ORDER

IA Nos. 2922 of 2012 (u/O XXXIX Rules 1 & 2 CPC)

1. The Plaintiff holds registration for the mark ‘Rajnigandha’. in Class 31 which relates to tobacco products. The Plaintiff's case is that the trademark ‘Rajnigandha’ was adopted by the Plaintiff's predecessors in the year 1983 in respect of pan masala. The Plaintiff is registered as the subsequent proprietor of this mark since 25th February 2002. The Plaintiff claims that ‘Rajnigandha’, the Plaintiff's flagship brand, is the world's largest selling premium flavoured pan masala and that the consumers around the world associate the mark ‘Rajnigandha’ exclusively with the Plaintiff. The export sales of the Plaintiff's group of the companies under the trade name ‘Rajnigandha’ are set out in para 6 of the plaint. For the year 2010-11, the sales were over Rs. 2.20 crores. The Plaintiff states that it has been spending huge amounts of money in popularizing and publicizing the goods bearing its trademark ‘Rajnigandha’ by widely advertising it in newspapers, magazines, electronic media etc. The worldwide sales figures and the total marketing/communications expenditure for the cumulative businesses of the Plaintiff since 2005-06 have been set out in para 9 of the plaint. The Plaintiff states that it has applied for registration of the trade mark ‘Rajnigandha’ (device) in Class 37 for building construction, repair, installation services on 1st October 2007 and the said application is pending.

2. The Defendants admittedly applied for registration of ‘New Rajneegandha Greens’ mark under Classes 36 and 37 only on 1 March 2012, i.e after the interim order dated 15 February 2012 and after service of summons on them on 22nd February 2012. The main business of the Defendants is real estate and building construction relatable to Class 37. A factor that is relevant to the issue at hand is that the real estate projects in which booking is offered by the Defendants are in and around the Noida area, where the Plaintiff has a principal place of business.

3. On 15 February 2012 this Court passed an interim order, the operative portion of which reads as under:

“In the meanwhile, the Defendants are restrained from using the domain names www.newrajneegandhagreens.com and www.rajneegandhagreensnoida.com. As far as the name of RAJNEEGANDHA GREENS’ is concerned, the said prayer would be considered at the time of hearing of the interim application. It is further directed that the Defendants shall maintain true accounts and the details of the booking of apartments under the name ‘NEW RAJNEEGANDHA GREENS’ and ‘RAJNEEGANDHA GREENS NOIDA’ and upon service, file the same by the next date of hearing alongwith written statement.”

4. Ms. Vaishali Mittal, learned counsel for the Plaintiff, submitted that the Defendants not only failed to fully comply with the interim injunction granted by the Court by its order dated 15 February 2012 but continued using the impugned mark extensively to promote their projects thus taking unfair advantage of the Plaintiffs well-known mark ‘Rajnigandha’. This had caused considerable confusion in the public, diluted the reputation and goodwill enjoyed by the mark and was detrimental to the distinctive character of the Plaintiff's mark. She accordingly urged that the Court should grant an interim injunction restraining the Defendant from infringing the mark.

5. Ms. Mittal pointed out that on clicking on the domain name www.newrajneegandhagreens.com, while a message pops up stating that the website has shut down, the viewer is directed to another website which is in fact the website of Defendant No. 2 and that on the redirected website the advertisement for booking apartments in the project ‘NEW RAJNEEGANDHA GREENS’ of Defendant No. 2 is displayed. She further states that the Defendant No. 2 has also started advertising the project under the name of ‘RAJNEEGANDHA PARK’ on its website. She points out that from the written statement it is seen that after the order dated 15 February 2012, the Defendants have filed an application in Trademarks Registry for registration of the mark ‘NEW RAJNEEGANDHA GREENS’. This fact is not denied by the Defendants. She also draws attention of the Court to the affidavit filed by Mr. Amit Singhal, Senior General Manager (Legal) of the Plaintiff on 24 February 2012 stating that calls have been received from interested third parties inquiring at the office of the Plaintiff about the ‘Rajneegandha Greens’ project and this is clearly an indication of the confusion created in the minds of the public that the projects of the Defendants are associated with or originate from the Plaintiff. She points out that one of the crossings in the Noida area where the Plaintiff is located is named after the brand name ‘Rajnigandha’, A DTC bus No. 34 also halts at a stop there. One of the exit gates of the Noida Sector 16 metro station identifies the place as ‘Rajnigandha Chowk’.

6. Ms. Mittal relied upon the decision of the Division Bench of this Court in Indian Hotels Company Limited v. Jiva Institute of Vedic Science & Culture2008 (37) PTC 468 (Del) (DB) to contend that if the Defendants have applied for registration of the same mark, they cannot contend that the mark is not distinctive. Reliance is also placed on the decision of the Bombay High Court in Essel Packaging Limited v. Essel Tea Exports Limited1999 PTC (19) 521 to urge that there is no requirement for a common field of activity to found a claim in passing off as long as it is shown that there is a real likelihood of confusion or deception in the minds of the public. She also referred to decision of the High Court of Judicature at Allahabad in Bata India Limited v. Pyarelal & Co.PTC (Suppl) (1) 116 (All), of the High Court of Bombay in Aktiebolaget Volvo v. Volvo Steels Limited1998 (PTC) (18) (DB) 47, and of this Court in Daimler Benz Aktiegesellschaft v. Hybo Hindustan. AIR 1994 Delhi 239.

7. Mr. Farukh Khan, learned counsel for the Defendants, on the other hand relied upon on the decision of this Court in Lowenbrau Ag & Anr.…Plaintiffs; v. Jagpin Breweries Ltd. & Anr.…Defendants. Limited2009 (39) PTC 627 (Del) to urge that the mark ‘Rajnigandha’ was not distinctive. It is the generic name of a fragrant flower and used extensively in trade and business not limited to the class of goods and services for which the registration was held by the Plaintiff. Referring to the documents filed by the Defendants, he submitted that there were numerous instances of ‘Rajnigandha’ being used by different persons in relation to various kinds of businesses, services and products in Delhi and elsewhere in India. These included apartments, perfumes and kattha/pan products. The Plaintiff has not chosen to injunct the other users and had, therefore, acquiesced in its use by others elsewhere. He further submitted that merely because the mark was registered, an injunction would not automatically follow. In each case it would have to be examined whether there exists a real confusion as a result of the use of the same mark or a mark that nearly resembles the registered trade mark.

8. Mr. Khan submitted that ‘Rajnigandha’ is not a part of the corporate name of the Plaintiff. He questioned the assumption that ‘Rajnigandha’ was a mark that had acquired a reputation that deserves protection under Section 29(4)(c) of the Trade Marks Act, 1999 (‘TM Act’). Lastly, it was submitted that any grant of injunction against the Defendants can be severely detrimental to the business of the Defendants as they spent more than Rs. 2 crores in advertising their projects under the names ‘NEW RAJNEEGANDHA GREENS’, ‘RAJNEEGANDHA GREENS NOIDA’ and ‘RAJNEEGANDHA PARK’. He submitted that these projects were in existence for some time and, therefore, the balance of convenience was in favour of the Defendants in declining the interim injunction as prayed for by the Plaintiff.

9. The above submissions have been considered. This is a case where the Plaintiff holds registration for its trademark ‘Rajnigandha’ in Class 31 relating to tobacco products. The Plaintiff seeks to restrain the Defendants from using their unregistered similar marks as noted above in relation to their building and housing projects in and around Noida in which bookings are being offered to the public.

10. The Court is first required to examine if the Plaintiff has a prima facie case for grant of an interim injunction against the Defendants for infringement of the Plaintiffs trademark. Considering that the Defendants are using marks that are similar to the registered mark of the Plaintiff, but in relation to goods and services that are neither identical with or similar to the goods and services in respect of which the Plaintiff holds registration, the Court is required to examine if the requirements of Section 29(4) of the TM Act are fulfilled. Section 29(4) of the TM Act reads as under:

29. Infringement of registered Trade Marks.-

(1) to (3)…..

(4) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which-

(a) is identical with or similar to the registered trade mark; and

(b) is used in relation to goods or services which are not similar to those for which the trade mark is registered; and

(c) the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark.”

11. The ingredients of Section 29(4) of the TM Act that require to be satisfied as under:

(i) The impugned mark must be identical with or similar to the registered trade mark; and

(ii) The impugned mark must be in relation to the goods or services not similar to those for which the Plaintiffs mark is registered; and

(iii) The infringer is neither a registered proprietor nor has permission to use the registered trade mark; and

(iv) The infringer has used the said mark in the course of trade; and

(v) The registered mark has a reputation in India; and

(vi) The use of the mark by the infringer,

(a) is without due cause; and

(b) takes unfair advantage of or is detrimental to, (b)(i) the distinctive character or

(b) (ii) repute of the registered trade mark.

12. All the sub-sections of section 29 of the tm act deal with infringement of a registered trademark. Sub-sections (1) to (3) deal with situations of identity or similarity of marks in combination with identity or similarity of either goods or services, and the likelihood of confusion resulting therefrom. Sub-section (4) of Section 29 of the TM Act is distinct from the earlier sub-sections inasmuch as it deals with a situation where the infringer's mark, which is not registered, is similar to or identical with the registered mark but the goods or services in relation to which it is used is not similar to those in relation to which the proprietor of the mark has been granted registration.

13. Section 29(4) is also distinct from Section 29(1) to (3) of the TM Act in another important aspect. The element of having to demonstrate the likelihood of confusion is absent. Perhaps to balance out this element, the legislature has mandated the necessity of showing that (a) the mark has a reputation in India (b) that the mark has a distinctive character (c) the use by the infringer is without due cause. In other words, the legislative intent is to afford a stronger protection to a mark that has a reputation without the registered proprietor of such mark having to demonstrate the likelihood of confusion arising from the use of a similar mark in relation to dissimilar goods and services. The words ‘unfair advantage’ and ‘detriment’ in the context of the ‘distinctive character’ and ‘reputation’ of the mark bring in the concept of ‘dilution’. In the context of ‘repute’ they are also relateable to the concept of ‘tarnishment’. The disjunctive ‘or’ between the words ‘distinctive character’ and ‘repute’ is designedly inserted to cater to a situation where a mark may not have a distinctive character and yet may have a reputation. It may not always be necessary for the proprietor of a registered mark to show that it is a ‘well-known trademark’ as defined in Section 2 (zg) although if in fact it is, it makes it easier to satisfy the ‘reputation’ requirement of Section 29(4) of the TM Act. The presumption of distinctiveness attached to a registered mark is a rebuttable one. At the interim stage, either of these elements showed be shown prima facie to exist. Whether in fact these elements are satisfied would depend on the evidence led by the parties at trial.

14. Thus for the purposes of Section 29(4) of the Act, the requirement of the registered proprietor having to demonstrate that there is likelihood of confusion on the part of the public if the infringer were to continue to use the impugned marks does not arise. At the pre-trial stage, in order to demonstrate that it has a prima facie case for the grant of an ad interim injunction restraining an unregistered user of the impugned marks, the registered proprietor should be able to satisfy the Court that the elements of Section 29(4) of the TM Act prima facie exist. If the registered proprietor does so, then subject to the alleged infringer being able to show to the contrary, an interim injunction should normally be granted.

15. In the present case, it is apparent that the impugned marks NEW RAJNEEGANDHA GREENS’, ‘RAJNEEGANDHA GREENS NOIDA’ and ‘RAJNEEGANDHA PARK’, used by the Defendants in the course of their trade, are phonetically identical with and even otherwise similar to the registered trade mark ‘Rajnigandha’ of the Plaintiff. Except replacing the alphabet ‘i’ with ‘ee’ in the above mark there is little difference in the two marks. Secondly, the Defendants are not the registered proprietors of the marks used by them. They do not have the permission of the Plaintiff to use the registered mark. The application by the Defendants for grant of registration of their marks, filed after receipt of summons in the present suit, is pending. Thirdly, the impugned marks are used for the real estate projects of the Defendants relatable to Class 39 of the Schedule to the Trade Marks Rules whereas the Plaintiff's registration of its mark is in relation to tobacco products and pan masala.

16. The factors that are relevant at this stage for determining if prima facie the Plaintiff's registered mark has a reputation in India are the sales figures which have shown a progressive increase over the past decade. The affidavit dated 24 February 2012 of Mr. Amit Singhal, Senior General Manager on behalf of the Plaintiff adverts to inter alia certain facts which are not disputed by the Defendants. These include the fact that one of the crossings in the Noida area where the Plaintiff's principal place of business is located is named after the brand name ‘Rajnigandha’ A bus route is shown to include the said location as one of the bus stops. One of the exit gates of the Noida Sector 16 metro station identifies the place as ‘Rajnigandha Chowk’ Material has been placed on record to show that there are television shows sponsored by the brand. These factors cumulatively would go to show prima facie that the Plaintiff's mark ‘Rajnigandha’ has a reputation in India.

17. Section 2 (zg) of the TM Act defines a ‘well known trade mark’ in relation to any goods or services to mean ‘a mark which has become so to the substantial segment of the public which uses such goods or receives such services that the use of such mark in relation to other goods or service would be likely to be taken as indicating a connection in the course of trade or rendering of services between those goods or services and a person using the mark in relation to the first-mentioned goods or services.’ In this regard, the aforementioned affidavit dated 24 February 2012 on behalf of the Plaintiff prima facie shows that customers of the Plaintiff have made enquiries whether the Defendants projects are in fact associated with the Plaintiff. While this will have to be tested in evidence, it is a relevant factor at the interlocutory stage.

18. On the question of whether the Plaintiff's mark has a distinctive character, it is not open to the Defendants to argue that Rajnigandha is not a distinctive mark and that it is in fact a common word with no distinctive characteristic. Admittedly, the Defendants have applied for registration of their marks, which as was noted earlier, are similar to the Plaintiffs mark. The Division Bench of this Court in Automatic Electric Limited v. R.K Dhawan1999 PTC (91) 81 in similar circumstances repelled the argument of the Defendants in that case that the trade mark ‘DIMMER DOT’ is a generic expression since they had themselves applied for its registration and claimed proprietary rights in the same mark. Further the Plaintiff's registration in Class 31 and its application for registration in Class 37 remains unopposed.

19. As regards the question whether the Defendants have, without due cause, taken unfair advantage of the Plaintiff's registered trade mark, it is apparent that the Defendants use the impugned marks as a prominent feature of the names of their real estate projects. Obviously, the Defendants value the reputation attached to the said marks. What is significant in this case is the geographical location of the Defendant's projects in and around Noida where the Plaintiff's principal place of business is located and where the public is likely to associate the projects of the Defendants with the Plaintiff.

20. The costs of booking flats in the Defendants' project justify it having spent huge amounts in advertising and promoting its projects under the impugned marks. It also shows the prima facie that the Defendants have exploited the mark commercially and taken unfair advantage of the registered mark of the Plaintiff.

21. There is merit in the contention of the Plaintiff that adoption and use by the Defendants of the Plaintiff's registered trade mark is likely to dilute the distinctive character and reputation of the Plaintiff's mark. As long as the Plaintiff's mark remains registered it deserves protection in terms of Section 28(1) read with Section 29(4) of the TM Act. Accordingly, the Court is of the opinion that the ingredients of Section 29(4) of the TM Act are prima facie satisfied in the present case.

22. Independent of the above plea, the Plaintiffs have also made out a prima facie case of passing off against the Defendants. It was explained in Essel Packaging Limited v. Essel Tea Exports Limited1999 PTC (19) 521 that “there is no requirement for a common field of activity to found a claim in passing off because the real question in each of such cases is whether there is, as a result of misrepresentation, a real likelihood of confusion or deception of the public and consequent damage to the Plaintiffs is likely to be caused and if that is the test then the focus is shifted from the external objective test of making comparison of activities of parties to the state of mind of public in deciding whether it will be confused.” In the instant case, it has been prima facie shown that the continued use of the impugned marks by the Defendants is likely to cause confusion in the mind of the public that the projects of the Defendants are associated with the Plaintiff.

23. The conduct of the Defendants, even after the limited interim injunction granted on 15 February 2012, indicates that the Defendants intend to use the impugned marks extensively in their business. The Court is of the view that the Plaintiff has made out a prima facie case for grant of interim injunction as prayed for and that the balance of convenience is also in its favour. By adopting the registered trade mark of the Plaintiff as a prominent part of the impugned marks under which their real estate projects are promoted, the Defendants have taken a calculated risk and cannot be heard to say that grant of an interim injunction would adversely affect their business. On the other hand, the continued use by the Defendants of the Plaintiffs registered trade mark would cause severe prejudice and hardship to the Plaintiff.

24. Accordingly, it is directed that during the pendency of the suit the Defendants, their partners or proprietor, as the case may be, their principal officers, servants and agents, distributors and all others acting on their behalf shall be restrained from manufacturing, selling, offering for sale, advertising, directly or indirectly, dealing in any manner with services and/or goods infringing and/or diluting by using any mark identical with or similar to the Plaintiffs trade mark ‘Rajnigandha’ and from passing off the Defendants' business or services or goods as those of the Plaintiff.

25. IA No. 2922 of 2012 is disposed of in the above terms.

IA. Nos. 4296 of 2012 and 15996 of 2012 (u/O XXXIX Rule 2 A CPC)

26. These applications by the Plaintiff under Order 39 Rule 2A CPC complain of non-compliance by the Defendants with the aforementioned interim order dated 15 February 2012.

27. Mr. Farukh Khan, learned counsel for the Defendants, states that while the domain name www.newrajneegandhagreens.com which belonged to the Defendants has been closed, he states that Defendants have nothing do with the second domain name www.rajneegandhagreensnoida.com. He states that upon enquiries it has been ascertained that the second domain name is registered in the name of Mr. Anurag Singh at C-103B, Sector-39, Noida, U.P 201301 Telephone No. 01204259249. He states that they have nevertheless written to Mr. Anurag Singh to stop using the said domain name in terms of the above order.

28. Mr. Khan, however, does not dispute the fact that the Defendants have till date not placed on record true accounts and details of the booking of apartments under the name ‘NEW RAJNEEGANDHA GREENS’ and ‘RAJNEEGANDHA GREENS NOIDA’ which they were specifically directed by the Court to do along with their written statement. It is, therefore, apparent that there has been an admitted failure by the Defendants to comply with the order dated 15 February 2012 passed by the Court in its entirety.

29. Notice is issued to Mr. Suneel Kumar Rajput, Defendant No. 1 who happens to be the Managing Director of Defendant No. 2, Rajput Properties & Developers Private Limited, to remain present in Court on the next date to show cause as to why the Defendants should not be proceeded against for wilful disobedience of the order dated 15 February 2012. He is directed to file an affidavit at least two weeks prior to the next date, with an advance copy to the learned counsel for the Plaintiff, who may file a response thereto before the next date of hearing.

30. List on 10 February 2014.

CS (OS) No. 381 of 2012

31. List for framing of issues on 10 February 2014.

32. In the meanwhile, the parties are willing to explore the possibility of settlement through mediation. Accordingly, the parties will appear before the Delhi High Court Mediation and Conciliation Centre (‘DHCMCC’) on 25 September 2013 at 3.30 pm. The report of mediation be placed on record by the next date of hearing. A copy of this order be sent to the Secretary, DHCMCC forthwith.