COMMENT:
1. This Judgment is also popularly known as
BUDDHA BAR JUDGMENT.
This
judgment is pronounced by Hon’ble Justice Shri C.K.Mahajan (The Hon’ble Judge ,
Delhi High Court). The Complete Text of the Judgment has been produced as
herein below:
1. By this order I propose to
dispose of plaintiff application being IA 3812/2003 under Order 39 Rule 1 and 2
CPC and defendants' application being IA 4665/2003 under Order 39 Rule 4 CPC
for vacation for exparte ad-interim injunction granted by this Court 1st April,
2003.
2. This Court on consideration
of documents and material on record, granted an ad-interim ex-parte injunction
restraining the defendants from reproducing, replicating, distributing,
manufacturing, selling offering for sale, advertising, directly or indirectly
dealing in any manner in music albums under the trade mark 'BUDDHA-BAR'.
3. The defendant is aggrieved
by the said order and hence his application under Order 39 Rule 4 CPC
4. It is the plaintiff's case
that the plaintiff is proprietor of the trademark BUDDHA-BAR being used in
relation to music albums in several countries around the world since the year
1999. The mark was registered in many countries in Class 9 and 41. The mark was
first adopted and used in the year 1996 by Plaintiff's affiliate company George
V. Restauration. In the said restaurant music was played by well-known disc
jockeys, which was compiled into CDs. These discs were sold by the plaintiff
under the trade mark BUDDHA-BAR since 1999 pursuant to agreements entered into
between the plaintiff and Chall'O Music International granting license to the
Chall'O Music to produce a double compilation of world music under the brand
name BUDDHA-BAR. The trademark BUDDHA-BAR in respect of music albums was
registered under number 00/3005110 on 3rd February, 2000 in France and was also
registered in all the EEC countries. The plaintiff claims that it's reputation
generated across the world spilled over to India and the plaintiff's mark
became distinctive of the plaintiff's goods and the same were identified as
goods of the plaintiff's. Rights were given to Wagrain for distribution of the
albums, who in turn appointed Worldwide Music in India as sub-distributor for
making CD compilation in India under the mark BUDDHA-BAR. Third series of
BUDDHA-BAR was released in France in March 2001 and in India on 11th December,
2001. The reputation of the plaintiff spilled over on account of news items in
TIME Magazine, New York Times, The Times, Evening Standard, ES Magazine,
Detroit News and Free Press, Daily Herald, Las Vegas Review Journal. Several
Indian newspapers and magazines in India also wrote in their columns of the
reputation and goodwill generated by the mark BUDDHA-BAR in relation to music
albums. Indian celebrities and the media also publicized the popularity of mark
BUDDHA-BAR in relation to music albums. Television coverage received on
satellite channels banned into India in June, July, 2001 of the fashion show of
the designer Ritu Beri brought awareness of the mark BUDDHA-BAR in India. The
plaintiff contends that the adoption of the identical trademark by the
defendants is patently dishonest and is likely to create confusion and
deception in the minds of the public causing the defendant's goods to be
associated or identified as the goods of the plaintiff.
5. Reliance was placed on the
decisions reported as Chennamsetty Rama Murthy v. Gattu Venkateswarlu and
Anr., 2001 (2) CCC 439 (A.P.), The Fleischmann Distilling Corporation v. Maier
Brewing Company, 136 USPQ 508, M/s, Midas
Hygiene Industries P. Ltd. v. Sudhir Bhatia, CA No, 107, 2002
order of the Supreme Court dated 22.1.2004, Balram Prasad Agarwal v. State
of Bihar, , Haw Par Bros,
International Ltd. v. Tiger
Balm Co. (P) Ltd. and Ors. (DB) and Indian Shaving Products v. Giff Pack, 1998
PTC (18) 698.
6. The defendant contends that
plaintiff is not entitled to continuation of adinterim injunction as he has
failed to establish proprietary rights in the mark BUDDHA-BAR because
restaurant business was owned by its affiliate company, who is not a party in
the present suit. The plaintiff failed to prove user for the years 1999 and
2000 since such user is by Claude Challe of Ghall'O Music. The plaintiff has
failed to establish user rights in India and the first invoice on record is of
21st February, 2002 and this is after releasing of defendants' album in
January, 2002. Reliance placed on newspaper reports and magazines etc. do not
further the case of the plaintiff as the material relied upon by the plaintiff
is not admissible in evidence and is hearsay evidence, BUDDHA-BAR has been used
by third party both in relation to the restaurant and music business. The
plaintiff is not entitled to the discretionary remedy of injunction as there is
a delay in instituting the suit in as much as 14 months. It is further
contended that CDs of the plaintiff do not bear the Plaintiff's name for the
earlier albums BUDDHA-BAR and BUDDHA-BAR II, therefore, consumers are unable to
associate the product with the plaintiff. The mark cannot be distinctive of the
plaintiff. The plaintiff has failed to establish that adoption and use is prior
to mark of the defendant. Trade activity of restaurant business is completely
different from business of music albums. There is no trade connections between
two trading activities. The first album was released by Chall'O Music in 1999
and 2000 and not by the plaintiff. The plaintiff has failed to produce any
evidence showing the use of the mark in the country of its origin,
internationally or in India. Newspapers reports cannot be relied upon. The most
of the documents filed by the plaintiff are of ^ no assistance to the
plaintiff.
7. I have heard learned
counsel for the parties and perused the documents on record.
8. It is settled law that
passing off is an action of deceit where the defendant attempts to pass of his
goods as those of the Plaintiff's. In Advocate's case Lord Diplock laid down
the characteristics for a valid cause of action in passing off namely there
must be a mis-representation made in the course of trade to prospective
customers of his or ultimate consumers of goods or services supplied by him which
is calculated to injure the business of goodwill of another trader and which
causes actual damage to the business or goodwill of the trader by whom the
action is brought.
9. In order to succeed the
plaintiff must establish prior adoption and use of the mark and on account of
user the mark has acquired a reputation and goodwill and become and distinctive
of the plaintiff's goods in the country of origin. The mark on account of use
has acquired the status of well-known/famous trade mark internationally and the
reputation spilled over to India prior to the adoption of the mark by the
defendant. The plaintiff must show a connection in the course of trade between
the goods and the plaintiff and that use of identical or deceptively similar
mark by the defendant is calculated to deceive or cause confusion leading the
purchaser to buy the goods of the defendant considering them to those of the
plaintiff.
10. The reputation claimed by
the plaintiff is on account of news items in several international newspapers
such as Time Magazines, New York Times, The Times, Evening Standard, PS
Magazine, Detroit News and Fees Press, Daily Heralds, Las Vegas Review Journal,
who devoted their column to BUDDHA BAR restaurant and BUDDHA BAR music albums
and both were linked to high fashion and to celebrities. These publications
have wide circulation abroad and in India and moreover the circulation of these
news items were prior to February, 2002. Several Indian Newspapers and
magazines such as Times of India, Mid Day, The Hindustan Times, Indian Express,
The Hindu etc. spoke of the international renown of mark BUDDHA BAR. In
connection with the restaurant and music albums and praised their high quality
of music linking it with well-known celebrities. The Indian Press/Media
coverage of the mark BUDDHA BAR and the music associated therewith suggest
spill-over trans border reputation into India. The contribution by Indian
artists of renown like Anaida to BUDDHA-BAR albums prior to February, 2002 as
well as interviews of these artists in local newspapers extolling the virtue of
the opportunity to participate in the BUDDHA-BAR experience and music and the
television coverage received on satellite television channels such as FTV,
beamed into Indian in June-July, 2001 of the fashion show held by designer Ritu
Beri in the BUDDHA BAR restaurant in Paris, which brought awareness of the mark
BUDDHA BAR. In India as well as in relation to music albums. The plaintiff
placed on record a large number of documents by way of articles, pictures,
interviews and write up to establish spill over reputation extending right up
to the date of the suit. It does not make any difference in case the said items
are downloaded from the internet when actual excerpts of news items appeared in
original publications. The plaintiff's case is that in an action for passing
off and trans-border reputation, it is not necessary for the plaintiff to show
that he was trading within, the country. The admission of the reputation of the
owner of the brand names in its advertisements amounts to user of the same. The
plaintiff has been selling CD's since 1999 in abroad and these music albums are
in demand abroad. Circulation of the music albums as internationally recognised
as would be evidence from the various articles in the journals and newspapers,
magazines copies whereof have been placed on record. There is spate of Indian
publications and foreign publications on record where the mark BUDDHA BAR and
music albums recognising the reputation and goodwill of the plaintiff in the
mark BUDDHA-BAR and music albums and its popularity in foreign country, which
spilled over into India. The music albums have also been sold through internet.
11. What is sought to be
contended by the defendant is that the plaintiff has failed to establish proprietary
rights over the trademark BUDDHA-BAR as the restaurant business is own by its
affiliate, who is not party to the present suit and therefore user of 1996
cannot be taken into account. The plaintiff has not produced sufficient
evidence form the year 1999-2000 as the said user is not of the plaintiff but
by Claude Challe of Chall'O Music. The plaintiff is violating the provisions of
Section 52(a) of the Copyright Act by not disclosing the name, address of
manufacture, copyright owners and year of publication. The plaintiff has
produced first invoice dated 21st February, 2002, which is after the
defendant's release of album in January, 2002. The documents filed by the
plaintiff being in the nature of newspapers reports are not admissible in
evidence and cannot therefore be relied upon. The present suit has been filed
after 14 months of delay and as such the plaintiff is not entitled for
discretionary relief of injunction.
12. The contention of the defendant
that the plaintiff has not established proprietary rights to the mark BUDDHA
BAR as the restaurant business was owned by its affiliate, who was not a party
to the suit is without force. There is sufficient evidence produced on record
to show that the plaintiff was the user of the mark BUDDHA BAR in relation to
music albums. The mark BUDDHA-BAR in relation to music albums was registered
under number 00/3005110 on 3rd February, 2000 in France. It is not disputed
that the music album business is owned by the affiliate or the sister companies.
The plaintiff and its sister concern constitute one economic entities and it a
well-known international practice for companies trading in multiple
jurisdiction to work with affiliate organisation which have been treated as one
economic entity for purposes of proprietary rights by Courts. The decisions in
the matter of Revlon v. Cripps and Lee, 1980 FSR 85 and Food Distributors v.
London Borough of Tower Hamlets, (1976) AH ER 462 supports the case of the
plaintiff wherein the Court held as under:-
"there is evidence of
general tendency to ignore the separate tendency to ignore the separate legal
entities of the various companies within a group, and to look instead at the
economic entity of the whole group"
13. Thus, the Plaintiff's
proprietary rights in the mark BUDDHA BAR stand prima facie established from
the reading of the plaint and documents inasmuch as there is a pleading to the
effect that plaintiff company is a affiliate of restaurant business of George
V. Restauration and the mark was registered in favor of the plaintiff in 2000
in Paris. The restaurant business and the plaintiff constitute one economic
entity for the purpose of proprietary rights.
14. The next contention of the
defendant that plaintiff has failed to produce sufficient evidence from the
year 1999-2000 as the said user is not the plaintiff but by clause Challe of
Chall'O Music does not inspire confidence in light of the trademark licensing
agreement dated 13th June, 2000 executed between the plaintiff and Chall'-O
Music International, which also carried on business involving musical
production, to produce a double compilation of world music under the brand name
BUDDHA BAR. Translated copy of the agreement is on record. The original
document was brought in Court at the time of hearing. It is apparent from the
reading of the agreement that license was earlier granted to the Chall'O Music
by George V. Record for production of first double compilation of music under
the trademark BUDDHA BAR free of cost. Article 7 of the agreement provides that
any proceedings pertaining to infringement of trademark against any third party
will be instituted by the Licensor to the plaintiff in his name and (sic) own
expenses with the technical help of the Licensee. The licensee acknowledges the
proprietary rights of the plaintiff over the mark. The music album under the
mark BUDDHA BAR was first released in 1999 and thereafter in 2000 by the Claude
Challe/Chall'O Music on the force of the aforesaid trademark license agreement.
The user of the mark in relation to music albums stand established from
1999-2000. So far as the contention of the defendant that plaintiff are
violating the provisions of Copyright Act is concerned, the same shall be
considered at the time of trial. The further contention of the defendant that
in order to succeed in an action of passing off, the plaintiff has produced
first invoice dated 21st February, 2002 which is after the defendant's release
of its album in January, 2002 is without force. The matter is at the
interlocutory stage. The plaintiff can filed the documents/additional documents
prior to settlement of issues. This Court at this stage has to see whether the
plaintiff is the prior adopter and user of the mark and whether the mark has acquired
a reputation and goodwill and become distinctive of the plaintiff's goods in
the country of origin and whether such reputation has spilled over into India.
15. The next contention of the
defendant that the documents filed by the plaintiff in the nature of newspaper
reports are not admissible in evidence and cannot be relied upon cannot be
considered at this stage. This can be if at all considered at later stage as it
may require evidence to be led by the parties to determine this contention. The
Court at this stage is to see whether a prima facie case is made out to grant
an interim relief to the plaintiff at the interlocutory stage. The Privy
Council in the case of Subramaniam v. Public Prosecution, 1 WLR 965
observed:
"Evidence of a statement
made to a witness who is not himself called as a witness may or may not be
hearsay. It is hearsay arid inadmissible when the object of the evidence is to
establish the truth of what is contained in the statement. It is not hearsay
and is admissible when it is proposed to establish by the evidence, not the
truth of the statement but the fact that it was made. The fact that it was made
quite part from its truth, is frequently relevant in considering the mental
state and conduct thereafter of the witness or some other persons in whose
presence these statements are made."
16. A Division Bench of the
Madras High Court in the matter of Haw Par Bros. International Ltd. v. Tiger
Balm Co. (P) Ltd. and Ors., 1996 PTC (16) (DB) 311 inter alia observed that
"There is nothing on record at present to reject the correctness of the
reports found in standard newspapers which have a reputation of correct
reporting. ..."
17. Reliance placed by the
defendant on Smithkline
Beecham Pic. and Ors. v. Hindustan Lever Limited and Ors., 2000 PTC
83, Clutte Peabody and Co. Inc. v. Arrow Apparals, 1998 PTC (18) 156, Veerumal Praveen Kumur v. Needle
Industries (India) Ltd. and Anr., 2001 PTC 889 (Del) (DB), Balram
Prasad Aggarwal v. State of Bihar, ,
State of Haryana and Ors. v. Ch.
Bhajan Lal and Anr., , Ravinder Kumar Sharma v. State of
Assam and Ors., , Samant N, Balakrishna etc. v. George Fernandez and
Ors. etc., Laxmi Ram Shetty and Anr. v. State of Tamil Nadu, are of no help
to the defendant in the present case. They are distinguishable on facts. In
some of the decisions referred to there were no write up or publication which
went out to the public like in the present case wherein large amount of
publicity material in local and overseas publication have been produced on
record. Reliance on 1998 PTC (18) 156 is also misplaced. In that case,
the Court did not grant injunction on account of long delay coupled with the
fact that during the relevant period the magazine was banned in India.
18. The next contention of the
defendant the trademark BUDDHA-BAR has been used by third party in relation to
the restaurant and music business, which are not parties of the present suit is
without force. In light of the aforesaid discussion it is prima facie
established that the restaurant business is owned by the affiliate or the
sister companies. The plaintiff and its sister concern constitute one economic
entities and it is well-known international practice for companies trading in
multiple jurisdictions to work with affiliate organisation, which have been
treated as one economic entity for the purpose of proprietary rights by the
Courts. The mark BUDDHA BAR was used by the Claude Challe on the strength of
the trademark license agreement between the plaintiff and Claude Challe. Claude
Challe acknowledged the plaintiff to be the proprietor of the mark BUDDHA BAR
in relation to music business.
19. The last contention of the
defendant that the plaintiff is not entitled to discretionary relief of
injunction is also without force in light of the decision of the Supreme Court
in the matter of Midas Hygiene
Industries P. Ltd. and Anr. v. Sudhir Bhatia and Ors. (C.A. No. 107/2002) reported in 2004 (28) PTC
121 (SC) dated 22nd January, 2004. The Supreme Court inter alia observed as
under:-
"... In case 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."
20. The defendant failed to
given any satisfactory
explanation/justification in
relation to adoption and use of the mark BUDDHA BAR. It appears that name was
picked up from the spill over reputation of the said mark in India by the
plaintiff and the defendants must be aware at the time of user. The adoption of
the mark by the defendant cannot prima facie be recorded as honest
21. It is well settled law
that in action of passing off and trans border reputation, it is not necessary
to insist that the plaintiff must be trading within the country. The admission
of the reputation of the owner of the brand names in its advertisements amounts
to user of the same.
22. The Calcutta High Court in
the matter of J.N. Nicholas (Vimto) v. Rose and Thistle and Anr, held:-
"The user of the mark
does not postulate actual sale of the goods bearing such mark, user can be in
any form or way and does not necessarily mean and imply actual physical sale
and even mere advertisement without having even the existence of the goods can
be said to be an user of the mark."
23. In the matter of Goldstar
Co. Ltd. v. Goldstar Industries, 1995 PTC 18 the court observed as under:-
"It has been the case of
the plaintiff herein that he had been advertising goods under the trademark
GOLD STAR in journals and in newspapers which are being circulated in India.
This shows that the plaintiff had been advertising the goods, which according
to the observation of the Calcutta High Court would amount to use. If that be
so, then prima facie, it cannot be said that there was not users of the
trademark for the long period."
24. In 2001 PTC 353 the
Court held as under:-
"Thus a product and its
trademark transcends the physical boundaries of a geographical region and
acquires a trans border or overseas or extra territorial reputation not only
through import of goods but also by its advertisement. The knowledge and the
awareness of the goods of the foreign trader and its trademark can be available
at a place where goods are not being marketed and consequently not being used.
The manner in which or the source from which the knowledge has been acquired is
immaterial."
25. This Court in the matter
of N.R. Dongre v. Whirlpool
Corporation observed as under:-
"Having regard to the
above discussion, the following position emerges. The courts to not approve of
any attempt by one trader to appropriate the mark of the another trader, even
though that trader may be a foreign trader and mostly uses his mark in respect
of the goods available abroad i.e. outside the country where the appropriation
of the mark has taken place. As mentioned earlier, awareness and knowledge of
the mark in the latter counter may be because of the small trickle of the goods
in that country or through advertisement. The manner and method by which the
knowledge of the mark is acquired by the public is of no consequence and will
not matter."
26. In light of the aforesaid,
it is prima facie established that plaintiff is the prior adopter and user of
the mark BUDDHA BAR in abroad. The plaintiff prima facie established
proprietary rights for the mark BUDDHA BAR in relation to music albums. The
mark enjoys reputation and goodwill in the country of its origin and several
other countries by way of advertisements/news reports in reputed newspapers and
reputed magazines and spill over the same to India, which is also evident from
the newspaper reports and magazines, amounts to user of the trademark in relation
to the music albums. In the case of goods, which have acquired a name and
reputation either through publicity in journals or newspapers, such publicity
itself creates a demand for the product and it is necessary to protect the
person, who is owner of the mark/goods to prevent another person from taking
benefit of his goodwill and reputation with reference to the same goods. The
adoption and use of the name BUDDHA BAR by the defendant appears to be
dishonest as the same is without any explanation and justification and moreover
the spill over reputation in India appears to have motivated the defendant to
manufacture and market the music albums under the mark BUDDHA BAR with the
intention to encash the goodwill and reputation of plaintiff. The two marks in
dispute are almost similar. The defendant failed to explain as to how the said
name is hit upon it. There is also possibility of confusion between the
plaintiff's goods and defendant's goods and there is likelihood of confusion in
the minds of the purchasing the defendant's goods, which are deceptively
similar and identical to the goods, which are manufactured and marketed by the
plaintiff. The purchaser public identifies the music albums as those of the
plaintiff and any attempt on the part of the defendant to pass over their goods
as those of the plaintiff would determine passing of their goods as those of
the plaintiff. The matter is only at an interlocutory stage for
confirmation/vacation of the injunction. Trial has yet to take place. The
objections raised by the defendant shall be considered at the time of trial as
they may require evidence to be led by the parties to determine the objections.
The plaintiff cannot be declined interim protection at this stage.
27. It is not possible to
say how long a mark should be used to establish goodwill and reputation. It
depends on the facts and circumstances of each case. In a given case, six weeks
was held sufficient to establish reputation and goodwill. It depends on the
nature of the goods or business, quantum of sales of the product, extent of
advertisement and publicity launched the area over which user of the mark is
made and so on. In the present case, the user of the mark in Paris and other
countries is prima facie established since 1999. The music albums under the
mark BUDDHA BAR were and are in demand abroad. The Indian publications and
foreign publications on record acknowledged the reputation and goodwill of the
mark BUDDHA BAR and music albums and its popularity in foreign country, which
spilled over into India. The albums have also been sold through internet.
The mark BUDDHA BAR is distinctive of the music albums. Singularity and
exclusiveness of the album would be eroded by the use of the word BUDDHA BAR on
the albums by defendants.
28. Grant of an injunction is
a discretionary relief. Three guiding factors have to be kept in mind while
refusing or allowing the relief of ad-interim injunction namely whether there
exists a prima facie case; balance of convenience between the parties and if
injunction is not granted, it will cause irreparable loss to the plaintiff. In
the present case the plaintiff is the owner of the trademark/name BUDDHA BAR.
He is prior adopter and user of the same. Prima facie case is made out in favor
of the plaintiff. Balance of convenience is clearly in favor of the plaintiff
from the facts found from the pleadings and documents. There can be no dispute
with regard to proposition of law. It is indeed a sad reality that the trial of
the case does not reach hearing for several years. Therefore, at the interim
stage itself if the court is prima facie satisfied that the plaintiff is the
prior adopter/user and registered proprietor of the trademark and the
defendant's adoption is dishonest, not granting an injunction would amount to encouraging
the tainted and dishonest to seek benefit of the delay in the disposal of the
suit. Refusal of injunction shall result in irreparable injury to the plaintiff
as already observed that the defendant's adoption of the trademark is not
honest. Plaintiff in these circumstances would be entitled to injunction.
29. In view of the aforesaid
discussion, I am satisfied that there is sufficient material on record to prima
facie establish the reputation, goodwill and distinctive-ness of the plaintiff
in relation to the music albums under the mark BUDDHA BAR internationally and
spill over the reputation into India. The plaintiff must succeed in the present
application. The plaintiff's application under Order 39 Rules 1 and 2 CPC is
allowed. The injunction is confirmed. The application of the defendant under
Order 39 Rule 4 CPC is dismissed. No order as to costs.
30. The observations made by
me herein are only for the dealing with this interim application and would in
no way effect the final determination of the controversy after the trial of the
suit.
