Full Judgment Text
2011:BHC-OS:6231-DB
1 App1158.10
srp
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO. 1158 OF 2010
IN
NOTICE OF MOTION NO. 599 OF 2006
IN
SUIT NO. 568 OF 2006
Cadila Pharmaceuticals Limited, a company]
incorporated under the Indian Companies ]
Act, 1956, having its address at 1389, ]
Dholka, Ahmedabad and also an office at ]
th
5 Floor, A-Wing, Oxford Chambers, Opp. ]
Saki Vihar Telephone Exchange, Near L&T,]
Saki Naka, Andhri (East), Mumbai-400072 ] ...Appellants/Ori.Defts.
Versus
1. Sami Khatib of Mumbai, Indian ]
inhabitant, carrying on business in the ]
name and style of M/s. Medley ]
Laboratories, having its office at Medley ]
th
House, D-2, MIDC Area, 16 Road, ]
Andheri (East), Mumbai – 400093. ]
2. Medley Pharmaceuticals Limited, a ]
company incorporated under the ]
Companies Act, 1956, having its office ]
at Medley House, D-2, MIDC Area, ]
th
16 Road, Andheri (East), Mumbai-72. ] ...Respondents/Ori.Plffs.
Mr.Janak Dwarkadas, Senior Counsel with Mr. Vinod Bhagat, Mr.
Punit Jani, Mr.Dhiren Karma and Mr.Suryakant Rao i/b M/s.G.S.
Hegde & V.A. Bhagat for the Appellant.
Dr.Virendra Tulzapurkar, Senior Counsel with Mr.S.U. Kamdar,
Senior Counsel with Mr.Ashish Kamat and Mr.Vikhil Dhoka i/b
M/s.Bharat Shah & Co. for the Respondent.
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CORAM : MOHIT S. SHAH, C.J. &
S.J. VAZIFDAR, J.
Date of Reserving: 12TH JANUARY, 2011
Date of Pronouncement : FRIDAY, 08TH APRIL 2011.
ORAL JUDGMENT. :- [Per S.J. Vazifdar, J.]
1. This is the defendants’ appeal against the order and judgment of
the learned single Judge restraining it from manufacturing, marketing,
selling and/or exporting medicinal or pharmaceutical preparations or
any other goods under the impugned trade mark “Hb TONE”/ “HB
TONE” or any other mark identical with and/or deceptively similar to
the plaintiffs’ trademarks “ARBITONE”, “RB TONE” and/or “HB
RON”, so as to pass off or enable others to pass off its pharmaceutical
preparations as and for those of the plaintiffs/ respondents.
2. The respondents had filed the suit for infringement and passing
off contending that the appellants’ marks were deceptively similar to
theirs. On 28.2.2007 i.e. after the suit was filed, the appellant secured
registration of the impugned mark. At this stage, therefore, the action
is limited to passing off.
The respondents’ marks are registered in class V in respect of
pharmaceutical preparations. Respondent No.1 by a Licensed User
Agreement dated 31.3.1997 granted a licence to respondent No.2–
Medlex Pharmaceuticals Limited to use the said marks. Respondent
No.2 is, therefore, the licenced user of the said marks. By a Deed of
th
Assignment dated 26 March, 2002, respondent No.1 assigned the
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right, title and interest in and to the trademark “HB RON” to
respondent No.2. Respondent No.2 is thus the proprietor of the
registered trademark “HB RON”.
For the purpose of this appeal, it is sufficient to compare the
appellant’s mark to the respondent’s mark “RB TONE”.
3. The appeal raises the following questions:-
I) Whether the respondents have established their reputation and
goodwill in respect of their mark “RB TONE”.?
II) Whether the appellant’s mark “HB TONE / “Hb TONE” is
deceptively similar to the respondent’s mark “RB TONE”?
III) Whether the respondents are disentitled to interim reliefs on the
ground of delay and latches?
IV) Whether the respondents have made a false statement
disentitling them to interlocutory reliefs?
V) Whether the respondent’s case is not based on a word mark, but
only on a label mark?
VI) Whether the respondents are not entitled to interlocutory reliefs
on the ground that the latter part of the marks “TONE” is in common
usage for similar products in a series of marks?
VII) Whether in view of section 56 of the Trade Marks Act, 1999,
the action for infringement or passing off is maintainable despite the
appellant only exporting its goods and not selling them in India.?
VIII) Whether this Court has territorial jurisdiction to entertain the
respondent’s suit?
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We have answered all the questions in the respondent’s favour
leading to a dismissal of the appeal. The answer to the questions I to
VI is straight forward and does not admit of any complication.
The only point which raises a question of law of importance is
question VI as it involves an interpretation of section 56 of the Trade
Marks Act, 1999.
Re: I: Whether the respondents have established their
reputation and goodwill in respect of their mark “RB TONE”.?
4. The respondents have more than satisfactorily established their
goodwill and reputation in the trademark “RB TONE”. Indeed, we
did not understand Mr. Dwarkadas as having seriously disputed the
same on facts. The appellant never sought inspection of or effectively
disputed the sales invoices, relied upon by the respondents, which
were duly certified by the Chartered Accountants. Suffice it to note
that the products have been sold under the mark “RB TONE” in India
since the year 1972. The sales under the said mark, which in the year
1972 were to the extent of Rs.4,67,000/-, increased enormously over
the years. For the past ten years the sales have been about Rs.20.00
crores per annum.
The respondents had exported the said preparations to various
countries including Kenya, Uganda, Tanzania, Zambia, Yemen, Sri
Lanka, Vietnam, Cambodia and Myanmar. The export sales figures of
the products sold under the mark “R.B. TONE” have also been
furnished. In the year 1999, the value of the product exported was
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Rs.41,56,000/-. The same increased to Rs.82,65,000/- the following
year. In the year 2004-2005, the exports were of the value of Rs.
53,72,000/-.
5. The respondents averred that large sums of money had been
spent and enormous efforts were made in promoting, marketing and
advertising their products by various means on a very large scale.
6. The respondents have thus established their goodwill and
reputation in the mark adequate to maintain an action for passing off.
Re: II: II) Whether the appellant’s mark “HB TONE /
“Hb TONE” is deceptively similar to the respondent’s mark “RB
TONE”?
7. The next question is whether the appellants’ mark “HB TONE”/
“Hb TONE” is deceptively similar to the respondents’ trade mark
“R.B. TONE”.
8. Dr.Tulzapurkar’s submission that the appellants’ mark is
deceptively similar to the respondents’ mark “R.B. TONE” is well
founded. The only difference between the rival marks is that the letter
“R” in the respondents’ mark is substituted with the letter “H” in the
appellant’s mark. This difference is insignificant to a person of
average intelligence and with imperfect recollection. It is not merely
possible but highly probable that the consumer would mistake one
mark for the other for they are visually and phonetically almost
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identical. Added to this is the fact that the nature of the products are
the same which enhances the likelihood of confusion. Further still is
the fact that both are pharmaceuticals/medicinal products calling upon
the Court to scrutinize the matter more strictly and with greater care
and concern.
9. While considering the question of similarity between marks,
judgments in other cases may not be binding as regards the actual
decision on facts. As noted by the Supreme Court in Amritdhara
Pharmacy v. Satya Deo Gupta, AIR 1963, SC, 449 :-
“Therefore, every case must depend on its own particular
facts and the value of authorities lies not so much in the
actual decision as in the tests applied for determining
what is likely to deceive or cause confusion.”
However, we find Dr.Tulzapurkar’s reliance upon two
judgments to be of considerable importance and assistance as the rival
marks and controversy therein are in this regard almost identical to
those in the present case. The similarity of the rival marks in those
cases and in this case are so striking as to compel us to place
substantial reliance upon them even in respect of the actual decision.
This, of course, is in addition to our own judgment, independent of
authority, that the appellant’s mark is deceptively similar to the
respondent’s mark.
10. In Charak Pharmaceuticals v. M.J. Exports Pvt. Ltd. (D.B.),
1993, IPLR 39 = 1993 PTC 309 (D.B.), a Division Bench of this
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Court considered the rival marks “MJTONE” and “M-2 TONE”. The
degree of similarity in the marks in that case was in fact less than the
degree of similarity of the marks in the present case especially on
account of the second letter “J” being substituted with the numeral
“2”, and the hyphen, “-”, between the letter “M” and the numeral “2”.
The Division Bench, after referring to the well established tests for
determining the question of similarity between marks, held as under:-
“ 5. ................................................................................
Turning to the two marks, it is obvious that the beginning
and ending of the two marks is similar and indeed except
for the letter `J’ in the mark of respondent No.1, the two
marks are identical. The only difference in the mark
proposed by respondent No.1 with that of the applicants
is that instead of figure `2’ letter `J’ is substituted. On the
first impression, it is obvious that there is every
likelihood of deception or confusion by the user of the
mark of respondent No.1. It is now well settled that the
Court, while considering likelihood of deception or
confusion must make allowance for imperfect
recollection and the effect of careless pronounciation and
speech of the part not only of the person seeking to buy
under the trade description, but also of the shop assistant
ministering to that person’s wants. Shri Daruwalla
submitted that the difference between the two marks is
noticeable because the mark of the appellants uses the
figure `2’, while respondent No.1, letter `J’. It is not
permissible to make a meticulous comparison of the
words, letter by letter and syllable by syllable and the
two marks must be taken as a whole to ascertain whether
there is a likelihood of deception or confusion. The
principle that the marks must be compared as a whole is
well settled and it is incumbent upon the Court to
consider whether the totality of the proposed trade mark
is such that it is likely to cause deception or confusion or
mistake in the mind of the person accustomed to the
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existing trade mark.”
11. Dr.Tulzapurkar’s reliance upon the judgment of a learned single
Judge of the Hon’ble Delhi High Court in Charak Pharma Pvt. Ltd. v.
Prashi Pharma Pvt. Ltd., is also well founded. The rival marks there
were “M2 Tone” and “MV - Tone”. The learned Judge held as under:-
“9. The statement that was made by counsel appearing
for the defendant, therefore, is clearly contrary to what
has been laid down by the Supreme Court in the aforesaid
decision. therefore, if on analysis it is found that the two
competing marks are similar either phonetically or
visually, in that event temporary injunction should be
granted immediately. As stated hereinabove, except for
''V'' replacing 2, the rest of the alphabets are the same
and, therefore, both the competing marks are phonetically
as also visually similar.
10 . When the facts of the present case are tested by the
touchstone of the factors laid down in the decision of
Cadila Health Care Limited Vs. Cadila Pharmaceuticals
Limited (Supra), it would also be, prima facie,
established that there is a degree of resembleness
between the two competing marks. The nature of the
goods in respect of which they are used as trade mark is
also similar and the class of purchasers who are likely to
buy the goods bearing the marks they require is also
similar. The mode of purchasing the goods is also similar
and, therefore, when weightage is given in the light of the
aforesaid decision of the Supreme Court, I am of the
considered opinion that both the competing marks are
deceptively and confusingly similar to each other and,
therefore, I am of the considered opinion that the plaintiff
has been able to make out a strong case for the grant of
temporary injunction in his favor and that any delay in
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granting the same would prejudicially affect the case of
the plaintiff.”
The degree of similarity between the rival marks in this case too
was less than the degree of similarity between the rival marks in the
present case on account of the second letter “V” being substituted
with the numeral “2”. Further, the judgment applies in fact with
greater force in the present case for the products manufactured by the
parties herein are the same.
12. Mr. Dwarkadas’ relied upon the judgment of the Supreme Court
in Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical
Laboratories PTC (Suppl.) (2) 680 (SC) in support of his contention
that the added material in the appellant’s mark are sufficient to
indicate a trade origin different from that of the respondents and to
distinguish the goods of the respective parties.
13. The similarity of the rival marks in the present case is so
striking that the added material, in our opinion, does not detract from
the deceptive similarity of the two marks. It is not necessary for us,
therefore, to refer to the judgment of a Division Bench of this Court in
Medley Laboratories (P) Ltd. vs. Alkem Laboratories Limited, 2002
(25) PTC 593 (Bom.) (DB) , relied upon by Dr. Tulzapurkar in this
regard.
14. The appellant pleaded that the mark “Hb TONE” was honestly
and independently adopted by it early in the year 2000 wherein the
letters “Hb” are symbolic of and an abbreviation and the chemical
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symbol of haemoglobin and the suffix “TONE” refers to increasing
the tone/tonal quality of iron in the blood by consuming the said
medicine. Therefore, it is averred, that the appellant’s tonic which is
meant to increase/tone up haemoglobin levels was sold under the
name Hb TONE.
15. We will assume that the appellant adopted the mark “Hb
TONE” as alleged in the affidavit in support. Firstly, even if it did so
honestly and independently, it would make no difference to the grant
of an injunction for infringement or passing off once it is held that the
mark is deceptively similar to the respondent’s mark [See Sun
Pharmaceutical Industries Ltd. v. Wyeth Holding Corporation, 2005
(30) PTC 14 (Bom) (DB) paragraph 21. ].
16. Secondly, it is difficult to accept that the average consumer
would, when purchasing the product, be aware of the fact that the
letters “Hb” are symbolic of and an abbreviation and the chemical
symbol of haemoglobin and thereby distinguish the appellant’s
products from those of the respondents. Indeed, only a microscopic
minority of consumers could be expected to even know the chemical
symbol “Hb” much less distinguish the products of the parties based
on the chemical symbol “Hb”.
17. It is settled law that the test while determining similarity is one
of possibility and not probability of confusion. Moreover, while
comparing marks, the Court does not go into the etymological
meaning of the rival words/marks.
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The Supreme Court, in Amritdhara Pharmacy vs. Satya Deo
Gupta, (1963) 2 SCR 484 = AIR 1963 SC 449 , held as under:-
“7. Let us apply these tests to the facts of the case
under our consideration. It is not disputed before us that
the two names “Amritdhara” and “Lakshman-dhara” are
in use in respect of the same description of goods,
namely a medicinal preparation for the alleviation of
various ailments. Such medicinal preparation will be
purchased mostly by people who instead of going to a
doctor wish to purchase a medicine for the quick allevi-
ation of their suffering, both villagers and townsfolk,
literate as well as illiterate. As we said in Corn
Products Refining Co. v. Skangrila Food Products Ltd.
the question has to be approached from the point of
view of a man of average intelligence and imperfect
recollection. To such a man the overall structural and
phonetic similarity-of the two names “Amritdhara” and
“Lakshmandhara” is, in our opinion, likely to deceive
or cause confusion. We must consider the overall
similarity of the two composite words “Amritdhara”
and “Lakshmandhara”. We do not think that the learned
Judges of the High Court were right in saying that no
Indian would mistake one for the other. An unwary
purchaser of average intelligence and imperfect rec-
ollection would not, as the High Court supposed, split
the name into its component parts and consider the
etymological meaning thereof or even consider the
meaning of the composite words as “current of nectar” or
“current of Lakshman”. He would go more by the
overall structural and phonetic similarity and the nature
of the medicine he has previously purchased, or has been
told about, or about which has otherwise learnt and
which he wants to purchase. Where the trade relates to
goods largely sold to illiterate or badly educated
persons, it is no answer to say that a person educated in
the Hindi language would go by the etymological or
ideological meaning and see the difference between
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“current of nectar” and “current of Lakshman”. “Current
of Lakshman” in a literal sense has no meaning; to give it
meaning one must further make the inference that the
“current or stream” is as pure and strong as Lakshman of
the Ramayana. An ordinary Indian villager or townsman
will perhaps know Lakshman, the story of the Ramayana
being familiar to him; but we doubt if he would
etymologise to the extent of seeing the so-called
ideological difference between “Amritdhara” and
“Lakshmandhara”. He would go more by the similarity
of the two names in the context of the widely known
medicinal preparation which he wants for his ailments.”
18. In Cadila Health Care Limited v. Cadila Pharmaceuticals Ltd. ,
(2001) 5 SCC 73, the Supreme Court indicated the approach to
determine the question of confusing similarity in the case of
trademarks used in respect of medicinal products. It was held as
under :-
“32. Public interest would support lesser degree of
proof showing confusing similarity in the case of trade
mark in respect of medicinal products as against other
non-medicinal products. Drugs are poisons, not sweets.
Confusion between medicinal products may, therefore,
be life threatening, not merely inconvenient. Noting the
frailty of human nature and the pressures placed by
society on doctors, there should be as many clear
indicators as possible to distinguish two medicinal
products from each other. It is not uncommon that in
hospitals, drugs can be requested verbally and/or under
critical/pressure situations. Many patients may be elderly,
infirm or illiterate. They may not be in a position to
differentiate between the medicine prescribed and bought
which is ultimately handed over to them. This view finds
support from McCarthy on Trade Marks , 3rd Edn., para
23.12 of which reads as under:
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“The tests of confusing similarity are modified
when the goods involved are medicinal products.
Confusion of source or product between
medicinal products may produce physically
harmful results to purchasers and greater
protection is required than in the ordinary case. If
the goods involved are medicinal products each
with different effects and designed for even
subtly different uses, confusion among the prod-
ucts caused by similar marks could have disas-
trous effects. For these reasons, it is proper to re-
quire a lesser quantum of proof of confusing sim-
ilarity for drugs and medicinal preparations. The
same standard has been applied to medical prod-
ucts such as surgical sutures and clavicle splints.”
33. The decisions of English courts would be relevant
in a country where literacy is high and the marks used
are in the language which the purchaser can understand.
While English cases may be relevant in understanding
the essential features of trade mark law but when we are
dealing with the sale of consumer items in India, you
have to see and bear in mind the difference in situation
between England and India. Can English principles apply
in their entirety in India with no regard to Indian
conditions? We think not. In a country like India where
there is no single common language, a large percentage
of population is illiterate and a small fraction of people
know English, then to apply the principles of English law
regarding dissimilarity of the marks or the customer
knowing about the distinguishing characteristics of the
plaintiff’s goods seems to overlook the ground realities
in India. While examining such cases in India, what has
to be kept in mind is the purchaser of such goods in India
who may have absolutely no knowledge of English
language or of the language in which the trade mark is
written and to whom different words with slight
difference in spellings may sound phonetically the same.
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While dealing with cases relating to passing off, one of
the important tests which has to be applied in each case
is whether the misrepresentation made by the defendant
is of such a nature as is likely to cause an ordinary
consumer to confuse one product for another due to
similarity of marks and other surrounding factors. What
is likely to cause confusion would vary from case to
case. However, the appellants are right in contending that
where medicinal products are involved, the test to be
applied for adjudging the violation of trade mark law
may not be on a par with cases involving non-medicinal
products. A stricter approach should be adopted while
applying the test to judge the possibility of confusion of
one medicinal product for another by the consumer.
While confusion in the case of non-medicinal products
may only cause economic loss to the plaintiff, confusion
between the two medicinal products may have disastrous
effects on health and in some cases life itself. Stringent
measures should be adopted specially where medicines
are the medicines of last resort as any confusion in such
medicines may be fatal or could have disastrous effects.
The confusion as to the identity of the product itself
could have dire effects on the public health.”
19. The appellant’s mark is, therefore, deceptively similar to the
respondent’s trademark “RB TONE”. The minor difference between
the two would not enable a person of average intelligence with
imperfect recollection to distinguish between the two. There is no
justification to interfere with the learned Judge’s decision in this
regard. In this view of the matter, it is not even necessary for us to
consider whether the impugned mark is deceptively similar to the
respondent’s mark “ARBITONE”.
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Re: III: Whether the respondents are disentitled to interim
reliefs on the ground of delay and latches?
20. Mr. Dwarkadas submitted that the suit and the application for
interlocutory reliefs suffers from gross delay and latches.
21. There is a valid explanation to the delay, if any, in filing the
suit. Moreover, the nature of the delay, if any, does not indicate
acquiescence on the respondent’s part in the appellant’s use of the
impugned mark or the waiver of their rights in respect of their marks.
22. Before referring to the facts in this regard, it is necessary to
note the legal principles to be considered with respect to a defence
based on delay and latches. The point is covered against the appellant
by several judgments, including of this Court, binding on us.
23(A) A learned single Judge of the Delhi High Court
considered the question of delay and latches in M/s. Hindustan
Pencils Private Limited vs. M/s. India Stationery Products Co. AIR
1990, Delhi, 19 . The judgment has been followed in several
judgments, including judgments of Division Benches of this Court.
Paragraphs 31 and 32 of the judgment read as under:-
“ 31. Even though there maybe some doubt as to
whether laches or acquiescence can deny the relief of a
permanent injunction, judicial opinion has been
consistent in holding that if the defendant acts
fraudulently with the knowledge that he is violating the
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plaintiffs rights then in that case, even if there is an
inordinate delay on the part of the plaintiff in taking
action against the defendant, the relief of injunction is
not denied. The defence of laches or inordinate delay is a
defence in equity. In equity both the parties must come to
the Court with clean hands. An equitable defence can be
put up by a party who has acted fairly and honestly. A
person who is guilty of violating the law or infringing or
usurping somebody else's right cannot claim the
continued misuse of the usurped right. It was observed
by Romer, J. in the matter of an application brought by
J.R.Parkington and Co. Ld., (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.
In other words, the equitable relief will be afforded only
to that party who is not guilty of a fraud and whose
conduct shows that there had, been, on his part, an honest
concurrent user of the mark in question. If a party, for no
apparent or a valid reason, adopts, with or without
modifications, a mark belonging to another, whether
registered or not, it will be difficult for that party to avoid
an order of injunction because the Court may rightly
assume that such adoption of the mark by the party was
not on honest one. The Court would be justified in
concluding that the defendant, in such an action, wanted
to cash in on the plaintiffs name and reputation and that
was the sole, primary or the real motive of the defendant
adopting such a mark. Even if, in such a case, there may
be an inordinate delay on the part of the plaintiff in
bringing a suit for injunction, the application of the
plaintiff for an interim injunction cannot be dismissed on
the ground that the defendant has been using the mark for
a number of years. Dealing with this aspect Harry D.
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17 App1158.10
Nims in his "The Law of Unfair Competition and Trade
Marks", Fourth Edition, Volume Two at page 1282 noted
as follows :
"Where infringement is deliberate and willful and
the defendant acts fraudulently with knowledge that
he is violating plaintiffs rights, essential elements of
estoppel are lacking and in such a case the
protection of plaintiffs rights by injunctive relief
never is properly denied. "The doctrine of estoppel
can only be invoked to promote fair dealings".
32. It would appear to me that where there is an honest
concurrent user by the defendant then inordinate delay or
laches may defeat the claim of damages or rendition of
accounts but the relief of injunction should not be
refused. This is so because it is the interest of the general
public, which is the third party in such cases, which has
to be kept in mind. In the case of inordinate delay or
laches, as distinguished from the case of an acquiescence
the main prejudice which may be caused to the defendant
is that by reason of the plaintiff not acting at an earlier
point of time the defendant has been able to establish his
business by using the infringing mark. Inordinate delay
or laches may be there because the plaintiff may not be
aware of the infringement by the defendant or the
plaintiff may consider such infringement by the
defendant as not being serious enough to hurt the
plaintiff's business. Nevertheless, if the Court comes to
the conclusion that prejudice is likely to be caused to the
general public who may be misled into buying the goods
manufactured by the defendant thinking them to be the
goods of the plaintiff then an injunction must be issued.
The Court may, in appropriate cases, allow some time to
the defendants to sell off their existing stock but an
injunction should not be denied.”
(B) Thus, even assuming that the appellant’s use of its mark was
honest, it would make little difference to the question of the grant of
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an injunction. In the present case, even assuming that the adoption of
the mark was not dishonest, the continued user thereof was, if not
dishonest, at the appellant’s peril as we will shortly indicate. In
Hindustan Pencils , the plaintiff admittedly came to know about the
user by the defendant of the infringing mark in March, 1982, and the
suit was filed only in the year 1986 i.e. after a delay of almost three
years. As is evident from paragraph 39 of the report, the first step to
oppose the mark was also taken only in the year 1985 by the plaintiff
having filed an application for cancellation of the registration of the
defendant’s copyright. The judgment, therefore, applies with greater
force in the present case.
24. The judgment of the learned single Judge of the Delhi High
Court would by itself not be binding on us. However, it has been cited
with approval and followed by a Division Bench of this Court in
Schering Corporation & Ors. vs. Kilitch Co. (Pharma) Pvt. Ltd., 1994
IPLR 1 . This judgment, in fact, also negates Mr. Dwarkadas’ attempt
to distinguish the judgment in Hindustan Pencils on the ground that
the marks in that case were identical, whereas in the present case, they
are not. The same argument raised in Schering Corporation was
accepted by the learned single Judge. The Division Bench, however,
over-ruled the same, holding that the observations in Hindustan
Pencils on the question of delay and the approach to the question
remained the same irrespective of whether the violation is by the
defendant adopting an identical mark or by a substantially similar
mark. (Pages 6 and 7 of the report).
Another Division Bench of this Court in Sun Pharmaceutical
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19 App1158.10
Industries vs. Wyeth Corporation Holding & Anr., 2005 (30) PTC, 14
(Bom.)(DB) also cited with approval, the judgment in Hindustan
Pencils and followed the judgment in Schering Corporation .
25. There are two other hurdles regarding the question that the
appellant has not overcome. Firstly, the appellant had the means of
discovering the respondent’s mark. Secondly, the appellant was in
fact aware of the respondent’s mark and that they had not only
opposed the appellant’s use of the impugned mark but had adopted
proceedings to prevent the same. The second aspect will be dealt with
while considering Mr. Dwarkadas’s submission that the respondent
had acquiesced in the use of the impugned mark. The appellant’s use
of the marks despite the same was, therefore, at its peril.
26. As we noted earlier, the respondent’s marks were registered.
The appellant was admittedly aware of the same as a matter of fact.
Even if it was not, reported decisions of this Court indicate that the
appellant not having made itself aware of the fact as to whether the
same mark is a subject matter of registration and belongs to another
person cannot be heard to complain, for the use of the mark then is
negligent inasmuch as he has not taken the elementary precaution of
making himself aware by looking at the public record of the Registrar
as to whether the mark in question is the property of another. In Bal
Pharma Limited vs. Centaur Laboratories Pvt. Ltd. & Anr., 2002 (24)
PTC, 226 (Bom.) (DB) , a Division Bench of this Court held:-
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20 App1158.10
“ 9. Then we turn to the question of delay and
acquiescence. Mr. Tulzapurkar, learned Counsel
appearing for the Respondent cites the judgment of the
Supreme Court in Power Control Appliances and Ors. v.
Sumeet Machines Pvt. Ltd., MANU/SC/0646/1994 :
[1994]1SCR708 wherein the Supreme Court approvingly
referred to the judgment of the Appeal Court in England
in Electrolux LD v. Electrix and quoted a passage
therefrom in paragraph 34 of its judgment. Our attention
was also drawn to the judgment in Electrolux itself.
Reference to the judgment in Electrolux shows that there
is no hard and fast rule that delay per se would defeat an
application for interlocutory injunction. The judgment
indicates that in a situation where the defendant to an
action has been using the mark, even if concurrently,
without making himself aware of the fact as to whether
the same mark is the subject-matter of the registration
and belongs to another person, the first person cannot be
heard to complain for he has been using it negligently
inasmuch as he has not taken the elementary precaution
of making himself aware by looking at the public record
of Registrar as to whether the mark in question is the
property of another. If, however, he had taken search and,
knowing full well that the mark was the property of
another person, continues to use the mark, then he runs
the risk of a registered proprietor challenging his action
for infringement and merely because it is done at a
subsequent stage, he cannot be heard to complain on the
ground of delay. Further discussion in the judgment
shows that in order to deny an interlocutory injunction,
the delay must be such as to have induced the defendant
or at least to have lulled him into a false sense of security
to continue to use the trade mark in the belief that he was
the monarch of all he surveyed. In our judgment, such are
not the circumstances here. We are not satisfied from the
record that a search was taken of the registry by the
Appellant to assure itself that there was no other person
who owned the mark "MICRODINE". Assuming that the
search was taken, and the Appellant has done it
consciously, then the Appellant has to thank itself for
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21 App1158.10
having gambled by investing large amounts in a risky
venture. Either way, we do not think that the defence can
succeed, at this stage, at least.”
Bal Pharma Limited was followed by another Division Bench
in Sun Pharmaceuticals Industries Limited vs. Wyeth Holding
Corporation & Anr ., 2005 (30) PTC 14 .
27. Mr. Dwarkadas then contended that in the facts of the present
case, the judgments would be of no assistance to the respondents as
the respondent’s conduct established that they had acquiesced in the
appellant using the said mark and had waived their rights in respect of
their marks.
28(A) The question of what amounts to acquiescence on the part
of a plaintiff has also been considered in several judgments, including
the judgments of this Court. Paragraph 9 of the judgment of the
Division Bench in Bal Pharma Ltd. , which we have reproduced
above, itself indicates that the delay must be such as to have induced
the defendant or, at least, to have lulled him into a false sense of
security to continue to use the trade mark.
In Sun Pharmaceuticals Ltd. (supra), the Division Bench
rejected the contention that the plaintiff/respondent therein was not
entitled to an injunction on the ground of delay of three years. The
Division Bench further held:-
“ 25. The relevant para of the judgment cited by the
Senior Counsel Dr. Tulzapurkar, reported in case of
Willmott v. Barber Vol IX Chancery Division, page 97, is
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22 App1158.10
reproduced, as under;
"It has been said that the acquiescence which will
deprive a man of his legal rights must amount to
fraud, and in my view that is an abbreviated
statement of a very true proposition. A man is not
to be deprived of his legal rights unless he has
acted in such a way as would make it fraudulent
for him to set up those rights. What, then, are the
elements or requisites necessary to constitute fraud
of that description? In the first place the plaintiff
must have made a mistake as go to his legal rights.
Secondly, the plaintiff must have expended some
money or must have done some act (not
necessarily upon the defendants land) on the faith
of his mistaken belief. Thirdly, the defendant, the
possessor of the legal right, must know of the
existence of his own right which is inconsistent
with the right claimed by the plaintiff. If he does
not know of it he is in the same position as the
plaintiff and the doctrine of acquiescence is
founded upon conduct with knowledge of your
legal fights. Fourthly, the defendant, the possessor
of the legal right, must know of the plaintiffs
mistaken belief of his rights. If he does not, there is
nothing which calls upon him to assert his own
rights. Lastly, the defendant, the possessor of the
legal right, must have encouraged the plaintiff in
his expenditure of money or in the other, acts
which he has done, either directly or by abstaining
from asserting his legal right. Where all these
elements exist, there is fraud of such a nature as
will entitle the Court to restrain the possessor of
the legal right from exercising it, but, in my
judgment, nothing short of this will do". [emphasis
supplied]
In the above passage from Willmott vs. Barber , the parties must
be transposed for the purpose of the present case to wit, the plaintiff
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23 App1158.10
therein fits the role of the defendant and vice-versa.
29. In Schering Corporation & Ors. v. Kilitch Co. (Pharma) Pvt.
Ltd. 1994 IPLR 1 at page 8 the Division Bench of this Court held:-
“Once it is established that there is visual and phonetic
similarity, and once it is established that the Defendants’
adoption of the trade mark is not honest or genuine, then
the consideration of any plea as to delay must be on the
basis of a consideration whether there has been such
delay in the matter as has led the Defendants to assume
that the Plaintiffs have given up their contention and/or
whereby the Defendants have altered their position so
that it would be inequitable to grant interim relief to stop
them from using the trade mark until the suit is
decided ?”
30. The question then is whether the delay, if any, on the
respondent’s part in filing the suit was of the nature indicated in the
judgments dis-entitling them to an injunction. This brings us to the
facts of the case. The facts clearly establish that the respondents have
from the beginning opposed in India and abroad, the use of the said
marks by the appellant. The question of acquiescence does not by any
stretch of imagination apply in the present case.
31. The appellant claims to have used the mark since the year 2000.
It is contended that the suit having been filed in the year 2006, the
respondents are not entitled to interim reliefs and that they must be
deemed to have waived their rights.
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24 App1158.10
32. At this time, the sale of the respondent’s products under the said
mark was about Rs.20.00 crores per annum. That the respondents took
steps to protect their mark and opposed the adoption of the impugned
mark throughout this period is evident from a series of facts.
nd
33(A) By a letter dated 22 August, 2001, addressed to one
Karari Pharmaceuticals in Uganda the respondent’s advocate stated
that they were the registered owners of the trade mark “RB TONE”
and that the products manufactured by them were in similar packages,
lay-out and bearing the deceptively similar mark “HB TONE”. The
notice called upon them to cease and desist from using the said mark.
th
(B)(i) By their advocate’s letter dated 20 March, 2002, the
respondents informed the Registrar of Trade Marks, Nairobi, Kenya,
that they were the registered proprietors of the trade marks
“ARBITONE” and “RB TONE”; that they had been using the mark
“RB TONE” in India for more than 25 years; that the mark was
registered in several other countries; that they had applied for
registration of the mark in Kenya; that they had been selling the
product in Kenya from January, 2000 and, therefore, claimed earlier
user compared to the appellant’s mark “HB TONE” and, therefore,
requested the Registrar of Trade Marks not to register the appellant’s
mark “HB TONE”.
th
(ii) The Registrar of Trade Marks, Kenya, by a letter dated 27
May, 2002, addressed to the appellant, stated that its trade-mark was
accepted by the Registrar in error and that the appellant’s mark was
not registrable under the provisions of the Trade Marks Act, Kenya.
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25 App1158.10
(C) It is pertinent to note that the appellant admitted in its affidavit
in reply that the respondent had been litigating against it in Uganda
with regard to the same trade-mark viz. “HB TONE” at least since
August, 2001 and in Kenya, at least since March, 2002.
The respondents thus opposed the impugned mark almost
immediately after the appellant commenced using it.
rd
34(A) On 3 February, 2003, respondent No.2 filed Criminal
Complaint No.16 of 2003 against unknown persons before the
th
Judicial Magistrate, First Class at Uran, Maharashtra. On 4 February,
2003, an ex-parte order was passed under section 156(3) of the
th
Criminal Procedure Code. Pursuant thereto, on 14 February, 2003,
333 cartons of the appellant’s products bearing the trade-mark “Hb
TONE” were seized from the Central Warehousing Corporation. The
appellant’s Directors had obtained anticipatory bail.
(B) Mr. Dwarkadas, however, relied upon the fact that the goods
were thereafter returned to the accused and the fact that the criminal
complaint had been dismissed in August, 2005.
35. Firstly, the seized goods were not ordered to be returned to the
appellant unconditionally. Secondly, the criminal complaint was
dismissed not on merits but for default and a Writ Petition against the
order of dismissal is pending in this Court. Thirdly, these facts are not
material to the question of acquiescence and/or waiver.
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26 App1158.10
36(A)(i) The goods were not released unconditionally as is evident
th
from two orders of the Court. The order dated 16 June, 2003, passed
by the Judicial Magistrate, First Class, Uran, reads as under:-
“ORDER
1. The seized muddemal property, after sealing be
returned to applicant after execution of indemnity bond
of Rs.50,000/- on the condition that he shall not sell out
muddemal property and shall produce the same as and
when required by the court.
2. The Investigation officer is directed to take
photographs of muddemal property after sealing of all
cartoons bearing signature of I.I. and applicant and
objector i.e. original complainant and produce on record
of this application, and also with him for investigation
purpose.
3. The original complainant i.e. Raaj Cirumalla is
directed to assist the Investigation office in this concern.
If it is found that original complainant is not assisting
them muddemal property be released by sealing its
bearing signature of Investigation officer and applicant
and two witnesses.”
(ii) The appellant had filed Criminal Revision Application No.100
of 2003 in the Court of Sessions Judge, Raigad, Alibag. The same was
th
disposed of by an order dated 19 July, 2003. The ad-hoc Additional
Sessions Judge accepted the contention that the seized goods are
likely to be destroyed and decomposed during the pendency of the
th
trial and, therefore, modified the order dated 5 June, 2003, in the
following terms:-
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27 App1158.10
“ORDER
Instead of condition directing the applicant
mentioned in para-1 of the order that he shall not sell out
muddemal property and shall produce the same as and
when required by the court, the following order is
passed :
One bottle from each carton be kept as sample,
while remaining bottles be handed over to the applicant
which he can sale the property. However, he has to
deposit the amount of sale proceeds in the lower court in
case the learned Judicial Magistrate, First Class, Uran,
directs him to do so at the trial.”
The suggestion that the the goods were returned unconditionally
or pursuant to a decision on merits in the appellant’s favour is,
therefore, unfounded. Indeed, by the said order, the goods had been
returned only on the condition that the appellant would not sell the
property and would produce the same when required by the Court. In
fact, the evidence has been preserved for the purpose of the trial.
(B) The complaint was not dismissed on merits. It appears that on
nd
2 August, 2005, the said Criminal Case No.16 of 2003 was
dismissed as no accused were served. The complaint had been filed
against an unknown person. The dismissal was, therefore, not on
merits. The respondent filed Writ Petition No.916 of 2007 against the
nd
said order. The same was admitted by an order dated 22 September,
2008 and is pending in this Court.
37. The proceedings support the respondent’s case that far from
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28 App1158.10
having acquiesced in the appellant using the trade-mark and far from
their having waived their rights claimed in the suit, they have, in fact,
vigorously pursued the preservation and protection thereof. Even if
the writ petition is dismissed finally, it would make no difference to
the point under consideration viz. as to whether there was
acquiescence or waiver on the respondent’s part. Even assuming that
there was negligence in prosecuting the criminal complaint, it would
not lead to the conclusion that the respondents had acquiesced in the
appellant infringing their marks or that the respondents had waived
their rights in respect of their marks.
th
38. On 5 March, 2003, the appellant had made three applications
for registration of its mark being application nos.1180284, 1180285
and 1180286. The appellant obtained registration in respect of its
application no.1180286. The respondents opposed application nos.
1180284 and 1180285 by filing opposition nos.292365 and 292366,
th
both dated 9 October, 2006. The applications are pending.
Mr. Dwarkadas contended that the respondent’s not having
opposed application no.180286, must be deemed to have acquiesced
in the appellant’s use of the impugned mark.
39. Dr. Tulzapurkar submitted that the only reason for the
respondents not having opposed the registration of the impugned mark
by application no.1180286 was that they had not noticed the same.
He further stated that the respondents thereafter filed a rectification
application challenging the grant of the registration and that the same
is pending. Mr. Dwarkadas contended that this statement has not been
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29 App1158.10
made on affidavit and ought, therefore, to be ignored. For the purpose
of this appeal, we shall do so. Despite the same, we are inclined to
accept Dr. Tulzapurkar’s submission that the only reason why the
respondent did not oppose the registration under the appellant’s
application no.1180256 is that they had not noticed the same at the
relevant time. This is evidenced by several facts.
40. Firstly, the background of the matter, especially the vigorous
action that the respondents have taken, both in India and abroad for
protecting their marks, belies the contention that they acquiesced in
the appellant using the impugned mark. It just does not stand to
reason. Further, application no.1180285, which was admittedly
opposed by the respondent by their application no.292366, was also in
respect of the mark “Hb TONE” although it is part of a label mark. It
is impossible, therefore, to accept the appellant’s contention of waiver
and acquiescence merely because there was no opposition to the
registration application no.1180286. The respondents having defended
their marks throughout in India and abroad the only reasonable
explanation for their having omitted to oppose only one application
for registration of the impugned mark is that it escaped their attention.
41. There is, therefore, a valid explanation for the delay, if any, on
the respondents part in filing the suit. Far less have the respondents
acquiesced in the appellant using the mark “Hb TONE” / “HB
TONE”. Nor have the respondents waived their rights qua their marks.
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30 App1158.10
Re: IV: Whether the respondents have made a false statement
disentitling them to interlocutory reliefs?
42. Mr. Dwarkadas further submitted that the respondents are not
entitled to interim reliefs as they had made a false statement in
paragraph 13 of the plaint. Paragraph 13 of the plaint refers to the said
Criminal Complaint No.16 of 2003. It is stated that after the appellant
th
made an application on 20 April, 2003, for the return of its products,
the appellant discontinued exporting goods bearing the trade mark
“Hb TONE”. Mr. Dwarkadas submitted that the statement was false
as evidenced by the fact that the appellant had, in fact, exported goods
bearing the said mark even thereafter. He relied upon the statement of
year-wise export sales of its products with the mark “Hb TONE” for
the years 200-2001 to 2005-2006. The relevant year for the purpose
of this allegation is the year 2002-2003. During this period, it is
alleged that the appellant exported goods worth about Rs.9,99,314/-.
43. It is difficult to see how the same, even if true, establishes the
respondent’s knowledge thereof. Firstly, there is no mention of the
countries to which the goods were exported during this period. In
other words, there is nothing to show that the exports were also to
countries in which the respondents may have had the means to notice
the same by virtue of their also trading in those countries. We hasten
to add that even if these particulars were furnished, it would not
establish knowledge on the respondent’s part of the said exports. This
would be too flimsy a basis to deny the respondents reliefs, which
they are otherwise entitled to on the ground of acquiescence or waiver.
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31 App1158.10
Re: V: Whether the respondent’s case is not based on a word
mark, but only on a label mark?
44. Mr. Dwarkadas submitted that the respondents case of passing
off qua RB TONE is based on the “RB TONE” label mark and not on
the word mark “RB TONE”. In this regard, he relied upon the fact
that “ARBITONE” and “HB RON” were registered as word marks,
whereas what was registered was the label mark containing as a
prominent feature, the word mark “RB TONE”. He submitted that
even the reliefs claimed were not for passing off or infringement of
the word mark.
45. From a reading of the plaint as a whole as well as the cease and
desist notices it is clear that the cause of action is based, not merely on
the label mark, but on the word mark “RB TONE” as well. This is
also clear from prayer (b) wherein the respondents have sought relief
against passing off qua their trade marks, including “RB TONE”. It is
not limited to the label mark. Merely because the label mark was
registered it would not preclude the respondents from basing their
cause of action also on the word mark which forms a predominant
feature thereof.
Re: VI: Whether the respondents are not entitled to
interlocutory reliefs on the ground that the latter part of the marks
“TONE” is in common usage for similar products in a series of
marks?
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32 App1158.10
46. Mr. Dwarkadas contended that a part of the mark viz. “TONE”
was common to the trade. Mr. Dwarkadas stated that there are several
marks with the suffix “TONE”.
47. However, here again the pleading is not sufficient to establish
this defence on facts. Nor was there any evidence to prove the same.
As rightly pointed out by Dr. Tulzapurkar, there is no material of
extensive use and/or availability of such rival marks bearing the
alleged common feature. He relied upon several judgments in this
regard including in Corn Products Refining Co. v. Shangrila Food
Products Ltd., AIR 1960 SC 142 and Schering Corporation & Ors. v.
V. Kilitch Co. (Pharma) Pvt. Ltd., 1994 1 IPLR 1 (at pg.8). It is
adequate to refer to the following observations of the Division Bench
in Charak Pharmaceuticals v. M.J. Exports Pvt. Ltd., 1993 IPLR 1 at
page 44:-
“.............. Shri Daruwalla referred to the decision
reported in 1967 Fleet Street Patent Law Reports 39 to
show that the suffix `TEST’ used in the mark of the four
contestants was common to the trade and, therefore, it
was held that there was no likelihood of deception or
confusion. It was urged that the word `TONE’ is in
common use in the trade and open to the trade use. The
submission proceeds on the assumption that the word
`TONE’ is in common use in the trade. Shri Tulzapurkar
controverts the claim by submitting that there is no
evidence on record to indicate that the word `TONE’ is
common to the trade of medicinal and pharmaceutical
preparations. Shri Daruwalla attempted to refer to the
affidavit filed by Kishore Dharnidhar Shroff, one of the
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33 App1158.10
partners of the appellants, on March 12, 1968 in some
other proceedings. It is not permissible to refer to the said
affidavit without the affidavit being on record and
without giving an opportunity to the appellants to meet
the claim. Shri Daruwalla did not dispute that there is
nothing on record to establish that there are several
marks on the Register using the suffix `TONE’. Even
assuming that some marks are registered using the suffix
`TONE’ that by itself is not sufficient to assume that
there would be no likelihood of deception or confusion.
It is now well settled that the mere fact that the mark is
on the Register is not sufficient but it is necessary to
establish the user of such mark in the market. In absence
of any material, it is not possible to accede to the
submission of Shri Daruwalla that the suffix `TONE’ is
common to the trade. In our judgment, on the facts and
circumstances of the case, the conclusion is inescapable
that the mark proposed by respondent No.1 is similar to
the registered mark on the appellants and the mark of
respondent No.1 is deceptively similar and is likely to
deceive or cause confusion.”
48. Thus, the mere reliance upon the Register to indicate the
registration of the marks with the suffix “TONE” does not establish
the defence that it is common to the trade.
Re:VII. Whether in view of section 56 of the Trade Marks Act,
1999, the action for infringement or passing off is maintainable
despite the appellant only exporting its goods and not selling them
in India?
49. Mr. Dwarkadas submitted that the question of infringement or
passing off cannot and does not arise as the appellant neither sells nor
intends selling its products in India under the said mark “Hb TONE”.
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34 App1158.10
The appellant only exports its products bearing the said mark. In any
event, according to him, section 56 does not apply to an action for
passing off. He submitted that this is so because to establish
infringement the plaintiff does not have to show user, commercial or
otherwise. However, in the present case of passing off “use” is
necessary. Accordingly, he submitted that if a mark is not used in
India, there is no question of protecting either the proprietor of the
mark or the general public. Therefore, a passing off action does not
fall within the ambit of section 56.
50. Section 56 of the Trade Marks Act, 1999, reads as under:
“56. Use of trade mark for export trade and use
when form of trade connection changes .—(1) The
application in India of trade mark to goods to be
exported from India or in relation to services for use
outside India and any other act done in India in
relation to goods to be so exported or services so
rendered outside India which, if done in relation to goods
to be sold or services provided or otherwise traded in
within India would constitute use of trade mark therein,
shall be deemed to constitute use of the trade mark in
relation to those goods or services for any purpose for
which such use is material under this Act or any other
law.
(2) The use of a registered trade mark in relation to goods
or services between which and the person using the mark
any form of connection in the course of trade subsists
shall not be deemed to be likely to cause deception or
confusion on the ground only that the mark has been or is
used in relation to goods or services between which and
the said person or a predecessor in title of that person a
different form of connection in the course of trade sub-
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35 App1158.10
sisted or subsists.”
Dr. Tulzapurkar submitted that the point has been considered by
a Division Bench of this Court to which one of us (S.J. Vazifdar, J.)
was a party in the case of M/s. Maxheal Pharmaceuticals (India) vs.
Shalina Laboratories Pvt. Ltd. in Appeal No.88 of 2005 in Notice of
th
Motion No.2638 of 2004 in Suit No.2663 of 2004 dated 16 February,
2005 . However, the applicability of section 56 was not decided by the
Division Bench. This is clear from paragraph 7 of the judgment where
the Division Bench stated that it was not necessary for it to dwell on
the point as the point taken by the appellant in that matter was raised
for the first time only in the appeal.
Our attention was not invited to any other judgment under the
said Act on the point. We must, therefore, deal with this question on
principle.
51. It is admitted that the appellant applies the impugned mark to
the goods in India which are thereafter exported. The impugned mark
has thus been applied to the appellant’s goods within the meaning of
section 56. Had the mark been applied in relation to goods to be sold
within India, it would undoubtedly have constituted use of the trade
mark in India. By virtue of section 56, the application in India of the
trade mark, although to goods to be exported from India, is deemed to
constitute use of the trade mark in relation to the said goods “ for any
purpose for which such use is material under the Trade Marks Act,
1999, or any other law ”. The plain language of section 56, therefore,
constitutes the application in India of trade marks even to goods to be
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36 App1158.10
exported from India as use of the trade mark in relation to those goods
for any purpose for which such use is material under the Act or any
other law.
The use of a trade mark is relevant for more than one reason. It
is relevant to a party seeking to establish goodwill and reputation in a
mark in an action for passing off. It is also relevant, even if it is not
necessary, to establish the act of infringement or passing off.
52. There is little doubt that the use of a trade mark within section
56 can be relied upon to maintain an action for infringement.
Section 28 of the Act gives to the registered proprietor of the
trade mark, the exclusive right to “use” the trade mark in relation to
the goods or service in respect of which the trade mark is registered
and to obtain relief in respect of infringement thereof in the manner
provided by the Act.
Section 29 enumerates various circumstances that would
constitute infringement of registered trade marks by the use thereof by
a person who is not entitled to use the same. For instance, Section 29
of the Act provides that a registered trade mark is infringed by a
person who, not being a registered proprietor or a person using by
way of a permitted use, “uses” in the course of trade, a mark which is
identical with or deceptively similar to the registered trade mark.
Section 29(2) provides that a registered trade mark is infringed by a
person who not being a registered proprietor or a person using by way
of a permitted use, uses in the course of trade, a mark which because
of the factors enumerated therein is likely to cause confusion on the
part of the public or which is likely to have an association with the
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37 App1158.10
registered trade mark. Section 29(6)(c) expressly provides that for the
purpose of section 29, a person uses a registered mark if he, inter-alia ,
imports or exports goods under the mark.
53. Thus section 56 would clearly apply to an action for
infringement if the trade mark is applied in India to goods to be
exported from India as the same is deemed to constitute use of a trade
mark in relation to those goods for any purpose for which such use is
material under the Act.
54. The position would be no different in the case of a passing off
action. Whether passing off is considered to be an action under the
said Act in view of section 27(2) or not makes little difference in view
of the concluding words of section 56 “ or any other law ”.
Even in a passing off action, the use of the impugned mark by
the defendant is important. It is one of the factors which even if not
necessary, entitles a plaintiff to maintain an action for passing off.
There is no warrant for limiting the ambit of section 56 which is in
consonance with the intention of the Legislature to protect intellectual
property rights. There is nothing in the plain language of section 56
that supports Mr. Dwarkadas’ alternative submission that section 56 is
restricted to the protection of the statutory right of infringement and
does not apply to an action for passing off.
A Court must tread carefully and be slow to imply a restriction
which does not appear from the words in a statute.
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38 App1158.10
Section 27 of the Act reads as under:
27. No action for infringement of unregistered
trade mark.- (1) No person shall be entitled to institute
any proceeding to prevent, or to recover damages for, the
infringement of an unregistered trade mark.
(2) Nothing in this Act shall be deemed to affect rights
of action against any person for passing off goods or
services as the goods of another person or as services
provided by another person, or the remedies in respect
thereof.”
A passing off action is a recognized legal right in India. We
need go no further than refer to the Objects and Reasons for clause 27,
which states that it “ recognizes the common law rights of the trade
mark owner to take action against any person for passing off goods as
the goods of another person or as services provided by another
person or the remedies thereof”.
56. Assuming that the language of the section is not clear, we
would lean in favour of a construction which would confer the benefit
of proprietorship in a trade mark rather than deny the same. A view to
the contrary would confer a benefit upon the unauthorized user of a
mark thereby prejudicing the rights of the proprietor of the mark. If
there was any ambiguity in section 56, we would have preferred the
view that the intention of the Legislature was to protect the rights of
the proprietor of the trade mark against the unauthorized use thereof.
The Legislature has and if we may add, with respect, justifiably not
restricted the ambit of section 56 in order to grant such protection as is
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39 App1158.10
possible within the territorial limits of the country to the proprietor of
trade marks.
57. There is nothing to suggest that if an infringing mark is only
applied to products to be exported from India, the proprietor of the
mark or the general public, does not have any interest which requires
protection. There are innumerable reasons why and circumstances in
which it could be said that even in a passing off action, the proprietor
of a mark and the general public require protection in respect of the
goods to be exported from India bearing the infringing mark. Merely
because goods bearing an impugned mark are only exported it does
not follow either as a question of law or even of fact that the
proprietor of the mark is not likely to suffer substantial damage to his
property in the goodwill. The assumption that goods that are exported
are not exposed to residents or citizens of this country is fallacious.
The mark is exposed by the unauthorized user thereof to various
persons, even within the country, including manufacturers of the
labels containing the mark, the manufacturers of cartons on which the
labels may be applied and the containers in which the products are
sold, the transporters of the goods and the various authorities that deal
with the goods before they are actually exported and in the course of
export. The process of inspection, quality control and export would
involve the exposure of the infringing mark to employees, workers,
proprietors and a variety of other persons.
58. Faced with this, Mr. Dwarkadas submitted that even if section
56 applies to passing off actions, the respondent must prove the
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40 App1158.10
factum of passing off in the country of export. In other words,
according to him, passing off in respect of goods exported from India
involves the concept of dual actionability. The principle requires the
plaintiff to establish two factors. Firstly, that the country to which the
goods are exported recognizes the action of passing off. Secondly, the
factum of passing off in the country of export must also be proved.
59. We do not find anything in the plain language of section 56 that
warrants the application of the principle of dual actionability. We are
not inclined to read into the section, restrictions absent therein.
60. The application of the mark by the appellant to the goods
exported by it thus constitutes use of the mark by it in India. The
respondent’s action for passing off is, therefore, maintainable.
Re: VIII: Whether this Court has territorial jurisdiction to
entertain the respondent’s suit?
61. An issue as to territorial jurisdiction was sought to be raised by
Mr. Dwarkadas. The issue, however, was not raised before the
learned single Judge. Nor has it been pleaded. We are, therefore, not
inclined to allow the appellant to raise the plea in this appeal. It is
important to note, in any event, that the appellant is a resident of
Mumbai and carries on business in Mumbai. Mr. Dwarkadas did not
press this point any further.
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41 App1158.10
62. In the circumstances, the appeal is dismissed. The stay granted
by the learned single Judge shall continue for a period of six weeks
from today.
CHIEF JUSTICE
S.J. VAZIFDAR, J.
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