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IN THE
HIGH COURT OF DELHI AT NEW DELHI
+
CS(COMM) 724/2018
RADICO KHAITAN LTD. .....
Plaintiff
Through:
Mr. Sudhir Chandra, Senior
Advocate
with Ms. Ishani Chandra,
Mr. Sagar
Chandra, Mr. Ankit
Rastogi
and Ms. Srijan Uppal,
Advocates.
versus
M/S.
DEVANS MODERN BREWERIES LTD. .....
Defendant
Through:Mr.
S.K. Bansal, Advocate with
Mr. Ajay
Amitabh Suman and
Mr. Kapil
Kumar Giri, Advocates
%
Reserved on : 11th
February, 2019
Date of Decision: 07th March,
2019
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
J U D G M E N T
I.As. 3483/2018, 4354/2018
1.
The present suit has been filed
for permanent injunction restraining infringement of trade mark, passing off,
delivery up, rendition of accounts, damages etc. The prayer clause in I.A.
3483/2018 is reproduced hereinbelow:-
CS (COMM)
724/2018 Page 1 of 29
“26. In
these circumstances it is respectfully prayed before that this Hon‟ble Court
may be pleased to pass an ex parte ad interim injunction restraining the
Defendants, their partners, proprietors, Companies, Sister Concerns, directors,
executives, as the case may be, its officers, servants and agents or anyone
acting for and on their behalf from manufacturing, exporting, marketing,
offering for sale, selling, advertising or in any manner dealing with any
Alcoholic Beverages including but not limited to Beer and Ready to Drink
Beverages under the trademark „ELECTRA‟ or from adopting any other mark or
label which is identical or deceptively similar to the Plaintiff‟s registered
trade mark ELECTRA thus amounting to infringement of trade mark, and/or do any
other thing which may lead to passing off of the goods and/or services of the
Defendants as that of the Plaintiff and/or do any other thing which may lead to
dilution of the Plaintiff‟s marks and unfair competition.”
2.
This Court passed an ex-parte ad interim injunction order dated
13 th March, 2018. The relevant
portion of the said order is reproduced hereinbelow:-
“Consequently, till further orders, the defendants, their partners,
proprietors, companies, sister concerns, directors, executives, as the case may
be, its officers, servants and agents or anyone acting for and on their behalf
are restrained in Delhi from manufacturing, exporting, marketing, offering for
sale, selling, advertising or in any manner dealing with any alcoholic
beverages including Beer under the trademark ELECTRA or from adopting any other
mark or label which is identical or deceptively similar to the plaintiff‟s
registered trademark ELECTRA, in any manner whatsoever.”
3.
A Division Bench of this Court,
on an appeal being filed, being FAO (OS)(COMM) 20/2018, with consent of
parties, vide order dated
11 th April,
2018 permitted the defendant to sell some of its stock lying
CS (COMM)
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in Delhi and directed a monthly affidavit giving details of sales made
in Delhi to be filed in the Court.
4.
I.A. 4354/2018 and 4355/2018 have
been filed for vacation and modification of stay by the defendant. With consent
of parties, I.A. 4354/2018 and I.A. 4355/2018 as well as the injunction
application being I.A. 3483/2018 filed by the plaintiff were taken up for
hearing and order was reserved on 11th February, 2019.
FACTS
5.
The plaintiff is one of India‟s largest liquor
companies, having
four millionaire brands –8 PM Whisky, Contessa Rum, Old Admiral and
Magic Moments Vodka, selling more than a million cases per annum.
6.
It is stated that on 23rd December, 2004, the plaintiff
applied for registration of the word mark ELECTRA under Class 33 claiming user
since 01st December, 2004. It is stated that on 28th March, 2007, the
plaintiff‟s word mark ELECTRA was registered. It is
contended that the plaintiff is the registered owner of various marks/labels
having ELECTRA as their prominent feature in Class 33 of the Trade Marks Act, 1999
since 23rd December, 2004.
7.
It is further stated that the
plaintiff adopted the mark ELECTRA for Vodka in September, 2004. It is the case
of the plaintiff that as a result of the test launch and customer perception,
it was realised that the word ELECTRA was peppy and appealed more to the
younger generation than the consumers of Vodka – which were relatively older
CS (COMM)
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people. It is stated that consequently, the plaintiff launched Vodka
under another of its marks i.e. „MAGIC MOMENTS‟, in 2005.
8.
It is stated that in 2014 the
plaintiff decided to use the mark ELECTRA for Ready to Drink alcoholic
beverages in Ready To Drink bottles, and in June 2015, officially launched its
Ready to Drink product under the aforesaid mark combined with its flagship
brand MAGIC MOMENTS.
9.
It is stated that the annual
revenue generated by the plaintiff from the sale of its products under the mark
ELECTRA in the financial year 2016-17 was INR 2015.03 lakhs. It is further
stated that at the time of filing the present suit, the plaintiff had sales
worth Rs. 43 crores.
10.
It is stated that the plaintiff
promotes its products bearing the mark ELECTRA in India through permitted
channels, and also promotes its products bearing the mark ELECTRA on its own websites
www.radicokhaitan.com and www.m2electra.com, as well on its
Official Facebook and Twitter pages „m2electra‟. The plaintiff has also
launched ELECTRA CDs and digital game, „Electrathon‟.
11.
It is the case of the defendant
that its existing mark GODFATHER is a well known mark and it applied for
registration of the mark ELECTRA bearing no. 2519404 on 25th April, 2013 on a proposed to be
used basis and the same is pending registration. According to the defendant, it
has honestly and bonafidely adopted
the
trademark GODFATHER ELECTRA on 25th April, 2013 and in support of its contention has relied on its first
invoice dated 13th August, 2014.
12.
It is the case of the plaintiff
that in November, 2016, while conducting a regular search on the website of the
Trade Marks Registry,
CS (COMM)
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the plaintiff came across the defendant‟s Trademark
Application dated 25th April, 2013, for the mark ELECTRA under Class 32 for goods „Beers,
mineral and aerated waters, and other non-alcoholic drinks; fruits drinks and
fruit juices; syrups and other preparations for making beverages‟ which was
filed on a „Proposed to be Used‟ basis.
13.
It is stated
that the plaintiff
sent a legal
notice dated 02nd
November, 2016 to the defendant. The plaintiff
received a reply dated 17th November, 2016, which denied the contentions of the plaintiff and
sought for labels which the plaintiff was using since 2004 as well as
plaintiff‟s Trade Mark Registration Certificates. In the reply, the defendant
also stated that it had been using the mark ELECTRA along with its trademark
GODFATHER LABEL. It is stated that although all the requested documents were
forwarded to the defendant‟s counsel, no response was received. It is further
stated that the plaintiff addressed two reminder notices to the defendant,
dated 03rd February, 2017 and 13th May, 2017, but no response was received.
14.
It is stated that in October,
2017, the defendant filed a suit for declaration to hold groundless threats as
unjustifiable and for permanent injunction under Section 142 of the Trade Marks
Act 1999, restraining defendant (plaintiff herein) from interfering in the
business activities of the plaintiff (defendant herein) and damages against the
plaintiff titled
„M/s Devans Modern Breweries Ltd. Vs. M/s Radico Khaitan Ltd‟ before the
District Court, Saket.
15.
It is stated
that in January,
2018, it came
to the plaintiff‟s
knowledge that the defendant intends to launch its products in Delhi and
Silvassa by April, 2018. On 23rd February, 2018, the defendant obtained
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an Excise Approval for selling products under the mark ELECTRA in the
territory of Delhi.
16.
As
mentioned hereinabove the
present suit was
filed on 26th
February, 2018 and this Court passed an ex-parte injunction order dated 13th March, 2018.
DEFENDANTS
ARGUMENTS
17.
Learned counsel for the defendant
stated that the defendant was the prior user of the mark “GODFATHER ELECTRA”.
He stated that the defendant had honestly and bonafidely adopted the trademark GODFATHER ELECTRA on 25th April, 2013 and had been
continuously using the same during the course of trade as its owner and
proprietor except in Delhi owing to the ex-parte
interim injunction dated 13th March, 2018.
18.
Learned counsel for the defendant
further stated that the first invoice of the defendant dated 13th August, 2014 made the defendant
the prior user on the face of the record. He stated that the said document had
been filed in legal proceedings by the defendant against the plaintiff
i.e. Rectification Petition against the plaintiff‟s
registration under no. 1327603 for the mark ELECTRA before the Intellectual
Property Appellate Board and Civil Suit No. TM 112 of 2017 before District
Court, South East Delhi, Saket, for groundless threats.
19.
Learned counsel for the defendant
stated that the first invoice placed on record which showed actual use of the
trademark MAGIC MOMENTS ELECTRA by the plaintiff was dated 18th March, 2016, whereas the
defendant had admittedly been using the trademark
CS (COMM)
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GODFATHER ELECTRA in relation to Beer and other goods falling under
Class 32 since 13thAugust, 2014.
20.
Learned counsel for the defendant
contended that despite having registration for the trademark ELECTRA since
2004, the plaintiff had not used the same in relation to any of their goods and
business until June, 2015. He further contended that prior to commencing use of
the trademark ELECTRA/GODFATHER ELECTRA in 2013, the defendant conducted a
market survey. He stated that at that time no products bearing the mark ELECTRA
were found.
21.
Learned counsel for the defendant
submitted that he is the honest and bonafide
adopter and user of the trade mark ELECTRA. He further submitted that the
defendant had vested rights in the trademark ELECTRA/GODFATHER ELECTRA. He
relied on Section 34 of the Trade Marks Act, 1999, specifically it‟s heading
and submitted that the heading constitutes a separate defence. Section 34 of
the Trade Marks Act, 1999 is reproduced hereinbelow:-
“34. Saving for vested rights.—Nothing
in this Act shall entitle the proprietor or a registered user of
registered trade mark to interfere with or restrain the use by any person of a trade
mark identical with or nearly resembling it in relation to goods or
services in relation to which that person or a predecessor in title of his has
continuously used that trade mark from a date prior—
(a)
to the use of the first-mentioned trade mark in relation to those
goods or services by the proprietor or a predecessor in title of his; or
(b)
to the date of registration of the first-mentioned trade mark
in respect of those goods or services in the name of the proprietor of a
predecessor in title of his;
CS (COMM)
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whichever
is the earlier, and the Registrar shall not refuse (on such use being proved) to
register the second mentioned trade mark by reason only of the
registration of the first-mentioned trade mark.”
(emphasis
supplied)
22.
Learned counsel for the defendant
emphasized that though the defendant may not be a prior registrant of the mark
ELECTRA, it was a prior user. He further submitted that as a prior user of the
trademark, the defendant had rights superior to a prior registrant of the same
mark. In support of his submission, he relied upon a judgment of the Supreme
Court in Neon Laboratories Ltd. Vs. Medical Technologies Ltd. &Ors.,
2015 (64) PTC 225 (SC) wherein it has been held as under:-
“6. It
may be reiterated that the respondent-plaintiffs assert that their
predecessor-in-interest had initiated user of the trade mark PROFOL in 1998, when it commenced
production thereof and the respondent-plaintiffs succeeded to the user of the
mark upon amalgamation with their predecessor-in-title in the year 2000. The
position that emerges is that whilst the appellant-defendant had applied for
registration of its trade mark several years prior to the respondent-plaintiffs
(1992 as against 26-5-1998 at the earliest), the user thereof had remained
dormant for twelve years. We can appreciate that this passivity may be the
result of research of the product or the market, but the appellant-defendant
will have to explain its supineness through evidence. In this interregnum, the
respondent-plaintiffs had not only applied for registration but had also commenced
production and marketing of the similar drug and had allegedly built up a
substantial goodwill in the market for PROFOL. The legal nodus is whether the prior registration would have the
effect of obliterating the significance of the goodwill that had meanwhile been
established by the respondent-plaintiffs. Would a deeming provision i.e.
relating registration retrospectively prevail on
CS (COMM)
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actuality—competing equities
oscillate around prior registration and prior user.
xxxx xxxx xxxx xxxx
9.
…..The question to examine, then, would be whether prior user would have
to be anterior to the date of application or prior to the user by the
appellant-defendant. In other words, the question before the Court would remain
whether the situation on the date of application for registration alone would
be relevant, or whether the developments in the period between this date and
the date of grant of registration would have any bearing on the rights of the
parties. All these considerations will be cast into a curial cauldron to be
appreciated by the Court before which the suit is being contested. In these
premises, we cannot conclude that a prima facie case has not been disclosed by the respondent-plaintiffs.”
23.
Learned counsel for the defendant
stated that the plaintiff had not been in continuous use of the trademark
ELECTRA since 2004, i.e. the date from which they claimed use of the trade
mark. Learned counsel for defendant submitted that due to non-use of the
trademark ELECTRA from 2004 until June, 2015 the plaintiff had no protectable
interest in the impugned trademark. In support of his submission he relied on Veerumal
Praveen Kumar vs. Needle Industries (India) Ltd. 2001 PTC 889 (Del) (DB).
The relevant portion of the said judgment is reproduced hereinbelow:-
“30. We
are in agreement with the view of the learned Single Judge of the Bombay High
Court that if there is non-user for a long period of time then by mere
registration of the mark continuing the respondents would not be entitled to
any injunction. This view is further reinforced by the judgment in Imperial
Group's case (supra), wherein it was
CS (COMM)
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held that
where there is no trading to give rise to a goodwill there is no interest to be
protected by a trademark and such a trademark cannot exist in vacuum.”
24.
Learned counsel for the defendant
lastly relied upon the judgment of a learned single judge of this Court in L.D.
Malhotra Industries Vs. Ropi Industries, PTC (Suppl) (2) 564 (Del) wherein
it has been held as under:-
“19. This
section saves vested rights. This means that the anterior use by a person of a
trade mark is protected under law. This was the position at common law. The
common law rule was that a mark did not become a 'trade mark' until it had been
publicly used as such by its proprietor and that such public use was the only
means by which title to a trade mark could be acquired by the first proprietor
of it (See GEC 2 case (supra)). The 1958 Act recognised this principle of common law and
embodied it in Section. 33.”
PLAINTIFF‟S ARGUMENTS
25.
Per contra, learned senior
counsel for plaintiff stated that the plaintiff restricts his claim for
infringement of the plaintiff‟s registered
trade
mark ELECTRA. He stated that on 23rd December, 2004, the
plaintiff
had applied for registration of the word mark ELECTRA under
Class 33 of the Trade Marks Act, 1999 for alcoholic
beverages bearing No.1327603 claiming user since 01st December, 2004. He stated that
the aforesaid application was registered on 28th March, 2007.
26.
Learned senior counsel for
plaintiff stated that the plaintiff was also the prior user of the trade mark
ELECTRA. He stated that apart from conducting the test launch in 2004, the
plaintiff also engaged the
services
of Quantum Market Research Pvt. Ltd. for „Project Higher‟
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between 2006-2007 for conducting category and
concept research and study of the brand ELECTRA for Vodka in Delhi, Mumbai and
Bangalore. In support of his contention, he relied on invoices dated 21st February, 2006 and 12th June, 2006 issued by Quantum
Market Research Pvt. Ltd.
27.
He further stated that on 01st January, 2007 the plaintiff
entered into an agreement with Hindustan National Glass & Industries Ltd.
towards developing, producing and supplying glass bottles of various brands
including ELECTRA.
28.
He also stated that in 2014 the
plaintiff began its pre-launch preparations for use of the mark ELECTRA for
ready to drink alcoholic beverages which included various labels designed by
third parties. In
support of his contention, he relied upon e-mails
dated 16th November, 2014 and 25th November, 2014 at page Nos.101 to 115 of the plaintiff‟s
documents. He stated that subsequently in June
2015, the plaintiff launched its ready to drink alcoholic beverages under the
mark ELECTRA. In support of his statement, he relied on the Invoice dated 18th March, 2016 issued by the
plaintiff.
29.
Learned senior counsel for
plaintiff further stated that the defendant had been selling Beer since 1984
under its main mark GODFATHER. He stated that in 2014 the defendant without
explanation added ELECTRA to its successful flagship brand GODFATHER. He
contended that while the defendant‟s main brand was GODFATHER, the plaintiff‟s
main mark for its ready to drink
alcoholic
beverages was ELECTRA.
CS (COMM)
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30.
Learned senior counsel for the
plaintiff contended that the plaintiff had a valid registration for the word
mark ELECTRA which had not been challenged by the defendant. He further
contended that the mark ELECTRA was an arbitrary mark with regard to alcoholic
and ready to drink beverages. He emphasized that the counsel for the defendant
had not disputed that beer and alcoholic beverages are similar goods sold
through identical trade channels. Consequently, according to him, a case of
infringement of registered trade mark under Section 29(2) of the Trade Marks
Act, 1999 was made out.
31.
Learned senior counsel for plaintiff submitted that
under Section
34 of the
Trade Marks Act,
1999 the defendant
was entitled to
protection if he was a user prior to the
plaintiff‟s registration or plaintiff‟s use, whichever was earlier. In support
of his submission he relied on Pfizer Products Inc. vs. Rajesh Chopra &
Ors.2007 (35) PTC
9 (Del.).
The relevant portion of the said
judgment is reproduced hereinbelow:-
“63. I
also find that Section 34 of the Trademarks Act requires that in order to
successfully assert a right against the registered proprietor of a trademark,
the defendant has to establish use of the trademark which is prior to the date
of registration of the plaintiff's trademark. In this case, the plaintiff's
registrations for Zoloft though granted in the year 2005 related back to 18thof November, 1992 while for the
trademark Geodon, the registration granted in later related back to 18th of
July, 1996.
The defendant has filed documents of sales being conducted by it only in
the year 2003. There is therefore admittedly no prior user giving the defendant
any right which could be urged to be superior to the rights of the plaintiff in
the registered trademark.”
CS (COMM)
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32.
Learned senior counsel for the
plaintiff contended that the defendant could not rely on Section 34 as the
plaintiff was the prior adopter, registrant and user of the trademark ELECTRA.
He emphasised that since 2006, the plaintiff had been conducting production
activities with regard to the trademark ELECTRA with Quantum Market Research
Pvt. Ltd and Hindustan National Glass & Industries Ltd. – which amounted to
use of the impugned trade mark.
He contended
that the plaintiff‟s
use as well
as registration of the
trademark
ELECTRA was prior in time to the defendant‟s first invoice
dated 13th August,
2014.
33.
Learned senior counsel for the
plaintiff submitted that the heading „Saving for Vested Rights‟ of Section 34
of the Trade Marks
Act, 1999, did not constitute a separate defence. In support of his
submission,
he relied upon Bhinka & Ors. Vs. Charan Singh, 1959
Supp(2)
SCR 798 wherein it has been held as under:-
“15. …..Maxwell on Interpretation of Statutes, 10th
Edn.,
gives the scope of the user of
such a heading in the interpretation of a section thus, at p. 50:
“The headings
prefixed to sections or sets of sections in some modern statutes are regarded
as preambles to those sections. They cannot control the plain words of the
statute but they may explain ambiguous words.”
If there is any doubt in the
interpretation of the words in the section, the heading certainly helps us to
resolve that doubt.”
CS (COMM)
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COURT‟S
REASONING
THE
RIGHTS OF REGISTERED PROPRIETORS OF A TRADE MARK AS WELL AS THE REMEDIES
AVAILABLE TO AN AGGRIEVED PARTY ON ACCOUNT OF NON-USE OF A REGISTERED TRADE
MARK ARE CLEARLY STIPULATED IN THE TRADE MARKS ACT, 1999. IN THE PRESENT CASE,
THE PLAINTIFF BEING THE REGISTERED PROPRIETOR OF THE MARK AND NO PROCEEDING FOR REMOVAL OF THE
REGISTERED
TRADEMARK
FROM THE REGISTER UNDER SECTION 47(1)(B) HAVING BEEN FILED BY THE DEFENDANT,
PLAINTIFF HAS THE EXCLUSIVE RIGHT TO USE THE SAME.
34.
Having heard learned counsel for
the parties, this Court is of the opinion that it is essential to first analyze
the scheme of the Trade Marks Act, 1999, to examine the rights of registered
proprietors of the trade mark as well as the remedies available to an aggrieved
party on account of non-use of a registered trade mark, as the plaintiff has
restricted its suit for infringement.
35.
Section 18 of the Trade Marks
Act, 1999, permits an application for registration of a trademark to be filed
on a used or proposed to be used basis. The relevant portion of Section 18 of
the Trade Marks Act, 1999 is reproduced hereinbelow:-
“18. Application for registration.—(1)
Any person claiming to be the proprietor of a trade mark used or proposed to
be used by him, who is desirous of registering it, shall apply in
writing to the Registrar in the prescribed manner for the registration of his
trade mark.”
(emphasis
supplied)
CS (COMM)
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36.
From the Section it is apparent
that registration of a trademark is not dependent on use. It postulates that an
application for registration of a trademark can be made on a proposed to be
used basis.
37.
Section 28 of the Trade Marks
Act, 1999 gives a registered proprietor of a trademark the exclusive right to
use the trademark. The relevant portion of Section 28 is reproduced
hereinbelow:-
“28. Rights conferred by registration.—(1)Subject
to the other provisions of this Act, the registration of a trade mark shall,
if valid, give to the registered proprietor of the trade mark the
exclusive right to the use of the trade mark in relation to the goods or
services in respect of which the trade mark is registered and to obtain relief
in respect of infringement of the trade mark in the manner provided by this
Act.”
(emphasis
supplied)
38.
Section 29(2)(a) of the Trade
Marks Act, 1999, postulates that a registered trademark is infringed if a
person, not being the registered proprietor uses an identical/deceptively
similar mark in relation to goods or services similar to that for which the
trademark has been registered. Section 29(2)(a) of the Trade Marks Act, 1999 is
reproduced hereinbelow:-
“29. Infringement of registered
trade marks.—(2) A registered trade mark is infringed
by a person who, not being a registered proprietor or a person using by way of
permitted use, uses in the course of trade, a mark which because of—
(a)
its identity with the registered trade mark and the similarity of the
goods or services covered by such registered trade mark; or
xxx xxx xxx
CS (COMM)
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is likely
to cause confusion on the part of the public, or which is likely to have an association
with the registered trade mark.”
(emphasis
supplied)
39.
In opinion of the Court, in the
event of non-use of a registered trademark, the Trade Marks Act, 1999 provides
a remedy to the aggrieved party to seek removal of the registered trademark
from the register under Section 47(1)(b). The relevant portion of Section 47 of
the Trade Marks Act, 1999 is reproduced hereinbelow:-
“47. Removal from register and imposition of limitations on ground of
non-use.—(1) A registered trade
mark may be taken off the
register in respect of the goods or services in respect of which it is
registered on application made in the prescribed manner to the Registrar or
the Appellate Board by any person aggrieved on the ground either—
(a)……….or
(b)
that up to a date three months before the date of the application, a
continuous period of five years from the date on which the trade mark is
actually entered in the register or longer had elapsed during which the trade
mark was registered and during which there was no bona fide use thereof in
relation to those goods or services by any proprietor thereof for the time
being……”
(emphasis
supplied)
40.
Section 2(2)(c)(i) of the Trade
Marks Act, 1999 defines “use of a mark” in a very broad manner. Under the said
Section use of a trademark is not limited to sale of goods or services bearing
the trademark only. The said provision is reproduced below:-
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“2. Definitions
and interpretation.—
xxxx xxxx xxxx
(2)
In this Act, unless the context otherwise requires, any reference—
xxxx xxxx xxxx
(c) to the use of a mark,—
(i)
in relation to goods, shall be construed as a reference to the use of
the mark upon, or in any physical or in any other relation whatsoever, to such
goods;”
(emphasis
supplied)
41.
At this stage, it is relevant to
mention that Section 27(2) of the Trade Marks Act, 1999 clearly stipulates that
nothing in the said Act shall affect rights of action against any person for
passing off goods as the goods of another person. Accordingly, the Trade Marks
Act, 1999 affords no bar to a passing off action. Prior use and goodwill are
two of the indispensible ingredients, required to be positively established by
the party seeking injunction, in a passing off action.
42.
In the present case, the
plaintiff being the registered proprietor of the mark and there being no
passing off action filed by the defendant, plaintiff has the exclusive right to
use the same.
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HOWEVER
SECTION 34 PROVIDES A DEFENCE IN A SUIT FOR INFRINGEMENT AND PERMITS SECOND
REGISTRATION OF THE SAME MARK.IN THE PRESENT CASE, THE CONDITION PRECDENT IN
SECTION 34 OF THE TRADE MARKS ACT, 1999 IS NOT SATISFIED AS THE DEFENDANT‟S USE
IS NOT PRIOR TO THE PLAINTIFF‟S REGISTRATION OF THE TRADE MARK. FURTHER THE
HEADING OF A SECTION DOES NOT CONSTITUTE AN INDEPENDENT DEFENCE.
43.
However, Section 34 defines when
vested rights are saved. The said Section provides a defence in a suit for
infringement and permits second registration of the same mark provided the
second applicant had been continuously using that trademark from a date prior
to the use or date of registration of the first proprietor/registered user‟s
trade mark, whichever is earlier. In the event the Registrar concludes that the
conditions precedent in Section 34 are satisfied and registers the trade mark
of the second applicant, then the exclusive right to the use of the trade marks
shall not be deemed to have been acquired by anyone of those persons as against
any other of those persons merely by registration of the trade mark.(See: Section 28(3) of Trade Marks Act, 1999).
44.
In fact, the Supreme Court in S.
Syed Mohideen vs. P. Sulochana Bai, (2016) 2 SCC 683 has
held, in case of conflict between two registered proprietors,
evaluation of better rights in common law is essential to enable the court to
determine whose rights are better and superior in common law which have been
recognized in the form of registration. It was held that “the action for passing off which is
premised on the rights of prior user generating a
goodwill shall be unaffected by any registration provided under the Act.”
CS (COMM)
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45.
This Court is further of the
opinion that a heading of a Section cannot control the plain words of a
Statute, but may explain ambiguous words. It is well settled law that the
heading of a Section does not constitute an independent defence. The heading of
a Section can only be an approximation and may not cover all the detailed
matters falling within a Section. Further, in case of conflict between the
plain language of the provision and the meaning of the heading or title, the
heading or title would not control the meaning which is clearly and plainly
discernible from the language of the provision there under. [See:
Liebert Corpn Australia Pty Ltd. Vs Collector of
Customs, [1993] FCA 525 and
Raichurmatham Prabhakar & Anr. vs. Rawatmal Dugar, (2004) 4 SCC 76].
In
Re Application by the Local Government Auditor, (2003) NIQB 21, (16) it
was held, “….a heading is of
very
limited use in interpretation
because of its necessarily brief and inaccurate nature….”(emphasis supplied)
46.
Consequently, Section 34 of the
Trade Marks Act, 1999 at the highest, is a defence in a suit for infringement
provided the conditions precedent in the said Section are satisfied, namely,
that the defendant‟s use of the impugned mark is prior to the plaintiff‟s use
of the mark
and/or prior to plaintiff‟s registration, whichever
is earlier i.e., in the present case the defendant‟s use has to be prior not
only to plaintiff‟s use but also to plaintiff‟s registration.
47.
In the present case the plaintiff‟s application for
registration of
the word mark ELECTRA bearing no. 1327603 is dated
23rd December, 2004 and upon registration on 28th March, 2007, it relates back to
the
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date of the application; whereas the defendant‟s
earliest claimed use is only of 25th April, 2013 or 13th August, 2014. Consequently, the condition precedent in Section 34 of
the Trade Marks Act, 1999 is not satisfied in the present case as the
defendant‟s use is not prior to the plaintiff‟s registration of the trade mark.
Accordingly, the defence of Section 34 is prima facie not available to the
defendant.
THE
JUDGMENTS CITED BY LEARNED COUNSEL FOR DEFENDANT ARE INAPPLICABLE TO THE FACTS
OF THE PRESENT CASE.
48.
This Court is of the opinion that
the judgment of the Apex Court in Neon Laboratories Ltd. Vs. Medical
Technologies Ltd. &Ors.(supra) relied upon by
learned counsel for the defendant is inapplicable to the facts of the
present case as the said judgment deals with an action for passing off and not
infringement. Furthermore, the Apex Court did not give a final finding on the
issue of whether prior use would have to be anterior to the date of application
for registration and/or prior to the other party‟s use. In fact, it left the
issue open. The relevant portion of the said judgment is reproduced
hereinbelow:-
“2. As
is to be expected, the assertion in the plaint is that the Defendant-Appellant
is marketing and passing off its products as that of the Plaintiff-Respondents.
xxxx xxxx xxxx xxxx
9.
This Court approved the grant of an injunction in favour of the prior
user. Additionally, in the recent decision in S. Syed Mohiden v. P. Sulochana
Bai [S. Syed Mohiden v. P. Sulochana Bai, (2016) 2 SCC 683 : (2015) 7 Scale
136] this Court has pithily underscored that the rights in a passing-off action
emanate from common law and not from statutory
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provisions,
nevertheless the prior user's rights will override those of a subsequent user
even though it had been
accorded registration of its trade
mark …………………….All these considerations will be cast
into a
curial cauldron to be appreciated by the Court before which the suit is being
contested. In these premises, we cannot conclude that a prima facie case has
not been disclosed by the respondent-plaintiffs.”
(emphasis
supplied)
49.
The judgment of this Court in the
case of L.D. Malhotra Industries Vs. Ropi Industries (supra)
is also clearly inapplicable as in the said case the challenge was to
a rectification order removing a mark from the Register at the instance of a
prior user and subsequent registrant.
50.
In fact, neither Neon
Laboratories Ltd. Vs. Medical Technologies Ltd. &Ors.(supra)
nor
S. Syed Mohidden Vs. P. Sulochana Bai (supra) or L.D. Malhotra Industries Vs.
Ropi Industries (supra) are an authority for a defence under Section 34
of the Trade Marks Act, 1999 in an action for infringement of a
registered trade mark.
51.
This Court is further of the opinion that reliance
on the judgment
Veerumal Praveen Kumar vs. Needle Industries
(India) Ltd. (supra) by learned counsel for
the defendant is misconceived. In the said judgment there had been non-use of a
registered trademark for forty years except 1977-79. Nothing had been placed on
record to show that the plaintiff-respondent had come back into business in
India at any subsequent stage of time. Apart from non-use, the Court also noted
that the delay on the part of the plaintiff-respondent, permitted the
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defendant-appellant
to expend money over a considerable period of
time and
to build up a business bearing the mark in question. The
relevant
portion of the said judgment reads as under:-
“…there
cannot be any hard and fast rule in determining the cut-off point when non-use
of the registered mark would disentitle the trader to any protection. It would
depend upon facts and circumstances of each case…We are persuaded to take this
direction as the object of the Trade Mark Act is to protect the proprietary
right of a registered trademark holder but not to be a source of monopoly where
the holder of the trademark does not, prima facie, carry on business for over a
long period of time, as in the present case.”
52.
Consequently, the judgments cited
by learned counsel for defendant are inapplicable to the facts of the present
case.
THIS
COURT IS OF THE PRIMA FACIE OPINION THAT THE DEFENDANT IS NOT EVEN THE PRIOR
USER OF THE IMPUGNED MARK.
53.
In the present case the plaintiff
had been continuously using the impugned mark ELECTRA with regard to pre-launch
and preparatory activities at least since 2006-07.
54.
This Court is prima facie of the view that the
plaintiff‟s pre-launch and preparatory activities with regard to the trade mark
ELECTRA amounts to use under the Trade Marks Act, 1999. The plaintiff had
engaged the services of Quantum Market Research Pvt. Ltd. in 2006 for
conducting category and concept research and study of the brand ELECTRA for
Vodka. Furthermore, it had entered into an agreement with Hindustan National
Glass & Industries Ltd. in 2007 for developing, producing and supplying
glass bottles of various brands
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including ELECTRA. The plaintiff has also filed
emails dated 16th November, 2014 and 25th November, 2015 showing various labels designed by third parties with
regard to use of the mark ELECTRA for ready to drink alcoholic beverages.
55.
This Court is of the opinion that
the averments in the plaint regarding continuous use of the registered word
mark ELECTRA would have to be believed at this stage, especially since
contemporaneous documents have been filed along with the plaint.
56.
In Hardie Trading Ltd. and Anr. Vs.
Addisons Paint and Chemicals Ltd., 2003 (27) PTC 241 (SC),
the Apex Court has given an expansive and wide interpretation
to the expression „use‟, contrary to the judgment of a learned single judge of
this Court in L.D. Malhotra Industries Vs. Ropi Industries (supra).
The relevant portion of the said judgment reads as under:-
“42. This shows that the use may be
other than physical. It may be in any other relation to the goods. Given
this statutory meaning, we see no reason to limit the user to use of the goods or to sale of goods
bearing the trade mark.
43.
In Hermes Trade Mark [1982 RPC
425,the registered proprietor had inserted advertisements in which the
trade mark appeared in relation to the watches it manufactured in the annual
trade publication. It was also in evidence that the registered proprietor
placed an order for parts of the watches during the period of alleged non-use
although the actual sale of the watches took place subsequently. In this
factual background, the words, “other relation” in an identical statutory provision
in the United Kingdom were construed to mean “something other than actually
being upon the goods or in physical relation to them — that would cover the use
of the mark,….., for example, in
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advertisements,
in invoices, in orders and so on”. It was also said, the phrase “in
the course of trade” must be wide enough to embrace the steps necessary for the
production of the goods as well as the actual placing of them on the market. It
was held that even though there was no use of the mark upon or in physical
relation to the goods, but it was used in “other relation” i.e. to say in non-physical
use.
44. A more recent example of the law in England of such
“non-physical
use” is to be found in Bon Matin Trade
Mark, 1989 RPC 536. The trade mark
was registered in the United Kingdom
in 1979 in respect of a range of cosmetics. The registered proprietor was a
resident of France and manufactured and sold the goods there. In 1984, an
application was made to expunge the registration on the ground that there had
been no bona fide use of the mark in the United Kingdom for a continuous period
of five years. The only use of the mark prior to the date of the application
was by issue of price lists and promotional literature on two occasions. A
distributor was appointed by the proprietor in the United Kingdom subsequent to
the application for rectification and the first sale of the goods took place 3
years after that. The Court held that the intention of the registered
proprietor to seek to establish a market not on any temporary basis but on the
basis of continuous sales had been proved. As they had been struggling to
market the goods in the United Kingdom and ultimately, were successful in
finding a distributor, it was held that this was sufficient use of the mark by
the proprietor for the purpose of defeating the applications for its removal.
45.
In Section 2(2)(b) of the Act, we have the additional words “any” and “whatsoever”
qualifying the words “other relation” giving the words a much wider meaning.
Reading
this definition into Section 46(1) it is clear that the word “use” in Section
46(1) may encompass actions other than actual sale.
xxx xxx xxx
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50.
As far as this country is concerned, Section 46(3) of the Act
statutorily prescribes the intention to abandon as an essential component of
non-use for the purposes of Section 46(1). In American Home Products
Corporation v. Mac Laboratories Pvt. Ltd and Anr., [1981] 1 SCC 465,
this Court was called upon to decide whether there was any bona fide use of the
trade mark in relation to goods by the proprietor or for the purposes of
Section 46(1)(a) of the Act. Under Section 46(1)(a), the trademarks which
were registered without any bona fide intention to use them in relation to the
goods and which have in fact not been used by the proprietor from the date of
such registration upto to the date of the application of registration, are
liable to be taken off the register. The Court held that both the intention of the
proprietor not to use the trade mark at the time of registration and also the
actual non-use of the trade mark subsequent thereto had to be proved. The
evidence in that case was that prior to registration, the proprietor had
entered into a collaboration agreement with an Indian company to manufacture
and, market its products. Subsequent to the registration, the Indian company
obtained a licence for the purpose of imposing a machine to manufacture
proprietor's goods, obtained samples from the proprietor and took other steps
to manufacture the goods, but no products were in fact put on the market. After
the application for rectification was filed, a registered user agreement was
entered into between the proprietor and the Indian company. It was not in dispute
that the goods had not been sold during the alleged period of non-use. Dismissing
the application for rectification, this Court held :
"A
person who intends to manufacture goods on has made preparations for the
manufacture of goods but the manufacture has not commenced and, therefore,
goods have not been marketed is nonetheless entitled to get the trade mark
which he proposes to use in relation to those goods registered. In the present
day world of commerce and industry, a manufacturing industry can neither be
commenced nor established overnight.
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There are
innumerable preparatory steps required to be taken and formalities to be
complied with before the manufacture of goods can start and the manufactured
goods marketed. The process must of necessity take time. If the position were that the
mere non-user of a trade mark for the period mentioned in clause(a) of Section
46(1) would make a trade mark liable to be taken off the Register, it would
result in great hardship and cause a large number of trade marks to be removed
from the Register, because the moment one month has elapsed after the
registration of a trade mark has been ordered, a trade rival can make an
application on the ground set out in clause (a) of Section 46(1) claiming that
there has been no bona fide use of the trade mark up to a date one month before
the date of his application."
51.
Although the decision was given in the context of Section 46(1)(a),
nonetheless, it would show that an intention to use does not
necessarily mean that the proprietor must show the marketing of the goods under
the trade mark….”
(emphasis
supplied)
57.
This Court is of the prima facie
opinion that the plaintiff has been using the trademark ELECTRA since at least
2006 and consequently, the defendant is not even the prior user of the impugned
mark.
THE SUPREME COURT HAS HELD THAT
PROTECTION OF A REGISTERED TRADE MARK IS NOT DEPENDENT ON ITS USE
58.
The Apex Court in M/s
Gujarat Bottling Co. Ltd. and others v. Coca Cola Company and others
(1995) 5 SCC 545 has held that protection of a registered trade
mark is not dependent on its use. The
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relevant portion of M/s Gujarat Bottling Co. Ltd. and others v.
Coca Cola Company and others (supra) is reproduced hereinbelow:-
“11.…In
respect of a
trade mark registered
under the
provisions
of the Act certain statutory rights have been conferred on the registered
proprietor which enabled him to sue for the infringement of the trade mark
irrespective of whether or not mark is used.…”
THE USE
OF THE IMPUGNED MARK BY THE DEFENDANT PRIMA FACIE CONSTITUTES AN INFRINGEMENT
UNDER SECTION 29(2)(A) OF THE TRADE MARKS ACT, 1999.
59.
Consequently, the use of the impugned mark by the
defendant
prima facie constitutes
an infringement under Section 29(2)(a) of the Trade Marks Act, 1999.
THE
DEFENDANT FAILED TO DISCHARGE ITS DUTY OF CARE AND DUE DILIGENCE AS IT HAD NOT
CONDUCTED A SEARCH IN THE TRADE MARKS REGISTRY WITH REGARD TO THE IMPUGNED MARK
ELECTRA FOR GOODS FALLING UNDER CLASSES 32 AND 33 BEFORE ADOPTING THE SAID
MARK.
60.
This Court is also of the prima facie opinion that the defendant,
being a big corporation, had failed to discharge its duty of care and due
diligence as it had not conducted a search in the Trade Marks Registry with
regard to the impugned mark ELECTRA for goods falling under Classes 32 and 33
before adopting the said mark. It is pertinent to mention that it is an
admitted position that Beer and Alcoholic goods are similar goods traded under the
same channels.
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THERE IS
PRIMA FACIE NO DELAY ON THE PART OF THE PLAINTIFF. IN ANY EVENT, RELIEF OF AN
INJUNCTION IN CASES OF INFRINGEMENT OF A REGISTERED TRADEMARK INJUNCTIONS MUST
ORDINARILY FOLLOW
61.
There is also no delay on part of
the plaintiff as the defendant had been put to notice on 02nd November, 2016 when the
plaintiff
discovered the defendant‟s
use of the
impugned mark ELECTRA.
Following
the legal notice dated 02nd November, 2016 there had been a
continuous exchange of correspondence between the parties as would be
apparent from the defendant‟s reply dated 17th November, 2016 as
well as supply of all of the plaintiff‟s documentation to the defendant
at
its request and reminder notices sent by the plaintiff to the defendant
on 03rd February, 2017 and 13th May, 2017.
62.
Furthermore, in a judgment
subsequent to Veerumal Praveen Kumar vs. Needle Industries (India) Ltd. (supra),
the Apex Court in
Midas Hygiene Industries P. Ltd.
& Anr. v. Sudhir Bhatia & Ors.,
2004 (28) PTC 121 (SC) has held that the relief of an injunction in cases of infringement of
a registered trademark injunctions must ordinarily follow. The relevant portion
of the said judgment is reproduced herein below:-
“5. The
law on the subject is well settled. In cases of infringement either of
trade mark or of copyright, normally an injunction must follow. Mere delay in
bringing action is not sufficient to defeat grant of injunction in such cases.
The grant of injunction also becomes necessary if it prima facie appears that the adoption of the
mark was itself dishonest.”
(emphasis
supplied)
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CONCLUSION
63.
Keeping in view the aforesaid, this Court is of the
opinion that a
prima
facie case of infringement of trademark
is made out in favour of the
plaintiff and balance of convenience is also in its favour. Further,
irreparable harm or injury would be caused to the plaintiff if an injunction
order is not passed.
64.
Consequently, the defendant, its partners,
proprietors, companies‟
sister concerns, directors, executives, as the case
may be, its officers, servants and agents or anyone acting for and on their
behalf are restrained from manufacturing, exporting, marketing, offering for
sale, selling, advertising or in any manner dealing with any Alcoholic
Beverages including but not limited to Beer and Ready to Drink Beverages under
the trademark „ELECTRA‟ or from adopting any other mark or label which is
identical or deceptively similar to the Plaintiff‟s registered trade mark
ELECTRA.
65.
Accordingly I.A. 3483/2018 is
allowed and I.As.4354/2018 and 4355/2018 are dismissed.
MANMOHAN, J
MARCH 07, 2019
mn
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