Wednesday, May 16, 2018

Laverana Gmbh & Co. KG Vs Mac Personal Care Pvt. Ltd. and Ors.


MIPR2015(1)246, 2015(63)PTC87(Del)

IN THE HIGH COURT OF DELHI

I.A. No. 18151/2012 and I.A. No. 19804/2013 in CS (OS) 3000/2012
Decided On: 19.02.2015

Appellants: Laverana Gmbh & Co. KG
Vs.
Respondent: Mac Personal Care Pvt. Ltd. and Ors.



Judges/Coram:
Manmohan Singh, J.



Counsels:
For Appellant/Petitioner/Plaintiff: Manav Kumar, Adv.

For Respondents/Defendant: S.K. Bansal, Ajay Amitabh Suman and Vikas Khera, Advs.


JUDGMENT

Manmohan Singh, J.

1. The present suit has been filed by the plaintiff for permanent injunction restraining passing off, damages, delivery up etc. against the defendants with regard to trade name/trademark LAVERA in relation to natural cosmetics and other body care products. Along with the suit, plaintiff also filed an application being I.A. 18151/2012 under Order 39 Rule 1 and 2 read with Section 151 CPC.

2. The defendant No. 1 is a private limited company engaged in the business of manufacturing and marketing of cosmetics, creams for hair/skin/oral/personal care products etc. Defendant nos. 2 and 3 are the Directors of the defendant No. 1.

3. The suit as well as the interim application was listed before Court on 28th September, 2012 when summons were issued in the suit and notice was issued in the application. The court also passed an ad interim ex-parte order against the defendants restraining from using the trademark LAVERA or Mac's LAVERA in respect of cosmetics/body care products.

4. Upon service, the defendants filed the written statement as well as an application being I.A. No. 19804/2013 under Order 39 Rule 4 CPC for vacation of the ex-parte interim order. By this order, I propose to decide both pending applications.

5. The case of the plaintiff is that the plaintiff is carrying on the business of manufacturing and marketing cosmetics and body care products and uses the trade name/trademark LAVERA in the course of its business. The plaintiff adopted the trademark LAVERA in early 1980 which is an arbitrary mark in connection with cosmetic products. The trademark LAVERA was used for the first time in Germany in 1982. Since then the mark LAVERA has been extensively used in many countries worldwide. In Latin, LAVERA means "the truth". The aforesaid mark, LAVERA is inherently distinctive of the goods of the plaintiff. The plaintiff was the first to use the mark LAVERA in relation to cosmetics and other body care products. The mark is exclusively associated with the business and products of the plaintiff.

6. It is averred in the plaint that the plaintiff's mark LAVERA enjoys statutory protection being registered trade mark in several countries of the world namely Germany, Denmark, Hong Kong, Italy, France, Japan, Singapore, Ireland etc. to name a few. In India the plaintiff's application for mark LAVERA is pending for registration under No. 1863388.

7. It is alleged in the plaint that from the year 1982 and since then, in the International market and in India, plaintiff's products under the mark LAVERA have become extremely popular and widely available/sold all over the world. The plaintiff's trademark LAVERA due to quality of ingredient used in the products has earned substantial goodwill and reputation in the minds of the public all over the world who recognizes this brand for its excellence in quality and free from synthetic preservatives, additives, petroleum-based ingredients, emulsifiers, colors and fragrances.

8. It is stated in the plaint that the products bearing the mark are freely available for purchase on ebay and several online stores. The plaintiff has also won several awards in relation to the LAVERA products, which itself provides ample evidence of the quality of its products.

9. As per averments made in the plaint, the plaintiff has also incurred huge expenditures to promote the brand worldwide. The advertisement expenses for LAVERA products worldwide are stated below:

10. It is stated that the plaintiff's trademark LAVERA is a well known mark and substantial goodwill and reputation has accrued to it on account of the relentless adherence to unmatchable standards of quality and intelligent marketing strategies of the plaintiff The worldwide sales figures for LAVERA products for the period 2007-2011 are given in Para 9 of the plaint, which are reproduced as below:

11. The plaintiff has also obtained domain name registrations for the mark LAVERA such as www.lavera.com, www.lavera.de, www.lavera.in, www.lavera.jp, www.lavera.cz, www.lavera.eu, www.lavera.ca. The plaintiff also sells its product online and its products and catalogue can be accessed by consumers in India. Furthermore search for the word LAVERA on popular search engines such as Google, Yahoo, bing, rediff, etc, show only plaintiff's products among the top 10 results.

12. It is also stated in the plaint that large number of Indians traveling overseas are also exposed to the plaintiff's brands through television, magazines, in flight catalogues/magazines, etc. around the world frequently visited by travelers. There is a large expatriate population of Indians residing in the UK, Europe, Australia, South Africa and the Middle East where the plaintiff's goods are sold freely. Many Indian families have relatives and friends residing in these countries where the plaintiff's goods are sold and advertised. Further a large number of students from India go to the UK, Australia and USA to pursue higher studies. By virtue thereof, and otherwise, the international reputation enjoyed by the plaintiff's trademark LAVERA has spilled over to India which is evident as per following:

a) India and Germany has diplomatic ties that go back to over 60 years. The current bilateral trade between two countries currently stands at over 15 billion Euros. Several airlines including Air India and Lufthansa have been operating direct flights to several cities of Germany from India. Thus many Indian tourists and business persons travel to Germany every year and are exposed to the plaintiff's brand and its products.

b) A report of NRIs living overseas has been compiled by the High Level Committee on the Indian Diaspora-formulated under the aegis of Ministry of External Affairs, Foreign Secretary's Office in the year 2000-according to which around 2% (i.e., 2 crore) of the Indian population is living overseas which further strengthens the plaintiff's submission that the international notoriety associated with the plaintiff's LAVERA mark/product amongst the Indian community has spilled over to the Indian market. The detailed report is available at www.indiandiaspora.nic.in.

13. Therefore, by virtue of the widespread availability, extensive advertising and promotion of plaintiff's trademark LAVERA through media such as fashion magazines, catalogues and outdoor advertisements including hoardings, banners and sponsorships of national and international events.

14. The plaintiff's products under the trademark LAVERA are extensively advertised in several international magazines which have a large circulation in India namely Cosmopolitan, Marie Claire, Women's Health, Elle, Oprah, Glamour etc. Many of the magazines are brought to India and distributed to subscribers by leading book distributors such as India Book Distributor. These books and magazines are also available at leading libraries and through old magazine dealers all over India and by virtue thereof are able to remain in circulation for a very long time and are therefore accessed and read by a large number of people. Internet users can access the plaintiff's website www.lavera.com at all times and see the plaintiff's products. In addition a number of online stores are advertising and selling LAVERA products which are accessible to consumers in India and in view of liberal foreign exchange control laws, the consumers are able to order these goods as well.

15. The case of the plaintiff against the defendants is that in or about September 2010, the plaintiff became aware of the defendants LAVERA mark when it was published in the Trademarks Journal no. 1441 for opposition purposes. The plaintiff filed notice of opposition against the defendants' application under No. 1725333. The defendants also filed an application under No. 1787014 for registration of the mark MAC'S LAVERA which was published in the Trademarks Journal No. 1443. The plaintiff has also filed opposition against the defendants' application for the mark MAC'S LAVERA.

16. On enquiry, it came to the notice of the plaintiff that the defendants are manufacturing and marketing cosmetic products under the name Mac's LAVERA which is identical to the plaintiff's mark LAVERA. It is stated that the addition of the word 'Mac's' does not make the defendants mark distinctive as the prominent and pertinent element is the word LAVERA in the defendants' mark. The defendants are also advertising the infringing Mac's LAVERA product on their website www.macpersonalcare.com.

17. The defendants have adopted an identical mark in relation to identical products to cash in on the reputation and goodwill of the plaintiff. It is averred that the defendants have no explanation for adoption of the said trademark. The defendants have merely added the word 'Mac's' before LAVERA. The intention of the defendants is to cause confusion and deception among the trade and public and reap benefits from their illegal act.

18. It is argued by the plaintiff that the defendants have deliberately used the similar mark in order to appropriate the rights of the plaintiff's product as possible and the adoption of an identical mark by the defendants are in utter bad faith. The defendants being in the same industry ought to have actual knowledge of LAVERA products and the quality for which it is known by consumers globally.

19. It is alleged that in view of statement made in the plaint and material placed on record, the trademark LAVERA deserves protection by virtue of the following reasons:

(i) The trademark LAVERA is prima facie inherently distinctive of the products and business of the plaintiff. The said trademark has been continuously and extensively used by the plaintiff for many years. Therefore, the use of any identical/deceptively similar trademark would be construed and associated exclusively with the business of the plaintiff.

(ii) The plaintiff has extensively promoted and advertised the LAVERA trademark worldwide. As a result of which, the relevant and substantial section of the public associates and knows that the said trademark belongs to the plaintiff.

(iii) The plaintiff's LAVERA trademark has been extensively advertised by way of print and visual mediums around the world. As a result of such publicity, the relevant section of the public recognizes and acknowledges the LAVERA trademark as that of the plaintiff.

(iv) The plaintiff has obtained several registrations for the LAVERA mark in numerous countries around the world. A vast number of registrations attained for the LAVERA trademark worldwide clearly reflects and indicates that the plaintiff is the exclusive proprietor thereof.

20. It is stated that the consumers are bound to presume that the goods provided under the impugned mark 'Mac's LAVERA' actually originate from the plaintiff or may presume that the defendants are under some sort of affiliation/link/connection with plaintiff when, in fact, no such affiliation or connection exists. Such misrepresentation and misunderstanding may not only cause damage to plaintiff's trade but also tarnish its reputation. The defendants have no explanation to adopt and use of identical trademark and in respect of same goods. Hence, the conduct of the defendants is dishonest and tainted.

21. The defendants have taken various defences in their written statement and in the grounds of application under Order 39 Rule 4 CPC. Relevant details for the purpose of deciding the present applications are mentioned below:

(i) The plaintiff is guilty of delay, latches and acquiescence inasmuch as it was already aware of the said rights and user of the said Trademark in relation to its said goods since the year 2005, and it has acquiesced for continuous period of more than 5 years to the user of the defendants. The plaintiff was aware of the rights of the defendants in the said Trademarks LAVERA and MAC'S LAVERA at the latest from September 2010, by its own admission still no action was taken by the plaintiff for two years, after having knowledge.

(ii) The plaintiff obtained the impugned ex-parte order by knowingly making false and misleading statements as to material particulars.

(iii) The plaintiff has not complied with the provision of the proviso to Order 39 Rule 3 CPC.

(iv) The plaintiff is neither the proprietor of the impugned trademark under statutory law nor under the common law. The plaintiff fails to satisfy the requisite ingredients to sustain an action of passing off. The plaintiff holds no goodwill or reputation, distinctiveness or any user leave aside significant user in relation to the impugned trademark within the jurisdiction of this Court. Further, the plaintiff has miserably failed to make out any case of trans-border reputation. There is no question of confusion and deception being ensued in the market and trade vis-`-vis the said user of the defendants. The people at large identify the said products of the defendants with defendants only. Even otherwise it is submitted that in an action of passing off, the heavy onus lies on the plaintiff to establish prior, continuous and extensive user of the said trademark, in which the plaintiff miserably failed. The defendant is entitled to use the said trademark/label LAVERA and MAC'S LAVERA on the basis of the law of honest adoption and concurrent user.

22. As far as adoption of same trademark LAVERA is concerned, it is the case of the defendant that one Sh. Rajesh Bansal, K-2035, Chitranjan Park, Ground Park, New Delhi-110019, the predecessor-in-interest of the defendant No. 1 had coined and adopted the trademarks LAVERA and Mac's LAVERA in respect of the products namely, bleaching preparations, other substances for laundry use, cleaning, polishing, scouring and abrasive preparations, soaps, perfumery, essential oils, cosmetics, hair lotions and dentifrices etc on 1st August, 2005. At the time of such adoption, the said predecessor was engaged in the trade of Henna, Sandal, Rose Water and other cosmetic goods containing Aloevera and to distinguish his goods from the goods of other traders, he took word LOAVERA from ALOEVERA and coined a new mark/word LAVERA. In order to protect the intellectual property in the trademarks LAVERA and Mac's LAVERA, Sh. Rajesh Bansal had also applied for the registration of his trademark LAVERA vide application No. 1725333 dated 26th August, 2008 in class 3 claiming user since 1st August, 2005 and Mac's LAVERA application No. 1787014 dated 18th February, 2009 claiming user since 1st August, 2005 which are in the process of registration and are likely to be registered in favor of the defendant No. 1.

23. The defendant No. 1 was incorporated on 1st May, 2007 as MAC PERSONAL CARE PRIVATE LIMITED who is engaged in the manufacturing, marketing and selling of the goods namely, bleaching preparations, other substances for laundry use, cleaning, polishing, scouring and abrasive preparations, soaps, perfumery, essential oils, cosmetics, hair lotions and dentifrices etc included in class 03 under the trademarks LAVERA/Mac's LAVERA since its incorporation with the permission of the said predecessor. However, in the year 2008, due to some personal reasons, the said predecessor assigned all his rights, title and interests in the trademarks LAVERA and Mac's LAVERA together with the goodwill of the business concerning the goods for which trademark registration application bearing No. 1725333 dated 26th August, 2008 and application bearing No. 1787014 dated 18th February, 2009 in class-03 pending before the concerned Trademarks Registry in favor of the defendant No. 1 vide Deeds of Assignment dated 5th September, 2009 and 16th February, 2009 respectively. It is stated that the defendant No. 1 has already filed request on Form TM-16 for entering its name as the applicant in the aforesaid applications and the same is likely to be allowed by the Registrar of Trademark. It is also stated that the trademark/label LAVERA as well as the trademark/device Mac's LAVERA are registered in Nepal in favor of the M/s. R.B. Brush Industries Private Limited, which is also a unit of the said Mr. Bansal and the said registration is valid, effective and subsisting till now.

24. It is alleged that the defendant No. 1 is also having active and interacting website namely www.macpersonalcare.com and the said website displays the entire range of products of the defendant No. 1. The advertisement expenses relating to the products under the said trademarks are as under:-

25. The defendants have already spent a huge sum of money as well as efforts/skills on the publicity/advertisement of their lawful trademark LAVERA/Mac's LAVERA and the same is also evident from the Annual Sale Figures of the goods under the aforesaid trademarks. The word/mark LAVERA/Mac's. LAVERA is exclusively associated with the goods of the defendants which is being used continuously and extensively publicized/advertised its products under the said trademark of the defendants. As the plaintiff is not using the trademark LAVERA in India, the question of confusion and deception does not arise.

26. In the replication, it is denied by the plaintiff that the plaintiff has not come to this Court with clean hands and is guilty of suppressing material facts. It is submitted that the plaintiff has a strong cause of action against the defendants and is maintainable in the eyes of law. It is denied that the plaintiff has dishonestly mentioned the old address of the defendants i.e. 203, Bajaj House 97, Nehru Place, New Delhi-110019, in the memo of parties. It is stated that the defendants are running and operating their business from the address 203, Bajaj House 97, Nehru Place, New Delhi-110 019 also. It is stated that the defendants have admitted that they are operating from the said address as well and the said address of the defendants is being reflected in the documents filed by the defendants. The user claimed by the defendants is also denied by the plaintiff.

27. It is alleged that the defendants being in the same industry ought to have actual knowledge of LAVERA products, the quality for which is known by consumers globally. The plaintiff will also like to bring to the Court's attention the fact that the defendants have not only copied their brand name LAVERA but also the trademark MAC of Makeup Art Cosmetics Inc. It is stated that the defendants are habitual infringers of international brand names and have deliberately copied plaintiff's internationally well reputed trademark LAVERA with the intention to pass off their products as that of the plaintiff's products. The mark LAVERA is completely arbitrary when used in relation to cosmetics. It is stated that it was copied and popularised by the plaintiff in relation to cosmetics.

28. The plaintiff has also produced some evidence in order to show that the products of the plaintiff are available to the customers in India through online retail outlets and online retail stores, satellite televisions, mobile phones, air travel etc. consumers and markets world-wide are connected with each other. Thus, it is argued by the plaintiff that knowledge of products and brands travel much more quickly. The products are freely available for purchase to consumers in India. The use and reputation of plaintiff's brand LAVERA has spilled over into India coupled with the fact that the defendants have failed to assign any reason to adopt the same trademark. It is argued that the justification given by the defendants that the mark LAVERA is from the ALOEVERA is without any substance and the plaintiff has no objection if the defendants may use the mark ALOEVERA in respect of cosmetic goods. The same trademark cannot be allowed to be used by the defendants who are using the mark LAVERA in identical manner.

29. It is submitted that the plaintiff became aware of the defendants product under the mark "LAVERA" and "Mac's LAVERA" in September, 2010, when the Defendants mark "LAVERA" was published in the Trademark Journal No. 1441 for opposition purposes. It is the plaintiff who first adopted the mark LAVERA in the early 1980's and since then the mark has been used extensively all over the world.

30. As far as user of the plaintiff's trade mark in India is concerned, the plaintiff's products under the trademark LAVERA are extensively advertised in several international magazines which have a large circulation in India namely Cosmopolitan, Marie Claire, Women's Health, Elle, Oprah, Glamour etc. Many of the magazines are brought to India and distributed to subscribers by leading book distributors such as, India Book Distributor. These books and magazines are also available at leading libraries and through old magazine dealers all over India.

31. It is denied by the plaintiff that the adoption by the defendant is bonafide i.e. to distinguish their goods from the goods of other traders, the defendants took the word LOEVERA from ALOEVERA and coined a new mark/word LAVERA, is denied by the plaintiff.

32. It is denied that the defendant no. 1 was incorporated on 1st May, 2007 as MAC PERSONAL CARE PRIVATE LIMITED. It is denied that the defendant No. 1 has been engaged in the manufacturing, marketing and selling of the goods namely, bleaching, preparations, other substances, for laundry use, cleaning, polishing, scouring and abrasive preparations, soaps, perfumery, essential oils, cosmetics, hair lotions and dentifrices etc included in class 03 under the trademarks LAVERA/Mac's LAVERA since its incorporation with the permission of the said predecessor. It is also denied that in the year 2008, due to some personal reasons, the said predecessor assigned all his rights, title and interest in the trademarks LAVERA and Mac's LAVERA together with the goodwill of the business concerning the goods for which trademark registration application bearing No. 1725333 dated 26th August, 2008 and application bearing No. 1787014 dated 18th February, 2009 in class-03 pending before the concerned trademarks registry in favour of the defendant No. 1 vide deeds of assignment dated 5th September, 2009 and 16th February, 2009 respectively.

33. It is denied that the defendants are the prior users of the trademarks LAVERA and Mac's LAVERA and have been using the same continuously, extensively and openly since the year 2005 in relation to their goods falling in class 3. It is denied that the use of the trademarks LAVERA and Mac's LAVERA on the part of the defendants have been without any hindrance from any corner including the plaintiff herein.

34. It is also denied that the defendants have continuously and extensively publicized/advertised its products under the said trademarks through various media including print and electronic media. It is further denied that the defendant No. 1 has also participated in various national and international trade exhibitions. The defendants have not attached any documentary proof in support of their version.

It is submitted that the defendants cannot by claiming false and fictitious sales justify their malafide adoption of an identical mark in relation to identical goods.

35. The plaintiff submits that the present case is only in respect of the illegal adoption of the mark LAVERA by the defendants and the same does not pertain to the packaging of the products of the parties. The defendants by contending that the packagings of the products of the parties are different and are only trying to divert the Court's attention from the real controversy between the parties. It is also denied that the defendants have already spent a huge sum of money as well as efforts/skills on the publicity of their lawful trademark LAVERA & Mac's LAVERA.

36. The plaintiff submits that the defendant cannot on one hand submit that the mark is generic and at the same time seek its registration. It is submitted that the plaintiff is the proprietor of the mark LAVERA and the same is also registered in several countries of the world. Further, due to its well known nature and spill over reputation into India, the mark LAVERA is well known to the customers in India and the plaintiff has the exclusive rights to its use and also restrains any third party from adopting and using an identical or deceptively similar mark.

37. The matter was heard and the order was reserved on 22nd July, 2014. The matter was put up for direction on 1st October, 2014 and the following order was passed by this Court:
"The parties in the above said matter made their submissions in the applications and the order was reserved. The entire matter revolves around the issue of prior user of the trade mark Laverana in question.
While dictating the orders, it has been noticed that parties have not filed the original documents on the basis of which the prior user is claimed. Even some of the advertisements appeared in the newspapers filed by the defendants are not complete newspapers. The plaintiff is claiming the earlier user in overseas countries. On the other hand, the case of the defendants is that the defendants are the prior and concurrent users of the trademark in India though the rival marks are identical so that goods. In the absence of all the original documents, it is not possible to reach at a definite conclusion, as to who is the prior user of the trademark. Let all the original documents be filed by both the parties within two weeks."

38. The plaintiff has filed following documents along with the plaint:
List of documents on behalf of plaintiff filed on 27.09.2012

39. The plaintiff also filed another list of documents dated 3rd July, 2014.
List of documents on behalf of plaintiff filed on 03.07.2014

40. The plaintiff has also filed few documents after hearing of the interim application by way of list of documents filed on 30th October, 2014, the details of which are given as under:

41. The documents filed subsequent to the argument of interim application and order being reserved cannot be considered.

42. The defendant has also filed large number of documents and list of original documents along with original documents on behalf of the defendant. From the documents placed on record, it is evident that the defendants have been using the trademark LAVERA openly since 2009 in respect of cosmetic goods.

43. From the material placed on record by both the parties, it is clear that the plaintiff is the first adopter of the trademark which is being used by the plaintiff in overseas countries prior to the defendants and the trademark was being advertised through various modern media definitely prior to the defendant.

44. As far as user of the trademark LAVERA in India is concerned, the plaintiff no doubt has to establish prima facie that the trademark in question is unique goodwill in other countries and then the benefit of trans border goodwill and reputation can be derived by the plaintiff.

45. One of the essential ingredients is goodwill. The classic case of passing off as it existed since its genesis always insist the existence of goodwill of a merchant in order to give him a locally enforceable right to sue for passing off. This has been explained by Kerly's in his book called Law of Trade Marks and Trade Names (Fourteenth Edition) (South Asian Edition 2007), wherein the concept of goodwill has always been categorized as local in character and the learned author observed thus:-
"Since an essential ingredient of passing off is damage (or prospective damage) to goodwill, he (the Plaintiff) must show that he had, at the date when the Defendants started up, in this country not merely a reputation but a goodwill capable of being damaged. Goodwill, however, is local; it is situated where the business is. Thus a foreign claimant may have a reputation in this country-from travellers or periodicals of international circulation or, increasingly, from exposure on the Internet-yet still fail in an action for passing off because he has here no business and so no goodwill. Such cases have been not uncommon in recent years, and have caused considerable difficulty. Where there is a substantial reputation here, our courts will often accept minimal evidence that a business exists here, but there has to be some".

46. This concept of goodwill and the insistence of localized business has been traditional concept of passing off which sometimes is called as classic case of passing off. However, this concept of passing off has undergone changes due to advent of technology and modernization. For the said reason the tendency to insist localized goodwill has been transformed into proving reputation of a global character. All this would mean that courts entertaining the case of passing off can discount the localized existence of goodwill and the business in the territory specific if the substantial nature of reputation has been proved which has some kind of nexus in the territory where the protection is sought and the said concept in the modern language is called trans-border reputation whereas the goodwill is always local in character, the concept of reputation is dynamic and is all encompassing.

47. The reputation of a person can transcend boundaries by virtue of its advertisement in the newspapers, media circulation, expatriate reputation due to cultural akinness and all other relevant factors which connect one country's business with that of another. This has been aptly explained by the Division Bench of this Court in the case of N.R. Dongre v. Whirlpool Corporation, MANU/DE/0700/1995 : AIR 1995 Delhi 300 wherein the concept of trans-border reputation was approved in the following words:-

"(25) Thus a product and its trade name transcend the physical boundaries of a geographical region and acquire a trans border or overseas or extraterritorial reputation not only though import of goods but also by its advertisement. The knowledge and the awareness of the goods of a foreign trade and its trade mark can be available at a place where goods are not being marketed and consequently not being used. The manner in which or the source from which the knowledge has been acquired is immaterial".

48. The said judgment of Whirlpool [supra] has been approved by the Supreme Court in the case of N.R. Dongre and Ors. vs. Whirlpool Corpn. and Anr., MANU/SC/1223/1996 : 1996(2) ARB. LR 488 (SC) wherein the exposition of law laid down by the Division Bench of this Court was again reiterated. This exposition of 1996 in the case of Whirlpool [supra] has been further revisited by the courts in India more importantly in the case of Allergan Inc. v. Milment Oftho Industries, MANU/WB/0094/1997 : 1999 PTC (19) (DB) 160 wherein Ruma Pal, J. has carefully analyzed the interplay between the goodwill and reputation in a case of passing off action and has laid down that the Courts in India have followed the third approach which is a middle path wherein strict insistence of localized business is not necessary. However, reputation which is sought to be protected has to be substantial one having global character. The observation made by Hon'ble Judge is as under:-

"13. Reputation is the connection that the public makes between a particular product or service and a particular source which may or may not be known. Some Courts have held that reputation which is built up on the basis of trade within the country is entitled to protection from passing off. Others Court have made some concession to the communication explosion and held that if the plaintiff has a reputation in another country, his right to the mark will be protected if it is coupled with some actual or proposed business activity within the country (See Alain Beniardin et Cie v. Pavilion Properties, (1967) RFC 581; Amway Corporation v. Eurway Int. Ltd. (1974) RFC 82. "Still other Courts have held that with the increase in international commerce, mass media communications and the frequency of the foreign travel, political and geographic boundaries do not stem the exchange of ideas and instant information. Local business is not an essential ingredient of a passing off action. However, the reputation must be well established or a known one See: Panhard et Levassor v. Panhard Motor Co. Ltd., (1901) 18 RPC 405; Sheraton Corpn. v. Sheraton Motels, (1964) RPC 202; Orkin Exterminating Co. Tnd. v. Pest Co. of Canada (1985) 5 Canadian Patent Reporter 433; Vitamins L. D.'s Application for Trademark, 1956(1) RPC 1. The decisions which reflect the first and second view have so held for reasons which are partly historic, partly geographic and partly because reputation was equated with goodwill. Goodwill has been defined as the benefit derived from reputation. It is not the reputation required to found a passing off action. The law of passing off is not trammeled by definitions of goodwill developed in the field of revenue law [per Hockhart J., Conagra Inc. v. McCain Foods (Aust) P. Ltd., 1993(23) IPR 193 231]. It is an asset of a business assessable in terms of money and transferable (See IRC v. Muller, (1901) AC 217, Trego v. Hunt (1896) AC 7; ITC v. B.C. Srinivas Shetty. In my opinion reputation framing the basis of a passing off action need not be so localised. Whatever the compulsion for the Courts taking the first or second view in other countries, as far as this country is concerned, Courts in India prescribe to the third view and have held that a plaintiff with a reputation which is established internationally can sue to protect it in this country even if it does not have any business activity here. In other words reputation of a product may precede its introduction and may exist without trade in such product in the country. See N.R. Dongre v. Whirlpool Corporation, (DB); J.N. Nichols (Vimto) Ltd. v. Rose & Thistle, MANU/WB/0005/1994 : 1994 PTC 83 (DB); Calvin Klein Inc. v. International Apparels, (1995) FSR 515: 1995 IPLR 83; Conagra Inc. v. McCain Foods (Supra) at p. 133."

49. The Courts in India have started recognizing the global character of the brand names and have started giving them protection merely on the basis of global nature of reputation without insisting any localized business which was significant departure from the classic trinity laid down by Lord Diplock in the case of Erven Warnink BV vs. J. Townend and Sons (HULL) Ltd. (1979) 2 ALL ER 927.

50. Recently, this Court has rendered a decision in the case of Cadbury U.K. Limited & Anr. vs. Lotte India Corporation Ltd., reported in MANU/DE/0372/2014 : 2014(57) PTC 422 (Delhi) wherein the decision of law relating to trans-border reputation has been further strengthened and has been taken to another level wherein the court has not merely relied upon the decision of Milment (supra) and Whirlpool (supra) but has also extended the principle of trans-border reputation by observing that the existence of a merchant on web pages which are of foreign origin and social media are sufficient to show the trans-border nature of reputation without having any activity in India at the relevant time. Though it is very broad extension of the concept of trans-border reputation, but it is a question of fact in each case as to how the internet documents are sufficient to show the global character of the trademark and the reputation attached to the same. The impact of the said decision which has been given very recently is yet to be seen and analyzed by the other Courts in India in the upcoming times.
The concept of trans-border reputation and goodwill is interesting in academic sense. However, due to advent of internet media, international travel, the insistence on the localized business as well as trans-border reputation is nowadays more or less dealt with in a kind of presumptive approach rather than by actual establishment of the same. As the international businesses grow and proximity between the markets would increase, over the time this concept will become weaker and on one good day world will be treated as one market.

51. Reliance is also placed on the following decisions:

(i) In Milment Oftho Industries & Ors. Vs. Allergan Inc MANU/SC/0512/2004 : 2004(28) PTC 585 (SC), it was observed that whilst considering the possibility of likelihood of deception or confusion, in present times the Courts must also keep in mind the possibility that with the passage of time, some conflict may occur between the use of the mark by the applicant in India and the user by the overseas company. The Court must ensure that public interest is in no way imperiled. It must also be remembered that nowadays goods are widely advertised in newspapers, periodicals, magazines and other media which is available in the country. This results in a product acquiring a worldwide reputation. Thus, if a mark is associated with the worldwide reputation it would lead to an anomalous situation if an identical mark in respect of a similar goods is allowed to be sold in India. However, one note of caution must be expressed. Multinational corporations, who have no intention of coming to India or introducing their product in India should not be allowed to throttle an Indian Company by not permitting it to sell a product in India, if the Indian Company has genuinely adopted the mark and developed the product and is first in the market. Thus, the ultimate test should be who is first in the market. The mere fact that the respondents have not been using the mark in India would be irrelevant if they were first in the world market.

(ii) Lowenbrau AG v. Jagpin Breweries Ltd. MANU/DE/0022/2009 : 157 (2009) DLT 791: 2009(39) PTC 627 (Del) to contend that the question of prior use cannot be agitated on the basis of user in India alone and that national and manmade boundaries and borders are getting diluted and the world has to be viewed as one common market.

(iii) N.R. Dongre v. Whirlpool Corporation MANU/DE/0700/1995 : AIR 1995 Delhi 300 (DB): 1996(16) PTC (Del) to contend that from prima facie evidence of advertisements in international publications and sale of products bearing the Whirlpool trademark in various geographical regions of the world and inspite of sales in India limited to the US Embassy and the US Aid Office in Delhi, injunction was issued in this case.

Thus, in the present case the plaintiff prima facie has been able to make out a strong case of goodwill and reputation as well as trans-border user of the mark LAVERA.

52. As far as two marks LAVERA and MAC LAVERA are concerned, both are deceptively similar. Reliance is placed on Kedar Nath vs. Monga Perfumery & Flour Mills, MANU/DE/0014/1974 : AIR 1974 Delhi 12, wherein this Court held that the mark Sudarshan and Vijay Sudarshan are deceptively similar.

53. The defendants in the present case have made its application for registration of the trademark LAVERA which was accepted and is now pending under opposition filed by the plaintiff. It is settled law that if a party at the time of making the application for registration of the trademark had knowledge that the mark applied for had already been used by another trader in relation to the said goods then the claim of the proprietorship made by him is false and frivolous. The heavy burden lies on the said party who had applied for registration of the same trade mark. Indian trader has to justify before the Court in order to claim the proprietorship of the mark if the mark is a foreign mark.

54. It is also settled law that under those circumstances if the foreign proprietors have an intention to use the mark in India then the conduct of the party, who has applied for registration of the same foreign mark in his name, is questionable. Under Section 11 of the Trade and Merchandise Marks Act, 1958 there is prohibition of registration of the similar trade mark which is already well-known and if the later mark would cause unfair advantage or be detrimental to the distinctive character or repute of the earlier trademark.

55. Provision of Section 17D of the Drugs and Cosmetics Act, 1940 mandates that if a cosmetic is manufactured under a name which belongs to another cosmetic or if it is an imitation of, or a substitute for, another cosmetic or resembles another cosmetic in a manner likely to deceive another cosmetic, the same amounts to spurious cosmetic within the meaning of said provision.

56. Thus, if the defendants are not able to justify a valid reason for adoption of the peculiar mark, they cannot derive the benefit of its proprietorship because this element in Trademark Law is very essential in order to determine as to whether any case is made out to contest the suit by the defendants. The mark LAVERA is not a common word/known mark in India by any third party.

57. The issue of delay in passing off matters has been considered by Courts from time to time. Some of them are referred to as under:

a) In the case of Midas Hygiene Industries Pvt. Ltd. vs. Sudhir Bhatia and Others, MANU/SC/0186/2004 : 2004(28) PTC 121, wherein it was held in the judgment that in case, no explanation could be given as to why the identical label is used and there is dishonest intention to pass off his goods as those of plaintiff, then the interim order can be passed.

b) In the case of Hindustan Pencils Pvt. Ltd. Vs. M/s. India Stationery Products Co., MANU/DE/0383/1989 : AIR 1990 DELHI 19 it was held as under:

".........It was observed by Romer, J. in the matter of an application brought by J.R. Parkingnon and Co. Ltd., (1946) 63 RPC 171 at page 181 that "in my judgment, the circumstances which attend the adoption of a trade mark in the first instance are of considerable importance when one comes to consider whether the use of that mark has or has not been a honest user. If the user in its inception was tainted it would be difficult in most cases to purify it subsequently". It was further noted by the learned Judge in that case that he could not regard the discreditable origin of the user as cleansed by the subsequent history."

c) In the case of M/s. Bengal Waterproof Ltd. Vs. M/s. Bombay Waterproof Manufacturing Co., MANU/SC/0327/1997 : AIR 1997 SC 1398 it was held as under:

"20.........It is now well settled that an action for passing off is a common law remedy being an action in substance of deceit under the Law of Torts. Wherever and whenever fresh deceitful act is committed the person deceived would naturally have a fresh cause of action in his favour. Thus every time when a person passes off his goods as those of another he commits the act of such deceit. Similarly whenever and wherever a person commits breach of a registered trade mark of another he commits a recurring act of breach or infringement of such trade mark giving a recurring and fresh cause of action at each time of such infringement to the party aggrieved. It is difficult to agree how in such a case when in historical past earlier suit was disposed of as technically not maintainable in absence of proper relief, for all times to come in future defendant of such a suit should be armed with a license to go on committing fresh acts of infringement and passing off with impunity without being subjected to any legal action against such future acts."

The ratio of the aforesaid decisions is squarely applicable to the facts of the present case. Thus, injunction cannot be refused on account of delay as the plaintiff has made a strong prima facie case of passing off.

58. Prima facie it appears to the Court that the plaintiff adopted the trademark LAVERA which is a completely arbitrary mark/word when used in connection with cosmetic products prior to use of the mark by the defendants. It is averred that the trademark LAVERA was used for the first time in Germany in 1982 and the same has been used in many countries worldwide. Thus, prima facie it appears to the Court that the plaintiff is the first to use the mark LAVERA in relation to many kinds of cosmetics and other body care products.

59. For the aforesaid reasons mentioned above, it is evident that the defendants are not the proprietor of the trademark LAVERA which is an unusual, uncommon and arbitrary mark. The defendants have failed to give any valid justification for using the mark except vague reply is given. At the time of adoption of the mark, the defendants must be aware about the mark of the plaintiff. Therefore, the adoption and use on the part of the defendants is not honest. The balance of convenience lies in favour of the plaintiff and against the defendants even otherwise is under injunction last since 28th September, 2012. On the other hand, if the interim order already granted is vacated, the plaintiff would suffer irreparable loss and injury. The sale of cosmetic products by the plaintiff on internet is valid sale and it amounts to use of a mark. The defendants' argument about the non-user of the mark is without substance. The compliance of Order 39 Rule 3 CPC has been made by the plaintiff as per record available. The plaintiff has filed an affidavit of compliance as per time granted by this Court.

60. Under these circumstances, ex-parte ad interim order dated 28th September, 2012 is made absolute. The plaintiff's application being I.A. No. 18151/2012 is accordingly disposed of. The defendants during the pendency of the suit are refrained from using the trademark LAVERA in respect of all kinds of cosmetic goods and body products included in class 3.

61. In view of order passed in I.A. No. 18151/2012, the defendants' application being I.A. No. 19804/2013 is dismissed.

62. It is clarified that the finding arrived by this Court are tentative which shall have no bearing when the matter would be decided at the final stage after trial.

63. No costs.

CS(OS) 3000/2012

List the matter before the Joint Registrar on 26th March, 2015 for further proceedings.

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