*
IN THE
HIGH COURT OF DELHI AT NEW DELHI
% Order delivered on: May 29, 2014
+ I.A. No.10946/2014 in CS(OS)
No.1720/2014
M/S GM MODULAR PVT LTD .....
Plaintiff
Through Mr.Amit
Sibal, Sr.Adv. with
Mr.S.K.Bansal,
Mr.Ajay Amitabh
Suman & Mr.Vikas Khera, Advs.
versus
M/S HAVELLS INDIA LTD ..... Defendant
Through Mrs.Prathiba
M.Singh, Sr.Adv. with
Mr.Sudeep Chatterjee, Ms.Bitika
Sharma
& Ms.Deepthi Mary
Alexander,
Advs.
CORAM:
HON'BLE MR.JUSTICE MANMOHAN SINGH
MANMOHAN SINGH, J.
I.A. No.10947/2014 (exemption)
Exemption
allowed, subject to just exceptions.
The
application is disposed of.
I.A. No.10948/2014 (u/s 149 r/w Sec.151 CPC)
Learned
counsel for the plaintiff states that the Court fee would be
filed within one week. In view of the statement made by the learned
counsel
for the
plaintiff, the application is disposed of.
CS(OS) No.1720/2014 & I.A. No.10946/2014 (u/o XXXIX R.1 & 2 CPC)
1.
Let the plaint be registered as a
suit.
2.
Issue summons in the suit and
notice in the application to the defendant. Mr.Sudeep Chatterjee, Advocate
appearing on behalf of the defendant accepts summons and notice. Let the
written statement and reply
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be filed within two weeks, with advance copies
thereof to the learned counsel for the plaintiff who may file the replication
and rejoinder within two weeks thereafter.
The parties shall also file the
documents along with the pleadings and shall complete the admission/denial of
each other’s documents by way of affidavits which may be filed on or before the
next date.
List this matter on 1st July, 2014 for framing of issues
and consideration on injunction application as well as for directions for
trial.
3.
Learned counsel for the plaintiff
is pressing for an interim order, in the meanwhile. I have heard the learned
counsel for the parties for some time.
4.
The brief facts of the case are
that the plaintiff has filed the abovementioned suit for permanent injunction
and damages for disparagement and unfair trade practices. Mr.Amit Sibal,
learned Senior counsel appearing on behalf of the plaintiff is pressing for
interim orders in view of the urgency involved. Though, there is no caveat,
still the defendant appeared through counsel who after obtaining instructions
has no objection if the matter is heard by this Court.
5.
At this stage, only a prima facie view is to be taken as to
whether the plaintiff is entitled for injunction or not. It is not denied by
the defendant that the impugned advertisement is shown on Sony TV during IPL
Cricket Matches which is at the stage of finals.
6.
It is not in dispute that the
plaintiff is engaged in the business of manufacture and trade of wide range of
electrical goods, electrical switches, accessories, appliances, electronic
components. In the year, 1999, the plaintiff in the course of trade adopted the
trade mark GM (word per se), the
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trade mark/label GM. The said trade mark/label/trade name is represented
herein below:
7. It is alleged in the plaint that with the advent of e-commerce and
the internet the plaintiff has been using the word/mark GM as a material part
of its domain name and E-mail ID viz. www.gmmodular.com/, E-mail: info@gmmodular.com/ respectively. The screen shot of
the plaintiff’s said domain name has been given as herein below:-
The screen shot of plaintiff’s
said domain name namely www.gmmodular.com displaying the plaintiff’s electric switches under the
trademark/label/design GM
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7.1 In the year 2011, the plaintiff has created one such novel and
original design in relation to its said product namely electrical switches. The
design of the plaintiff is unique, original and aesthetic in nature. The said
unique design of the electrical switches has been applied by the plaintiff in
relation to GM electrical switches. The said unique design of the electrical
switches does appeals to eye and has great aesthetic credentials (referred to
as the said design). Since the year 2011, the plaintiff has been applying the
said novel and original design in relation to its said electrical switches
continuously and openly and is distinctive indicium of the plaintiff only. The
true representation of the plaintiff’s said GM electrical switches under the
said unique design has been given as herein below:
The plaintiff’s said electric switches under the
GM trademark/design/label
7.2
The plaintiff’s
said goods and
business are known
recognized,
demanded, sold and traded with reference to its said GM
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Trademark/label/trade name/design. The members of the trade, industry,
the consumers and general public at large are well aware of the plaintiff’s
said goods and business there under. The plaintiff’s said GM
Trademark/label/trade name/design is a well known trade mark within the meaning
of Section 2 (1) (zg) of the Trade Mark Act.
7.3 The
plaintiff has its customer all around the world including WAL-
MART, TATA,
CHROMA, SPENCER'S, XCITE
RELIANCE-RETAIL,
SPENCER’S, FUTURE
GROUP, METRO, CASH
& CARRY, HYPER
CITY, TOTAL GROUP and many more.
8.
The defendant namely M/s Havells
India Limited is also engaged in the business activity of manufacturing and
marketing of electrical devices, appliances, accessories and allied and cognate
products.
9.
It is stated in the plaint that
in the 3rd week of May, 2014, the plaintiff became aware of the impugned
advertisement HAVELLS SHOCK LAGA which was being aired/broadcasted during the
IPL Cricket Matches display on the Television. The impugned HAVELLS SHOCK LAGA
advertisement intentionally and deliberately disparages the plaintiff’s said GM
electric
Switches and the unique distinctive design of the plaintiff’s
switches. The impugned advertisement of the defendant relates to the defendant’s
electric product namely HAVELLS RCCB and MCB.
10. It is averred that the impugned HAVELLS SHOCK
LAGA advertisement of the defendant is solely meant for damaging the tremendous
goodwill and reputation of the plaintiff’s said GM electric switches. In the
impugned advertisement of the defendant, the plaintiff’s said GM electrical
switches have been shown in bad light. The plaintiff is filing the impugned
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advertisement of
the defendant downloaded
in compact disc.
The still
representation of impugned
advertisement has been given as herein below:-
The impugned HAVELLS SHOCK LAGA advertisement is in
the backdrop of Peace Summit, India
It begins with security and safety check measure
regarding Peace Summit, India, wherein the one person is enquiring about the
safety and security measure at the mentioned place.
In the next frame of advertisement, the person is
shown the
magnetic fields.
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In the next frame of advertisement, the person is
shown fish eye camera.
In the next frame of advertisement, the person is
shown the bullet proof machchardani
In the next frame of the impugned advertisement,
the person wishes to use the washroom.
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IMPUGNED OBJECTIONABLE SHOT “A” AS PER PLAINTIFF
The advertisement further depicts that when the
person went to washroom and try to switch on the bathroom lights by touching
the switch, he got electric shock.
IMPUGNED OBJECTIONABLE SHOT “B” AS PER PLAINTIFF
The next frame of the advertisement shows facial
expression of the person because of the shock and in the background the sound
is being displayed “Shock Laga, Shock
Laga
In the last frame of the advertisement it is
displayed that the all the safety measure has been taken but since the HAVELLS
RCCB & MCB is not used that’s why the Shock was caused.
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11.
It is argued by the plaintiff that shots marked as “A”
& “B” give an
impression to the common public at large that the Plaintiff’s said GM
electrical switches are of extremely inferior quality. The impugned
advertisement disparages the plaintiff’s said product by showing the plaintiff’s
said GM switches in bad light.
The details of the defendant’s impugned HAVELLS SHOCK LAGA advertisement
have been given as here in below:
(a)
The impugned HAVELLS SHOCK LAGA
advertisement begins with one security and safety check measure regarding Peace
Summit, India, wherein one person is enquiring about the safety and security
measure at the mentioned place.
(b)
The next frame of the impugned
advertisement the person is shown the magnetic fields, fish eye camera and the
bullet proof machchardani.
(c)
In the next frame of the impugned
advertisement, the person wishes to use the washroom.
(d)
The advertisement further depicts
that when the person went to washroom and try to switch on the bathroom lights
by touching the switch, he gets electric shock.
(e)
The next frame of the
advertisement person’s face reflects the shock and in the background the sound
is being displayed “Shock Laga, Shock Laga”.
(f)
The electric switches under the
Trade Mark GM are being displayed in the impugned advertisement from which the
person allegedly got the electric shock.
(g)
In the last frame of the
advertisement it is displayed that the all the safety measure has been taken
but since the HAVELLS RCCB & MCB
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is not used that’s why the Shock was caused. The said wording is being
displayed in Hindi language, the said has been given as herein below:
“Sab Kuch Lagaya Lekin Havells RCC & MCBB Nahi Lagaya Isliye Shock
Laga”
(everything
has been done but since HAVELLS RCCB &
MCB is not used, that’s why the shock is being caused to the mentioned
person).
12. It is also submitted that the impugned advertisement is nothing but
is a clandestine attempt by the Defendant to increase the market share by
disparaging the tremendous goodwill and reputation of the Plaintiff’s said
Switches under the Plaintiff’s said Trade Mark/Design GM. All the
indicia described in the impugned advertisement as well as the surrounding
circumstances shown therein points towards the singular fact without leaving
any room for doubt towards the defendant’s impugned malafide intention.
13. The impugned advertisement is viewed/broadcasted on various
television serials which are also viewed by many people at large in India and
outside India also. It is submitted by the plaintiff that the impugned
advertisement far outreaches the limit of allowed competitive advertisement and
blatantly disparages the reputation and goodwill of the Plaintiff’s said
product namely switches under the said Trade Mark/Design GM. The impugned
HAVELLS SHOCK LAGA advertisement not only shows that the defendant’s impugned
product is good but also very clear the electric switch of the plaintiff under
the said Trade Mark/Design GM of the plaintiff is inferior. The impugned
advertisement amounts to disparaging and
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defaming the product of a competitor i.e. plaintiff by the defendant or
promoting its own products.
14. Mr.Amit Sibal, learned Senior counsel appearing on behalf of the
plaintiff submits that the defendant is not denying that the switch shown in
the advertisement is of the plaintiff whose trade mark GM is also shown in a
blurred condition. There is no justification on behalf of the defendant to show
the plaintiff’s product in bad faith when admittedly the defendant itself is
manufacturing the electric switches. The defendant ought to have been shown its
own switch if the defendant is making any impression being given that “Sab Kuch Lagaya Lekin Havells RCC & MCBB
Nahi Lagaya Isliye Shock Laga”.
He argues that it is a clear case of product
disparagement and it is
deliberately done by the defendant in order to disparage the product of the
plaintiff and to promote its product otherwise there is no justification why
the defendant is doing this and what is the fault of the plaintiff and why they
should suffer at the hand of the defendant who is the competitor of the
plaintiff and why they have not used the switches in the advertisement or any
other product which is not the product of the plaintiff and its trade mark. It
is argued that it is a clear case of malafide where the thing speaks for
itself. It is argued that in case, the interim orders are not passed, the
plaintiff would suffer an irreparable loss and injury as the plaintiff has
already received various complaints from their dealers and distributors about
the said advertisement.
15. Mrs.Prathiba M. Singh, learned Senior counsel appearing on behalf of
the defendant, on the other hand, has argued that no case of grant of interim
order is made out. There is no disparagement of the plaintiff’s product. The
trade mark of the plaintiff GM is not feasible if the advertisement is seen.
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No one can read mark GM from the said
advertisement. The defendant is only promoting its product HAVELLS’ RCCB and
MCB. The main purpose of advertisement is that if MCB is not used, it may cause
electric shock, thus it was imperative to show the electric switch in the
advertisement.
16.
It is also argued that in the
impugned advertisement, no untrue, falsehood or malicious statement is made. It
is the case of trade label. The plaintiff has failed to make out any case that
the statement made in the advertisement is untrue or thus have suffered any
damages by such an action of the defendant. Their claim is unsubstantiated.
They should not be hyper-sensitive. It is wrong perception of the plaintiff.
She referred the following three decisions of this Court in support of her
submissions:-
(i)
Dabur India Ltd. vs. Colortek
Meghalaya Pvt. Ltd. and Godrej Sara-Lee,
reported in MIPR 2010(1) 0195.
(ii)
M/s Eureka Forbes Limited vs.
Kent RO Systems, I.A. No.4600/2010 in CS(OS)
No.664/2010, decided on 17th May, 2010.
(iii)
Marico Limited vs. Adani Wilmar
Ltd., 2013 (54) PTC 515 (Del.)
17.
While arguing the case, she has
not specifically denied that the product shown in the advertisement is not of
the plaintiff, except it was submitted that many manufacturing of using
switches with the similar design. The following principles have been discussed
and approved by many Courts while dealing with the cases of disparagement from
time to time. The said fact is not denied by the defendant:-
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(a) For the purpose of saying that his goods are the best in the world or
his goods are better than his competitors, he can even compare the advantages
of his goods over the goods of others.
(b) He, however, cannot while saying that his goods are better than his
competitors, say that his competitors’ goods are bad. If he says so, he really
slanders the goods of his competitors. In other words, he defames his
competitors and their goods, which is not permissible.
(c) If there is no defamation to the goods or to the manufacturer of such
goods no action lies, but if there is such defamation an action lies and if an
action lies for recovery of damages for defamation, then the Court is also
competent to grant an order of injunction restraining repetition of such
defamation.
18.
In the very recent judgment
delivered by the Division Bench of this Court on 31st January, 2014 in the case of Hindustan
Unilever Limited vs. Reckitt Benckiser India Limited,
reported in 2014(57) PTC 495 (Del) (DB), the learned Division Bench has
confirmed the judgment and decree of learned Single Bench rendered by my
esteemed brother Shri Badar Durrez Ahmed, J. who after trial has decreed the
suit as well as granted damages to the tune of Rs.5 lacs. The Division Bench
after upholding the decision of the Single Bench not only dismissed the appeal
filed by the defendant but also enhanced the damages to Rs.20 lacs and
quantified the cost at
Rs.55,000/-. The relevant facts and discussion of the judgment of the
learned Single Judge are reproduced as below:-
“22. .......Although, the brand name, logo or the sword device does not
appear in the orange bar of soap shown in the advertisement (Ext. PW1/2), there
can be no
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misgiving that the bar of soap which has been shown
in the said advertisement is of a colour similar to that of the plaintiff's
DETTOL soap. The contours, curvature as well as the overall shape of
the orange bar of soap in the advertisement itself, are virtually the same as
that of the contours, curvature and overall shape of the plaintiff’s DETTOL
Original soap. Moreover, the clear impression given in the advertisement is
that the said orange bar of soap has been taken out from a green wrapper/ packaging.
It must also be noted that the design of the plaintiff’s soap has been
registered by the plaintiff as indicated by Ext.PW1/DX-1. While it is true that
there may be other orange coloured soaps and other soaps sold in the pre-dominantly
green packaging and other soaps which have an oval shape, it is also true that
it is only the plaintiff's soap which has a combination of all the three
elements, i.e., orange colour, curved oval shape and pre-dominantly green
packaging. Apart from this, it is only the plaintiff's soap which has contours
in the manner indicated in the bar of soap in the said advertisement. No
evidence has been produced by the defendant to show that there is any ordinary
antiseptic soap with the same combination of the aforesaid elements of colour,
shape, design and packaging. I have absolutely no doubt that the orange bar of
soap shown in the advertisement refers to the plaintiff's DETTOL Original soap.
23. x x x x x
24. It has been contended on behalf of the defendant
that the plaintiff has not produced any evidence of consumers to indicate that
the orange bar of soap in the said advertisement appears to be the plaintiff's
DETTOL Original soap. In response the learned counsel for the plaintiff
submitted that producing such evidence would be counter-productive and is not
necessary. He submitted that the plaintiff could produce witnesses stating that
the orange bar of soap shown in the advertisement had
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reference to the plaintiff's DETTOL Original soap.
Similarly, the defendant could also produce witnesses to state the contrary.
Ultimately, it would be for the court to make a judgment from the perspective
of an average person with imperfect recollection, a test which has been well
established, particularly in passing off cases. Though slander of goods and
disparaging advertisements stand on a slightly different footing to passing off
cases, I find myself to be in agreement with the submissions made by
the learned counsel for the plaintiff. For, ultimately, it is a question of
perception and the perception has to be determined from the stand point of an
average person man with imperfect recollection but, with a corollary, which
shall stated be shortly. One could normally expect that there would be a
difference in perception between two distinct classes of persons -- (1) Persons
who are using DETTOL Original soap and (2) persons who do not use that soap. A
person belonging to the latter category may not be aware of the orange coloured
bar of soap of the plaintiff with its distinctive shape, curvature and
contours. He may also not be aware of the packaging employed by the plaintiff.
Therefore, such a person may not link the bar of soap shown in the advertisement
with the plaintiff's product when he sees the advertisement or when he comes
upon the plaintiff’s product in a shop. Such a person, in all likelihood, would
perceive the orange bar of soap shown in the advertisement as being some
unbranded bar of soap. On the other hand, a person belonging to the former
category, being a user of the plaintiff's DETTOL Original soap, would
immediately recognise the bar of soap shown in the advertisement as referring
to the plaintiff's DETTOL Original soap. This is because, such a person is
familiar with the plaintiff's product. He is “intimately” aware of the look
and feel of the soap because he uses it everyday. He knows its colour, shape,
size and contours. The moment, he sees the bar of soap in the advertisement, he
would immediately correlate the
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colour, shape, size and contours including the
colour of the wrapper/packaging with that of the soap that he uses everyday,
that is, the plaintiff's DETTOL Original soap. Moreover, it is not as a matter
of co-incidence that all these features of colour, shape, curvature and colour
of the packaging have come together. It has been done deliberately so that it
is obvious to users of the plaintiff's DETTOL Original soap that it is the very
soap that they use everyday which is shown in the advertisement.
25. x x x x x
26. The difference in approach in a passing off
action and one for disparagement must also be highlighted. In a case of
passing off, the question invariably is whether the trade mark or trade dress
employed by A for his product is so deceptively similar to the established mark
or trade dress of B’s product that A’s product could be confused by or passed
off to consumers as B’s product? Here the comparison is of rival products
having a similar trade mark, get-up or trade dress. Familiarity with the
established mark, trade dress or get-up is presumed. Because, it is this
familiarity that the person intending to pass off his goods as those of the
famous or more popular, exploits. In the case of disparagement, the one who
disparages another’s product, does not seek to make his product similar to the
disparaged product, but to distinguish it from the disparaged product. The
object of disparagement is to make the disparaged product appear to be as near
or similar to the competitor’s product. The comparisons, therefore, in cases of
passing off and in cases of disparagement are different. Consequently, the
comparison must be from the perspective of an average person with imperfect
recollection but, that person must be picked from the category of users of the
product allegedly sought to be disparaged or slandered.
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36. The advertisement can be viewed in two
parts. One part is where the orange coloured soap is shown as being
harmful and used by people who are naïve and without any wisdom and who could
be saved only through prayers. The other part is where the defendant's product
is shown as having the qualities of providing a protective wall against dry
cracked skin and as an eliminator of germs. There can be no grievance in
respect of the second part of the advertisement, where the qualities of the
defendant's soap are sought to be demonstrated: whether those qualities exist
or not is not an issue. That part, even if untrue, would be mere puffery.
However, the first part of the advertisement, where the orange bar of soap has
been slighted and shown in bad light and in fact, as something which is
harmful, cannot but be construed as disparagement and denigration of the orange
bar of soap shown in the advertisement. It is one thing to say that a person's
product is the best or that his product is better than somebody else’s product,
but, it is entirely a different matter to say that his product is good whereas
another's product is bad and harmful. Puffing up of one's product is
permissible in law but slighting or rubbishing or otherwise denigrating or
disparaging another's product is not. From the standpoint of a reasonable
person, the advertisement, in question, certainly disparages and denigrates the
orange bar of soap shown therein which I have held, under Issue No.1, to refer
to the plaintiff's DETTOL Original soap.
66. Since the findings returned by me are that
the said disparaging advertisement was a deliberate act on the part of
the defendant aimed at reducing the sales of the plaintiff's product and
thereby increasing its own sale, through the device of slander of
goods/disparaging and/or denigrating advertising, the plaintiff would be
entitled to punitive damages in the same manner as was awarded in Time
Incorporated (supra). Cases of slander of goods, malicious falsehood and
disparaging advertising have to
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be decided on the crucible of fairness. There is no
impediment to a trader employing any means possible, provided such means are
fair, to increase his sales, even at the cost of its competitors. But the law
does not permit any person to use unfair means or practices to gain and profit
to the detriment of his competitors. Such unfair means or practices include
disparaging advertisements/ slander of goods. In the fiercely competitive world
that we live in, businesses compete with each other on various fronts including
quality of goods. The differences in quality of the goods are sought to be made
known to the public through advertising. While providing such information, the
law permits a businessman to puff up his product and show it in a better light
than that of his competitors. However, as we have seen above, the law does not
permit a manufacturer or a trader to advertise in such a manner that it
slanders the products of its competitors, virtually rubbishing the same, while
promoting his own product. As the competition gets fierce, price differences
get reduced and businesses tend to play for a larger market share by employing
practices such as slandering of goods/disparaging advertising which are unfair
business practices and ought to be curbed. Since the question is of fairness
versus unfairness, when this Court has found that the defendant has been
deliberately unfair in its said advertising campaign, it is reason enough for
this Court to impose punitive damages so as to discourage such a sharp practice
and to put to an end to this growing tendency. Consequently, I am of the view
that the plaintiff is entitled to punitive damages from the defendant, which I quantify
as Rs.5,00,000/-.”
19.
The facts in the present case are
very near and similar to the case of
Hindustan Unilever Limited (supra).
Having gone through the impugned advertisement, the decisions
referred by the learned counsel for the parties, if the entire gamut of the
matter is considered in a meaningful manner, it is
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clear to the Court that if the intent of the defendant is to damage the
product itself of the other party and it is intended to gain its business by
promoting its product, then a classic case of injunction is also made out. From
the facts of the present case, I am of the considered view that prima facie the impugned advertisement
of the defendant falls within the principle mentioned in para 18 of my
judgment. Therefore, the plaintiff has made out a prima facie case for the grant of an ad-interim injunction. In
case, the interim order is not passed, the plaintiff will suffer an irreparable
loss and injury. The balance of convenience also lies in favour of the
plaintiff and against the defendant. Till the next date of hearing, the
defendant is restrained from telecasting, displaying, showing, broadcasting the
impugned advertisement, in any media whatsoever including electronic media.
However, it is made clear that in case, the defendant shall delete/erase the
shot “A” and the contents of shot “B” from the said advertisement, then they
are entitled to continue with the impugned advertisement.
20. Copies of this order be given dasti to the learned counsel for the
parties, under the signatures of the Court Master and copies thereof be also
sent to SONY Entertainment Network, Multi Screen Media Pvt. Ltd, M.G.Road,
Gurgaon (Haryana) as well as to the television channel SET MAX C/o Multi Screen
Media Pvt. Ltd., for immediate compliance in view of the urgency involved in
the matter.
(MANMOHAN SINGH)
JUDGE
MAY 29, 2014
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