Rajiv Sahai Endlaw, J.:—The plaintiff, an American company carrying on business, inter alia, as manufacturer of confectionery items including ice creams and chocolates and owning several famous brands of chocolates viz MARS, GALAXY, SNICKERS, CELEBRATIONS, MILKY WAY, TWIX has instituted this suit inter-alia for permanent injunction to restrain the defendant No. 2, a private limited Indian Company having its registered office at Ernakulam, Kerala and its Managing Director defendant No. 1 also resident of Ernakulam, Kerala and carrying on business, inter alia, of manufacturing, marketing and distribution of cakes, breads and confectionery from using the trademark CELEBRATIONS in connection with chocolates or chocolate coated goods including cakes and confectionery or in any other manner pass off their goods and/or business as those of plaintiff. The applications of the plaintiff for interim relief (IA. No. 10465/2003) and for judgment on admissions under Order 12 Rule 6 CPC (IA. No. 5962/2004) and of the defendants for framing of preliminary issue qua territorial jurisdiction (IA. No. 7597/2005) and for deletion of portions of the replication in advancement/variation of the case in the plaint (IA. No. 7596/2005) are for consideration in this order.
2. The senior counsel for the defendant has contested the claim of the plaintiff for interim relief and otherwise on several counts. The discussion hereunder is divided under the following sub-heads —
A. On the defendant being the prior user of the word/mark CELEBRATIONS.
3. It is the claim in the plaint that the plaintiff conceived the trademark CELEBRATIONS in the year 1988 for use in relation to a unique packaged assortment of their various chocolate products; the CELEBRATIONS brand was test marketed in September, 1996 in the United Kingdom followed with a national launch in 1997; thereafter the product under the said trademark has been sold extensively in different world markets including India and its neighbouring countries. The plaintiff also claims to be the registered proprietor of the trademark CELEBRATIONS in classes 5 and 30 in various countries, though not in India. The plaintiff claims that its products under the trademark CELEBRATIONS has been sold through duty free outlets in India.
4. The plaintiff's claim to have during a trademark search conducted around January/February, 2000 found a trademark application filed by the defendants in class 30 in respect of “bread, biscuits, cakes, pastry, confectionery, food preparations made from cereals, ice, sauces and spices” with respect to the trademark CELEBRATIONS; the plaintiff claims to have got issued a cease and desist letter to the defendants advising them of the prior rights of the plaintiff in the trademark CELEBRATIONS since 1988 and calling upon the defendants to withdraw their application.
5. The defendants in their written statement have pleaded that they have been successfully selling their cakes under the mark CELEBRATIONS since the year 1995 and after noticing the grand success of their products had applied for registration vide application aforesaid on 24th December, 1997. It is the contention of the defendants that since as per the averments in the plaint, the plaintiff tested the brand CELEBRATIONS in the market in United Kingdom for the first time only in September, 1996, even if it were to be believed that the mark had conceived in 1988 by the plaintiff, as alleged, the first test appearance thereof being only in September, 1996, the defendant is a prior user of the trademark CELEBRATIONS.
6. The plaintiff in replication has pleaded that it is the registered proprietor of the trademark CELEBRATIONS in several countries of the world, the earliest of which is for the mark CELEBRATIONS dated 25 November, 1959 in United Kingdom and which predates the defendants' application by almost four decades. (though document shows registration effected in 1999) It is inter alia with respect to the said plea in replication that the application for striking off thereof has been filed. It is the case of the defendants that the plaintiff having expressly pleaded in the plaint that the trademark CELEBRATIONS was coined in 1988, cannot be permitted to plead contrary thereto a registration thereof of 25 November, 1959.
7. Reliance is placed on M/s Anant Construction (P) Ltd v. Shri Ram Niwas 1994 (4) AD Delhi 185 and Dr Mrs N.D Khanna v. Hindustan Industrial Corporation AIR 1981 Delhi 305 to contend that such new and inconsistent pleas cannot be permitted to be introduced through replication.
8. The senior counsel for the plaintiff has also relied on Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd.. (2001) 5 SCC 73, Chhattar Extractions Ltd. & Anr. v. Kochar Oil Mills Ltd. AIR 1996 Delhi 144 to demonstrate the essentials of passing off and has contended that the prior user is essential in an action for passing off. Attention in this regard is invited to Coolways India v. Princo Air Conditioning & Refrigeration PTC (Suppl.) (1) 470, Uniply Industries Ltd. v. Unicorn Plywood Pvt. Ltd. (2001) 5 SCC 95, Bharat Hotels Ltd. v. Unison Hotels Ltd. 2004 (28) PTC 404 (Del.) It is contended that in the present case the defendant is the prior user of the mark CELEBRATIONS. Reference is also made to N.R Dongre v. Whirlpool Corporation 1996 (2) Arb.L.R 488 SC to contend that even in a case of infringement of a registered trademark prior use is a valid defence.
(B) Of the plaintiffs having not used the mark in India and being thus not entitled to any injunction in this action for passing off.
9. The senior counsel for the plaintiffs relied upon Franz Xaver Huemer v. New Yash Engineers AIR 1997 Delhi 79 (though relating to patent) and Wyeth Holdings Corporation v. Burnet Pharmaceuticals (Pvt) Ltd 2008 (36) PTC 478 Bombay to contend that to be able to maintain an action for passing off, it is essential for the plaintiff to show use of the trademark in India. Reference is made to para 11 of the plaint wherein the year when the plaintiff claims to have set up operations in India has been left blank and where it is only pleaded that the plaintiff through a subsidiary Effem India Pvt Ltd is importing a variety of its products under well known brands into India and that the said Effem India is currently engaged in manufacture, imports and distribution of pet foods in India. It is further highlighted that the plaintiff in the said paragraph admitted that the direct operation had not been commenced by the plaintiff in India. It is further pointed that the only averment of the plaintiff of use of the mark in India is of the availability of the goods in the duty free shop at the airports and of the goods being available to the Indians visiting abroad.
10. It is further the contention of the senior counsel for the plaintiff that the plaintiff has in the replication taken contrary pleas in this regard also. On the contrary, it is contended that it is the admitted case that the defendant has been using the trademark in India.
11. Per contra, the senior counsel for the plaintiff has contended that though, at the time of institution of the suit, the plaintiff's subsidiary Effem India Pvt Ltd only provided support to local distributors who were directly importing the confectionery products from the plaintiff's group companies but now the said Effem India is importing directly. It is further contended that the mark aforesaid of the plaintiff has a trans-border reputation. Reference is made to N.R Dongre (supra). It is further contended that non availability of the CELEBRATIONS product of the plaintiffs is no bar to the plaintiffs maintaining the present action. Strong reliance is placed on Milment Oftho Industries v. Allegran Inc AIR 2004 SC 3355 (though relating to pharmaceutical products and in the context of doctors) laying down that the mere fact that the mark has not been used in India would be irrelevant if the party suing for the said mark is first in the world mark.
12. It is contended that the plaintiffs CELEBRATIONS chocolates have been available in India since 1997 not only at duty free outlets but also through distributors who directly import the goods into India. It is further argued that subsequent to the institution of the suit, the CELEBRATIONS chocolates are now being directly imported into India by the plaintiff's subsidiary aforesaid.
(C) On the ground of this court not having territorial jurisdiction.
13. The plaintiff has invoked territorial jurisdiction of this court on the plea of the defendants' product being offered for sale through their website, inter alia, in Delhi and which can be accessed by traders and consumers in Delhi. It is further pleaded that dynamic effect of the defendants' wrongful use of the impugned trademark is also felt by the plaintiff, inter alia, at Delhi where the plaintiff is carrying on business through its subsidiary aforesaid. The defendants have, per contra, in their written statement contended that their products are sold only in the States of Kerala, Tamil Nadu and Karnataka; that no cause of action had accrued to the plaintiff against the defendants within the territorial jurisdiction of this court; that the defendants admittedly did not have their place of business and residence within the jurisdiction of this court. It is further pleaded that even the plaintiff does not have as its registered office in the jurisdiction of this court. With respect to the website, the same is not denied but it is argued that it is a dormant and not an interactive website. Reliance is placed on Haryana Milk Foods Ltd v. Chambel Dairy Products 2002 V AD Delhi 728 and (India TV) Independent News Services Pvt Ltd v. India Broadcast Live LLC 2007 (35) PTC 177 (Delhi) and host of other judgments in this regard. Judgments in support of the proposition of a preliminary issue going to the root of the matter being required to be decided first have also been cited.
14. Per contra, the senior counsel for the plaintiff has argued that the admission by the defendants of the website clearly indicates that one can place an order for all kinds of cakes of the defendants from Delhi and to be delivered to any part of Chennai, Bangalore, Coimbatore and any parts of Kerala. It is further argued that there is a very large section of persons from these three South Indian States living in Delhi who are interested in placing orders to their friends and relatives in places mentioned above and therefore the cause of action has also arisen in Delhi. Admission of the defendant of advertising its products at Delhi through its website aforesaid is relied upon. The plaintiff has also filed an affidavit of an independent investigator, inter alia, to the effect that he had placed order on the defendants from Delhi for delivery at Bangalore. Though the senior counsel for the defendants objected to the filing of the said affidavit but in my view the parties can, in support of their applications for interim relief, file affidavits by way of evidence in support of their respective cases. The same is permitted by language itself of Order 39 Rule 1 CPC. The weight to be given thereto is of course in the domain of the courts. The senior counsel for the plaintiff has also relied upon Jawahar Engineering Co Ghaziabad v. M/s Jawahar Engineering Pvt Ltd 1983 PTC 207 and Pfizer Products v. Rajesh Chopra 2006 (32) PTC 301 Delhi to contend that where the trademark is sought for sale in Delhi amongst other places and or where a threat of sale exists has the territorial jurisdiction to entertain the suit. It was further contended that since on the basis of the admitted website, business was solicited from/carried on by the defendants at Delhi, this court would have jurisdiction. Independent News Services Pvt. Ltd. (supra) is contended to be in favour of plaintiff. Lastly, it was argued that the jurisdiction being a mixed question of fact and law, cannot be decided as a preliminary issue. Reliance was also placed on Pepsico Inc v. Sunrise Beverages 2007 (35) PTC 687 to contend that since the goods of the plaintiff are sold at Delhi the damages to the plaintiff's mark has occurred at Delhi this court would have jurisdiction.
(D) On the ground of delay
15. It is the case of the plaintiff in the plaint itself that the plaintiff learnt of the use by the defendants of the mark CELEBRATIONS in January, 2000. The suit has been filed in the year 2003. The plaintiff has pleaded that the plaintiff since 2000 was issuing cease and desist notices to the defendants and finally instituted the suit on noticing the website of the defendants and which is available at Delhi. The senior counsel for the defendants has contended that this being an action for passing off, the plaintiff is not entitled to interim relief for the reason of delay, which is vital in such actions. It is contended that the defendants have established use of the impugned trademark since 1995 and the suit has been filed after eight years in 2003; the defendants in the meanwhile have built goodwill.
16. Per contra, the senior counsel for the plaintiff has contended that there is no delay. It is argued that the present suit is a quia timet action. It is urged that the plaintiff has instituted the present suit not for the relief of restraining the defendants from using the trademark CELEBRATIONS with respect to plum cakes for which the defendants are presently using the said trademark but only for the relief of restraining the defendants from using the said trade mark in relation to chocolate or chocolate coated goods including cakes and confectionery and with respect whereto the defendants are admittedly not using the trademark. It is contended that the suit has been instituted because the plaintiff is under a threat. Thus, it is contended that the question of delay or latches does not arise. Reference in this regard is made to Mars Inc. v. Kumar Krishna Mukherjee 2003 (26) PTC 60 (Del.) and Bank of America v. Registrar of Trade Marks [1976] FSR 582 (that TM is only in relation to goods and not dehors the goods). Delay is also stated to be not coming in the way of the plaintiff for the reason of the opposition of the plaintiff to the application for registration of defendant having been filed and pending all this while.
(E) Of the defendants being honest and concurrent user.
17. It is contended that in the aforesaid facts and circumstances the defendants can at best be an honest and concurrent user and on that principle alone the plaintiff is not entitled to any injunction against the defendants. Documents are filed to show that defendants got the mark designed from an agency, bona fide; it is also contended that colour combination, formation of alphabets, packaging of/in the defendants' mark is entirely different from that in plaintiff's and by no means any intent to piggy ride on plaintiff is made out. It is further contended that there could be no question of deception since the plaintiff's product was till the institution of suit admittedly not available in the markets here.
18. The senior counsels for both the parties have also drawn attention to the documents filed by each of the parties to demonstrate prior use. The senior counsel for the plaintiff has vehemently relied upon advertisement of the plaintiff of the goods under the trademark CELEBRATIONS appearing in the 24 August, 1996 issue of the Grocer's Magazine which is stated to be a most read for all persons in the food trade as the defendants. It is contended that though from the documents filed by the defendants it appears that the word CELEBRATIONS was being used by the defendants prior to the said issue only as a description for one of the varieties of its plum cakes but the defendants after knowing of the launch by the plaintiff of its goods under the said trademark has started giving prominence to CELEBRATIONS so as to take advantage of the marketing and efforts of the plaintiff and to pass off their goods as that of the plaintiff. The senior counsel for plaintiff would call it the “Smoking Gun Evidence” of defendants' guilt. Arguments were also addressed on the plaintiff using the word CELEBRATIONS as its trademark and the defendants, at least till the launch in the manner aforesaid of the plaintiff's trademark not using the word CELEBRATIONS as a trademark; their trade mark being ELITE. It is argued prior user is relevant only as a Trade Mark and the user shown by the defendants is not as a Trade Mark. It was further pointed that that while the defendants had not applied for registration as a trademark of any of the other words used by it to describe various varieties of its products, registration had been applied for of CELEBRATIONS with a malafide intention so as to squat over the said trademark for illegal enrichment, being fully aware that the plaintiff having worldwide business in the said trademark and having applied for and being in the process of obtaining registration of the said trademark in several countries of the world, would be ultimately inclined for registration of the same in India also. The senior counsel for defendants counters that just as MARS is the principal brand of plaintiff with CELEBRATIONS being only a sub brand, ELITE is the principal brand and CELEBRATIONS sub brand of defendants.
19. The aforesaid factual matrix and the pleas and counter pleas would demonstrate that the present is not a suit in which it can be said that no trial is necessary or which can be decided on documents alone, as in several of the cases of infringement of trademark/copyright. The case also does not fall in the exception carved out in Milment Oftho (supra) with respect to Multinational Corporations having no intention of coming to India or introducing their product in India and only wanting to throttle an Indian Company. The plaintiff claims to be in India in a big way.
20. It will have to be determined only after trial and nothing can be said with certainty at this stage as to who is the first user/prior user of the trademark. The nature and extent of the use will also have to be adjudicated only by examination and cross examination of witnesses. I am unable to hold that the interim relief can be denied to the plaintiff at this stage on the grounds of territorial jurisdiction or delay also. The question of territorial jurisdiction is also not found to be such which can be adjudicated without recording any evidence. As aforesaid, the plaintiff has filed affidavit of a purchase having been made of the goods of the defendants sitting in Delhi. The nature of the website of the defendants will also have to be adjudicated only after evidence.
21. A preliminary issue can be framed, which can be adjudicated without recording any evidence. However, where an issue even if going to the root of the matter requires evidence to be recorded, the same cannot be treated as a preliminary issue for adjudication before other issues. Law/procedure does not permit a piecemeal trial. On the aspect of delay also, there is merit in the contention of the senior counsel for the plaintiff. The suit is for a threatened action. Even if a threat is presumed to have existed for over 3 or four years prior to the institution of the suit, the same would not be a ground for denying the interim relief. Threat is a matter of perception. A person is not expected to rush to the court immediately. The defendants admittedly, as per their own admission, have confined their business to only three States of this country. The defendants are also till date not in the field of chocolate/chocolate related products. The plaintiff appears to have reconciled to the defendants using the mark CELEBRATIONS in relation to the plum cakes for which the defendants are using the mark till now. The plaintiff appears to have been spurred into action on seeing the expansionist plans of the defendants by widening their reach through website and realizing that if they do not initiate action now, the defendants may tomorrow to the prejudice of the plaintiff also use the said trademark in relation to the products same as that of the plaintiff. The present is a different case in this respect from the others.
22. The judgments cited by the senior counsel for the defendants are, where the impugned goods have been marketed for selling and with the knowledge of the plaintiff. In those cases it has been held that the plaintiff having acquiesced and/or allowed the defendants to continue its business is not entitled to the interim relief. Here admittedly there is no business as yet, which is sought to be restrained. There could then be no question of delay. One cannot also loose sight of the fact that the plaintiff is opposing the registration applied for by the defendant. The defendant was from such opposition fully aware of the stand of plaintiff. It is not the case of defendant that the defendant has after knowledge of opposition by plaintiff extended or expanded the trade mark subject matter of suit to other goods/territories. There is thus not consent, acquiescence, waiver found in the conduct of the plaintiff so as to disentitle it to interim relief on this ground, if otherwise entitled to.
23. The stand of the defendants in their written statement guides me to the interim order called for in the present case. The defendants in their written statement in para 9 of the preliminary objections have stated
“However, the defendants have been selling only traditional plum cakes under the brand CELEBRATIONS especially during the festive seasons and no chocolate base cake or confectionary has even been manufactured or sold by the defendants herein under the brand name “CELEBRATIONS”. The plaintiffs have admitted in the suit that they manufacture only cocoa based products and hence there is no injury at all, caused to the plaintiffs and there is no cause of action for the present suit. The plaintiff has no proprietary right over the brand “CELEBRATIONS” and they have no trademark application pending with regard to the same before the Registrar of Trademark in India. The defendant has been advertising its brand of “CELEBRATIONS” plum cakes in its website ever since 1998 itself. In fact, injury has been caused to the defendants, who are liable to be compensated by the plaintiffs who are harassing the defendants in the name of imaginary grievances.”
24. The defendants again in para 23 of the reply on merits in their written statement have stated
“The defendants are not manufacturing any confectionary and are manufacturing only cakes and biscuits. Hence the apprehension of the plaintiffs at present is totally misplaced and there is no injury caused to them whatsoever.”
25. Yet again in para 25 it is stated —
“These defendants have never sold chocolate coated cakes under their trademark and copyright CELEBRATIONS. The plaintiffs have no cause of action at all and the defendants have every right to continue the sale of their CELEBRATIONS brand of plum cakes.”
26. The aforesaid being the state of the pleadings and the present suit itself having already remained pending for the last nearly six years and the defendants in spite of knowledge of the plaintiff claiming rights with respect to the trademark CELEBRATIONS and marketing their chocolates thereunder having not taken any steps for whatsoever for restraining the defendants from doing so, in my prima facie view the rights have accrued to the plaintiff also, even if all the pleas of the defendants are to be believed, to use the trademark CELEBRATIONS in India, at least in relation to cocoa and cocoa based products.
27. The products of the plaintiff and the defendants though having some similarity are yet different. The parties notwithstanding vehement contest in these applications appear to be reconciled to both existing in harmony. This court also by interim order dated 19 April, 2004 had restrained the defendants from using the trademark CELEBRATIONS for chocolate related goods. Nothing has been informed that the defendants have since then also forayed into chocolate or chocolate coated goods. In my view, equity shall be balanced if during the pendency of the suit interim order as claimed is granted, i.e of restraining the defendants from using the mark CELEBRATIONS in relation to chocolate and chocolate coated goods.
28. It is significant that it is nowhere the case of the defendants that the plaintiff has copied the mark of the defendants. In fact, the case of the defendants is of its business having been restricted to three States only. The defendants do not even claim a pan Indian least pan international presence. It is best that the status as prevailing today continues during the trial also. Judicial notice of events subsequent to the institution of the suit can be taken. It is the case of the plaintiff that since the institution of the suit the subsidiary of the plaintiff in India has been directly importing, distributing and marketing the chocolate goods in the name of CELEBRATIONS in India. Even otherwise there has been a sea change in the international trade and travel in the last six years since the suit was instituted. Owing to the outsourcing of various services to India and Indians setting up businesses abroad and communication barriers collapsing with lowering of tariffs, there is an increasing number of Indians travelling to UK and other countries where the plaintiff claims to have launched the mark first and where the said mark is claimed to be established and similarly a larger number of persons from those counties, of Indian or foreign origin, are coming to India and/or communicating with each other. Undoubtedly if the chocolate related goods under the name/marks CELEBRATIONS are permitted to be marketed/sold by the defendants during the pendency of the suit, the same is likely to lead to confusion amongst the customers and the possibility of the customers picking the goods of the defendants from the shelve relying upon their experience/reputation of the goods of the plaintiff of the same mark cannot be ruled out. The same ought not to be permitted during trial especially when the same has not happened till now.
29. I am also of the view that during the pendency of the suit, the use of the mark by the defendants ought to be restricted to the same manner and style as of now. The manner and style of use of the mark by the defendants as of today is to equally highlight the trademark ELITE of the defendants and as has in fact been argued by counsel for defendants. In fact, I find that prominent use by the defendants of the mark ELITE alongwith CELEBRATIONS is a distinctive feature between the goods of the plaintiff and of the defendants even though related and which may guide the customers and prevent confusion/deception. The business of the defendants of plum cakes under the name CELEBRATIONS with the trademark ELITE also prominently displayed is unlikely to make the buyers thereof treat the same to be coming from the stable of the plaintiff and vis versa. However, if the defendants, during the pendency of the suit, are permitted to sell even its non chocolate products under the name of CELEBRATIONS only with the trademark ELITE being deleted or not being given prominence, the same is again likely to cause confusion.
30. In cases of this kind, it is not the parties alone whose interest has to be protected. The public good and of the good of the ultimate buyers/consumers who act on the basis of the trademark is also to be given consideration. Though the senior counsel for the plaintiff had also argued of the defendants having for the first time used the word CELEBRATIONS only and after the announcement of the launch of the mark CELEBRATIONS of the plaintiff and of the plaintiff having originally used the word CELEBRATION but in my view, neither does anything turn on the same nor do I find any such clear action on the part of the defendants. On the contrary, the documents show that the defendants even earlier had been using the mark CELEBRATION and CELEBRATIONS interchangeable.
31. I am thus inclined to grant the interim relief claimed and the order dated 19 April, 2004 and to make the same absolute during the pendency of the suit. The defendants, their officers, agents are thus restrained from manufacturing, selling and offering for sale or advertising chocolate or chocolate coated goods including cakes and confectionary under the mark CELEBRATIONS or any other mark deceptively similar thereto. The defendants are also restrained from varying or altering the use of the mark CELEBRATIONS on the goods already being used, as set out in the written statement and recorded above, so as to pass off the said goods even as those of the plaintiff. However, the said order is subject to the condition on the plaintiff not to use the trademark CELEBRATIONS in relation to the goods for which the defendants is using the same and not to use the mark in a manner similar to that of the defendants.
32. As far as the application of the plaintiff under Order 12 Rule 6 CPC is concerned, I find that the defendants have in the written statement while stating that they are not using the mark CELEBRATIONS at present for chocolate or chocolate coated goods have not admitted to the suit being disposed of on those terms and have asserted their right, to in future use the said mark in relation to chocolate goods also. In the circumstances there is no such admission on the basis whereof the suit can be decreed as claimed. IA. No. 5962/2004 is thus dismissed.
33. On IA. No. 7597/2005 of the defendants for framing of preliminary issue I have already held above that the issue of territorial jurisdiction requires evidence and any issue which requires evidence cannot under the CPC be framed as a preliminary issue and has to be tried alongwith other issues. IA. No. 7597/2005 is thus dismissed.
34. As far as IA. No. 7596/2005 of the defendants for striking off portions of the replication of the plaintiff is concerned, at this stage I do not deem it appropriate to allow the same. The plaintiff having taken the pleas to which objections is taken immediately on the filing of the written statement, and the suit being at a preliminary stage, even if the said pleas are ordered to be struck off, the plaintiff would still have a right to apply for amendment of the plaint, inter alia, to take the said pleas. The same is likely to lead to further delays in the disposal of the suit. The said application as such is disposed of with the direction that the effect of the inconsistency in the pleas in the plaint and the replication shall be considered at the stage of final hearing and it shall be open to the defendants to lead any evidence in rebuttal to any new pleas taken by the plaintiff in the replication.
RAJIV SAHAI ENDLAW, J.