clear that the right conferred on a trader is not an indefeasible right as the same is expressly made subject to other provisions of the Act. This is further made clear by section 27(2) of the Act, which provides that” nothing in this Act shall be deemed to affect the right of action against any person for passing off the goods as goods of another person or the remedies in respect thereof.” Thus it is manifest that Section 28 of the Act and all other provisions come within the over-riding sway of section 27(2) of the Act. Similarly section 33 of the Act also saves vested rights of a prior user. It lays down that nothing in the Act shall entitle a registered proprietor of a trade mark to interfere with the use of the trade mark by a prior user of the same. Thus the right created by section 28(1) of the Act in favour of a registered proprietor of a trade mark is not an absolute right and is subservient to other provisions of the Act namely sections 27(2), 33 etc. Neither section 28 nor any other provision of the Act bars an action for passing off by an anterior user of a trade mark against a registered user of the same. In other words registration of a trade mark does not provide a defence to the proceedings for passing off as under section 27(2) of the Act a prior user of a trade mark can maintain an action for passing off against any subsequent user of an identical trade mark including a registered user thereof. Again this right is not affected by section 31 of the Act, under which the only presumption that follows from registration of a mark is its prima facie evidentiary value about its validity and nothing more. This presumption is not an unrebuttable one & can be displaced. Besides section 31 is not immune to the over-riding effect of section 27(2). Placing reliance on section 28(3) of the Act the learned counsel for the appellant contended that when two registered proprietors of identical or near similar trade marks cannot be deemed to have acquired exclusive right to the use of any of those trade marks against each other, how can an unregistered user of the trade mark maintain an action for passing off against a registered user of the same mark and seek an injunction restraining him from using it. This argument of the learned counsel seems to stem from a misconception about the real purpose and intent of section 28(3). actually section 28(3) protects registered proprietor of a trade mark from an infringement action by another registered proprietor of an identical or near similar trade mark.- In this regard it will also be necessary to extract Section 28(3) and section -30(1) (d) which carries of the intent of section 28(3). these sections read as under:—
“28(3) When two or mors persons are registered proprietors of trade marks, which are identical with or nearly resemble each other, the exclusive right to the use of any of those trade marks shall not (except so far as their respective rights are subject to any conditions or limitations entered on the register) be deemed to have been acquired by any one of those persons as against any other of those persons merely by registration of the trademarks but each of those persons has otherwise the same rights as against other persons (not being registered users using by way of permitted use) as he would have if he were the sole iegistered proprietor.
30(1)(d) Not withstanding anything contained in this Act, the following acts do not constitute an infringement or the right to the use of a registered trade mark—
………the use of a registered trade mark, being one of two or more trade marks registered under this Act which are identical or nearly resemble each other, in exercise of the right to the use of that trade mark given by registration under this Act.”
32. A reading of section 28(3) with section 30(1)(d) shows that the proprietor of a registered trade mark cannot file an infringement action against a proprietor of an identical or a similar trade mark. While sections 28(3) and 30(1)(d) on the one hand deal with the rights of registered proprietors of identical trade marks and bar action of infringement against each other, section 27(2) on the other hand deals with the passing off action. The rights of action under section 27(2) are not affected by section 28(3) and section 30(1)(d). Therefore, registration of a trade mark under the Act would be irrelevant in an action for passing off. Registration of a trade mark in fact does not confer any new right on the proprietor thereof than what already existed at common law without registration of the mark. The light of goodwill & reputation in a trade mark was recognised at common law even before it was subject of statutory law. Prior to codification of trade mark law there was no provision in India for registration of a trade mark. The right in a trade mark was acquired only by use thereof. This right has not been affected by the Act and is preserved and recognised by sections 27(2) and 33.
33. The law of ‘passing off’ as it has developed, permits an action against a registered proprietor of a trade mark for its mendacious use for inducing and misleading the consumers into thinking that his goods are the goods of or are connected with the goods of a prior user of the trade mark. It seems to us that in so far as this Court is concerned, this position cannot be disputed in view of the judgment of the Division Bench in Century Traders v. Roshan Lal Duggar & Co. 1978, Delhi 250 where, while construing sections 27(2) and 106 of the Act, it was held as follows:—
“From a reading of the above sections it is clear that registration of mark in the trade mark registry would be irrelevant in an action for passing off. Thus, the law is pretty well settled that in order to succeed at this stage the appellant had to establish user of the aforesaid mark prior in point of time than the impugned user by the respondents. The registration of the said mark or similar mark prior in point of time to user by the appellant is irrelevant in an action for passing off and the mere presence of the mark in the register maintained by the trade mark registry did not prove its user by the persons in whose names the mark was registered and was irrelevant for the purposes of deciding the application for interim injunction unless evidence had been led or was available of user of the registered trade marks. In our opinion these clear rules of law were not kept in view by the learned single Judge and led him to commit an error.”
34. Again in Consolidated Foods Corporation v. Brandon & Co., AIR 1965 Bombay 35 similar view finds expression. In this regard it was held as follows:—
“……To summarise, therefore, a trader acquires a right of property in a distinctive mark merely by using it upon or in connection with his goods irrespective of the length of such user and the extent of his trade. The trader who adopts such a mark is entitled to protection directly the article having assumed a vendible character is launched upon the market. As between two competitors who are each desirous of adopting such a mark, “it is, to use familiar language, entirely a question of who gets there first.” (Gaw Kan Lye v. Saw Kyone Saing, AIR 1939 Rang 343 (FB). Registration under the statute does not confer any new right to the mark claimed or any greater right than what already existed at common law and at equity without registration. It does however, facilitate a remedy which may be enforced and obtained thoroughout the State and it established the record of facts affecting the right to the mark. Registration itself does not create a trade mark. The trade mark exists independently of the registration which merely affords further protection under the statute. Common law rights are left wholly unaffected. Priority in adoption and use of a trade mark is superior to priority in registration.”
35. Again in L.D Malhotra v. Ropi Industries I.L.R 1976 (1) Delhi 278, a learned single Bench of this Court restated & adopted the principles noticed in Consolidated Foods Corporation case (supra). It also referred to the decision of the House of Lords in GEC v. GE CO. Ltd. 1972 All E.R 517. Drawing upon the aforesaid decisions, it was observed as follows:—
“…….Now at common law the use of the mark was the only way in which trade mark rights in it could be acquired: Kerly's Trade Mark 10th edition page 245. It is difficult to understand the statutory law relating to trade marks without understanding the state of the common law as it existed before the law was codified. In a recent decision of the House of Lords in GEC v. The GE Co. Ltd. (1972) 2 All E.R 507(2) Lord Diplock said:
“The right of properly in a trade mark was recognised at common law before it was the subject of any enactment. The 1875 Act did not itself create any right of property in trade marks. As its title itself indicates and its provision confirm, it simply provided for ‘the registration of trade marks arid spelled out the consequences of registration and non-registration on the proprietory rights of the owner of the trade mark and the remedies available to him for the protection of those proprietary rights. “The 1875 Act must. therefore, be coastrued in the light of the common law relating to trade marks in 1875. I use the expression ‘common law’ to include the doctrines of equity applied in what at that time was the separate Court of Chancery.
My Lords, it may well be a legitimate criticism of our methods of drafting legislation that in order to ascertain the meaning of an Act of Parliament passed in 1938, it should be necessary not only to consider the legislative history over the previous 63 years but also to engage in what in other systems of law might be regarded as antiquarian research, namely, the state of the common law as it existed before the first Act to alter it was passed nearly 100 years ago. But, in my view, the 1938 Act which purports to consolidate our existing law becomes intelligible only when this course, which is a well recognised aid to statutory construction, is adopted.”
36. As regards the common law of trade marks before the first Act of 1875 he said:
“The right of property in a trade mark had special characteristics. One, which it shared with patents and with copyright, was that it was a monopoly, that is to say, it was a right to restrain other persons from using the mark. But it was an adjunct of the goodwill of a business and incapable of separate existence dissociated from that “goodwill. To be capable of being the subject-matter of property a trade mark had to be distinctive, that is to say, it had to be recognisable by a purchaser of goods to which it was affixed as indicating that they were of the same origin as other goods which bore the same mark and whose quality had engendered goodwill. Property in a trade mark could therefore only be acquired by public use of it as such by the proprietor and was lost by disuse.”
37. At another place the judgment in L.D Malhotra's case (supra) holds that Section 33 of the Act saves vested rights of a prior user of a trade mark. In this regard, it was observed as follows:—
“……This section saves vested rights. This means that the anterior use by a person of a trade mark is protected under law. This was the position at common law. The common law rule was that a mark did not become a ‘trade mark’ until it had been publicly used as such by its proprietor and that such public use was the only means by which title to a trade mark could be acquired by the first proprietor of it (See GEC 2 case (supra)). The 1958 Act recognised this principle of common law and embodied in S.33”
38. Both the decisions in L.D Malhotra and others v. Ropi Industries and Consolidated Food Corporation v. Brandon & Co. (supra) were noticed and relied upon in Century Traders v. Roshan Lal Duggar by the Division Bench of this Court.
39. Learned counsel for the appellants submitted that since a registered proprietor of a trade mark has an exclusive right to the use thereof under section 28(1) of the Act, even a prior user of the said trade mark cannot be permitted to bring an action for ‘passing off’ against the former & the only remedy of the latter is to move for cancellation of registration under section 56 of the Act. In this regard he Relied upon certain decisions including single Bench decisions of this Court namely, Anil Food Industries v. Alka Food Industries, 1989 PTC 129, P.L.J & Co. v. Promilla Industries, 1991 PTC 233 and P.M Diesels Pvt. Ltd. v. Thukral Mechanical Works. AIR 1988 Delhi 282. But the decision of the Division Bench of this Court in Century Traders v. Roshan Lal Duggar holds the field for this Court in so far as the question of maintaining passing off action against a registered proprietor of a trade mark is concerned. Learned couasel did not cite any decision of a Division Bench or larger bench of thus court taking a view contrary to the one taken in Century Traders.
40. In Anil Food Industries v. Alka Food Industries (supra) the trade mark “Anil” was registered in favour of both the plaintiff and the defendant in respect of Union Territory of Delhi. Noting this fact, the learned Single Judge held that the question of the defendant being injuncted from using the mark “Anil” in respect of the Union Territory of Delhi did not arise. The matter was not considered from the point of view of section 27(2) of the Act. In P.L.J & Co. v. Promilla Industries (supra) the question whether in a suit for passing off an order of injunction can be passed against the owner of a registered trade mark restraining him from using the said mark, was not decided as it was felt that there was no necessity to decide the same in view of the concession of the defendant that he shall not sell its product in cartons similar to the ones used by the defendant. In P.M Diesels Pvt. Ltd. v. Thukral Mechanical Works (supra) both plaintiff and the defendant were admitted owners of the trade mark ‘Field Marshal’. While the plaintiff was the registered proprietor of trade mark ‘Field Marshal’ in respect of disel oil engines or parts thereof, the defendants were the registered proprietors of the trade mark ‘Field Marshal’ in respect of centrifugal pumps etc. The learned single Judge held that the proprietary rights of both the plaintiff and defendants in respect of their marks were protected under section 28(3) of the Act and neither of them could be restrained from using its mark. A perusal of the judgment shows that the provisions of section 27(2) of the Act were neither considered nor noticed. Besides this was a case which arose under the provisions of section 28(3) of the Act. Therefore, none of these decisions further the case of the appellants.
41. The concept and principle on which passing off action is grounded is that a man is not to sell his own goods under the pretence that they are the goods of another man. A trader needs protection of his right of prior user of a trade mark as the benefit of the name and reputation earned by him cannot be taken advantage of by another trader by copying the mark and getting it registered before he could get the same registered in his favour. We see no reason why a registered owner of trade mark should be allowed to deceive purchasers into the belief that they are getting the goods of another while they would be buying the goods of the former which they never intended to do. In an action for passing off it should not matter whether misrepresentation or deception has proceeded from a registered or an unregistered user of a trade mark. He cannot represent his own goods as the goods of some body else.
42. In Delco Engineering Works v. General Motors Corporation ILR 1974 Punjab & Haryana series 502 it has been held that an action for passing off is founded on the desirability of preventing commercial immorality or dishonesty by a trader who by using a particular mark, whether registered or unregistered wants to falsely represent that his goods are the goods of some one else so that he can take undue and unfair advantage of the reputation of the other person in the mark. Therefore, it cannot be stated that under section 28 of the Act the statutory right of use acquired by a trader by registration of a mark is a defence to proceedings for passing off initiated by a prior user of the mark. In our opinion the learned Single Judge correctly analysed the decision of the Division Bench in Century Traders v. Roshan Lal Duggar and we record our respectful approval thereto by holding that there is no statutory bar to a prior user of a trade mark for bringing an action for ‘passing off’ against a registered proprietor thereof. It is also wholly immaterial in an action for passing off that the opposition of the plaintiff to the registration of the mark in favour of the defendant was not accepted. In an action for passing off, it is no defence that the defendant's trade mark is registered and that of the prior user is not so registered.
43. Having regard to the above discussion, the following position emerges. The Courts do not approve of any attempt by one trader to appropriate the mark of another trader, even though that trader may be a foreign trader and mostly uses his mark in respect of the goods available abroad i.e out side the country where the appropriation of the mark has taken place. As mentioned earlier, awareness & knowledge of the mark in the latter country may be because of small trickle of goods in that country or through advertisement. The manner and method by which the knowledge of the mark is acquired by the public is of no consequence & will not matter. Applying this principle & the reasons already stated we have prima facie come to the conclusion that the appellants have acquired reputation & goodwill in respect of its goods bearing trade mark ‘WHIRLPOOL’ in this country. Even though the appellants have no connection with the respondents, they are using the mark ‘WHIRLPOOL’ for their products. Prima facie it appears to us that buyers are likely to be deceived or confused as to the origin and source of the goods. They will believe that the product is manufactured by the respondents, an impression not founded in truth. The imitation will pass off as genuine. No one can be permitted to trade by deceiving or misleading the purchasers or to unauthorisedly divert to itself the reputation and goodwill of others. Under section 27(2) an action for passing off against registered user of trade mark is maintainable at the instance of a prior user of the same, similar or identical mark. Since such a remedy is available against the registered user of a trade mark, an interim injunction restraining him to use the mark can also be granted to make the remedy effective.
44. We also do not agree with the submission of learned counsel for the appellants that the respondents are guilty of culpable delay, acquiescence and laches which disentitle the respondents from claiming the relief of injunction. It may be noted that the respondents filed their oppesition to the application of the appellants for registration of the trade mark ‘WHIRLPOOL’ which was decided on August 12, 1992. Thereafter the respondents also filed an appeal before this Court which is still pending. On August 4, 1994 the present suit was filed against the appellants. Right from the time the respondents came to know about the application for registration of trade mark by the appellants, the former has been contesting the same. It is also not the case of the appellants that they have sold large number of washing machines over a long period of time. There is no question therefore of any prejudice being caused to the appellants by filing of the suit in the year 1994 by the respondents. If they have not done any appreciable business, they cannot be said to have been adversely effected by the filing of the suit in the year 1994. Delay, if any, without being coupled with prejudice caused to the apellants cannot be a good defence by itself. Defence of laches or delay can be set up in equity but it cannot be put forth by some one who has not acted fairly and honestly and has used the trade mark of another person. There is no plausible & con-vineing explanation by the appellants as to how they came to adopt the mark ‘WHIRLPOOL’. In absence of any satisfactory explanation by the appellants, the adoption of the mark by them cannot prima facie be regarded as honest and plea of delay & laches would be of no avail to them. As regards acquiescence, there is nothing to show that there has been a tacit or express assent by the respondents to the appellant's using the mark. As regards the submission of learned counsel for the appellants that the respondents had abandoned the trade mark ‘WHIRLPOOL’ and therefore, they cannot maintain the action of passing off, is not well founded. As already seen, the respondents had been using the trade mark ‘WHIRLPOOL’ world wide and there is no reason to assume that the same was abandoned. Mere fact that the registration was not renewed by them in India after 1977, is no ground to hold that the respondents had abandoned the trade mark.
45. Lastly learned counsel for the appellant submitted that the order of the Assistant Registrar of Trade Marks was binding on the principle of issue estoppel. It has been rightly pointed out by the learned single Judge that the registration of the mark was of no consequence in a passing off action.
46. Learned counsel for the appellant relied on the decision of the Chancery Division in Crown Estate Commissioners v. Dorset County Council 1991 All E.R 19, where the question was whether the decision of the Chief Commons Commissioner that certain road verges were not registrable under the Commons Registration Act, 1965 as the same formed part of a highway could be reagitated in proceedings unconnected with the proceedings in which these road verges were excluded from the register of common land. Following the decision of the Commissioner, defendants ceased to make any payments to the plaintiffs in their use of the verges. The plaintiffs brought proceedings for trespass with a view to relitigate the same question, namely, whether the road verges are part of the highway, which the Chief Commons Commissioner decided against them. The Chancery Division of the High Court held that the Commissioner had a statutory jurisdiction to decide whether or not the road verges should be registered as common land and for that purpose it had to determine the question whether or not the land formed part of the highway, which was again a matter in its jurisdiction. Therefore, it was held that the decision of the Commissioner created an issue estoppel and the same issue was not capable of being relitigated subsequently in the Court. The aforesaid principle is well established bur the same has no application in the present case as registration of a mark as a consequence of the proceedings before the authorities under Section 28 of the Act has been expressly made subject to the other provisions thereof. As already noticed, section 27(2) of the Act itself provides for an action for passing off and saves such a right Not withstanding registration of the mark by the Trade Mark Registry. It seems to us that Section 27(2) and 33 are conclusive on the question of maintainability of the suit for passing off and the application of doctrine of issue estoppel in case of this kind will not apply.
47. Having regard to the above discussion, we see no reason to interfere with the discretionary order passed by the learned Single Judge dated October 31, 1994 granting the restraint order. Accordingly, the appeal is dismissed but without any order as to costs