MANMOHAN SINGH, J.
1. The plaintiffs have filed a suit for permanent injunction restraining infringement of trademark, copyright, passing off, unfair competition, dilution, tarnishment etc. against the defendant.
2. By way of this order I propose to decide the application being I.A No. 11376/2014 under Order 39 Rule 1 and 2 read with Section 151 CPC filed by the plaintiffs seeking interim injunction against the defendant restraining from using the mark/name UNIVERSAL or any other mark similar thereto including the domain name or doing any other act amounting to infringement of plaintiff's registered trade mark and/or passing off its products and business as that of the plaintiffs.
Case of the plaintiffs
3. Plaintiff No. 1 was originally incorporated under the trading style of Hoechst Fedco Pharma Pvt. Ltd. in May, 1956. Plaintiff No. 1's corporate name was changed to Sanofi India Ltd. with effect from May 11, 2012 consequent to a change of name of its parent company from ‘Sanofi Aventis’ to ‘Sanofi’ in May, 2011, in an effort to provide a common identity to the Sanofi Group globally. Plaintiff No. 1 is a strong and cohesive entity in the field of pharmacy and medicine and is engaged in the research, development, manufacture and marketing of prescription based pharmaceutical products as well as over-the-counter (OTC) medication. It is also urged that plaintiff No. 1 has a strong presence in seven major therapeutic areas viz. Diabetes, Oncology, Cardiovascular diseases, Thrombosis, Central Nervous System disorders and Internal Medicine.
Plaintiff No. 2 was incorporated in 1971 and is one of the leading pharmaceutical companies in India and is engaged in the manufacture and distribution of pharmaceutical and nutraceutical products. Plaintiff No. 2 is the holder and proprietor of the trademark/name UNIVERSAL in relation to inter alia pharmaceutical and nutraceutical products which constitute an integral and dominant part of plaintiff No. 2's corporate name/trading style since 1971.
4. Plaintiff No. 2's trademark UNIVERSAL is used in relation to a wide range of plaintiff No. 2's pharmaceutical and nutraceutical products such as UNIVERSAL PRIMOSA, UNIVERSAL'S ICE GEL etc. Plaintiff No. 2 has secured registration of the UNIVERSAL family/series of marks in India. The details whereof are provided in Annexure - A to the plaint.
5. Plaintiff No. 2 has developed a series of trade dresses for the packaging/cartons and strips of its pharmaceutical products which comprise a distinct layout, get up, colour scheme and arrangement of features closely resembling one another. One of these trade dresses is used in relation with plaintiff No. 2's Soft Gel capsules marketed under the trademark UNIVERSAL PRIMOSA (hereinafter referred to as “the PRIMOSA trade dress”) the essential elements whereof are as follows:
a) An overall silver background
b) A bright pink device comprising an artistic rectangle with a curved lower right corner, hereinafter referred to as the ‘Curved Rectangle Device’.
c) The trade mark PRIMOSA prominently appearing within the Curved Rectangular Device.
6. The PRIMOSA trade dress was created at the instance of the plaintiff No. 2 in exchange for consideration by an independent agency A.V Graphics and constitutes an original artistic work within the meaning of Section 2(c) of the Copyright Act, 1957. Plaintiff No. 2 is therefore the proprietor of the said trade dress and is entitled to the exclusive reproduction thereof.
7. In November, 2011 plaintiff No. 1 entered into an agreement to acquire plaintiff No. 2's business of marketing and distribution of branded nutraceutical formulations in India. As per the terms of the acquisition, plaintiff No. 2 transferred its entire nutraceutical portfolio comprising over 40 branded formulations representing key categories within the nutraceutical market such as antioxidants, vitamins and mineral supplements, anti-arthritics, anti-osteoporotics, liver tonics and other nutrients to plaintiff No. 2. This transfer also entailed an assignment of some trademarks from plaintiff No. 2's UNIVERSAL series/family of marks, which are specific to nutraceuticals, to plaintiff No. 1. Plaintiff No. 1 is therefore the subsequent proprietor of the trade mark UNIVERSAL and the UNIVERSAL family/series of marks in relation to nutraceutical products while plaintiff No. 2 continues to retain proprietorship in relation to the trade mark and name UNIVERSAL and the UNIVERSAL family/series of marks in relation to its pharmaceutical products other than nutraceutical products.
8. It is the case of the plaintiffs that in or around March, 2014 the plaintiffs became aware of the existence of the defendant company through their representatives and were utterly shocked to know that the defendant, engaged in the manufacture, marketing and distribution of nutraceutical products, has adopted the corporate name and trading style Universal Neutraceuticals Pvt. Ltd. It was incorporated on 3rd May, 2013.
9. It has been stated that the defendant company has been formed by ex-employees of plaintiff No. 2 whose services were taken over by plaintiff No. 1 consequent on the transfer of plaintiff No. 2's nutraceutical business to plaintiff No. 1. These employees subsequently left the services of plaintiff No. 1 during the period between October and December, 2013. The defendant's Board of Directors is constituted entirely by individuals who are spouses of the ex-employees of the plaintiffs.
10. It is stated that the defendant has filed an application under No. 2589182 seeking registration of the impugned mark UNIVERSAL in class 5 and the same is pending.
11. The defendant has also created a domain name
12. It is the case of the plaintiffs that the defendant has adopted a trade dress comprising an identical get up, lay out, colour scheme and arrangement of features as plaintiff No. 2's PRIMOSA trade dress. The defendant has even adopted a device which is identical to plaintiff No. 2's Curved Rectangular Device which forms the most distinctive and essential feature of plaintiff No. 2's PRIMOSA trade dress.
13. It is stated by the plaintiffs that the defendant is therefore clearly trying to deceive the general public by dishonest imitation of plaintiff No. 2's trade dress/packaging in the following manner:-
(a) Deliberate following of the overall silver background;
(b) Conspicuously displaying the Curved Rectangular Device which appears at exactly the same location and with the same degree of conspicuity as on plaintiff No. 2's PRIMOSA packaging.
(c) Prominently displaying the brand name of its products within the Curved Rectangular Device in the same manner as on plaintiff No. 2's PRIMOSA packaging.
14. The plaintiffs issued a ceased and desist notice on 10 March, 2014 to the defendant refraining it from using the mark UNIVERSAL (in isolation or in conjunction with any other mark including NEUTRACEUTICALS) and any other mark, name, logo, including as a part of the impugned domain name www.universalneutraceuticals.com which may be deceptively similar to the plaintiffs' well known trademark/name UNIVERSAL or dilutes the distinctiveness thereof in the relevant field and also to withdraw trademark application No. 2589182 in Class 5 for registration of the impugned mark UNIVERSAL. The defendant in its reply to the notice dated 24 March, 2014 refused to comply with the requisitions contained in the notice. In addition, the defendant's website www.universalneutraceuticals.com which was under construction since the domain name was registered on 19 August, 2013 became operational immediately after the defendant received the plaintiffs' cease and desist notice. The rejoinder letter was sent to the defendant by the plaintiffs on 4 April, 2014 granting them one final opportunity to comply with the requisitions contained in the notice. As there was no response on behalf of the defendant, the present suit has been filed by the plaintiffs.
15. It is submitted in the plaint by the plaintiffs that the defendant's trade name ‘Universal Neutraceuticals Pvt. Ltd’ incorporates the plaintiffs trade mark/name UNIVERSAL in entirety and when used in conjunction with the word ‘Nutraceuticals’, draws a direct reference to the plaintiff's products and services and is therefore, designed to create confusion. The impugned mark/name UNIVERSAL NEUTRACEUTICALS used by the defendant is deceptively similar to the trade marks UNIVERSAL SKINCEUTICALS and UNIVERSAL DERMACEUTICALS which are registered in favour of plaintiff No. 2 in class 5 and were assigned to plaintiff No. 1 vide the Deed of Assignment dated 3 November, 2011. Thus, the use of the impugned mark/name UNIVERSAL NEUTRACEUTICALS by the defendant therefore, amounts to infringement of trademark apart from passing off their goods and business as those of the plaintiffs.
It is also alleged that each and every one of the unique and artistic features of plaintiff No. 2's PRIMOSA packaging has been substantially reproduced and imitated by the defendants, in terms of the get up, colour scheme, arrangements of features and lay out. Therefore, the defendant's act clearly amount to infringement of plaintiff No. 2's copyright in the PRIMOSA packaging.
The defendant's adoption of the trade name UNIVERSAL and the impugned trade dress in respect of the said products and business is approximately 42 years subsequent to plaintiff No. 2's adoption of the trade mark/name UNIVERSAL and is clearly in bad faith. The malafide nature of the adoption of the impugned name and trade dress by the defendant is demonstrated by the formation of the defendant company by ex-employees of the plaintiffs.
The defendant's use of the plaintiff's trade mark/name UNIVERSAL, either in isolation or in conjunction with the word NEUTRACEUTICALS is bound to cause confusion among the relevant class of consumers. A prudent and reasonable person is bound to be misled into believing that the defendant's products originate from the plaintiffs or that the defendant have an association/relationship/sponsorship/affiliation/authorization or nexus with the plaintiff on account of the following factors:
(a) The defendant has adopted an identical trade name as plaintiff No. 2 viz. UNIVERSAL in conjunction with the term NEUTRACEUTICAL which has an obvious affiliation with the plaintiff's products and business;
(b) The defendant has reproduced plaintiff No. 2's PRIMOSA trade dress including the use of the Curved Rectangular Device;
(c) The defendant is selling identical products as those of the plaintiffs under the impugned name and trade dress;
(d) The defendant has created a domain name
(e) The defendant's sales representatives are informing members of the trade that they are dealing in ‘genuine Universal products’.
16. It is prayed in the interim application that the plaintiffs have established a good prima facie case and the balance of convenience also tilts in their favour. The defendant's use of a trade mark/name identical to the plaintiffs clearly constitutes infringement and amounts to passing off the defendant's products and business as that of the plaintiffs and will inevitably cause confusion amongst the consumers. Irreparable loss, damage and injury would be caused to the plaintiff's goodwill, reputation and business if the defendant is not restrained by an immediate interim injunction.
17. No written-statement is filed on behalf of the defendant. In the reply to the application filed by the defendant, it was stated that the plaintiffs do not possess any exclusive rights in the trademark UNIVERSAL. The plaintiffs have not produced any supporting documents to show that plaintiffs are registered proprietors of UNIVERSAL. The plaintiffs have relied upon several registrations for UNIVERSAL formative marks, however, the said registrations are only referred to as ‘UNIVERSAL family series’ marks by the plaintiffs.
18. It is stated that the registration certificates and official extracts furnished by the plaintiffs in relation to the UNIVERSAL formative marks evidently establish that the plaintiffs have ‘disclaimed’ any exclusive right to the word UNIVERSAL, particularly in reference to Registration Nos. 879887 [UNIVERSAL DERMACEUTICALS], 879889 [UNIVERSAL SKINCEUTICALS], 1356776 [Universal ECOCAPS], 837377 [UNIVERSAL SEACOD] and 1356167 [Universal CHEWELS], whereby it is stated that the plaintiffs have ‘agreed’ to the said disclaimer condition. In view of the agreed disclaimer condition, it is adequately substantiated that the plaintiffs possess no exclusive rights over the word UNIVERSAL and cannot therefore, enforce any rights over the same, much-less restrain the bonafide use of UNIVERSAL logo by the defendant. It is further stated that the plaintiffs, by suppressing the material fact of disclaimer, have tried to overreach the due process of this Court in an attempt to obtain ad-interim injunction against the defendant.
19. It is stated that the plaintiffs have made misleading averments in the suit regarding long and continuous use of the trade mark UNIVERSAL and its formative marks since 1971 who have also failed to prove any subsisting or valid copyright in the PRIMOSA trade dress as an artistic work, of which they allege to be the rightful owners. The PRIMOSA trade dress is claimed to have been created by an independent agency known by the name of A.V Graphics, at the instance of the plaintiffs. The plaintiffs have failed to produce the details of the author unless the same has been created in the course of employment of the author as a contract of service. The plaintiffs, on the contrary, refer to A.V Graphics as an independent contractor, who would be deemed to be the first owner of the alleged copyright in the trade dress, if any, unless proved otherwise by way of a written contract of assignment/transfer. The plaintiffs have not only failed to provide any document which shows that the alleged trade dress was created by A.V Graphics but they have also failed to prove their averments qua ownership of alleged copyright in the said trade dress in the absence of any valid assignment in favour of the plaintiffs by A.V Graphics.
20. It is stated that the plaintiff No. 2 has evidently assigned all title, rights and interests together with goodwill, if any, in the UNIVERSAL formative marks to plaintiff No. 1 and while admitting to this fact, the plaintiffs have also filed the Deed of Assignment dated 3 November, 2011 executed between plaintiff Nos. 1 and 2. In view thereof, plaintiff No. 2 may be deemed to be the subsequent proprietor of the alleged UNIVERSAL formative marks, for the purpose of using the same on the plaintiffs' products, packaging and trade dress from the year 2011. However, a review of the copies of the plaintiff's packaging and products, as filed herein by the plaintiffs, reveals that the same date back to the year 2010. It is further stated that the plaintiffs have, with a malafide to mislead this Court, filed copies of packaging of products manufactured by plaintiff No. 2 prior to the assignment of the alleged UNIVERSAL formative marks to plaintiff No. 1.
It is alleged that the defendant has obtained currently available products of the plaintiffs, as available in the market and a bare review of the packaging thereof does not reveal any application or depiction of the alleged UNIVERSAL formative trade marks by the plaintiffs. The same are being marketed and distributed under the house mark of plaintiff No. 1 i.e SANOFI.
21. It is stated that the plaintiffs in their legal notice dated 10 March, 2014 to the defendant have alleged to have become aware of the defendant's incorporation in May, 2013, whereas, in suit filed in the instant proceedings, the plaintiffs claim that they first became aware of the defendant's incorporation in March, 2014. The plaintiffs have been, admittedly aware of the defendant and its incorporation for more than a year and have chosen to remain silent until now. During the hearing, learned counsel has indicated that in fact the plaintiffs have been aware about the defendant's activities from the month of January, 2014 and had also shown one photocopy of circular dated 28 January, 2014 in this regard.
22. It is further alleged that the test of deceptive similarity of trade name cannot be based out of mere reliance on a keyword search report from an online search engine website. This is essentially owing to the fact that the keyword search reports issued by the online search engines, including Google, are essentially based upon the success of a company's internet marketing strategy and on the basis of the well-known process called Search Engine Optimisation (SEO). Therefore, the alleged Google search reports are nothing but a tool for misleading this Court qua the actual market scenario and the plaintiffs must not be permitted to derive any benefit from such flagrant misrepresentation.
23. Although the plaintiffs have relied upon several UNIVERSAL formative trade marks by producing registration certificates for the same, none of the alleged registrations certificates bear reference to the trade mark - UNIVERSAL NEUTRACEUTICALS. Therefore, all claims and averments of the plaintiffs qua deceptively similarity of the defendant's trade name to plaintiffs' alleged trademarks/trade name must fail.
In relation to the word ‘NEUTRACEUTICALS’, it has been stated that the same is conjunction of ‘nutrition’ and ‘pharmaceuticals’ and was coined in the year 1989 by Dr. Stephen Defelice, who is world renowned for his innovations in the field of medicine and is the founder and chairman of the Foundation for Innovation Medicine, USA. The word ‘NEUTRACEUTICAL’, which is very often used to denote nutritional supplements, has also found place in the Oxford Dictionary. Evidently, the said term is a dictionary term and cannot be monopolized and hence, the plaintiffs are barred from claiming any exclusive rights over the word ‘NEUTRACEUTICALS’ in any form be it as a trademark or as a trade name.
24. On a perusal of plaintiffs' product packaging for PRIMOSA, a person of reasonable intelligence can determine the essential component of the said trade dress to be the trade mark PRIMOSA; whereas the essential feature of the defendant's trade dress is EPO FORTE. Additionally, the dissimilarity in the colour scheme, layout and overall visual appeal further mitigates any scope for public confusion. Further, the presence of defendant's composite mark UNIVERSAL on the trade dress and the plaintiff No. 1's house mark SANOFI leaves no scope for likelihood of confusion.
25. It is further stated that the plaintiffs may also be barred from claiming any exclusive rights over the common dictionary term UNIVERSAL, which has become common to trade in relation to medicinal products. From a bare review of the public search report for the mark UNIVERSAL in Class 5, the official records of the Registry reveals several UNIVERSAL formative trademarks registered in India. Additionally, a detailed market survey conducted online by the defendant also reveals several pre existing companies using UNIVERSAL as a part of their trade name and also most of these companies are operating in the field of medicine, with extensive use and reproduction of the trademark/trade name UNIVERSAL. It is further stated that where there are numerous trademarks, registered or unregistered, having a common feature or syllable, i.e UNIVERSAL and if the said trademarks are owned by different individuals and proprietors, then the plaintiffs must not be permitted to claim exclusive rights over UNIVERSAL, which is common to trade and industry. Hence, there is no scope of any confusion and injury, actual or probable, to the goodwill, if any, of the plaintiffs'.
26. It is the admitted position that out of 20 registrations, in 16 registrations there is no disclaimer to the word UNIVERSAL. Therefore, in 16 registrations granted in favour of the plaintiffs, the plaintiffs should have got the exclusive and statutory rights under Section 28 of the Trade Marks Act (hereinafter referred to as the “Act”. With regard to the remaining 4 registrations, it is the settled law that the disclaimed portion does not take away the right of the trade mark considered as a whole. In case, some of the registrations referred by the learned counsel for the defendant to the effect that the mark UNIVERSAL cannot be examined in isolation to the remaining portion, the said registrations are within UNIVERSAL A-25. The essential feature of the said trade mark and trading style is UNIVERSAL which is being used by the plaintiffs since 1971. Therefore, the defendant in view of the above referred settled law cannot absolve itself from infringing the trademark of the plaintiffs and passing off its business as that of the plaintiffs.
27. In order to understand the arguments of the parties, one has to read together the definitions of “mark” and “trademark” under Sections 2(1)(m) and 2(zb) of the Act. In Section 2(1)(m), the meaning of the “mark” includes the name and word and/or any combination thereof. Similarly, as per Section 2(z), the “trademark” means, if the same is used in relation to goods or services for the purposes of indicating or so as to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right as proprietor to use the mark.
Infringement of trademarks and passing off
28. Before I proceed to decide this issue, it is imperative to discuss Section 29 of the Act that envisages the law relating to infringement of a registered trademark and Section 28 of the Act that provides for exclusive rights granted by virtue of registration. The said provisions read as under:-
“29. Infringement of Registered Trademark
(1) 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 is identical with, or deceptively similar to, the trade mark in relation to goods or services respect of which the trade mark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trade mark.
(2) 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 because of-
(a) its identity with the registered trade mark and the similarity of the goods or services covered by such registered trade mark; or
(b) its similarity to the registered trade mark and the identity or similarity of the goods or services covered by such registered trade mark; or
(c) its identity with the registered trade mark and the identity of the goods or services covered by such registered trade mark, is likely to cause confusion on the part of the public, or which is likely to have an association with the registered trade mark.
(3) In any case falling under clause (c) of sub-section (2), the court shall presume that it is likely to cause confusion on the part of the public.
(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.
(5) A registered trade mark is infringed by a person if he uses such registered trade mark, as his trade name or part of his trade name, or name of his business concern or part of the name, of his business concern dealing in goods or services in respect of which the trade mark is registered.
(6) For the purposes of this section, a person uses a registered mark, if, in particular, he-
(a) affixes it to goods or the packaging thereof;
(b) offers or exposes goods for sale, puts them on the market, or stocks them for those purposes under the registered trade mark, or offers or supplies services under the registered trade mark;
(c) imports or exports goods under the mark; or
(d) uses the registered trademark on business papers or in advertising.
(7) A registered trade mark is infringed by a person who applies such registered trade mark to a material intended to be used for labelling or packaging goods, as a business paper, or for advertising goods or services, provided such person, when he applied the mark, knew or had reason to believe that the application of the mark was not duly authorised by the proprietor or a licensee.
(8) A registered trade mark is infringed by any advertising of that trade mark if such advertising-
(a) takes unfair advantage of and is contrary to honest practices in industrial or commercial matters; or
(b) is detrimental to its distinctive character; or
(c) is against the reputation of the trade mark.
(9) Where the distinctive elements of a registered trade mark consist of or include words, the trade mark may be infringed by the spoken use of those words as well as by their visual representation and reference in this section to the use of a mark shall be construed accordingly.”
“28. Rights conferred by registration -
(1) Subject to the other provisions of this Act, the registration of a trade mark 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 or services 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.
(2) The exclusive right to the use of a trade mark given under sub-section (1) shall be subject to any conditions and limitations to which the registration is subject.
(3) Where two or more 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 person as against any other of those persons merely by registration of the trade marks 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 registered proprietor.”
29. By mere reading of these provisions, it is clear that a registered trademark is infringed by a person who not being a registered proprietor, uses in the course of trade a mark which is identical or deceptively similar in relation to the goods or services which are identical or similar to that in respect of which the trademark is registered without the permission of the trademark owner.
30. In order to establish infringement, the main ingredients of Section 29 of the Act are that the plaintiff's mark must be registered under the Act; the defendant's mark is identical with or deceptively similar to the registered trade mark; and the defendant's use of the mark is in the course of trade in respect of the goods covered by the registered trade mark. The rival marks are to be compared as a whole. Where two rival marks are identical, it is not necessary for the plaintiff to prove further that the use of defendant's trademark is likely to deceive and cause confusion as the registration shows the title of the registered proprietor and the things speak for themselves. In an infringement action, once a mark is used as indicating commercial origin by the defendant, no amount of added matter intended to show the true origin of the goods can effect the question. If Court finds that the defendant's mark is closely, visually and phonetically similar, even then no further proof is necessary.
31. The Division Bench of this Court in the case of Jagan Nath Prem Nath… v. Bharttya Dhoop Karyalaya…, AIR 1975 Delhi 149 held as follows:
“7. This being the law, it cannot be disputed that in an action for infringement the plaintiff can succeed not only when he proves that the whole of his registered trade mark has been copied but can also succeed if he shows that the defendant's mark is similar to the plaintiff's mark as it would be remembered by persons possessed of an average memory with its usual imperfections or that its essential particular or the distinguishing or essential feature has been copied
……….
15. Shri P.C Khanna, learned counsel for the respondent, argued that where a distinct label is registered as a whole such a registration does not confer any exclusive statutory right on the proprietor to use any particular word or name contained therein, apart from the mark as a whole. Reliance in support of this proposition was placed on the observations in the Registrar of Trade Marks v. Ashok Chandra Rakhit Lid. (1955) 2 S-C-R. These observations in the cited case were made in the context of exercise of powers conferred on the Registrar by Section 13 of the Trade Marks Act, 1940. This aspect is not at all relevant for the present controversy because the plaintiff can succeed in an action for ‘infringement’ if he proves that an essential particular of his trade mark has been copied: See Taw Manufacturer Coy. Ltd. v. Notek Engineering Coy. Ltd.’. (1951) 68 RPC 271 (2).”
32. Thus, it is apparent that registrations obtained by the plaintiffs do not show the disclaimer of trade mark UNIVERSAL. This fact is not denied by the defendant's counsel. As regard the arrangement of the defendant with regard to Section 17 of the Trade and Merchandise Marks Act is concerned, the same has no force in view of the reason that in all work of registering additional mark suffix with the mark is insignificant and thus ignorable at the time of comparing the mark. The same is not essential and dominant part.
33. Thus, it is classic case of infringement as the defendant has used the registered trade mark UNIVERSAL in its corporate name, it amounts to infringement under Section 29(5) of the Act. The main principle in an action for infringement have been discussed and requirement in law, the following few judgments are relevant to be referred to for the purpose of deciding the issue relating to infringement of trademark:
i. In the case of Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories AIR 1965 SC 980 - at 989-990 page, it was held that:
“The action for infringement is a statutory remedy conferred on the registered proprietor of a registered trade mark for the vindication of the exclusive right to the use of the trade mark in relation to those goods”
“if the essential features of the trade mark of the plaintiff have been adopted by the defendant, the fact that the getup, packing and other writing or marks on the goods or on the packets in which he offers his goods for sale show marked differences, or indicate clearly a trade origin different from that of the registered proprietor of the make would be immaterial”
ii. In the case of American Home Products Corporation v. Mac Laboratories Pvt. Ltd., AIR 1986 SC 137 in Para 36 it was held as under:
“When a person gets his trade mark registered, he acquires valuable rights by reason of such registration. Registration of his trade mark give him the exclusive right to the use of the trade mark in connection with the goods in respect of which it is registered and if there is any invasion of this right by any other person using a mark which is the same or deceptively similar to his trade mark, he can protect his trade mark by an action for infringement in which he can obtain injunction….”
iii. In the case of National Bell Co. v. Metal Goods Mfg. Co. (P) Ltd. AIR 1971 SC 898 at page 903 it was held as under:
“On registration of a trade mark the registered proprietor gets under Section 28 the exclusive right to the use of such trade marks in relation to the goods in respect of which the trade mark is registered and to obtain relief in respect of any infringement of such trade mark.”
iv. In the case of Avis International Ltd. v. Avi Footwear Industries, AIR 1991 Delhi 22, it was observed as under:
“14. At this stage of the case, we have no affidavit against another affidavit, and in view of the statutory provisions of Ss. 28 and 31 of the Trade and Merchandise Marks Act, it would be appropriate to rely upon contentions of the plaintiffs.
15. It is apparent that the word AEVI is not a commonly used word. The word is not in a dictionary. Its adoption by the defendants, therefore, needed to be explained, which the defendants have not explained in the pleadings before the Court.
16. Phonetically the word AVIS, which is registered mark for footwear, and the word AEVI'S have to be pronounced identically. The business name of the defendants is known as AVI Footwear Industries. Prima facie, if it was the intention of the defendants by affixing the label AEVI'S on the footwear made by them was to indicate that the footwear carrying that label is made by the AVI Footwear Industries, then the mark they would have adopted would have been AVI, but that they have not done. They have tried to bring their mark/label as close as possible phonetically to the registered mark AVIS.
17. In my view, the statutory monopoly which has been conferred upon the plaintiffs in connection with use of the mark AVIS for any other consideration in relation to grant or non-grant of an injunction, especially when the matter is at an interlocutory state, and is yet to be tried, and it cannot be foreseen as to whether the defendants who seek rectification of the plaintiffs mark, on account of nonuser would be able to prove their case. The statutory registration establishes prima facie case in favour of the plaintiffs.
18. In this view of the matter, I think that the balance of convenience would be in favour of the plaintiffs, to ensure that by concurrent user, during the period of the trial, no other rights come into existence. In my view, it is very convenient, if the defendants are so minded, to adopt any other label that establishes a connection in the course of trade with respect to the footwear manufactured by them.”
34. With regard to disclaimer imposed in few registrations are concerned, an action for passing off is maintainable in case, it is established that the defendant is infringing the common law rights of the plaintiff.
In Duke Fashions (India) Pvt. Ltd. v. Girish Hosiery MIPR 2010 (2) 422 it was observed that:
“……..The senior counsel for Duke Fashions in this regard also relies on the judgment of the Bombay High Court in Pidilite Industries Ltd. v. S.M Associates 2004 (28) PTC 193 and with which I respectfully agree, reiterating that disclaimer does not affect the significance which a mark conveys to others when used in the course of trade; disclaimers do not go into the market place, and the public generally has no notice of them. The matter which is disclaimed is not necessarily disregarded when question of possible confusion or deception of the public, as distinct from the extent of a proprietors exclusive rights, are to be determined. In that case, the whole of the mark including the disclaimed portion was considered to determine the question of confusion/deception.”
The scope and effect of disclaimer has been explained by the Supreme Court in the case of Registrar of Trade Marks v. Ashok Chandra Rakhit Ltd., AIR 1955 SC 558 wherein it was held that as under:
“The real purpose of requiring a disclaimer is to define the rights of the proprietor under the registration so as to minimise, even if it cannot wholly eliminate, the possibility of extravagant and unauthorised claims being made on the score of registration of the trade mark. The disclaimer is only for the purposes of the Act. It does not affect the rights of the proprietor except such as arise out of registration.”
35. In view of the above and as per the settled law, as the two trademarks of parties have to be compared as whole, the argument of the defendant has no force. Even otherwise, the disclaimer part is protectable under the law of passing off by virtue of the proviso to Section 17 of the Trade and Merchandise Marks Act, 1958. Thus, arguments of the learned counsel for the defendants in this regard are rejected.
EX-EMPLOYEE
36. It is the admitted position that the defendant company has been formed by ex-employees of the plaintiffs. The defendant's Board of Directors is constituted entirely by the spouses of the ex-employees of the plaintiffs. The position of law regarding ex-employees has been discussed in the following cases:
(i) In the case of Velcro Industries v. Velcro India Ltd. 1993 (1) Arb. LR 465, a learned Single Judge of the Bombay High Court rejected a contention made on behalf of the defendants therein that they are entitled to continue use of Velcro as a part of their corporate name because they have independently developed a reputation in India. It was noted that the defendants in that case were merely acting as licensees and even if the agreement between the parties did not provide that on termination of the license, the defendants would cease to use Velcro as a part of their trade name, that would make no difference, since the trademark Velcro is a registered trademark of the plaintiff and to allow the defendants to use it as a part of their corporate name is to permit them to give an impression to the public that they are still connected with or have a license from the plaintiffs.
(ii) In East End Hosiery Mills Pvt. Ltd. v. Agarwal Textile Mills AIR 1971 Cal. 3, it was observed that the defendant's object in using the mark and the get-up in the neck labels and packing box labels of his own goods was to produce confusion in the minds of purchasers of the said goods. The explanation that the name MOTI had been taken from father's name of one of the partners of the defendant firm was not accepted by the Court, on the principle that the right to trade in one's own name did not entitle a man to use his name in connection with goods or business if the result will be to deceive the public into believing that they were the goods or the business of another.
(iii) In Charan Dass v. Bombay Crockery House 1984 PTC 102 (Del), the court restrained defendants' mark TRISHIL PERFECT and VIJAY PERFECT because defendants, up to 1981, were stocking and selling the stores manufactured by the plaintiffs under plaintiffs' registered trade mark PERECT and SWASTIK PERFECT. Defendants could thus easily pass off their goods as those of plaintiffs.
(iv) A former partner of a firm or a servant who has left his employer may set up a similar business and advertise his previous connection, in the absence of any contract to the contrary. He should not, however, any representation amounting to a suggestion that he is still connected with the former firm or that he is their successor.
(v) In Pompadour Laboratories v. Stanley Frazer (1966) RPC 7, where the defendants had formerly been manufacturing hair lacquer for the plaintiffs, used the message “Frazer Chemicals have manufactured hair lacquer for Pampadour Laboratories Ltd. for several years” on the goods and advertisements, it was held that this did not amount to an assertion that the defendants' goods were the goods of the plaintiffs.
(vi) In Scott v. Stanley Frazer (1866) 16 LTNS 143, the words “Scott and Nixon, Late Robert and Walter Scott” were held to be a representation that Walter Scott had retired and Scott and Nixon were carrying on the business of the old firm.
(vii) In Arthur Fairest v. Fairest (1949) 66 RPC 275 defendant, a former managing director of the plaintiff company set up a similar business and used one of the vouchers issued by the plaintiff company in which his name was printed as managing director. Injunction was granted restraining the defendant from using the vouchers as it amounted to a representation that the business carried on by the defendant was connected with the plaintiff company.
(viii) In Glenny v. Smith (1865) 2 Drew & Sm 476, defendant was an employee of the plaintiffs, Thresher, Glenny & Co. of 152, Strand. After leaving their service he opened a shop in Oxford Street and placed on the shop windows the words “from Thresher & Glenny”, the word ‘from’ being in very small letters. Injunction was granted to restrain the defendant from using the name of the plaintiffs.
(ix) In Harrods v. Schwartz-Sackin (1986) FSR 490, the defendants who had operated the fine art department of Harrods' Store for 15 years under concession agreement, after the termination of the agreement started its own art department and advertised that it had operated the fine art department of Harrods for 15 years. Held that they were entitled to do so, but injunction was granted on the basis of a clause in their contract with the plaintiffs.
(x) In the case of J.K Jain & Others v. Ziff-Davies Inc. 2000 (56) DRJ 806, where the subject matter of the suit were four titles used with respect to magazines, the basis of the plaintiff's suit is that the defendants/appellants were its licensee for publishing computer magazine under the trade mark “PC MAGAZINE INDIA” under a license agreement. As per the license agreement the appellants specifically agreed and acknowledged the copyright and trade marks of the plaintiff, not to exercise its rights under the agreement or otherwise claim any right or interest in trade marks beyond the rights given in the agreement. After the license stood terminated, the defendants/appellants started publishing four magazines, contrary to the terms of license. The Court on the issue of whether the words “PC”, “WEEK”, “MAGAZINE”, “COMPUTER”, “SHOPPER”, “USER”, “INTERNET”, are descriptive or general words, observed that as an ex-licensee, appellants were estopped from claiming that the mark was descriptive since the appellants under the terms of the agreement were unable to challenge the proprietary rights of the respondents trade mark or trade name on any ground. It was held that after termination of the license the very act of the Defendant/Appellant in publishing the four titles is contrary to the terms of the licence.
37. In the case of Automatic Electric Ltd. v. R.K Dhawan, (1999) (19) PTC 81 it was held that the defendant therein having got the trademark “DIMMER DOT” registered in Australia, could not contend that the word “DIMMER” is a generic expression. Automatic Electric Ltd. (supra), was approved by the Division Bench of this Court in The Indian Hotels Company Ltd. v. Jiva Institute of Vedic Science & Culture, 2008 (37) PTC 468, wherein it was held that:
“40. It was next argued by Mr. Rohtagi that the word ‘JIVA’ is a descriptive word which cannot be protected as a trade mark by a Civil Court. We do not think so, the appellant has itself applied for registration of the Jiva as a trade mark and cannot, Therefore, argue that the mark is descriptive. In Automatic Electric Limited v. R.K Dhawan 1999 PTC (91) 81 this court has in similar circumstances repelled the contention and held that since the defendant had itself sought to claim a proprietary right and monopoly in “DIMMER DOT”, the disputed trade mark it did not lie in its mouth to say that the said mark was a generic expression.”
38. In Novartis AG v. Crest Pharma Pvt. Ltd., 2009 (41) PTC 57 (Del), it was held:
“33. A mere filing of the search report from the trademarks office does not prove as to whether the marks mentioned in search report was actually been used or not. It is imperative on the part of the party who relies upon the marks of third party to produce cogent and clear evidence of user in order to prove the defence of common marks to the trademark on the basis of the third party user. Hence, in the absence of valid and cogent evidence, the submission of the defendant cannot be accepted.”
Passing Off
39. The words which are of common use in a language can be adopted by a trader or manufacturers as is evident from the definition of “mark” under Section 2(m) of the Act.
40. In the case of B.K Engineering v. Ubhi Enterprises, AIR 1985 Delhi 210, it was observed as under:
“Competition must remain free. It is true it is the life blood of free enterprise system. It is essential that trading must not only be honest but must not even unintentionally be unfair.” In view of the above said well known settled law on the subject, it is clear that the defendant is guilty of infringement of copyright and passing off their goods as the goods of the plaintiff. From the above said judgments cited it is clear that in most of the cases the copyright has been claimed by the plaintiff on the article itself. It is also pertinent to mention that the subject matter of the colour combination, get-up and layout are not only covered in the subject matter of copyright but also covered under the common law remedy i.e law of passing off. Even in the New Trade Mark Act 1999 the definition of the mark is given in Section 2(m) which says that “Mark” include a device, brand, style, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof. As per the definition and as per the judgments mentioned above it is clear that the colour scheme, get up, layout and combination of colours is covered under the action for passing of also. In view of this, in the present case the defendants have infringed the Copyright of the plaintiff. This issue is accordingly decided in favour of the plaintiff.”
41. The test of confusion and deception in order to prove the case of passing off has been very well discussed in the case of Laxmikant V. Patel v. Chetanbhat Shah, reported in (2002) 3 SCC 65, wherein the Supreme Court while considering a plea of passing off and grant of ad interim injunction held in no uncertain terms that a person may sell his goods or deliver his services under a trading name or style which, with the passage of time, may acquire a reputation or goodwill and may become a property to be protected by the Courts. It was held that a competitor initiating sale of goods or services in the same name or by imitating that name causes injury to the business of one who has the property in that name. It was held that honesty and fair play are and ought to be the basic policy in the world of business and when a person adopts or intends to adopt a name which already belongs to someone else, it results in confusion, has the propensity of diverting the customers and clients of someone else to himself and thereby resulting in injury. It was held that the principles which apply to trade mark are applicable to trade name also.
The relevant Paras 8 and 10 of the aforesaid judgment read as under:-
“8. It is common in trade and business for a trader or a businessman to adopt a name and/or mark under which he would carry on his trade or business. According to Kerly (Law of Trade Marks and Trade Names, 12 Edn., para 16.49), the name under which a business trades will almost always be a trade mark (or if the business provides services, a service mark, or both). Independently of questions of trade or service mark, however, the name of a business (a trading business or any other) will normally have attached to it a goodwill that the courts will protect. An action for passing-off will then lie wherever the defendant company's name, or its intended name, is calculated to deceive, and so to divert business from the plaintiff, or to occasion a confusion between the two businesses. If this is not made out there is no case. The ground is not to be limited to the date of the proceedings; the court will have regard to the way in which the business may be carried on in the future, and to its not being carried on precisely as carried on at the date of the proceedings. Where there is probability of confusion in business, an injunction will be granted even though the defendants adopted the name innocently.”
“The law does not permit any one to carry on his business in such a way as would persuade the customers or clients in believing that his goods or services belonging to someone else are his or are associated therewith. It does not matter whether the latter person does so fraudulently or otherwise. The reasons are two. Firstly, honesty and fair play are, and ought to be, the basic policies in the world of business. Secondly, when a person adopts or intends to adopt a name in connection with his business or services which already belongs to someone else it results in confusion and has propensity of diverting the customers and clients of someone else to himself and thereby resulting in injury.”
In this case, the Supreme Court further observed that:
“Where there is probability of confusion in business, an injunction will be granted even though the defendants adopted the name innocently.”
42. In the case of Reddaway v. Banham (1896) 13 RPC 218 which was referred in the case of Globe Super Parts v. Blue Super Flame Industries AIR 1986 Delhi 245, the judgment given by the Single Judge of this Court speaking through Shri Mahinder Narain, J who discussed the case of Reddaway (Supra) at great length by referring the facts of the matter. The said narration of facts are as under:
“…….The words of common language which were held to be exclusively appropriated by Reddaway, in that case were ‘Camel Hair”. What was asserted in the Reddaway's case was that beltings were manufactured and sold by various persons; that the beltings used to be sold under the name of various animals like Yak, Llama, Buffalo, Crocodile etc. What Plaintiff Reddaway asserted was that Banham was their one time employee and that he had started selling the beltings under the name ‘Camel Hair”; Reddaway also asserted that they were entitled to stop others, like Defendants Banham, from using the word ‘Camel Hair with respect to the beltings manufactured by them.
48. This case was decided by the House of Lords on or about 26 March, 1896. The case was started on 3 May, 1893 when Frank Reddaway and F. Reddaway & Co. Ltd., commenced the suit in the Manchester District Registry of the Queen's Bench Division against George Banham and George Banham & Co. Ltd., for an injunction to restrain the Defendants from infringing certain trade marks and from continuing to use the word ‘Camel in such a manner as to pass off their goods as and for the plaintiff's goods. It was asserted that the plaintiffs had, during the course of trade, sold very large quantities of beltings as ‘camel beltings’ and that the word ‘Camel’ appeared upon, or was attached to their beltings as ‘camel beltings’. In England and abroad the word ‘camel’, or the figure of a camel, was universally understood in all the places where their beltings was sold, to indicate goods to be of plaintiffs manufacture. It was also asserted that beltings was sold as ‘camel’ and ‘camel hair beltings also. The action was commenced because the Defendants' company and the Defendant Banham had recently sold in England and advertised for sale in conjunction with the word “Camel” large quantities of beltings, which belting was not made by the plaintiffs and thus, the persons who desire for purchasing beltings of the Plaintiff would be deceived by the Defendants' use of the word ‘Camel’, into the belief that they were purchasing the beltings of the plaintiffs' manufacture.
49. The plaintiffs got the injunction from Collins, J. but the Defendants' appeal was allowed by the Court of Appeal holding that ‘Camel Hair’ Belting’ was merely a truthful description of the nature of the goods and nobody can be prevented from using that name, although it may lead to goods being purchased under that name, as a goods of a particular maker. The Court of Appeal held that ‘Camel Hair Belting was a true description of the goods, and that it was the name by which a person wanting to buy goods would ask for them. Again a judgment was given for the Defendants. The plaintiffs then appealed to the House of Lords.
50. The House of Lords examined the case, and held that even “descriptive words” like ‘Camel Hair Belting’ were capable of exclusively appropriation, that the words ‘Camel Hair Belting’ have acquired a secondary signification with respect to the beltings in the sense that the words ‘Camel Hair’ with respect to the trade in beltings had lost their primary meaning, to indicate belting made of camel hair, but has acquired a secondary significance or meaning in the trade, and came to connote the products of the plaintiffs. The House of Lords found that there was ample evidence to justify the finding that amongst those who were the purchasers of such goods, the words “Camel Hair” were not applied to beltings made of that material in general; that in short, it did not mean in the market belting made of a particular material, but belting made by a particular manufacturer. The House of Lords thus came to the conclusion that common words of a language can be exclusively appropriated to a particular manufacturer as they had acquired a special meaning as denoting the goods of a particular manufacturer/trader.
51. Lord Herschell also dealt with “coined” words, that did not have any meaning in the language; and at page 228 line 19, said that “words never in use before, and meaningless except as indicating by whom the goods in connection with which it is used were made, there could be no conceivable legitimate use of it by another person”. Thus the “coined” “created”, “Fancy”, or “new” words which were not in use in any language before, and which did not have any meaning in the ordinary language, us evidenced by their absence in authoritative and standard language dictionaries, were the exclusive property of the person who first “coined”, or created them and adopted them for use, and used it in connection with any article the only reason why a hitherto meaningless word would be used by another in connection with his activities would be to deceive the public, that the letters article, thing or goods or the articles, thing or goods of the former. He also observed that “he was unable to see why a man should be allowed in this way, more than in any other, to deceive purchasers into the belief that they are getting what they are not, and thus to filch the business of a rival”.
43. The marks which are of common terms, the claim for distinctiveness or secondary meaning is weak. Manish Vij v. Indra Chugh 2002 (24) PTC 561 (Del) was a case where “kabadibazaar” was held not to be a newly coined but a descriptive word as since it required no imagination to connect it with second hand goods.
44. In the case of Munday v. Carey (1905) 22 RPC 273 the Court held that it is a rank case of dishonesty, and where you see dishonesty, then even though the similarity were less than it is here, you ought, I think, to pay great attention to the items of similarity, and less to the items of dissimilarity. Similarly in the case of Midland Counties Dairy Ltd. v. Midland Dairies Ltd. (1948) 65 RPC 429 it was held that:
“…For if the Court comes to the conclusion that the defendant was actuated in adopting the style complained of by the dishonest motive of filching some part of the plaintiffs' reputation, then the Court will not be astute to find that this nefarious design has failed.”
Common to the Trade
45. Law of publici juris has been discussed in various cases and the Courts have given their respective findings to the effect that a party who has taken the defence of publici juris has to prove his case. The same has been dealt with by the Courts in the following cases:
(i) In Express Bottlers Services Pvt. Ltd. v. Pepsico Inc., 1989 (9) PTC 14, it has been observed as under:
“50…..To establish the plea of common use, the use by other persons should be shown to be substantial. In the present case, there is no evidence regarding the extent of the trade carried on by the alleged infringers or their respective position in the trade. If the proprietor of the mark is expected to pursue each and every insignificant infringer to save his mark, the business will come to a standstill. Because there may be occasion when the malicious persons, just to harass the proprietor may use his mark by way of pinpricks…. The mere use of the name is irrelevant because a registered proprietor is not expected to go on filing suits or proceedings against infringers who are of no consequence….”
(ii) In the case of Century Traders… v. Roshan Lal Duggar & Co…, AIR 1978 Delhi 250 it was observed as under:
“14. 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.”
(iii) Reference may also be made to the judgment of this Court in the case of P.M Diesels Ltd. v. S.M Diesels.., AIR 1994 Del 264, where in para 8, this Court held as follows:
“(8) Next contention raised by learned counsel for the defendant is that the word Marshal has become common to the trade of diesel engines in Rajkot and various other persons are using the trade mark in one form or other as inasmuch as some are using Airmarshal, Perfect Marshal, Powermarshal etc. and the defendant is not the only person who is using the trade mark Sonamarshal only. The plaintiff, therefore, cannot claim its trade mark to be distinctive of its goods or business and no customer is likely to be confused or deceived on account of this trade mark. This contention of the learned counsel for the defendant is also without force. In this connection it is sufficient to say that under the law it is the right of two parties before the court which has to be determined and the court has not to examine the right of other parties. If some other manufacturers are using or suffixing the word Marshal on their diesel engines, it is of no consequence. Furthermore, if the plaintiff has not taken any action against several other infringements, this does not mean that the plaintiff has abandoned its trade mark and cannot challenge the action of the defendant.”
Thus, the plaintiffs at this stage prima facie able to establish the case of passing off.
Similarity in Trade Name/Corporate Name
46. In Bhandari Homoeopathic Laboratories v. L.R Bhandari (Homoeopaths) Pvt. Ltd. 1976 Tax LR, 1382 (Del) one R.K Bhandari retired from the partnership business of L.R Bhandari and Sons and there was a clear condition that the retiring partner would not be entitled to carry on business in the firm's name. The cause of action for filing the suit arid application for injunction arose because a private limited company under the name of the defendant had been set up by R.K Bhandari, the retiring partner. It was stated that this was done with a view to nullify the affect of the dissolution deed. Kapur, J. held as under:
“It is settled law, that a registered company can be restrained being registered with a name similar to that of another registered company. There is considerable case law, showing that a company can also be restrained from being registered in the name of an unregistered firm. There is also case law to indicate, that if the Company has already been registered, it can be restrained from carrying on business in the registered name. The principles on which an injunction is issued by the Court have been set out in Buckley on the Companies Act thirteenth edition at page 48:-
The jurisdiction in these cases rests either upon fraud or upon property; not that there is property in the name, but that the use of a name closely resembling that in which another carries on business is calculated to deceive or cause confusion between the two businesses and to affect property by diverting customers to the person taking, the name, or by affecting the credit or goodwill of the person whose name is taken (a), where this is not the case there is no jurisdiction (b).”
47. The Division Bench of this Court in the case of M/S. Montari Overseas Limited… v. M/S. Montari Industries Limited…S, reported in 1996 PTC (16) 142, in relevant paras observed as under:-
“(9) We have considered the submission of learned counsel but we have not been persuaded to accept the same. Section 20 of the Companies Act, 1956 provides that no company will be registered by a name which is similar or identical or too nearly resembles the name by which a company in existence has been previously registered. In case where a company has been incorporated with a name which is identical or too nearly resembles the name of a company which has been previously incorporated, Section 22 makes a provision for getting the names of the former altered. No doubt, Section 22 makes provision for rectification of the name of a company which has been registered with undesirable name but that does not mean that the common law remedy available to and aggrieved party stands superseded. The plaintiff will have two independent rights of action against the defendant who may be using the corporate name of a previously incorporated company, one under Section 22 of the Companies Act and the other for injunction restraining the defendant from using the corporate name of the plaintiff or from using a name bearing close resemblance which may cause or which is likely to cause confusion in the minds of the customers or general public in view of the similarity of names. Both the remedies, one under Section 22 and the other under the common law operate in different fields. Under Section 22 of the Companies Act, the Central Government has no jurisdiction to grant any injunction against the use of an undesirable name by a company whereas in a suit for permanent injunction the court can pass an order injucting the defendant from using the name which is being passed off by the defendant as that of the plaintiff. In K.G Khosla Compressors Ltd. v. Khosla Extraktions Ltd., AIR 1986 Delhi 184 (2), the plaintiff filed a suit against the defendant or permanent injunction restraining the latter from using, trading or carrying on business under the name and style of Khosla Extraktions Ltd. on the ground that the plaintiff was incorporated as K.G Khosla Compressors Ltd. prior to the incorporation of the defendant and it cannot be allowed to imitate or copy the trade name of the appellant. Along with the suit, the plaintiff had filed an application under Order 39, Rules 1 and 2 for temporary injunction restraining the defendant from using trading and carrying on business and from entering capital market and making public issue under the name M/s. Khosla Extraktion Ltd. In that application, the defendant had taken the same plea which has been taken in the present case about the competence of the court to grant relief in view of Sections 20 and 22 of the Companies Act, 1956. The learned single Judge after review of the case law held that the Court would, have jurisdiction to grant injunction and Sections 20 and 22 of the Companies Act, 1956 in no way limit the jurisdiction of the Civil Court. In this regard the Court observed as follows:-
“But, then in the present suit the plaintiff has also based its cause of action on passing off of the name of defendant No. 1 as that of the plaintiff. I would rather say that jurisdiction of the Central Government under Ss. 20 and 22 of the Act and the jurisdiction of the Civil Court operate in two different fields. Further the Central Govt. has to act within the guidelines laid down under S. 20 of the Act, while there are no such limitations on the exercise of jurisdiction by the Civil Court.”
48. As far as the trade dress is concerned, the learned counsel for the defendant says that there is no similarity but still the statement is made by him that in future, the defendant has no intention to use the same in its product.
49. As far as infringement of copyright in LOGO and script is concerned, (i) in the case of Sodastream Ltd. v. Thorn Cascade Co. Ltd.. reported at 1982 RPC 459, the plaintiffs were marketing the gas cylinders of grey colour under their trade mark ‘Sodastream’ and the defendants having also been marketing their black colour cylinders under their own trade mark ‘Thorn Cascade’, the proposals of the defendants to refill the grey colour gas cylinders of the plaintiff, even with their own trade mark amounts to passing off as the grey colour cylinder is distinctive of the plaintiffs in respect of which the reputation accrued in favour of the plaintiffs. Interlocutory injunction granted.
(ii) In another case Hoffmann-La Roche and Co. A.G v. D.D.S.A Pharmaceuticals Limited, reported in 1972 RPC 1, the plaintiffs manufactured and marketed chlordiazepoxide in distinctive black and green capsules bearing the word “Roche” on each capsule, the defendants also marked and advertised the drug chlordiazepoxide in black and green 10mg capsules which were identical to those of the plaintiffs except that they bore the letters “DDSA” instead of the plaintiffs' name. The plaintiffs were granted interlocutory injunction to restrain the defendants from passing off capsules of the patented drug as the goods of the plaintiffs. It was held that marketing of the capsules by the defendants in almost identical form to those of the plaintiffs was calculated to cause damage to the plaintiffs. It was further held that there was a likelihood of confusion as both the capsules contained the same drug. The public were not concerned with the identity of the manufacturing of the capsules as long as the capsules contained the same substance and had the same effect.
(iii) In case of Smith Kline and French Laboratories Limited. v. Trade Mark Applications, reported at 1974 RPC 91, it was observed as under:
“The upshot of all these cases is to my mind to establish that a scheme of colouring applied to goods may be a mark within the definition in Section 68. That definition as was pointed out in contrast to other definitions in the Act, starts with the word “includes” showing that the definition is purposely not limited to the precise words which follow. The combination of colour giving a speckled effect in the present case is, in my judgement, no less a mark than the red lines in Redduway's hose case of the “heading” in the cotton cases and in the Winter-Hoffmann-La Roche chlordiazepoxide case.”
It was further observed:
“The truth of the matter is I think as follows. In some cases the colour is an essential part of the article as an article whilst in others it is something which is not essential and has been added for some other reason. If it has been added so as to denote the origin of the goods, and the evidence shows that in practice it does so, it can properly be said that it is being used as a mark in the trade mark sense. The answer is no doubt one of degree and will depend on the evidence. It would be highly unlikely that colour in a lipstick could ever become distinctive of one manufacturer because in such a case colour is an essential element in and part of the article itself. It is for that reason that the customer buys it. Colour in a passenger motor car would normally be in a similar but not so conclusive a position, but I see no reason why a trader, as some do, should not paint his delivery vans or racing cars in specific distinct colours to indicate the origin of the car or of the goods it normally carries as emanating from him. With drugs, on the other hand, the position is the opposite of the lipstick. Colour is of no importance to the article as a drug and it may, if sufficiently, distinctive, be an exceedingly effective indication of origin.
It was further observed: I cannot see why other manufacturers should want to adopt the applicants. colour arrangements here except for the improper motive of trying to benefit from the latter's established goodwill.”
DELAY
50. Lastly with regard to small delay in filing the present suit against the defendants is concerned, the same is not fatal in an action for infringement in view of the settled law laid down by Courts in various matters. I do not agree with the argument of the defendant's counsel that the plaintiffs have concealed the material facts from the Court. In case the whole plaint is read in meaningful manner, it appears that the plaintiffs have even informed the date and month of incorporation of defendant's company. The question of concealment does not arise. Further no ex-parte interim orders are passed. In case there is any discrepancy about the month of information to their dealer, the plaintiffs due to oversight wrongly mentioned the month. The said act is condonable as no benefit is derived by the plaintiffs. Some of the relevant judgments in this regard are as under:
(i) In the case of Midas Hygiene Industries Pvt. Ltd. v. Sudhir Bhatia, 2004 (28) PTC 121 (SC), it was observed as under:
“5. The law on the subject is well settled. In cases of infringement either of Trade Mark or of Copyright normally an injunction must follow. Mere delay in bringing action is not sufficient to defeat grant of injunction in such cases. The grant of injunction also becomes necessary if it prima facie appears that the adoption of the Mark was itself dishonest.”
(ii) In the case of Swaran Singh v. Usha Industries (India) AIR 1986 Delhi 343 (DB), it was observed as under:
“7. There is then the question of delay. Learned counsel for the respondents had urged that the delay is fatal to the grant of an injunction. We are not so satisfied. A delay in the matter of seeking an injunction may be aground for refusing an injunction in certain circumstances. In the present case, we are dealing with a statutory right based on the provisions of the trade and Merchandise Marks Act, 1958. An exclusive right is granted by the registration to the holder of a registered trade mark. We do not think statutory rights can be lost by delay. The effect of a registered mark is so clearly defined in the statute as to be not capable of being misunderstood. Even if there is some delay, the exclusive right cannot be lost. The registered mark cannot be reduced to a nullity…..”
(iii) In the case of Hindustan Pencils Pvt. Ltd. v. India Stationery Products Co. AIR 1990 Delhi 19, it was observed as under:
“31. …….. It was observed by Romer, J. in the matter of an application brought by J.R Parkingnon and Co. Ltd., (1946) 63 RPC 171 at page 181 that “in my judgment, the circumstances which attend the adoption of a trade mark in the first instance are of considerable importance when one comes to consider whether the use of that mark has or has not been a honest user. If the user in its inception was tainted it would be difficult in most cases to purify it subsequently”. It was further noted by the learned Judge in that case that he could not regard the discreditable origin of the user as cleansed by the subsequent history.”
51. Considering the above-mentioned, overall facts of the present case as well as settled law applicable to the present case, this Court is of the opinion that the plaintiffs have been able to make out a strong prima facie case in its favour who are the proprietors of the trademark UNIVERSAL registered in their favour. The balance of convenience also lies in favour of the plaintiffs. The use of the mark UNIVERSAL by the defendant company, that has been formed by ex-employees of plaintiff No. 2, would cause irreparable loss and injury to the plaintiffs, in case the interim order is not passed.
52. Accordingly, till further orders, the defendant, its partners, franchises, officers, servants, agents, distributors, stockists, representatives and all others acting for and on its behalf, are restrained from using the trade mark/name UNIVERSAL or any other mark/name that is deceptively similar thereto in any manner including as a part of its corporate name/trading style and/or domain name or doing any other act amounting to infringement of the plaintiffs' registered trademark and/or passing off its products and/or business as that of the plaintiffs'.
53. Since the plaintiffs have been able to make out a prima facie case of infringement against the defendant, that admittedly comprises of the ex-employees of the plaintiff, under Section 29(5) of the Act, injunction as prayed for is granted in favour of the plaintiffs, the defendant is given one month's time to change its corporate/trade name from Universal Neutraceuticals Pvt. Ltd.
54. Compliance of Order XXXIX Rule 3 CPC be made within three days from the date of receipt of the order. Dasti.
CS(OS) No. 1808/2014
55. Let the written statement be filed within four weeks. Replication, if any, be filed within four weeks thereafter.
56. The parties to appear before the Joint Registrar for admission/denial of documents on 18 December, 2014. Thereafter, the matter be listed before Court on 19 January, 2015 for framing of issues and directions for trial.
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