COMMENT: In this Judgment, the Hon’ble Delhi High Court has laid down the important proposition.
1. The plaintiff would be entitled to institute an action of passing off in respect of a design used by him as a trade mark, provided the action contains the necessary ingredients to maintain such a proceeding. (Para No.10).
IN THE HIGH COURT OF DELHI AT NEW DELHI
CS(OS) 1414 of 2012
DGT HOLDING B.V & ANR ..... Plaintiffs
Through: Mr. N. Mahabir and Dr. Sheetal Vohra, Advocates.
versus
RAVI SCIENTIC INDUSTRIES & ANR ..... Defendants
Through: Mr. Ashish Deep Verma, Advocate.
CORAM: JUSTICE S. MURALIDHAR
ORDER 11.07.2013
I.A. No. 20660 of 2012 (by Defendants under Order XXXIX Rule 4 CPC) and I.A. No. 9360 of 2012 (filed by Plaintiffs under Order XXXIX Rule 1 and 2 CPC)
1. The background facts to the present suit have been set out in some detail in the order date 16th May 2012 passed by this Court in I.A. No. 9358 of 2012 filed by the Plaintiff under Order XXXIX Rules 1 and 2 CPC in paras 9 and 10 which read as under:
"9. As per the plaint, plaintiffs are in the business of manufacturing and marketing goods and products for use in Chess particularly clocks for use in chess matches. Since the year 1993 the plaintiffs have been producing several types of digital clocks and electronic chess boards. The products of the plaintiffs are sold in over 70 countries. One of the most successful products of the plaintiffs is DGT 2010 chess clock, which is the official FIDE chess clock. Plaintiffs are the copyright owners of the drawings/artistic work based on which the DGT FIDE clock was introduced. Plaintiffs are also the owners of packaging in which the clock DGT 2010 is packed and sold. Plaintiffs are advertising its products through their websites www.dgtprojects.com and www.digitalgametechnology.com.
10. Learned senior counsel for the plaintiffs submits that the plaintiffs have learnt that defendants have started selling clocks bearing identical trade dress, get up, in the market under a trade mark NEW 2020, which is deceptively similar to the plaintiffs trade mark DGT 2010. Defendants are also selling another model of Chess Clock bearing identical trade dress and get up. Counsel further submits that the defendants not only copied the entire colour combination but also copied all the features including shape/get up, drawings and even the brochure/user manual is identical to the brochure and the manual of the plaintiffs. Senior counsel further submits that in fact defendants’ packaging is a substantial reproduction of plaintiffs’ packaging. In support of his submission, learned senior counsel for the plaintiffs has drawn the attention of the Court to a comparison between clocks of the plaintiffs and the defendants as extracted in the plaint. Senior counsel for the plaintiffs has also produced in Court the original clocks of the plaintiffs and the defendant to show the similarity between both the clocks. Senior counsel next submits that the defendant has adopted a similar trademark NEW 2010 coupled with substantially similar shape and design as that of the plaintiffs DGT 2010 with a view to take undue advantage and ride over the goodwill and reputation of the plaintiffs. Senior counsel in these circumstances prays for ex parte ad interim injunction."
2. The Court accordingly on that day passed an ex parte ad interim injunction restraining the Defendants from selling, advertising, marketing its clocks or any other clock under the names ‘NEW 2020’ and ‘Chess Clock’, and the user manual, the packaging with the present trade dress and the identical features of the DGT 2010 clock.
3. The Court also appointed Local Commissioner (LC) to seize all the infringing products stored in the premises of the Ravi Scientific Industries. The report of the LC has been filed. The LC has, in the report, noted that when a third cupboard in the premises of the Defendants was opened, it had "identical clocks as the plaintiffs under the mark New 2020". Further, the "boxes found were the same on the exteriror as to that of the plaintiff and had a celphene wrapped on the said box". The LC was informed by Mr. Ravi Chadha, Proprietor of the Defendant No.1 that "he had no invoices" as he purchased them from the dealer Mr. Sagar and the money had been transferred from his account. He had been selling these items without bill (5 in number)". The LC also found other boxes which were plain white of identical dimension as that of the Plaintiffs’ DGT 2010 clocks. The covers on the said boxes were labeled as ‘Chess clock’. The picture on the sliding cover was identical to the Plaintiff’s clock DGT 2010. Mr. Chadha informed the LC that "these clocks were assembled here but the parts were imported from China". He also stated that "there were low volumes no margins and there were no account books available". The photographs of the stocks found at the Defendants’ premises have also been enclosed with the report.
4. The written statement was filed by the Defendants on 28th September 2012. The Defendants had also filed an I.A. No. 20660 of 2012 under Order XXXIX Rule 4 CPC on 5th November 2012 seeking the vacation of the interim orders dated 16th May 2012.
5. Counsel for the Defendants placed considerable reliance on the decision in Samsonite Corporation v. Vijay Sales 73 (1998) DLT 732 to urge that since registration of the Defendants design had been granted, the suit for passing off would not be maintainable.
6. Counsel for the Plaintiff, on the other hand, placed reliance on the judgment of the Full Bench of this Court in Mohan Lal v. Sona Paint & Hardwares MIPR 2013 (2) 156 to contend that notwithstanding the grant of registration of the infringing design a suit for passing off would be maintainable. He also informed the Court that the Plaintiff had taken steps to have the registration of the infringing design in favour of the Defendants cancelled.
7. The Court finds the plea of the Defendants unsustainable in law. The majority in Mohan Lal v. Sona Paint & Hardwares has indeed answered the issue against the Defendants. The three issues that arose for consideration in the said decision were:
"I. Whether the suit for infringement of registered Design is maintainable against another registered proprietor of the design under the Designs Act, 2000?
II. Whether there can be an availability of remedy of passing off in absence of express saving or preservation of the common law by the Designs Act, 2000 and more so when the rights and remedies under the Act are statutory in nature?
III. Whether the conception of passing off as available under the Trade Marks can be joined with the action under the Designs Act when the same is mutually inconsistent with that of remedy under the Designs Act, 2000?"
8. The answers to issues 2 and 3, which are relevant to the case on hand, are as follows:
"…….a design can be used as a trade mark and if by virtue of its use, goodwill is generated in the course of trade or business, it can be protected by an action in the nature of passing off."……..
22. In our view, the aforesaid contentions are flawed for the reason that while the Trade Marks Act confers certain statutory rights qua a registered trade mark, it does not deprive a user of an unregistered trade mark the right to protect the misuse of his mark by a defendant who is in possession of a registered trade mark. Therefore, in so far as a design, which is registered under the Designs Act is concerned, it may not have the statutory rights, which a registered trade mark has, under the Trade Marks Act, it would certainly have the right to take remedial steps to correct a wrong committed by a defendant by instituting a passing off action. If such an action is instituted, the plaintiff would have to demonstrate that the registered design was used by him as a trade mark which, in the minds of the purchasing public is associated with his goods or services which, have acquired goodwill/reputation which is worth protecting. Quite naturally, result of such an action, would depend upon whether or not the plaintiff is successful in proving the essential ingredients involved in a passing off action, to which we have already made a reference hereinabove.
22.1 Therefore, the argument that since there is no saving clause in the Designs Act as found in Section 27(2) of the Trade Marks Act, and consequently such a remedy ought not to be made available qua a registered design, which is used as a trade mark, is in our view, completely without merit. As is obvious, such a passing off action would be based on a plea that: the design, which is an unregistered mark, was being used by the plaintiff for the purposes of business; and that the plaintiff's goods and/or services had acquired a reputation and/or goodwill, which were identified in the minds of the consumers, by associating the design/the mark, with the goods and/or services. In other words, the plea would be that the design which was being used as a mark identified the plaintiff, as the source of the goods supplied or services offered."
9. The Full Bench also approved the decision of the Bombay High Court in Gorbatschow Wodka KG v. John Distilleries Ltd. 2011 (47) PTC 100 (Bom.) and in particular the following passages:
"...15. The fact that the Defendant has obtained registration under the Designs Act, 2000, does not impinge the right of the Plaintiff to move an action for passing off. Section 27(2) of the Trade Marks Act, 1999 provides that nothing in the Act shall be deemed to affect the right of action against any person for passing off goods or services. Section 27(2) is a statutory recognition of the principle that the remedy of passing off lies and is founded in common law.
16. Now, in the present case, the material which has been placed on the record by the Plaintiff, prima facie indicates that the Plaintiff has an established trans border reputation and that an integral part of that reputation lies in the shape of the bottle in which Vodka is sold. The shape of the bottle which the Plaintiff has adopted has no functional relationship with the nature sold. The shape, to use the language of a leading authority on the subject, is capricious. It is capricious in the sense that it is novel and originated in the ingenuity and imagination of the Plaintiff. The true test is not as to whether the Defendant took a search from the Design Register. As the first user of the shape, the Plaintiff was not bound to register it under the Designs Act, 2000. If the Defendant knew that the bottles of the Plaintiff with a distinctive shape were in the market -as a prudent person in the trade would know upon a diligent enquiry no amount of search in the Register would bring it within the purview of an honest adoption....
22. The test is whether the shape that has been adopted by the Plaintiff is one that is adopted capriciously, purely to give the article a distinctive appearance or characteristic of the goods of the manufacturer. If that be so, the manufacturer may be able to establish that he has a reputation and goodwill in the distinctive appearance of the article itself which would furnish a cause of action in passing off....
Secondly, under the Trade Marks Act, 1999, the shape of goods and their packaging is statutorily recognized as a constituent element of a trade mark as distinguishing the goods or services of a person with those of others; Thirdly, the submission of the Plaintiff that no other manufacturer either globally or in India has adopted the shape of the bottle of the Plaintiff (save and except for the Defendant) has not been disputed in the course of submissions by counsel for the Defendant; Fourthly the shape which has been adopted by the Plaintiff is unique to the point of being capricious...."
10. Finally, the Full Bench crystallized its answers to the questions in para 34 of the judgment affirmatively holding that "The plaintiff would be entitled to institute an action of passing off in respect of a design used by him as a trade mark provided the action contains the necessary ingredients to maintain such a proceeding. The argument that such a suit could be instituted only after the expiry of the statutory period provided under Section 11 of the Designs Act, does not find favour with us". The Court also answered the issue stating that "a composite suit for infringement of a registered design and a passing off action would not lie".
11. The second plea that no registration of a trademark in relation to the shape of the products could be granted is also tenable. It will always be open to the Plaintiff, as long as it satisfies the Court about the ingredients of a suit for passing off, to maintain such action. The plea that the Plaintiff cannot claim infringement even on the basis of the Copyright Act should also fail for the same reason.
12. Learned counsel for the Defendants admitted that there was no document showing prior user of the infringing design by the Defendants. He also was candid that there were invoices to show that the Defendants’ products were in the market in the past five years.
13. The Court clarifies that the above observations are prima facie in nature and will not influence the final decision of the Court at the conclusion of the trial.
14. In the circumstances, the Court finds no reason to vacate the interim injunction granted in favour of the Plaintiff on 16th May 2012.
15. Accordingly, I.A. No. 20660 of 2012 filed by the Plaintiff under Order XXXIX Rule 4 CPC is dismissed, and I.A. No. 9358 of 2012 filed by the Plaintiff under Order XXXIX Rule 1 and 2 CPC is disposed of by making the interim order 16th May 2012 absolute during the pendency of the suit.
CS(OS) No. 1414 of 2012
16. The following issues are framed:
(i) Have the Plaintiffs made out a case restraining the Defendants from advertising, marketing and selling clocks under the name of ‘NEW 2020’ clock or ‘Chess clock’ and any other clock similar thereto? OPP
(ii) Are the Plaintiffs entitled to a permanent injunction to restain the Defendants infringing the copyright in the artistic work of the Plaintiff in its DGT 2010 clock? OPP
- (iii) What is the effect of the Defendants having obtained registration under the Designs Act in respect of the infringing design? OPP
(iv) Whether there is an infringement of copyright in the user manual and packaging of the Plaintiffs in their DGT 2010 clock by the Defendants by selling, advertising, marketing or making user manual or packaging with its ‘NEW 2020’ clock or ‘Chess clock’ and any other similar clock thereto? OPP
(v) Are the Defendants liable for passing off their products being sold under the mark NEW 2020 and ‘Chess clock’ as that of the Plaintiffs’ DGT 2010 clock? OPP
(vi) Are the Plaintiffs entitled to damages, as prayed for? OPP
(viii) Relief.
17. No other issue either arises or is pressed.
18. List the matter before the Joint Registrar on 25th September 2013 for admission/denial of documents and for further steps. The affidavits by way
of admission/denial be filed by that date.
JULY 11, 2013
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