$~
*
IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 23.04.2018
% Judgment delivered on: 01.06.2018
+
FAO 443/2017
ANURAG SANGHI & ANR .....
Appellant
Through:
Mr. Chander Lall, Ms. Nancy Roy, Mr.
Gaurav
Miglani and Ms. Samreen Khan, Advs.
versus
KNITPRO INTERNATIONAL .....
Respondent
Through:
Mr. Akhil Sibal, Sr. Adv. with Mr. S.K.
Bansal, Mr. Ajay Amitabh Suman, Mr.Pankaj
Kumar, Mr.
Kapil Kumar Giri
and Mr. Vinay
Kumar
Shukla, Advs.
+
FAO 445/2017
ANURAG
SANGHI & ANR .....
Appellant
Through:
Mr. Chander Lall, Ms. Nancy Roy, Mr.
Gaurav
Miglani and Ms. Samreen Khan, Advs.
versus
KNITPRO
INTERNATIONAL
..... Respondent
Through:
Mr. Akhil Sibal, Sr. Adv. with Mr. S.K.
Bansal, Mr. Ajay Amitabh Suman, Mr.Pankaj
Kumar, Mr.
Kapil Kumar Giri
and Mr. Vinay
Kumar
Shukla, Advs.
+
FAO 446/2017
ANURAG SANGHI & ANR .....
Appellant
Through:
Mr. Chander Lall, Ms. Nancy Roy, Mr.
Gaurav
Miglani and Ms. Samreen Khan, Advs.
versus
KNITPRO INTERNATIONAL .....
Respondent
FAO 443, 445 & 446 OF 2017 Page 1 of 36
Through: Mr. Akhil Sibal, Sr. Adv. with Mr. S.K.
Bansal, Mr. Ajay Amitabh Suman, Mr.Pankaj Kumar, Mr. Kapil Kumar Giri and Mr.
Vinay Kumar Shukla, Advs.
CORAM:
HON'BLE MR. JUSTICE NAJMI WAZIRI
NAJMI WAZIRI, J.
1.
These appeals impugn an order
dated 31.08.2017 passed by the Trial Court granting ad interim ex-parte
injunction against the appellants in suits filed by the respondents/plaintiffs.
BRIEF FACTS:
2.
The parties are engaged in
manufacturing and selling of knitting needles and allied products. In an
earlier round of litigation, a settlement had been arrived at between the
parties recognising the rights and interests of the respondents/plaintiffs and
delineating unrestricted areas of operation for the appellants. Over time, on
account of some developments, the plaintiffs felt aggrieved that, activities of
the appellants had breached the terms of the Settlement Agreement dated
20.07.2016 in many ways, hence, they sought an injunction seeking protection of
their statutory and common law rights, resulting in the impugned order. The
said ex-parte injunction order restrains the appellants from manufacturing,
marketing, supplying, using, selling, soliciting, exporting, displaying,
advertising directly or through the Internet or by any other mode or manner,
the impugned trademark/trade dress annexed as D, D1, D2, E and F (colly) or any
other trademark/trade dress which are deceptively similar and/or fraudulent
and/or
FAO 443, 445 & 446 OF 2017 Page 2 of 36
obvious imitation of the plaintiff‟s said shape and
trademark/trade dress annexed as A, A1, A2, B and C (colly) in relation to
knitting needles and related products; and from doing any other acts or deeds
amounting to or likely to be in violation of plaintiff‟s common law rights
therein.
3.
On 28.08.2017, the plaintiffs had
filed a suit (Suit No. 918 of 2017) against the infringement of their design by
the appellants, an ex-parte injunction was granted on 31.08.2017. Subsequently,
they filed two more suits on 30.09.2017- one against passing-off (Suit No.
178/2017) and another for injunction against copyright, infringement of drawing
(Suit No. 179/2017). An ex-parte injunction was granted on 09.10.2017. The
Trial Court appointed Local Commissioners, in both the suits, who discharged
the
commission by visiting the appellants‟ premises on
07.11.2017, and examining, making inventory of the infringing goods. They
submitted their reports. All the three suits were decided by a consent order of
this Court on 14.11.2017 in the aforementioned FAO 443, 445 and 446 of 2017.
These became the subject matter of an SLP, which remanded the matters back to
this Court for fresh disposal, in accordance with law. However, vide this
Court‟s order dated 14.11.2017, the said sealed/ seized goods were directed to
be made available to the appellants.
4.
The ex-parte impugned injunction
is apropos Fixed Circular Knitting Needles, Double Pointed Knitting Needles,
Single Pointed Knitting Needles and Interchangeable Knitting Needles. According
to the plaintiffs, the Knitting Needles permitted to be manufactured and sold
by the appellants as per the Settlement Agreement dated 20.07.2016 were the
ones in Column A as against the plaintiff‟s product mentioned in Column B. But,
now the appellants have started manufacturing items shown in Column C, which
FAO 443, 445 & 446 OF 2017 Page 3 of 36
according to the respondents/plaintiffs is in breach of the agreement
and in conflict with their registered design. See photo below:
5.
The obvious and distinctive
features of the items permitted to be manufactured and sold by the appellants,
were needles having a black tip on a wooden body; if a needle had a head or
connector attached to it, that too would have to be black in colour. In other
words, the black tipped and/or black headed needles were agreed to be the
distinctive and defining feature
of the appellant‟s needles. The plaintiff‟s
products had metallic tip but not necessarily in black colour. The plaintiffs
also manufactured and marketed knitting needles made of a single wooden piece
of uniform colour or design (Chevron pattern).
6.
The plaintiffs had a grievance
that the design of needles adopted by the appellants being Annexure D, D1, D2,
E and F (depicted here-below) were deceptively similar to and an obvious
imitation of the plaintiff‟s
FAO 443, 445 & 446 OF 2017 Page 4 of 36
designs covered under registration nos. 249066,
249067 and 263053 (Annexure A, A1, A2, B and C) and therefore amounted to
infringement of the plaintiff‟s registered designs.
TRIAL
COURT ORDER:
7.
The impugned order referred to
the decision of this Court1 which held that infringement and passing-off are two distinct remedies –
the former emanates from the statute – section 27(2) of the Trade Marks and Merchandise
Marks Act, 1958; it gave statutory recognition to the remedy against
passing-off as well. However, absence of the same in the Designs Act, 2000
would not mean that such remedies would not be available in the case of
designs. Remedies against passing-off of a design would be through institution
of a suit by the registered design owner. Such an action could not be combined
with the suit for infringement of the design. The basis for a suit for
infringement under the Designs Act, 2000 is based on the uniqueness, newness
and originality of the design; while an action for passing-off is opted for
when, a party was misrepresented by using the
plaintiff‟s trade mark, the consequences of which
includes damage to the reputation and to the goodwill of the plaintiff and
plaintiff‟s goods2. In Micolube India Limited (supra)
the Full Bench held that dual protection may
exist under the two IPR regimes of Design law and Trademark law, especially
in case of the shape of an object; that while simultaneous registration as a
Trade Mark and Design was not permitted, there was no bar
1 Smithkline
Beecham Consumer Healthcare GMBH v. Hindustan Lever Limited: 2000 (52) DRJ 55
2 Micolube
India Limited v. Rakesh Kumar & Ors.; CS(OS) No. 384/2008) & Mohan Lal
vs. Sona Paint & Hardware; CS(OS) No. 1446/2011) [2013 (55) PTC 61 (DEL)]
FAO 443, 445 & 446 OF 2017 Page 5 of 36
on a design being used as a Trade Mark after its
registration. The Court, therefore, held that dual protection under the design
law and trade mark law was permitted.
8.
After initial examination of the plaintiff‟s case,
the impugned order
came to the prima facie view that the plaintiffs
had been able to establish that they had attained reputation and goodwill in
their products and that the defendant had committed acts of misrepresentation.
The order also opined that in an action for passing-off, it was essential that
firstly, the design be used as a mark and the people who are familiar with the
products, are immediately able to identify the products of the plaintiff‟s even
without plaintiff‟s name being mentioned thereon. It also opined that often,
the hallmark of all well-known designers is clearly evident and identifiable
from the manner in which they use different materials and fashion the products in
a unique form or style. Shapes help in determining and communicating the
choices people make. Therefore, design acquires an identity of its own and is
unique to its maker/manufacturer/owner. The infringement of the same would be
the liable for a judicial injunction. The Trial Court also referred to cases in
which defendants were restrained from use of a particular design on fabric
material3 and from using bottles of the same shape of the plaintiff‟s bottles, on
the ground of infringement of design and passing-off4. Apropos the law on passing
off-in designs, the impugned order refers to the decision of this Court in Mohan
Lal, Proprietor of Mourya Industries vs Sona Paints & Hardwares and
Micolube India Limited vs. Rakesh Kumar
3 Eicher
Goodearth Pvt. Ltd. Vs. Krishna Mehta,
4 Cello
Household Products vs. Modware India,
FAO 443, 445 & 446 OF 2017 Page 6 of 36
Trading as
Saurab Industries & Ors. 200 (2013) DLT 322 which also held that
in passing-off, the plaintiffs would have to establish that (i) there is a
goodwill or reputation attached to the goods or services which the plaintiffs
offer, i.e. the purchasing public or the consumer is able to associate it or is
in a position to identify such goods or services with the plaintiff, by virtue
of the trademark used, these identifying marks could include the get-up,
trade-dress, design, packaging, label, etc. (ii) the defendant has employed
misrepresentation which has made the consumer believe that the defendant‟s
goods are those of the plaintiff‟s and lastly (iii) the defendant‟s action has
caused damage or is calculated to cause damage to the plaintiffs.
9.
The impugned order compared the
offending designs of the appellant vis-a-vis the plaintiff‟s design and found
them to be infringing the plaintiff‟s
registered designs and trademarks; as shown herebelow:
FAO 443, 445 & 446 OF 2017 Page 7 of 36
10.
After considering the visual
impact of the shape, colour, size and design of the appellant‟s products with
those of the plaintiff‟s registered
design, the impugned injunction order concluded
that prima facie, the appellants‟ had infringed the plaintiff‟s intellectual
property rights. The plaintiff‟s products are marketed under their product line
which is known as KNITPRO SYMFONIE, while the appellants have marketed their
products under the brand name, LYKKE. The plaintiffs had claimed exclusive
rights in the said design registration, within the meaning and ambit of section
2(c) and 11 of the Designs Act, 2000 and claimed that their products/goods
under the aforementioned design have become well-known with respect to their
patterns, configuration and shape; that their design had become symbolic to its
said range of products, in such a way that it had gained phenomenal prominence
and exclusivity in the market and the public immediately associates the
products bearing the plaintiff‟s design solely with the plaintiffs. The
plaintiffs had argued that they had been using the respective designs in
relation to knitting needles uninterruptedly in the course of the trade; had
built up a valuable trade, goodwill and reputation, both in India and overseas;
the goodwill and reputation was also achieved through its websites
www.knitpro.eu/ and www.knitterspride.com., the said websites and other
services have been used for promotion, development and popularisation of its
products and increase of business under the registered designs; they maintained
formidable presence of their designs on the Internet and otherwise also in the
business of knitting needle providers. Additionally, the plaintiff had been using
various intermediary websites as well as other social media for the same
purposes. It is the plaintiff‟s case that its website has assisted lakhs of
people to find information on the
FAO 443, 445 & 446 OF 2017 Page 12 of 36
plaintiff‟s products. The plaintiffs claimed that the defendant has a
history of violating intellectual property rights.
11.
The impugned order records the plaintiff‟s
contention that the appellants were fully aware about the plaintiff‟s products,
their registered
designs,
their goodwill and reputation as well as
the expansive use and
overall
benefit of the plaintiff‟s designs, when the appellants‟ adopted the
said
designs; that the resemblance between the rival designs is so close that
it could hardly happen by a deliberate imitation by the defendant.
Nevertheless, the
defendant went ahead,
adopted the same
design and
appearance
of the plaintiff‟s products and sought to pass them off as their
own; this
was done dishonestly, fraudulently and out of greed, with a view
to take unfair advantage of the plaintiff‟s goodwill, reputation and
proprietary
rights in their registered designs. The plaintiff‟s have contended
that any
unsuspecting person could be misled into believing that they were
dealing
with the plaintiff‟s products. The plaintiffs had also contended that:
“a. Defendants have been violating intellectual property rights of
plaintiff's said family concern namely M/s Indeutsch International who has
filed a civil suit being Suit no. 240 of 2012 before this Hon'ble Court against
the defendants in which ex-parte injunction was granted vide order dated
11.10.2012 against use of CHEVRON PATTERN TRADEMARK.
b. The plaintiff filed Suit bearing No. 170 of 2015 (subsequently
renumbered as CS(OS) No.2142 of 2015) against the defendants in relation to
shape trademark before the Hon'ble District Judge, Patiala House District Court
in which ex-parte injunction was granted vide order dated 25.06.2015.
FAO 443, 445 & 446 OF 2017 Page 13 of 36
c. The plaintiff filed Suit bearing No. 27 of 2015 (subsequently
renumbered as CS(Comm) 432 of 2016) against the defendants in relation to
District Judge before the Hon'ble District Judge, Patiala House District Court
in which ex-parte injunction was granted vide order dated 25.06.2015.
d. Subsequently both the Suits bearing CS(Comm) 432 of 2016 and CS(OS)
No.2142 of 2015 were decreed in view of Joint Compromise application under
Order 23 Rule 3 CPC , vide common order dated 20.07.2016 passed therein and the
copy thereof is being filed herewith.”
ARGUMENTS
ON BEHALF OF THE APPELLANTS:
12.
The appellant impugns the said
injunction order on the ground that the two suits filed by the plaintiffs had
sought, inter alia, i) permanent
injunctions
to restrain infringement of the plaintiff‟s registered design under
the Designs
Act, 2000 and
passing-off, delivery up,
etc. as well
as ii)
injunction
to restrain passing-off, damages, delivery up, etc. apropos the
appellants‟ impugned shape, trademark/trade dress vis-a-vis plaintiff‟s
Knitpro shape, trademark/ trade dress. It
is argued that the subject matter of
the two
suits, leading to the filing of the present appeals, were completely
covered
by two previously instituted suits before this Court and the resultant
statement recorded by this Court‟s order dated 20.07.2016; that the
appellant‟s
product were squarely covered by the settlement terms yet they
were
seized by the impugned order (although later ordered by this Court to
be
released); that the appellant‟s products, which were the subject matter of
the
injunctions are the exceptions carved out by the aforesaid Settlement
Agreement for
use by the
appellants, yet the
plaintiffs have negatively
FAO 443, 445 & 446 OF 2017 Page 14 of 36
alluded to the same, and have caused immense damage
to the appellant‟s business by seeking injunction at the end of the year,
particularly during Christmas time, when the said products are most sought
after in the international market.
13.
According to the learned counsel for the appellant,
a false assertion
has been made that the plaintiff‟s products are
sold in India/Delhi. It is argued that the plaintiff‟s and respondent‟s designs
are entirely different and in no way violates the aforesaid Compromise
Deed/Settlement Agreement between the parties; that the only restraint in the
compromise was that “the defendants would not use laminated wood in
any natural colour, other colours or form to manufacture, market, promote and
sell any knitting needles and crochet hooks in future”. The term “laminated wood” as defined in sub clause
(vi) of Clause 3 of the Compromise Deed/Settlement Agreement would mean “wood that has been cut into thin layers,
then glued under pressure or without pressure.”. It is the plaintiff‟s case that,
pursuant to the settlement, the
appellant had developed a new technology for manufacturing of knitting needles
by using solid wood impregnated with resin through a novel process and filed an
application for registration of the patent in the process of wood
stabilization; that there was no restraint in the use of tips which had the
same material as the shaft of the knitting needle. It is argued that with
respect to the Fixed Circular Knitting Needles, the plaintiffs had
categorically agreed that the following would not violate any of its rights:
“(a)
Knitting needles or crochet hooks carrying the striped pattern and with a tip
only in striped brown wooden finish with black colour brass tips and metallic
connectors;
FAO 443, 445 & 446 OF 2017 Page 15 of 36
(b)
Knitting needles or crochet hooks in striped brown wood finish body with
matching black color brass tips;”
14.
The appellants argued that under
paragraph 3(v) of the Settlement Agreement it has been agreed that the
appellant “would not manufacture, market, promote and sell any knitting needles
and crochet hooks in any
material,
form or shape carrying the striped pattern” apart from those agreed
and represented
above and those
in annexure B1-B8
of the Settlement
Agreement
as described above. It is argued that none of the said conditions
have been
violated by the appellant‟s products and the goods have been
wrongly
seized; that the appellant‟s goods are neither similar to nor do they
use same material and colour, for the tip of the shaft. It is argued that its
products
are the exception of the Settlement Agreement between the parties
and
insofar as it falls in the excluded category, it does not violate the terms
of the
settlement.
15.
Since the appellants relied
largely on the Compromise Deed, it would be worthwhile to reproduce the same.
It reads inter alia as under:
1.
That the above mentioned suit is pending adjudication before this Hon’ble
Court. The plaintiff has filed the above mentioned suit against the defendants
for piracy and/or infringement of plaintiff's registered design under no.
249065, 249067 and 249068 and violation of plaintiff's right’s under design
under no. 249065, 249067, 249068 and 249066.
2.
That the
ex-parte ad-interim injunction was granted on
25
th June, 2015 against defendants and local commissioner was also appointed
vide said order by Ld. ADJ-03, NEW DELHI at Patiala House Courts, New Delhi.
The commission was executed on 3rd July, 2015. A large
FAO 443, 445 & 446 OF 2017 Page 16 of 36
number of
infringing products were seized at defendant's premises. The matter was then
transferred to this Hon’ble Court in view of application/petition filed by the
defendants.
3.
That the Plaintiff (through its one of the partners-Mr. Shirish Jain)
and Defendants (through Mr. Anurag Sanghi, defendant no. 1 and Constituted
Attorney of. defendant no. 2) have mutually resolved their disputes and have
agreed to enter into a compromise on tire following terms and conditions:
i. That
the Defendants admit proprietary rights of the plaintiff in view of the plaintiff’s
rights under the registered designs under no. 249065, 249067 and 249068 and
application under no. 249066.
ii.
That apart from the product referred to in para 3 (iii) below, as agreed
and represented in Annexure B-1 to B-8, the defendants undertake not to use any
design which is substantial reproduction or identical with or in any other
colour combination or deceptively similar with that of the plaintiff’s
registered designs (of Knitting Needle [Fixed Circular Needle], knitting Needle
[Double Pointed Needle] , Knitting Needle [Single Pointed Needle] under no.
249065, 249067 and 249068 and of plaintiffs design of Knitting Needle
[Interchangeable] under application no. 249066 and/or the designs (of which
representation is given in Annexure-A (Colly)-Pages 1 to IC of the plaintiffs
documents dated 12/06/2015 in the present suit and/or designs [of which
representation is given in Annexure-B-Page 2 of the plaintiffs documents dated
12/06/2015 in the present suit].
FAO 443, 445 & 446 OF 2017 Page 17 of 36
iii.
That as part of the compromise, the Plaintiffs agree that the defendants
can manufacture, market, sell or export knitting needles or crochet hooks
carrying the striped pattern and with a tip only in striped brown wooden finish
with black colour brass tips and metallic connectors, the representations of
which are contained in Annexure- B-1 to B-8 and also represented or as per
photographs attached in striped brown wooden finish body with matching black
colour brass tips. The Plaintiff confirms that the same does not in arty manner
infringe the common law or statutory rights of the Plaintiff in knitting
needles as depicted in Annexure A (Colly) to this application or any other
knitting needles of the Plaintiff.
iv.
That the defendants undertake to withdraw any design
application/applications that similar/identical/deceptively similar to the
plaintiff's registered design under no. 249065, 249067 and 249068 and
application under no. 249066.
v.
That apart from the product referred to in para 3 (iii) above, as agreed
and represented in Annexure B-1 to B-8, the defendants would not manufacture,
market, promote and sell any knitting needles and crochet hooks in any
material, form or shape carrying the Striped pattern.
vi.
That apart from the product referred to in para 3 (iii) above, as agreed
and represented in Annexure B-1 to B-8, the defendants would not use laminated
wood in any natural colour,
FAO 443, 445 & 446 OF 2017 Page 18 of 36
other
colours or form to manufacture, market, promote and sell any knitting needles
and crochet hooks in future. Laminated wood as described herein would mean wood
that has been cut into thin layers, then glued together under pressure or
without pressure.
vii.
that apart from the product referred to in para 3 (iii) above, as agreed
and represented in Annexure B-1 to B-8, the defendants would not manufacture,
market, promote and sell any knitting needles and crochet hooks with metallic
tips or tips (that are at one end of the knitting needle used to pick up the
stitches) in any material, colour, form or shape where the material, form or
colour of the tip is different from the material, form or colour of the shaft
of the knitting needle. This applies to any type or knitting needles and
crochet hooks made from any type of raw material including wood, aluminium,
brass, any type of steel, other metal, acrylic, plastic, carbon fibre, bamboo,
etc. and in any type of colour combination.
viii.
That the defendants would not give any know-how or product development technology
for manufacture of the knitting needles and crochet hooks in striped pattern or
those made of laminated wood or those having any kind of tips including those
agreed in Annexure B-1 to B-8 to any related .or unrelated parties in India or
abroad.
ix.
That the defendants would not directly or indirectly produce, market,
promote or sell the above referred products in paras 3 (ii), (v), (vi), (vii)
directly or indirectly to any related or unrelated parties in India and
overseas.
FAO 443, 445 & 446 OF 2017 Page 19 of 36
x. That the defendants would not oppose any
Knitpro
International or Indeutsch, International’s applications, directly or
indirectly, pertaining to different types of IP rights with reference to .all
types of knitting needles and crochet hooks as filed before 03rd July, 20l5 in any office or
forum in India or abroad.
xi.
That that
defendants undertake that
they
havenotfiledanydesign
application/applications
that is similar/identical/deceptively similar to the plaintiff's KMIPRO
1)1-SIGNS in Class 26 and also undertake to withdraw opposition to any of
plaintiffs design application/registered design rights or any other IP
application or registered IP rights in Class 26 or any other class as on the
date of this settlement.
xii.
That the Plaintiff undertakes to return to the Defendants all seized
goods which are in the Superdari oJ the Plaintiff and which are not infringing
to plaintiff's rights. Al infringing material-and goods would be destroyed in
the
presence
of the plaintiff's representative/counsel and the remaining materials, can be
returned to the Defendants for further use in "accordance with" use
agreed in Para 3(iii) above. The plaintiff is entitled" to make
photography and videography of the same. The Plaintiff will not be responsible
for any damages to the goods.
xiii.
That the Defendants are willing to suffer decree of permanent injunction
in terms of Para No:32(a)(i) and (ii) of the plaint tor
FAO 443, 445 & 446 OF 2017 Page 20 of 36
piracy
and/or infringement of plaintiff’s registered design under no. 249065, 249067
and 249068 and violation of plaintiff's rights under registration no. 249065,
249067 and 249068 and under application no. 249066.
xiv.
That in view of above undertakings of the Defendants as mentioned in para
(i) to (xiii) above, the plaintiff has agreed to give up other prayers as
prayed for in Para No.32(b), 32(c), and 32(d) of the plaint.
4.
That the aforementioned compromise has been entered into between the
parties without any force, coercion or undue influence and out of their own
free will;
5.
That the aforementioned compromise terms shall be binding on parties,
their representatives, assignees, distributors, dealers, agents, employees
etc., or any other person acting on their behalf as the case may be.
6.
That tire necessary supporting affidavits of the' respective parties are
being filed herewith, in support of the instant - application.”
16.
Referring to clause 3 (vii)
above, the learned counsel for the appellants contends that: (i) the compromise
limits the scope of its ambit to
safeguarding the plaintiff‟s products by limiting
the appellant to manufacture only the products specified therein apropos such
products which the plaintiff was then manufacturing; (ii) it is not an all
encompassing permanent embargo or self-restraint upon the appellant from
manufacturing such products which are not covered under the compromise deed;
(iii) the appellants could not manufacture, market, sell or export knitting
needles or crochet hooks carrying the striped pattern and with a tip only in
striped
FAO 443, 445 & 446 OF 2017 Page 21 of 36
brown wooden finish with black colour brass tips
and metallic connectors, the representations of which are contained in Clause
3(iii); Annexure B, B1 to B8; and (iv) that the appellants were precluded from
manufacturing, marketing, promoting and selling knitting needles and crochet
hooks with metallic tips in any material, colour, form or shape where the
material, form or colour of the tip was different from the material, form or colour
of the shaft of the knitting needle. Therefore, the appellant contends that if
the shaft of the tip was the same material or colour, then there was no bar, so
long as the material and the tip was not of a stripped pattern or of laminated
material.
17.
The appellant argues that design
registration no. 363053 was a part of the Settlement Agreement and has been
indeed introduced only to cause confusion to give it to same agreed protection
under the aforesaid compromise/settlement between the parties.
ARGUMENTS
ON BEHALF OF RESPONDENT/PLAINTIFF:
18.
Refuting the aforesaid arguments,
the learned Senior Advocate for the respondent contends that as per clause 3(i)
of the Compromise Deed, the appellant had given up all the arguments and rights
to the validity of four registered designs under applications no. 249065,
249067, 249068 and 249066; of which 249066 and 249067 are relevant for the
present purposes. Additionally, the appellant had agreed to manufacture
products only in the shape and design as specified in Annexure B1 to B8; in
particular reference is made to Annexure B2 and to its serial no. 10 which
specifies the size of the needle as 4.50 mm in diameter; 128 mm in length; the
metal connector length as 30 mm; metal tip length as 22 mm and wood length as 76
mm
FAO 443, 445 & 446 OF 2017 Page 22 of 36
corresponding to US size 7. It is contended that
the appellant was permitted to use the design and the specific dimensions only
for this US item and not for the other products which are protected under
common law. It is the appellant‟s case that the aforesaid dimensions are not
standardized US manufacturers‟ specific dimensions. In any case, the permission
was only with respect to the metallic tip at both ends and in no case did the
compromise envisage the appellants‟ needle tip to be made of wood.
19.
The respondent further submits
that there were two agreements – one with respect to the designs/shapes,
specific sizes, colour and the material to be used; while the other compromise
deed of the same date, was apropos the terms and conditions of admission to the
present plaintiff‟s proprietary, common law rights in Knitpro shape
trademark/trade dress whereunder the defendants/appellants had undertaken not
to use any shape trademark which is a substantial reproduction of or is
identical with or in any other colour combination or being deceptively similar
to that of the plaintiff‟s Knitpro
shape trademarks/trade dress (representation of
which is given in Annexure-A (Colly)) and/or shape trademarks/trade-dress as
per Annexure B and/or identical with or deceptively similar with that of the
plaintiff‟s shape trademarks/trade dress of Fixed Circular Cable Knitting
Needle under no. 2416516 in class 26 and/or Double Pointing Knitting Needle
under no. 2416519 in class 26 and/or Single Pointed Knitting Needle under no.
2416517 in class 26 and/or Interchangeable Knitting Needle under no. 2416518 in
class 26.
20.
The respondent also contends that the appellant‟s
endeavour to find
products not covered under the Compromise Deed is an exercise in
futility and would provide them no cause for relief because they themselves
have
FAO 443, 445 & 446 OF 2017 Page 23 of 36
given up all rights to object to the registration
of the designs in favour of the plaintiffs. Simultaneously, they have given up
all their rights except as specifically conceded to them by the plaintiff in
the Compromise Deed. The said document therefore estopps them from utilising
the plaintiff‟s design in any material or colour. In other words, imitation and
passing-off of the plaintiff‟s products by the appellant in any product colour other
than what is permitted in the Settlement Agreement/Compromise Deed would be
subjected to an injunction. Alternatively, he argues that if it is the
appellant‟s case that the compromise permits the manufacture and sale of a
needle made up of same wooden shaft and tip, which they claim to have developed
by using a new technology for manufacturing of knitting needles by using solid
wood impregnated with resin through a novel process and have filed an
application for registration of the patent in the process of wood
stabilization, then the appellants would have to show that their new innovated
product would not infringe the common law rights of the plaintiffs. However, he
fairly submits that stage of examination of the same has not yet risen because
the impugned order is based on a prima facie view and it would be open to the
appellant to prove the same in the suit. The appellant claims that their
products were permissible in view of the exclusion envisaged in clauses 3 (iii)
and 3 (vii).
21.
The learned counsel for the
plaintiffs has relied upon a Comparison and Analysis Report of the concerned
goods of Knitpro‟s Products versus
the respondent‟s Lykke‟s range of products. It is authored
by an Assistant Professor (Department of Mechanical Engineering, B.I.T.,
Gorakhpur), ITM Gorakhpur. He has examined in detail the exact dimensions of
the products of the two parties. According to the Report, the dimension, shape
and
FAO 443, 445 & 446 OF 2017 Page 24 of 36
design of the appellant‟s products are identical. Some of the
comparisons of the products are as under:
FAO 443, 445 & 446 OF 2017 Page 25 of 36
REASONING:
22.
The appellants have argued that
in proceedings before the Office for Harmonization in the Internal Market
(Trade Marks and Designs), the plaintiffs had in defence of their tessellating
„chevron pattern” in blue colours, had contended that “the informed user would pay less attention to
the
needle shape and the metallic connector as these aspects of the design are
common to the products at issue and are dictated by the technical function of a
knitting needle. By contrast, their attention would be attracted solely, or at
the very least in particular, to that area in which the designer is free to
develop the design – the decoration of the shaft...”, therefore, the plaintiff‟s
cannot now seek to set up a case for injunction merely on the
FAO 443, 445 & 446 OF 2017 Page 32 of 36
basis of designs of the needles because: (i) they
have already admitted that needle shape and the metallic connector are common
to the products and are dictated by the technical function of the needle; (ii)
the plaintiff‟s had argued that the deceptiveness of the needle was due to the
design on it and not necessarily because of the actual shape of the metallic
connectors; and
(iii)
that it is on this basis that
they were granted the protection in the uniqueness of the “chevron pattern”
adopted by them. The Court, however, is not persuaded by this argument because
the parties have agreed to a settlement, limiting the use of the plaintiff‟s
registered designs by the appellants, only with respect to those items
permitted in terms of Annexure B1 to B8 of the Compromise Deeds; in particular
such usage was restricted
to the appellant‟s needles having a metallic head
and tip in black colour. The plaintiff‟s arguments for the sake of grant of the
“chevron pattern” before the Office for Harmonization in the Internal Market,
do not necessarily give up their common law rights and other rights, as may
have crystallized against the appellants in the territory of India.
23.
It is the settled law that in
such matters the appellate Court will not interfere with the exercise of
discretion of the court of first instance and substitute its own view and
discretion, except where the impugned order has been shown to have been
exercised arbitrarily or capriciously or where the impugned order has ignored
the settled principles of law regulating grant of refusal of interlocutory
injunctions. This Court in Allied Nippon Ltd. & Anr.
V. Allied
Motors 80 DLT 38 (DB) has held as under:
“...4. There is no doubt that appeal against an order granting ex parte
injunction would be maintainable under Order XLIII, Rule 1(r) read with Section
104 of
FAO 443, 445 & 446 OF 2017 Page 33 of 36
the Code
of Civil Procedure, but the scope of hearing such an appeal on the ratio of
decision of a Division Bench of this court in Rajesh Batra vs Grandlay
Electricals (India), 1997 1 AD (Delhi) 377 is limited. In t he said decision it
was held:
“The scope of hearing in such an appeal is limited. Ordinarily the
Appellate Court would not take into consideration any new material. The hearing
would be confined to finding out whether the original Court was justified or
not in granting the ex parte order of injunction on the material available
before it.
If the
Appellant Court may concur with the view taken by the original Court then the
appeal would be dismissed leaving it open to the appellant to contest the ex
parte order of injunction before the original Court. If the Appellate Court may
form an opinion that on the material available before original Court, the grant
of injunction ex parte cannot be sustained then the appellate Court would set
aside the ex parte order of injunction leaving it open to the parties to appear
before original Court and have a hearing by-parte on the grant or otherwise of
the order of injunction.
If the
Appellate Court forms an opinion t hat on the material available on record of
the suit before the original Court an injunction not in the form granted by the
original Court but in a different form could only have been
FAO 443, 445 & 446 OF 2017 Page 34 of 36
granted
ex parte then it may substitute its own order in place of the original order
(under appeal) leaving it open to the opposite party to contest the issue as to
grant of injunction by-parte before the original Court.”
......
......
10.
It is a settled proposition in law that the Appellate Court will not
interfere with the exercise of discretion of the Court of first instance and
substitute its own discretion except where the discretion has been shown to
have been exercised arbitrarily or capriciously or perversely or where the
Court has ignored the settled principles of law regulating grant or refusal of
interlocutory injunctions....”
24.
Having considered the aforesaid
facts and the rival contentions, the Court is of the view that the impugned ex parte order cannot be faulted with,
because it has taken a plausible view in the context of the facts discussed
till that stage. Furthermore, sub clauses (iii) and (vii) of clause 3 of the
Settlement Agreement precludes the appellant from using the plaintiff‟s
design
for the manufacture of knitting needles in other material, except that
which is
specifically permitted i.e. the metallic head and tip in black colour
with a
wooden body in between. Sub clause (vii) comprises two sentences.
The first
one provides that apart from the products permitted in Annexure B-
1 to
B-8, the defendant
was precluded from
manufacturing any other
knitting
needle, crochet hooks with metallic tips in any colour, shape or
form. The
second sentence extends the said prohibition to any such products
FAO 443, 445 & 446 OF 2017 Page 35 of 36
made from any type of raw material including wood
or any type of steel. In particular, it records that the appellants had agreed
that the preclusion or restriction applied “to
any type of knitting needle and crochet hooks made from any type of raw material including wood, aluminium, brass, any
type of steel, other metal, acrylic, plastic, carbon fibre, bamboo,
etc. and in any type of colour combination.”(emphasis supplied).
25. At this stage, the Court is not persuaded by the
appellant‟s contention that a needle having shaft and tip of the same wooden
material is permissible under the Settlement Agreement, because sub clause
(vii) of Clause 3 of the Agreement specifically bars the manufacture and sale
of any products other than which were specifically permitted therein.
26.
In view of the preceding
discussion, the Court finds no reason to interfere with the impugned order. The
appeal is without merit and accordingly is dismissed.
NAJMI WAZIRI, J.
JUNE 01, 2018/acm
FAO 443, 445 & 446 OF 2017 Page 36 of 36
