Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 23 November, 2020
+ CS(COMM) 375/2020, IAs 8010/2020 & 9611/2020
UFO CONTEMPORARY, INC. .....Plaintiff
Through: Mr. Hemant Singh, Adv. with
Ms. Mamta Rani Jha, Mr. Wasim
Shuaib Ahmed, Mr. Sambhav Jain,
Advs.
Versus
CREATIVE KIDS WEAR (INDIA) PVT. LTD.
&ORS. .....Respondents
Through: Mr. A. Murali, Adv. with
Ms. Bansuri Swaraj & Ms. Ana
Upadhyay, Advs. for D-1 to D-4
Mr. Dheeraj Nair, Adv. with
Mr. Mohit Bakshi & Ms. Vishrutyi
Sahni, Adv. for D-5
Ms. Nilofar Absar, Adv. for D-6
Mr. Kunal Kher, Adv. for D-7
Ms. Akanksha Kalyanpur, Adv. for D-
8 & 9
CORAM:
HON'BLE MR. JUSTICE V. KAMESWAR RAO
J U D G M E N T
V. KAMESWAR RAO, J.
IA 8010/2020
1. By this order, I shall decide IA 8010/2020 filed by the
plaintiff under Order XXXIX Rule 1 & 2 read with Section 151
CPC.
2. The case of the plaintiff, as contended by Mr. Hemant Singh
is that the suit has been filed for infringement and passing off in
relation to plaintiff’s trade mark UFO (word per se) registered in
CS(COMM) 375/2020 Page 1/24
India vide trade mark registration No. 388739 dated April 13, 1982
in class 25 for description of goods comprising trousers including
pants and blouses and shirts for men, women and children. The
registration is valid till April 13, 2030. According to Mr. Singh, the
trade mark UFO is an arbitrary mark, which was adopted by the
plaintiff in the year 1968 and has been registered in various
countries. The trade mark UFO has been promoted extensively by
various brand ambassadors and has also featured in the leading
international magazines, which are circulated globally, as well as in
India. The plaintiff has also registered its trade mark UFO as a
domain name in 1998. The plaintiff gets its clothing manufactured
for export and sale in international markets from third party
manufacturers. The defendant Nos. 2, 3, 8 and 9 have been engaged
and associated with such manufacturers of clothing under the trade
mark UFO for and on behalf of plaintiff in India since 1970s till
2011. In this regard, he has relied upon the sale invoices bearing
the trade mark UFO for the period between 2003-2011.
3. Mr. Singh stated, the use of the trade mark UFO by the
defendant Nos. 2, 3, 8 and 9 during the period 1970-2011 was by
way of license granted by the plaintiff, one such agreement dated
October 21, 1982 has been placed on record. He stated that the said
agreement was signed by the plaintiff and defendant Nos. 8 and 9
on behalf of Creative Casualwear Pvt. Ltd., which was a part of the
Creative Group of Companies. He laid stress on the fact that
defendant Nos. 2, 3, 4, 8 and 9 are all part of the Creative Group of
Companies and were associated with the plaintiff by undertaking
the manufacture and export of plaintiff’s product i.e. apparels under
CS(COMM) 375/2020 Page 2/24
the trade mark UFO. He stated that in March, 2011, defendant No.
2 approached the plaintiff vide email dated March 30, 2011 to
launch children’s clothing in India under the trade mark UFO. Vide
e-mail dated May 07, 2011, the plaintiff agreed to grant license for
the use of the trade mark UFO for kids-wear by sharing a draft
license agreement. The said draft license agreement had depicted
the trade marks proposed to be licensed for its use by the licensee in
India. Vide e-mail dated June 08, 2011, the defendant No. 2 shared
the logo it proposed to use with UFO written in the same manner in
which it is currently being used by the defendants and is sought to
be injuncted by the plaintiff on grounds of being an unauthorized
use. The defendant No. 2 desired full ownership of the trade mark
UFO in India instead of licensed use, which was categorically
denied by the plaintiff vide its e-mail dated July 12, 2011. This led
to the parties falling apart in respect of the then business
relationship. Thereafter, the plaintiff started getting its clothing
products for export, manufactured from another manufacturer till
2017. The plaintiff is in negotiations with other manufacturers in
India for undertaking the said assignment.
4. Mr. Singh would contend that it was only in the month of
January, 2019 that the plaintiff came across trade mark
of defendant No.1 published in Trade
Marks Journal No. 1869 dated October 01, 2018 on a ‘proposed to
be used’ basis for garments falling in class 25. The plaintiff
immediately filed opposition thereto since
used in the advertised
trade mark was the same which the plaintiff has disallowed the
defendants from using, except by way of a license, to be granted by
CS(COMM) 375/2020 Page 3/24
the plaintiff as is evident from communications exchanged in 2011.
He stated that further inquiry by the plaintiff revealed that the
defendants are even selling clothing and garments on various e-
commerce platforms under the trade mark
. Such infringing
products were purchased by the plaintiff through an investigator
engaged for the said purpose and such infringing
branded
clothing were sold by Amazon India, Tatacliq and Myntra etc.
Pursuant thereto, the plaintiff had issued legal notice dated October
24, 2019 to defendant Nos. 1 to 4, 8 & 9 in order to bring such
infringing activities to their notice and seeking an undertaking not to
use the trade mark
. The defendnat No.1 replied to the said
notice and agreed to change the logo
. They further represented
that they already stopped using
from November 14, 2019 and
are ready and willing to give an undertaking not to use
in future
as well. However, the defendants demanded six months’ time to
clear the stock bearing the impugned mark
. Vide letter dated
December 05, 2019, the plaintiff agreed to ten weeks’ time frame
for the defendants to exhaust the subsisting stock. However, since
even towards the end of January 2020, the infringing products were
found to be on sale on ecommerce platforms, a reminder was sent
by the plaintiff to the defendant Nos. 1, 2, 3, 4, 8 & 9 to remove
such listings and give an undertaking to stop the use of the
impugned mark. Despite such notices and assurances given by the
defendants, the plaintiff found the infringing UFO branded products
selling on the said e-commerce platforms even in the month of June,
2020.
CS(COMM) 375/2020 Page 4/24
5. Mr. Singh stated that the plaintiff’s trade mark registration
is for the word mark UFO for clothing falling in class 25. Such trade
mark is infringed by use of any deceptively similar trade mark
thereto. (Ref: K.R. Krishna Chettiar v. Sri Ambal AIR 1970 SC
146. He refers to Section 29(9) of the Trade Marks Act, 1999 (‘Act
of 1999’, for short) which recognizes that a registered trade mark
consisting of words is infringed by spoken use of those words and
reference to the use of mark in Section 29 shall be construed
accordingly. According to him, no matter how UFO is visually
depicted and is different from its depiction of plaintiff’s trade mark,
such use will always constitute infringement on account of phonetic
identity by spoken use of the impugned trade mark by the
defendants. Phonetically, the registered trade mark UFO and the
impugned trade mark
are identical. They are further used for
identical goods namely clothing and garments for which the
plaintiff’s trade mark is registered. Hence, on account of identity of
registered trade mark and identity of goods, the use of the impugned
trade mark by the defendants falls within the scope of infringement
as defined under Section 29(2)(c) of the Act of 1999 and in case of
such use, the Court is required to presume confusion vide Section
29(3) and hence the defendant Nos. 1 to 4, 8 and 9 are liable to be
injuncted. He stated that the use of the mark
with any other
‘added matter’ thereto by way of other marks used in conjunction
such as ‘under fourteen only’ or ‘device of a face’ or any other
device or mark is irrelevant consideration as held by the Supreme
Court in the case of Kaviraj Pandit Durga Dutt v. Navaratna
Pharmaceutical AIR 1965 SC 980. He also relied upon the
CS(COMM) 375/2020 Page 5/24
judgment of the Supreme Court in the case of Ruston and Hornby
v. Zamindara Engineering AIR 1970 SC 1649 . In effect, it is his
submission that the use of the mark by the defendants as depicted
above, is in violation of statutory right of exclusive use of the
registered trade mark under Section 28 and Section 29 of the Act of
1999. The said violation of right of exclusive use cannot be
mitigated or circumvented by adding some other mark.
6. On the plea of estoppel taken by the defendant Nos. 1 to 4, it
is the submission of Mr. Singh that the defendant Nos. 1 to 4 were
permitted to use plaintiff’s registered trade mark UFO in relation to
the clothing manufactured by the defendants on behalf of the
plaintiff by way of a license arrangement. The said license
arrangement came to an end in the year 2011. The defendants are
therefore estopped from claiming any right to use the said trade
mark or any other deceptively similar trade mark, or questioning
plaintiff’s proprietary rights in the trade mark UFO by way of
present proceedings. In this regard, he relied upon the judgment of
this Court in the case of J.K. Jain & Ors. v. Ziff-Davies 2000 (20)
PTC 244 (Del). He also stated that the adoption of the mark UFO
by the defendant Nos. 1 to 4 is a mala fide adoption, inasmuch as
they are also using UFO as abbreviation of the mark ‘Under
Fourteen Only’ which is descriptive in nature. A party is not
permitted to copy or use a registered trade mark on the basis that it
is an abbreviation or acronym of another mark, which is different.
Such dishonest and mala fide attempt to misappropriate registered
trade marks have been rejected by the Courts through various
judgments. In support of his submission, he relied upon the
CS(COMM) 375/2020 Page 6/24
judgment of this Court in the case of H&M Hennes & Mauritz v.
HM Megabrands (2018) 251 DLT 651; B.K. Engineering v. Ubhi
Enterprises 1985 (5) PTC 1 (Del) (DB).
7. According to Mr. Singh, the plea of the defendants that the
plaintiff is not entitled to the relief of injunction as there is no sale
of UFO branded products of the plaintiff in India is misconceived
and untenable. Firstly, it is incorrect on the part of the defendant
Nos. 1 to 4 to plead that there is no use of trade mark UFO by the
plaintiff in India. The defendant Nos. 1 to 4 themselves have been
manufacturing and exporting UFO branded clothing for and on
behalf of the plaintiff from India till 2011 and thereafter the plaintiff
has got the said products manufactured by other third-party
manufacturers. Section 56 of the Act of 1999 recognizes that use of
trade mark in India in relation to goods to be exported amounts to
use of trade mark in India for any purpose which is material under
the Act. In this regard, he has relied upon the judgment of the
Bombay High Court in the case of Wockhardt v. Eden Healthcare
2014 (58) PTC 14 [Bom] ; Ajanta Pharma v. Zuventus Healthcare
2020 (82) PTC 363 [Del].
8. That apart, it is his submission that the balance of
convenience is in favour of the plaintiff and irreparable injury
would be caused to the plaintiff if the injunction as prayed for, is not
granted.
9. On the other hand, Mr. A. Murali stated that the Defendant
No. 1 had in the year 2012, launched a popular Indian exclusive
kids’ wear brand namely “Under Fourteen Only” with the brand
mascot “Oodle” which is clearly visible on the Defendants’ applied
CS(COMM) 375/2020 Page 7/24
Device Mark in use since 2012
. In the last 8
years, the brand “Under Fourteen Only” has flourished in the
Indian market as a popular brand manufacturing and selling kids-
wear and it is only possible because of the continuous efforts of the
defendant Nos. 2, 3 and 4. His submission is that the plaintiff has
no locus to file the present suit for injunction against the defendants,
inasmuch as the plaintiff has no presence in the Indian market. In
this regard, he stated that the plaintiff is a USA based company
whose products under its word mark UFO do not have any
commercial presence in the Indian market through any online
platforms or offline in the form of Brick and mortar stores.
Furthermore, nothing has been brought on record to prove any sales
of the plaintiff’s products under its word mark UFO. Even
otherwise, the manufacture of the plaintiff’s products under the
mark UFO has taken place in factories in India from the 1970s till
2017 for purpose of export to various countries such as Japan, USA,
Canada, etc, and not for sale in the Indian sub-continent.
10. That apart he stated, the attempt of Mr. Hemant Singh to
show popularity of its products under the mark UFO, on the Indian
soil by way of magazines and periodicals, pertaining to an era
between the 1970s-1990s, which can neither be said to have a wide
nor a popular circulation in India in a period when even social
media had not been introduced worldwide. He stated that the
defendants’ brand “Under Fourteen Only” remains a popular and
exclusive kids’ wear brand in Indian households since its launch in
2012. There is no similarity between the plaintiff’s mark UFO and
label used by the defendants, which utilizes the letters “u, f, & o” as
CS(COMM) 375/2020 Page 8/24
a mere acronym for their popular Indian brand “Under Fourteen
Only” , to save space for branding on its popular apparel. Therefore,
even prima facie a case of infringement does not survive against the
defendants.
11. In support of his submission on the aspect of distinctiveness
and passing off, he relied upon the judgment of the Supreme Court
in the case of Laxmikant V. Patel vs Chetanbhai Shah and
Another, (2002) 3 SCC 65. In substance, it is his submission that in
view of the judgment of the Supreme Court, the plaintiff’s word
mark UFO has not been able to fulfill the mandatory requirement of
user in India in the arena of retail and thus by no means has
acquired distinctiveness in India which is sine qua non to a
successful action against passing off or for that matter dilution and
misappropriation of goodwill. He also relied upon the judgment of
the Supreme Court in the case of Toyota Jidosha Kabushiki Kaisha
v. Prius Auto Industries Ltd., (2018) 2 SCC 1 to contend that the
Territoriality Doctrine over and above the Universality Principle in
relation to protection of trade marks claiming to enjoy trans-border
reputation. He stated that the Apex Court clearly held that the
Territoriality Doctrine is in accordance with the principle of equity,
justice and good conscience which is the foundation for a relief of
interim injunction as sought vide the present application.
12. He also relied upon the judgment in the case of Ajanta
Pharma Ltd. (supra) to contend that the plaintiff has to show sales
in India thereby establishing goodwill within the territory of India.
That apart, it is his endeavour to contend that the brand “Under
Fourteen Only” has acquired a formidable reputation in the Indian
CS(COMM) 375/2020 Page 9/24
household for kids’ wear in contrast to the plaintiff’s products,
which are absent on any of the online and offline retail platforms in
India and even for the sake of argument if it is said that the plaintiff
has an online website on which its products under mark UFO are
available for sale, it goes without saying, that the population with
whom such knowledge or information of the product would be
available would be a very limited section of the public which may
have come across the brand on their visit to the USA in a time much
earlier than the launch of the defendants’ brand. Hence, it cannot be
said that the plaintiff’s word mark UFO enjoys a formidable
goodwill or reputation in the Indian or International markets.
13. He also pleaded acquiescence on the part of the plaintiff
along with delay and laches. The submission of Mr. Murali is that
the plaintiff has approached this Court after eight years from the
launch of the brand “Under Fourteen Only” by the defendants with
a sole intention to harass the defendants. He relied upon Section
33(1) of the Act of 1999 to contend that the said provision clearly
disempowers a registered trade mark owner from opposing a trade
mark later in origin, if it has acquiesced for a continuous period of
five years in the use of a registered trade mark by being aware of
that use. In this regard, he has relied upon the judgments of the
Supreme Court in the case of Power Control Appliances v. Sumeet
Machines (P) Ltd., (1994) 2 SCC 448 and Ramdev Food Products
(P) Ltd. v. Aravindbhai Rambhai Patel and Ors., (2006) 8 SCC
726.
14. Mr. Murali has also relied upon the judgment of the
Supreme Court in the cases of Vishnudas Trading v. Vazir Sultan
CS(COMM) 375/2020 Page 10/24
Tobacco Co. Ltd., (1997) 4 SCC 201 and Nandhini Deluxe v.
Karnataka Co-Operative Milk Producers Federation ltd. and Ors.,
(2018) 9 SCC 183 to contend that the defendants have proposed to
register the impugned mark purely with the intention of using the
same to manufacture and sell garments for kids under the age of
fourteen years only and the same will not be detrimental to the mark
of the plaintiff because the plaintiff has not sold a single garment
within India till date, let alone garments for kids and therefore the
plaintiff is not entitled for an injunction. In any case, the defendant
Nos.1 to 4 product with label
have been duly delisted from the
e-commerce websites of defendant Nos. 5 to 7 herein. Even on that
count, no prejudice is going to be caused to the plaintiff because of
the use of the label
.
15. That apart, it is also stated that the defendant Nos. 2 to 4 are
non-litigious individuals and therefore, before the advent of the
Pandemic and without admitting to the infringement or violation of
rights pertaining to the plaintiff with respect to the word mark UFO,
the defendants on their own volition and in a bona fide manner,
planned to change the Label for the brand name “Under Fourteen
Only” , which has been completely misconstrued by the plaintiff as
an admission to infringement. However, due to the onset of the
Pandemic and the statutorily imposed nation-wide lockdown, the
defendants were rendered handicapped, and could not make the
requisite changes, as they have on their own decided to do, without
prejudice to their rights and contentions, and so as to avoid any
legal complications. They seek dismissal of the application.
CS(COMM) 375/2020 Page 11/24
16. Having heard the learned Counsel for the parties and
perused the record, the prayer of the plaintiff in this application is
seeking an injunction against the defendants, more particularly,
defendant Nos. 1 to 4 from infringing and passing off the plaintiff’s
registered trade mark UFO which is registered in India in the year
1982. The mark of the defendant Nos. 1 to 4 is reproduced below:
17. The plea of Mr. Hemant Singh, learned Counsel for the
plaintiff is that the depiction of the words
in the device mark
of the defendant Nos. 1 to 4 is infringing.
18. The submission of Mr. A. Murali, learned Counsel for the
defendants can be summed up as under:
I. Defendants had launched popular kids’ wear brand
namely “Under Fourteen Only” with the brand mascot
“Oodle”.
II. The plaintiff has no locus to file the suit and seek
injunction against the defendant Nos. 1 to 4 as the plaintiff
has no presence in the Indian market through online or
offline platforms.
III. Even otherwise, the manufacturing of the plaintiff’s
products under mark UFO has taken place in factories in
India for purpose of export to various countries such as
CS(COMM) 375/2020 Page 12/24
Japan, USA, Canada, etc, and not for sale in the Indian sub-
continent.
IV. The plaintiff having approached this Court after eight
years of the defendants launching its products under the
mark “Under Fourteen Only” and in view of Section 33 (1)
of the Act of 1999, the plaintiff is estopped from opposing a
trade mark after five years.
V. The defendant Nos. 1 to 4 proposed to register the
impugned mark
purely with an
intention for using the same to manufacture and sell
garments for children under the age of 14 years only and
same will not be detrimental to the mark of the plaintiff.
19. Having noted the broad submissions made on behalf of the
defendant Nos.1 to 4, there is no dispute that a mark is said to be
deceptive if it is visually or phonetically similar to the registered
mark or a mark which is in use prior in time and has attained
goodwill and reputation.
20. The grievance of the plaintiff is primarily the presence of
the letters “UFO” in the devise mark of the defendant Nos. 1 to 4,
assuming that
is written in a different form than the mark
“UFO” of the plaintiff. The mark
of the defendant Nos. 1 to 4
is phonetically identical to the plaintiff’s mark “UFO”, more
particularly when the goods in question are also identical. In this
regard, Mr. Singh is justified in relying upon the judgment of the
CS(COMM) 375/2020 Page 13/24
Supreme Court in the case of K.R. Krishna Chettiar (Supra),
wherein the Supreme Court has held as under:
“Ambal cannot be read to get the mark registered as
there is a striking similarity and affinity of the sound
with the word “Andal”
21. That apart in view of Section 29 (2)(c) of the Act of 1999,
the impugned device mark of defendant nos. 1 to 4 with
even
being an abbreviation of “Under Fourteen Only” and in
conjunction with other devise occupy the same class, i.e., Class 25
shall constitute infringement of the plaintiff mark “UFO”.
22. In Kaviraj (supra) the Supreme Court in Para 28 held that if
the essential device of the trade mark of the plaintiff had been
adopted by the defendants, the fact that get up of the packaging
and other trading or marks of the goods on the packets in which he
offers his goods for sale, showed a marked difference or indicate
clearly a trade origin, with that of the registered proprietor of the
mark would be immaterial.
23. Mr. Singh is justified in stating that if the impugned mark of
the defendants falls within the scope of infringement then the
Court is required to presume confusion under Section 29 (3) of the
Act of 1999.
24. The plea of Mr. Murali that the plaintiffs mark “UFO” has
not been able to fulfil the mandatory requirement of user in India
as the plaintiff has no sales in India and cannot be said to have
acquired distinctiveness, it is necessary to answer a related issue
whether in view of Section 56 of Act of 1999, when the garments /
clothes are being manufactured in India for the purpose of export
CS(COMM) 375/2020 Page 14/24
with mark “UFO” and not for sale in India, can there be an
infringement of trade mark “UFO”. The answer to the question has
to be affirmative in view of Section 56 of the Act of 1999, which
reads as under:
“(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 a
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 subsisted or
subsists.”
25. It is not disputed that the plaintiff is getting manufactured
garments / clothes in India by applying the mark “UFO” before
exporting them abroad. The depiction of mark UFO is within the
meaning of Section 56 of the Act of 1999. Section 28 of the Act of
1999 gives the right, to the registered proprietor of the trade mark
to exclusive use of the trade mark in relation to goods or services
in respect of which the trade mark is registered and obtain the
relief in respect of infringement thereof in the manner provided by
the Act of 1999.
CS(COMM) 375/2020 Page 15/24
26. The Bombay High Court in the case of Cadila
Pharmaceuticals Ltd. v. Sami Khatib, MANU/MH/0497/2011 has
in Paras 51, 52, 53 held as under:
“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 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
CS(COMM) 375/2020 Page 16/24
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 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.”
27. Similarly, Coordinate Bench of this Court in the case of
Kirorimal Kashiram Marketing Agencies Pvt. Ltd. v. Sachdeva
and Sons Industries Pvt. Ltd. MANU/DE/1773/2008, has held
that export under Section 56 of the Act of 1999 is use of the trade
mark.
28. Another Coordinate Bench of this Court in the case of
Friends Overseas v. Swadi Product U.K. Ltd. and Ors .,
MANU/DE/2941/2012 as in Para 14 held as under:
“In Kirorimal Kashiram Marketing & Agencies Private
Limited versus Sachdeva & Sons Industries Pvt. Ltd. 2009
(39) PTC 142 (Del.), a Single Judge of this Court has
held that export under Section 56 of the Act is use of the
trade mark. There is no restriction on the plaintiff
exporting its goods. If the plaintiff were to export its
goods, the buyers in different countries are similarly, as
in this country, likely to be confused by
CS(COMM) 375/2020 Page 17/24
similar/deceptively similar trade mark. It also cannot be
said that the present suit is without any cause of action
merely because defendant no. 1 is not marketing its
products in India under the trade mark “SWADI” for the
simple reason that the defendant no. 2 has been set up to
manufacture, products under the mark “SWADI” and
goods are exported under the said mark by the defendant
no. 2 to defendant no.1, inasmuch as, defendant no.3 is
printing and supplying packaging material to the
defendant no.2. Manufacturing and packaging in India
will attract Section 56 of the Act. Alberto Co. versus R.K.
Vijay 166(2010) DLT 391, World Tanker Carrier versus
SNP Shipping AIR 1998 SC 2330 and Crompton Greaves
Ltd. versus Salzer Electronics Limited 2011 (46) PTC 450
Madras are in the context of different facts and of no help
to the defendants.”
29. In view of the above position of law, even if it is said that
there is no commercial sale of clothes / garments of the plaintiff in
India through online / offline, but the fact that the clothes /
garments are being manufactured by putting trade mark UFO and
exported outside India, the parameters of Section 56 are satisfied
inasmuch as there is a Brand in India of the trade mark although
goods to be exported from India is deemed to constitute the use of
the trade mark in relation to goods. So, it is inconsequential that
there is no commercial sale of goods of the plaintiff in India. This
plea of Mr. Murali is to be rejected.
30. The reliance placed by him on the Judgments in the case of
Laxmikant V. Patel (supra), Toyota Jidosha Kabushiki Kaisha
(supra) and Ajanta Pharma Ltd. (supra) have no applicability in
the facts of this case in view of Section 56 of the Act of 1999 and
in view of my conclusion above.
CS(COMM) 375/2020 Page 18/24
31. The plea of Mr. Singh that the adoption of the mark
as
an abbreviation of “under fourteen only” by the defendant Nos. 1
to 4 is mala fide , is justified. This I say so as the defendant Nos. 1
to 4 were manufacturing the garments / clothes for the plaintiff for
almost 22 years. The defendant Nos. 1 to 4 had approached the
plaintiff for the use of the mark
on their goods to be marketed
locally, which the plaintiff consented to on a licensed basis, which
it appears was not accepted by defendant Nos. 1 to 4. Later, when
the defendants Nos. 1 to 4 were called upon to cease and desist
from using the impugned mark UFO, the defendants Nos. 1 to 4
sought time to exhaust the stock. It transpired even after the expiry
of the time sought for, defendants Nos. 1 to 4 continues to use the
impugned mark. So the usage of the mark
under these
circumstances is surely an attempt to encash the goodwill and
reputation of the plaintiff as an international brand which is clearly
impermissible. In fact, in the Judgment relied upon by the
defendants in Laxmikant V. Patel (supra) , the Supreme Court
held that the even the innocent infringement cannot be condoned.
32. In the present case, mala fide being apparent and the
defendant nos. 1 to 4 being aware of the plaintiff’s trade mark,
they have no reason / justification to adopt
as part of device
mark. The submission of Mr. Murali that the present Suit having
been filed after a period of eight years and in view of the Section
33 (1) of the Act of 1999, which bars the filing of the petition after
five years is also unsustainable. A coordinate bench of this Court
in the case of Pankaj Goel v. M/s. Dabur India FAO(OS) 82/2008
had held that in an event of passing off which is a recurring cause
CS(COMM) 375/2020 Page 19/24
of action and since delay is a defence in equity, the same would
not be available to the defendant if its conduct is fraudulent. In the
said case, it was also held that the so-called delay and concurrent
use, if any, could not have been a ground for refusing interim
injunction. The Apex Court has, in the case of Midas Hygiene
Industries Pvt. Ltd, v. Sudhir Bhatia, (2004) 3 SCC 90 ; held that
delay is inconsequential in a case of infringement/passing off,
especially where the adoption is in bad faith.
33. This Court in the case of M/s. Hindustan Pencils Private
Limited v. M/s. India Stationary Products Co. & Anr. 1989 SCC
OnLine Del 34 had differentiated between laches, inordinate delay
and acquiescence; where it had stated that where the proprietor in
knowledge of his rights knows that the infringer is ignorant of the
same and encourages the infringer to commit actions which would
violate its rights is stated to have acquiesced. It was also held that
a mere failure to use, without some positive act of encouragement,
is not enough to constitute a defence. A defendant who knowingly
infringes the plaintiff’s mark, can hardly complain if he is later
sued, nor is a defendant who starts to infringe without searching
the Trademarks register in any better position than if he had
searched and so learnt of the plaintiff’s mark. Acts of the
proprietor done in ignorance of infringement, or even done without
his own registration in mind will not amount to acquiescence. It
was also held that the manufacturer of the genuine products may
not be adversely affected by such sales and may not chose to
approach the Court for a number of years, but as far as the general
public is concerned, the sale of spurious goods results in the public
CS(COMM) 375/2020 Page 20/24
spending good money for bad things; the Court opined that it
would be the general public which is being cheated. A person who
is guilty of violating the law or infringing or usurping somebody
else’s right cannot claim to continue misuse of the usurped right.
Acquiescence may mean an encouragement by the plaintiff to the
defendant to use the impugned mark as if the plaintiff wanted the
defendant to be under the belief that the former does not regard the
action of the latter as being in violation of its rights. Moreover,
there should be an express assent by the plaintiff to the defendant
using the said mark in a way to encourage the defendants to
continue with the business. In such a case, if the infringer acts
upon an honest mistaken belief that it has not infringed the trade
mark of the plaintiff and once the defendant has established
business reputation the plaintiff turns around and brings an action
for injunction, in such a case, the defendant would be entitled to
raise the defence of acquiescence. Acquiescence may be a good
defence even for the grant of permanent injunction because the
defendant may legitimately contend that the encouragement by the
plaintiff to the defendant for the use of the mark, tantamounted to
abandonment of its rights in favour of the defendant and that over
a period of time, the general public has accepted the goods by
increasing the sale of defendant’s product. The Court in that case
cautioned however, that in such a scenario, it would be for the
defendant to prove acquiescence by the plaintiff and that
acquiescence cannot be inferred merely by the reason of fact that
the plaintiff has not taken any action against the infringement of its
rights. The Court had also taken into account that if the plaintiff is
CS(COMM) 375/2020 Page 21/24
not likely to accept the user of its mark by the defendant, despite
of which the defendant continues to do the business by using the
impugned mark, it does so at its own peril and that the continued
user cannot be set up as a defence in such circumstances. Having
noted the position of law, and it is the case of the plaintiff that it
had come to know about the defendant Nos. 1 to 4 are using the
mark UFO when the plaintiff came across the trade mark of
Defendant No.1 published in the Trade Mark Journal in the year
2018 only. Even otherwise the plea of delay/ acquiescence is a
mixed question of fact and law and can be decided after evidence
is led by both the parties. It is also a settled law that at this stage
the Court shall not conduct a mini trial as held in the judgment of
this Court in the case of Advance Magazine Publishers Inc. vs.
Bombay Rayon Fashions Limited & Others 2017 SCC Online
Del 10064. Prima facie the submission of Mr. Murali is not
appealing. The judgments relied upon by Mr. Murali in the case
Power Control Appliances (supra), Ramdev Food Products (P)
Ltd. (supra) and Ajanta Pharma (supra) have no applicability
being distinguishable on facts.
34. A plea was raised by Mr. Murali that the defendant Nos. 1
to 4 have proposed to register the impugned mark purely with the
intention of using the same to manufacture and sell garments for
kids under the age of fourteen years only and the same will not be
detrimental to the mark of the plaintiff because the plaintiff has not
sold a single garment in India till date. In this regard, Mr. Murali
has relied upon the judgments of the Supreme Court in Vishnudas
Trading (supra) and Nandhini Deluxe (supra) . The said
CS(COMM) 375/2020 Page 22/24
submission is unsustainable in the facts of this case as the
plaintiff’s mark is registered in class 25 under which the defendant
Nos. 1 to 4 also propose to get their device mark registered. The
plaintiff is also manufacturing clothes/garments for children as
well as is being done by defendants Nos. 1 to 4. So, it is not a case
where the defendant Nos. 1 to 4 propose to get trade mark
registered with regard to clothes/garments different from that of
the plaintiff’s even though within the same class. The said
judgments have no applicability in the facts of this case.
35. That apart, the plea of Mr. Murali that the brand of the
defendants “Under Fourteen Only” has attained distinctiveness in
the Indian market as there is no sales of the plaintiff’s goods in
India, though may be matter of record, but, the defendant Nos. 1 to
4 cannot use the abbreviation, of “under fourteen only”
in the
manner it infringes the plainitff mark “UFO”. Having said that, it
may be stated nothing precludes, the defendant Nos. 1 to 4 to use
its mark, without
, to obviate, infringing the plaintiff mark
“UFO”.
36. In view of my above discussion, the defendant Nos. 1 to 4,
their directors, associates, affiliated companies, assignees in
business, franchisees, licensees, distributors, dealers, stockists and
agents are restrained from manufacturing, selling, supplying,
offering for sale including through online platforms, exporting,
importing, directly or indirectly dealing in children’s clothes or
any other goods bearing the impugned trade marks
and or any
other trade mark/trade name/device/logo as may be identical with
or deceptively similar to the Plaintiff’s trade mark UFO amounting
CS(COMM) 375/2020 Page 23/24
to infringement of registered trade mark, dilution and passing off
thereto till the final disposal of the Suit.
37. The application stands disposed of.
V. KAMESWAR RAO, J
NOVEMBER 23, 2020/ ak/jg
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