Kamal Trading Co. and Ors. v. Gillette U.K. Limited

ORDER

1. This is an appeal preferred by the original defendants against the order dated November 20, 1986 whereby the learned Judge granted an injunction restraining the defendants from manufacturing, selling, offering for sale or otherwise dealing in tooth brushes and the like goods bearing the trade mark 7 O'CLOCK on any other trade mark deceptively similar thereto as to pass off or as would be likely to pass off or enable others to pass off the defendants' goods as and for the goods of the plaintiffs. The facts which gave rise to the passing of this order are as follows. The plaintiffs are a Company incorporated under the laws of the United Kingdom and are a subsidiary of the Gillette Company, U.S.A. The Gillette Company and its subsidiaries have been carrying on worldwide business in the manufacture and sale of safety razor blades, safety razors, shaving cream, shaving brushes, etc. since last over several years. The plaintiffs have been using the trade mark 7 O'CLOCK upon and in connection with its goods since the year 1913 in India and certain neighboring countries and the plaintiffs have acquired an extensive reputation all over the world. The plaintiffs had recorded a declaration of ownership of the trade mark 7 O'CLOCK on March 17, 1915 and subsequently, the plaintiffs have obtained registration of the trade mark in India in respect of various articles in class 21, 8 and 3. The registration of the marks are valid and subsisting, the plaintiffs entered into an agreement with an Indian Company called Indian Shaving Products Limited, a company registered under the Companies Act, for the purpose of manufacture and sale of safety razor blades in India. The agreement of collaboration was entered into as the goods manufactured by the plaintiffs were not imported in India after the year 1958 because of the import restrictions. Under the collaboration agreement, the Indian company is entitled to use the trade mark 7 O'CLCOK' but with the addition of the word 'EJTEK; The plaintiffs have granted licence to the Indian Company to use the trade mark 7 O'CLOCK in the manner as set out in the agreement dated December 28, 1984.

2. In November 1985, the plaintiffs became aware that tooth brushes were sold in the Bombay market under the trade mark of 7 O'CLOCK'. The trade mark appeared with the letter 'R' in a circle thereby indicating that the mark is a registered trade mark. The plastic pouch in which the tooth brush is encased also bears the expression Hollywood-London-Paris. The mark used on the tooth brush as well as on the pouch is deceptively similar to the registered trade mark of the plaintiffs. The tooth brush or the pouch in which it is sold did not state who are the manufacturers, with the result the plaintiffs filed a complaint before the Metropolitan Magistrate against an unknown person. The complaint was filed on November 22, 1985 and in pursuance of the complaint, the Magistrate issued an order for investigation and enquiry under section 202 of the Code of Criminal Procedure. The crime branch of C.I.D. Bombay conducted the enquiry and seized the goods from the premises of defendants Nos. 1, 5 and 6. Thereafter, the plaintiffs became aware as to who are the manufacturers and distributors of the tooth brush with the deceptively similar mark. The plaintiff thereupon served notice upon the defendants to cease the user of the mark, but having failed to receive any positive response, the suit was instituted in this court on August 21, 1985 for an injunction restraining the defendants from manufacturing, selling or offering for sale the tooth brush and the like goods bearing the trade mark 7 O'CLOCK; The action instituted by the plaintiffs is on the basis that the defendants are passing off the goods with a view to trade on the reputation acquired by the plaintiffs.

3. There is one fact which is required to be noticed at this juncture. On May 31, 1982, the defendants had applied to the Registry of Trade Marks for registration of their trade mark 7 O'CLOCK' in respect of tooth brushes in Class 21. The Registrar accepted the mark on March 16, 1986 and the application was duly advertised in the trade mark journals. The plaintiffs filed opposition to the proposed registration of the mark and the opposition is pending hearing.

4. On institution of the suit, the plaintiffs took out Notice of Motion No. 1922 of 1986 for interim relief and in support of the application Vidya Bhushan Mehrish, Constituted Attorney of the plaintiffs, filed affidavit in support. The defendants filed affidavit in reply of Vinod Kumar, C. Kumar, a pattern of defendant No. 1 and the defendant claimed that they are using the mark from July 24, 1982. The defendants resisted grant of interim relief on the ground that the mark 7 O'CLOCK is a word mark and not an invented mark. It was also claimed that the mark was used in respect of safety razor blades and the goods manufactured by the plaintiffs are not sold in India since the year 1958 and, therefore, the goodwill or reputation which the plaintiffs may have acquired has stood extinguished. The defendants further claimed that the mark is used by the defendants in respect of tooth brushes which are not manufactured by the plaintiffs and there is no likelihood of any deception in the mind of the customer. The defendants have set out in Exhibit '1' to the affidavit in reply particulars of sales of tooth brushes, and sales expenditure on advertisement publicity for the period commencing from 1982 till the end of year 1986-87. The maximum sales are to the tune of Rs. 2, 52, 196.08 and the minimum sales are to the tune of Rs. 20,391.08.

5. The learned trial judge, after considering the affidavit filed on behalf of the defendants, felt that the plaintiffs had made out a case for grant of interim relief and accordingly, interim relief in terms of prayer (a) of the Notice of Motion was granted. The order of the learned Single Judge is under challenge.

6. Mr. Desai, learned counsel appearing on behalf of the appellants challenged the correctness of the order by raising four contentions. The learned counsel urged that the interim relief should have been refused to the plaintiffs on the ground of delay. It was contended that the plaintiffs have not established that the customers are likely to be deceived by the use of mark '7 O'CLOCK' by the defendants in respect of their product 'tooth brush'. The learned counsel further urged that the plaintiffs had no goodwill in mark '7 O'CLOCK' as the goods manufactured by the plaintiffs are not available in India since 1958 and the goodwill, even if any, stood extinguished, while, on the other hand, the defendants acquired goodwill in respect of the mark '7 O'CLOCK' from 1982. The learned counsel also submitted that in pursuance of the ad-interim order passed by the Appeal Court while admitting this appeal, the defendants have altered the mark used in respect of their products and, therefore, it is now not necessary to grant injunction claimed by the plaintiffs. In our judgment, none of the submissions are of any merit and the appeal is devoid of any substance.

7. The first contention urged by Mr. Desai is that the plaintiffs are not entitled to interim relief in view of the fact that the plaintiffs have approached the Court after a considerable delay from the date of the knowledge of the user of the mark by the defendants. It was submitted that grant of injunction pending the suit is a discretionary relief and the plaintiffs have disentitled themselves from seeking such relief in view of the delay which remained unexplained. We are not prepared to accede to the submission urged by the learned counsel. It is undoubtedly true that the Court would be reluctant to grant interim discretionary relief in case the plaintiffs have slept over their right and approached the Court after a considerable delay, but in the present case the facts clearly disclose that the plaintiffs are not, at all, guilty of any laches. As mentioned hereinabove, the plaintiffs became aware of the user of the mark in November 1985, but the plaintiffs did not know who were using that mark and that fact has become known only when the goods manufactured by the defendants were seized. The plaintiffs thereupon, immediately, served notice upon the defendants advising to cease the user of the offending mark, but the defendants declined to take any corrective measure, with the result that the suit was required to be instituted by the plaintiffs in August 1986. In these circumstances, we fail to appreciate how the defendants can suggest that the relief should be refused to the plaintiffs on the ground of delay. The first submission of Mr. Desai, therefore, must be turned down.

8. Mr. Desai then urged that the plaintiffs have not established that there is any likelihood of the customer being deceived by the use of the mark '7 O'CLOCK' in respect of defendants' product 'tooth brushes'. The learned counsel relied upon the decision of Lord Fraser in the celebrated case of Erven Warnink B.V. and another vs. J. Townend & Sons (Rull) Ltd. and another reported in 1980 R.P.C. 31, Lord Fraser in his speech in the House of Lords observed that it is essential for the plaintiff in a passing off action to show at least the following facts:

1) That his business consists of, or includes, selling in England, a class of goods to which the particular trade name applies;

That the class of goods is clearly defined, and that in the minds of the public, or a section of the public, in England the trade name distinguished that class from other similar goods;

That because of the reputation of the goods, there is goodwill attached to the name;

That the plaintiff, as a member of the class of those who sell the goods, is the owner of goodwill in England which is of substantial value;

That he has suffered, or is really likely to suffer, substantial damages to his property in the goodwill by reason of the defendants selling goods which are falsely described by the trade name to which the goodwill is attached.

Relying on this observation, Mr. Desai submitted that the plaintiffs have not established any of the conditions required for grant of interim relief. It was submitted that the goods manufactured by the plaintiffs and the defendants are different in nature; the plaintiffs manufacture blades, while the defendants manufacture tooth brushes. The goods of the plaintiffs and the defendants are not available in the same shop and the customers of these goods are different. The goods sold by the plaintiffs are blades and fall in Class 8, while those of the defendants are tooth brushes which fall in Class 21. Relying on these circumstances, it was contended that there was no likelihood of any deception. We are unable to see any merit in this submission. In the first instance, the assumption of the learned counsel that the class of customers for purchase of safety blades and tooth brushes are different and these goods are not available in the same shop is wholly misconceived. We take judicial notice of the fact that these goods are available in every shop including a small shop and each and every person is required to purchase these goods. The safety blades and tooth brushes are items of daily requirement and are required by every person. It is impossible to accept the submission that as the goods being different and as the goods are set out in different Classes in Schedule to the Act, there is not any likelihood of customer being deceived.

9. Mr. Tulzapurkar very rightly submitted that the trade mark '7 O'CLOCK' had acquired worldwide reputation and any customer purchasing the goods with that mark would immediately connect the goods to the house of Gillets which are the registered owners of the mark '7 O'CLOCK'. It cannot be overlooked that it is not necessary for the plaintiffs to establish that in fact any customer was deceived, it is enough if it is shown that there is likelihood of deception. We have no hesitation in concluding that the user of the mark '7 O'CLOCK' by the defendant would clearly result in deceiving the customer with the impression that the tooth brushes come from the house of Gillets. A faint submission was advanced by Mr. Desai that the plaintiffs cannot use trade mark '7 O'CLOCK' simplicitor in India and it is not necessary to add to word 'Ejtek' while selling the razor blade. We fail to appreciate how additional word would make any difference and how it will enable the defendants to pass of their products by using the mark '7 O'CLOCK' simplicitor.

10. Mr. Desai then submitted that even assuming the plaintiffs have acquired reputation and goodwill in respect of mark '7 O'CLOCK', that reputation and goodwill stands extinguished because the goods manufactured by the plaintiffs are not available in India from the year 1958 onwards because of import restriction. It was contended by the learned counsel that as the goods are not available, the goodwill stands extinguished and in support of this submission reliance was placed on the decision in the case of Anheuser-Busch Inc. v/s. Budejovicky Budvar N.P. (trading a Budweiser Budyar Brewery) and others reported in Fleet Street Reports (1934) page 413. In this case, the plaintiffs were brewers of beer in the United States and their beer was sold since 1875 under Budweiser trade mark which extensively advertised throughout North America as the King of bears. The defendants No. 1 were brewers of beer in Ceske Budejovice, a town in Czechoslovakia and the business was carried out from the year 1895. In the year 1911, the defendant No. 1 objected to the registration in the United States of Budweiser, but the plaintiffs compromised this objection by entering into agreement and whereunder the plaintiffs were given right to the trade mark for all countries outside Europe, while the defendants were free to use the word Budwesier in all jurisdictions as a description of the geographical origin of beer brewed by them at Budweis. The defendants prior to 1973 sold significant quantity of beer in the United Kingdom, while the plaintiffs exported no beer to United Kingdom for normal commercial sale and domestic consumption. After 1974, the plaintiffs sold minimum quantity in the United Kingdom, In the year 1979, the plaintiffs instituted action and sought injunction preventing the defendants from selling or dealing in any beer by the name of Budweiser. The defendants by counter-claim sought injunction to prevent the plaintiffs from selling or dealing in any 'Budweiser' beer unless it was brewed by the defendants. The learned trial Judge dismissed both the claim and the counter-claim and the plaintiffs carried an appeal. The Appeal Court observed that the question in its simplest form which arose before the Court was how far is it an essential ingredient of successfully claiming passing off, that the plaintiffs should have established in United Kingdom, the business in which his goods or services are sold to the general public on the open market. The Court of Appeal after referring to the decision of House of Lords in Advocate's case, held that the plaintiffs could not legitimately claim that before the defendants' entry into the market, they had acquired a reputation as the brewers of the beer with a substantial section of the public. The court of Appeal felt that the reputation could not have been associated with the beer, which for practical purposes, nobody could buy in United Kingdom. The Court of Appeal felt that the beer was sold only to Military and diplomatic establishments of America situated in England, and, therefore, it could not be claimed that the plaintiffs were carrying on business activity. The Court of Appeal referred to the classic statement of Lord Macnathten in C.I.R. Versus Miller & Company reported in (1901) Appeal Cases 217 to the effect that goodwill has no independent existence and it cannot subsist by itself but must be attached to a business. Destroy the business and the goodwill perishes with it, though elements remain which may perhaps be gathered up and be revived again.

11. We must express our dissent with the view taken in this case. In our judgment, it is not possible to conclude that the goodwill or the reputation stands extinguished merely because the goods are not available in the country for some duration. It is necessary to note that the goodwill is not limited to a particular country because in the present day, the trade is spread all over the world and the goods are transported from one country to another very rapidly and on extensive scale. The goodwill acquired by the manufacturer is not necessarily limited to the country where the goods are freely available because the goods though not available are widely advertised in newspapers, periodicals, magazines and in other. The result is that though the goods are not available in the country, the goods and the mark under which they are sold acquires wide reputation. Take for example, the Television and Video Cassette Recorders manufactured by National, Sony or other wellknown Japanese Concerns. These Televisions and V.C. Rs. are not imported into India and sold in open market because of trade restrictions, but is it possible even to suggest that the word 'National' or 'Sony' has not acquired reputation in this Country? In our judgment, the goodwill or reputation of goods or marks does no depend upon its availability in a particular country. It is possible that the manufacturers may suspend their business activities in a country for short duration but that fact would not destroy the reputation or goodwill acquired by the manufacturers. An identical view was taken by Division Bench of Mr. Justice S.K. Desai and Mr. Justice Bharcuha in a judgment dated July 24, 1986 in Appeal No. 368 of 1986. The question for consideration before the Division Bench was whether the goodwill in the trade mark 7 O'CLOCK stood extinguished because of non-availability of blades with the mark in India after year 1958. The Division Bench turned down the claim by pointing out various reasons and we are in entire agreement with the observations made in the judgment on this aspect. In our judgment, it is not possible to follow the view taken in the case of 'Budweiser'. Finally, Mr. Desai submitted that while admitting this appeal on December 12, 1986, the Division Bench granted interim relief pending the hearing of the appeal by putting certain conditions before which the defendants could use the trade mark 7 O'CLOCK. It is the claim of Mr. Desai that the defendants have carried out the conditions set out by the Division Bench and, therefore, there is no occasion now to grant interim injunction. The conditions put by the Division Bench were that number will not be written within the circle of Letter 'O'; that the letter 'O' in the mark would be plain; that the device of a tower or any other mark to convey any connection to any foreign country will not be used; that letter 'R' within a circle to represent that the mark is registered trade mark will not be used; that the appellants would put the words Made in India below the words Tooth Brush and also the words Manufactured by Kamal Trading Company on the plastic pouch and the manufacture or sale of tooth brushes will not exceed 20,000. We fail to appreciate how grant of this relief pending the appeal can create any right in the defendants to insist that the same order be passed at the hearing of the appeal. We have heard Mr. Desai very extensively and we find that not only there is no merit in the appeal but the entire conduct of the defendants is totally dishonest and fraudulent in using the mark 7 O'CLOCK. To begin with, the defendants are unable to explain how the mark was invented by them. The mere perusal of the tooth brush and the plastic pouch in which it was sold clearly reveals the dishonest conduct of the defendant. The mark used on the tooth brush and the plastic pouch is also not identical. The plastic pouch mentions the word R in a circle to suggest that the mark used by the defendants is a registered mark. In addition, a picture of tower possibly Fifet Tower, is printed on the pouch to suggest that the goods are manufactured in Paris. The defendants also used the words as Hollywood-London-Paris to suggest that the goods are of the foreign made. This conduct on the part of the defendants clearly indicate that the anxiety was to trade upon the reputation of the mark 7 O'CLOCK and not to leave any chance for customer to detect the mis-use of the mark, further effort was made to give an impression that the mark is a registered mark and that goods are manufactured in foreign country. It is hardly required to be stated that when the defendants are guilty of total dishonesty, then it is futile to claim that when the aggrieved party goes to the Court, the defendants should be permitted to use the mark by making some alteration. When confronted with the conduct of the defendants, the only excuse Mr. Desai can think of is that the defendants are illiterate and the commencement of the mark was without taking legal advice. In our judgment, the conduct reveals the mind of the defendants and the conduct by no stretch of imagination can be said to be either bonafide or innocent. We also cannot overlook the fact that the defendants did not bother to produce any invoice in support of the claim that the goods were sold from 1982 onwards and the sale figures annexed as Ex. '1' to the affidavit in reply were correct figures. We enquired from Mr. Desai as to how the amounts were spent on the advertisement and the answer was that the advertisement boards were put up in shops where the tooth brushes are sold. No affidavit of any trader or any distributor is filed in support of the claim, nor did the affidavit of partner sets out the names of any distributors to whom the advertisement material was handed over. In these circumstances, we are unable to accept the claim made by the defendants by setting out certain figures in Ex. '1' to the affidavit on the facts and circumstances of the case, the learned single Judge was perfectly right in granting relief to the plaintiffs and there is no infirmity whatsoever in the impugned order.

Accordingly, appeal fails and is dismissed with costs.