Comment: I have reproduced the few relevant portion of the judgment, in
which case laws has been referred/settled by the Hon’ble Supreme Court of
India.
2. For the purpose of the construction of
contracts, the intention of the parties is the meaning of the words they have
used. There is no intention independent of that meaning.
3. Where the words of a contract are
capable of two meanings, one of which is lawful and the other unlawful, the
former construction should be preferred.
4. It is now a well-settled principle of
law that a document must be construed having regard to the terms and conditions
as well as the nature thereof. [Union of India v. M/s. Millenium
Mumbai Broadcast Pvt. Ltd. 2006 (5) SCALE 44]
5. A trade mark is the property of the
manufacturer. The purpose of a trade mark is to establish a connection between
the goods and the source thereof which would suggest the quality of goods. If
the trade mark is registered, indisputably the user thereof by a person who is
not otherwise authorised to do so would constitute infringement.
6. Thus, the distinction between a trade
mark and a property mark is that whereas the former denotes the manufacture or
quality of the goods to which it is attached, the latter denotes the ownership
in them. In other words, a trade mark concerns the goods themselves, while a
property mark concerns the proprietor. A property mark attached to the movable
property of a person remains even if part of such property goes out of his
hands and ceases to be his.
7. Traditionally, a trade mark has always
been considered a vital and inseparable part of the goodwill of the business.
In fact, the sale of a trade mark without the sale of the goodwill to the same
buyer is considered null and void. However, the trade mark can be assigned with
or without the goodwill of business though subject to certain conditions.
8. Waiver is the abandonment of a right in
such a way that the other party is entitled to plead the abandonment by way of
confession and avoidance if the right is thereafter asserted, and is either
express or implied from conduct.
9. The doctrine of passing off is a common
law remedy whereby a person is prevented from trying to wrongfully utilise the
reputation and goodwill of another by trying to deceive the public through
'passing off' his goods.
10. Although, the defendant may not be using
the actual trade mark of the plaintiff, the get up of the defendant's goods may
be so much like the plaintiff's that a clear case of passing off could be
proved. It is also possible that the defendant may be using the plaintiff's
mark, the get up of the defendant's goods may be so different from the get up
of the plaintiff's goods and the prices also may be so different that there
would be no probability of deception of the public. However, in an infringement
action, an injunction would be issued if it is proved that the defendant is
improperly using the plaintiff's mark. In an action for infringement where the
defendant's trade mark is identical with the plaintiff's mark, the Court will not
enquire whether the infringement is such as is likely to deceive or cause
confusion. The test, therefore, is as to likelihood of confusion or deception
arising from similarity of marks is the same both in infringement and passing
off actions. [See Ruston
& Hornsby Ltd. v. The Zamindara Engineering Co., (1969) 2 SCC
727]
11. Acquiescence is a facet of delay. The
principle of acquiescence would apply where: (i) sitting by or allow another to
invade the rights and spending money on it; (ii) it is a course of conduct
inconsistent with the claim for exclusive rights for trade mark, trade name,
etc.
12. The principle of balance of convenience
applies when the scales are evenly balanced.
13. We are not oblivious that normally the
appellate court would be slow to interfere with the discretionary jurisdiction
of the trial court. The grant of an interlocutory injunction is in exercise of
discretionary power and hence, the appellate courts will usually not interfere
with it. However, appellate courts will substitute their discretion if they
find that discretion has been exercised arbitrarily, capriciously, perversely,
or where the court has ignored settled principles of law regulating the grant
or refusal of interlocutory injunctions.
14. The appellate court may not reassess the
material and seek to reach a conclusion different from the one reached by the
court blow if the one reached by that court was reasonably possible on the
material. The appellate court would normally not be justified in interfering
with the exercise of discretion under appeal solely on the ground that if it
had considered the matter at the trial stage it would have come to a contrary
conclusion.
Ramdev Food Products Pvt. Ltd vs Arvindbhai Rambhai Patel & Ors on
29 August, 2006.The contents of the judgment has been reproduced as herein
below:
CASE NO.:
Appeal (civil)
8815-8816 of 2003
PETITIONER:
Ramdev Food Products
Pvt. Ltd.
RESPONDENT:
Arvindbhai Rambhai
Patel & Ors.
DATE OF JUDGMENT:
29/08/2006
BENCH:
S.B. Sinha & P.P.
Naolekar
J U D G M E N T W I T
H CIVIL APPEAL NO.8817 OF 2003
Interpretation of the
provisions of the Trade and Merchandise Marks Act, 1958 (for short "the
1958 Act") arises for consideration in these appeals arising out of a
judgment and order dated 08.05.2003 passed by the High Court of Gujarat at
Ahmedabad.
FACTS
The appellant is a
company incorporated under the Companies Act, 1956. The other parties to these
appeals were/are its Directors.
In the year 1965, one
Rambhai Patel started a business of grinding and selling spices under the name
and style of 'Ramdev'. He had three sons and two daughters, Arvindbhai,
Hasmukhbhai and Pravinbhai were his sons. A partnership firm was constituted in
the year 1975. It applied for registration of the trademark 'Ramdev', which was
granted on 03.01.1986 being Trademark No.447700. Another partnership deed was
executed in supersession of the earlier partnership deed wherein new partners
were inducted. On 06.01.1989, the appellant company was incorporated whereby
and whereunder the pattern of shareholding amongst the three brothers was :
Arvindbhai Group (40%); Hasmukhbhai Group (30%); and Pravinbhai Group (30%). The
registered trademark was assigned by 'Ramdev Masala Stores' in favour of the
appellant by a deed dated 20.05.1990. However, by the said deed the goodwill
was not assigned. The trademark together with the goodwill was assigned in
favour of the appellant company by another deed of assignment dated 20.05.1992.
A 'user' agreement was also entered into by the same parties permitting the
firm 'M/s. Ramdev Masala Stores' to use the said trademark subject to the terms
and conditions stipulated therein. Another partnership firm being 'Ramdev
Masala' was started on 01.04.1991 for carrying on the trade of grinding and
trading of masalas. A user agreement was also entered into by and between the
appellant company and the said firm permitting the latter to use the registered
trade mark for seven years i.e. from 01.04.1991 to 31.03.1998 in terms whereof
it was stipulated :
"3. AND WHEREAS
the User is a firm registered under the Indian Partnership Act and wishes to
use in the city of Ahmedabad except the area of Naroda City of Ahmedabad and
district Mehsana, Gujarat State (India) registered proprietors aforesaid
registered Trade Mark (hereinafter referred to as "the said Trade
Mark") in respect of the said goods."User restricted to the cities of
Ahmedabad and Mehsana;
4(C) That the User
will continue to use the said mark only so long as he manufactures his goods in
accordance with the terms and specifications devised by the Registered
Proprietor.
4(E) That within the
terms of this agreement and thereafter the User will not acquire any right to
the said mark by any means whatsoever except in accordance with law.
4(G) That the User
covenants not to use the said Trade Mark in the advertisement, journal label
and/ or other documents in such a manner that the said Trade Mark may in any
way be diluted in respect of distinctiveness of validity if necessary and
indication either usually, phonetically may be given to the purchasing public
to the extent that the User uses the said mark by way of permitted use
only."
Indisputably, the
firm 'Ramdev Masala Stores' was dissolved on 04.11.1991. Yet again a new
partnership firm came into being under the name and style of 'Ramdev Exports'.
The said partnership firm was constituted for the purpose of export of spices
manufactured by the appellant company.
It is not in dispute
that the business of manufacturing and selling of spices under the trade name
of 'Ramdev' was being run by the three brothers through the appellant company.
Another partnership
firm being 'Ramdev Masala' was being run through seven outlets for retail sale
of the products of the Company.
It is also not in
dispute that both the firms 'Ramdev Masala' and 'Ramdev Exports' had distinct
and separate existence. Their areas of operation were also different. The respective
roles assigned to each of the partnership firm had clearly been specified in
their respective partnership deeds. Whereas M/s. Ramdev Masala was allowed to
manufacture and trade in spices, the business of M/s. Ramdev Exports was
limited to export of the spices manufactured by the appellant company. Yet
again, the partnership deed of Ramdev Masala was amended on 01.04.1995; in
terms whereof the business of the said firm was confined only to trading in
spices manufactured by the appellant company. In other words, the respective
businesses under the partnership deeds of the said firms are stated to be as
under :
a. Type of business
of Ramdev Masala under the first partnership deed was grinding and selling of
spices.
b. Type of business
of M/s. Ramdev Masala under the second partnership deed was trading in spices.
c. The business of
M/s. Ramdev Exports was exporting the goods manufactured by the appellant
company.
DISPUTES
Disputes and
differences having arisen between the members of the family and in particular
between the three brothers, the same was settled by their well-wishers,
pursuant whereto and in furtherance whereof a Memorandum of Understanding (MOU)
was executed by and between the parties, to which we would advert to a little
later.
LEGAL PROCEEDINGS
On the premise that
the respondents had been infringing its rights, trade name and logo, the
appellant company filed a suit in the City Civil Court, Ahmedabad, which was
numbered as CS No.828 of 2000, inter alia, for the following reliefs :
"A) The
defendants by themselves, their
servants, agents,
partners and all persons claiming through or under them be restrained by a
perpetual order of this Hon'ble Court from, in any manner, using the trade mark
'RAMDEV' in their label, packing materials, advertising materials, business
materials etc., in respect of goods which are covered under registration of the
plaintiff's mark and/or any mark which may be identical and/or deceptively
similar to the plaintiff's registered trade mark and thereby restrain them from
infringing the
plaintiff's registered trade mark bearing No. 447700 and other marks bearing
No.531084, 531085, 545253, 545253, 545255,545257 and 545258."
An application for
injunction was also filed wherein the following interim prayers were made :
"(A) The
defendants by themselves, their servants, agents, partners and all persons
claiming through or under them be restrained by an order of temporary
injunction of this Hon'ble Court from, in any manner, using the trademark
'RAMDEV' in their label, packing materials, advertising materials, business
materials etc. in respect of goods which are covered under registration of the
plaintiff's mark and/or any mark which may be identical and/or deceptively
similar to the plaintiff's registered trade mark and thereby restrain them from
infringing the plaintiff's registered trade mark bearing No.447700 and other
marks bearing No.531084, 531085, 545253, 545255. 545257 and 545258, till the
hearing and final disposal of the suit.
(B) The defendants by
themselves, their servants, agents, partners and all persons claiming through
or under them be restrained by an order of temporary injunction of this Hon'ble
Court from using in relation to any spices, masala bearing the name 'RAMDEV' as
produced with separate list or any label or packing material or advertising
material containing the trade mark 'RAMDEV' and/or any mark which is identical
and/or mark containing word 'RAMDEV' either on label or in trading style or
trading name, so as to pass off the defendants goods and/or business as that of
the plaintiff, till the hearing and final disposal of the suit."
An application was
also filed for appointment of a Court Commissioner.
DEFENCES OF THE
RESPONDENTS
The principal
defences raised by the respondents in the said suit are as under:
(i) The appellant has
no exclusive statutory right to use 'Ramdev' apart from the label as a whole.
(Sections 15 and 17 issue)
(ii) The first
respondent has a right to use the mark as concurrent user; (Section 29 issue)
(iii) That the use
complained of is protected, as bona fide user and furthermore the appellant is
not entitled to the reliefs sought for as the same were barred under the
principles of estoppel, acquiescence, etc.
ORDER ON THE
APPLICATION FOR INJUNCTION
By a judgment and
order dated 17.03.2000, the learned Trial Judge opined that the plaintiff
company was the owner of the trademark. It was further held that the defendants
had started manufacturing and marketing the same business which is deceptively
similar to the trademark of the plaintiff which created confusion in the mind
of public. However, the defendants were given liberty to manufacture spices in
their factory and sell the same in seven outlets under the trademark 'Ramdev
Masala'.
On an interpretation
of the said MOU dated 30.05.1998, it was, inter alia, held :
"Therefore, if
there is agreement between the parties that the defendant No.1 should purchase
spices from the plaintiff for the purpose of retail- sale in 7 outlets, it must
have been mentioned in the MOU. No such condition is mentioned. If that be so,
it cannot be presumed that the defendants should purchase spices from the
plaintiff for the purpose of retail-sale in 7 outlets. In case of
written-agreement between the parties, it should be taken as it is. It should
be read as it is. No additional terms and conditions or agreement can be
presumed. Therefore, in absence of any
specific condition
that the defendants should sell spices by using trade-mark "Ramdev"
in 7 outlets by purchasing the goods from the plaintiff is not believable.
13. This condition
also does not seem to be possible
14. The defendants have arranged for the packing
material bearing regd. trade-mark
"Ramdev"
and used the same for the purpose of retail business. These facts clearly
suggest that there was no restriction on the defendants to purchase spices from
the plaintiff for the purpose of retail business in 7 outlets. On the contrary,
the defendant was at liberty to manufacture in their factory and sell the same
in 7 outlets for the purpose of retail business.
15. Relevant portion
of MOU is reproduced earlier. Accordingly, the defendants are permitted to use
the trade-mark or logo "Ramdev" for the purpose of retail-sale in 7
outlets. The words used suggest that the defendants were entitled to use the
trade-mark "Ramdev" without any restriction for the purpose of retail
sale of spices. It was not compulsory on the part of the defendants to purchase
spices from the plaintiff. They can arrange or manufacture in their way and
sell the same in 7 retail outlets under the trade-mark "Ramdev".
21. Therefore, he
cannot sell spices in other shops under the trade-mark "Ramdev". He
can run spices' business and other business in his shop Ramdev Masala. The
plaintiff cannot restrict him."
The respondents had
been selling a large variety of spices under the trade name "Swad".
However, the packings and labels adopted by them were also held to be
deceptively similar to the trade-mark "Ramdev" of the appellant.
Although they had been manufacturing and marketing spices under the trade name
'swad', the respondents had been writing the words "Ramdev Masala" in
such a manner that it creates confusion in the minds of customers. It was,
therefore, opined that the respondents had been passing off their goods as if
it was manufactured by the appellant. The learned Judge, however, opined that
as per the provisions of the Prevention of Food Adulteration Act, 1955, it was
mandatory to disclose the name and address of the manufacturer they have been writing
their name "Ramdev Masala" as manufacturer which does not create any
deception or confusion. Noticing that the appellant got it entered in the
records of the Registrar of Trade Mark by following due procedure and
acknowledging that the appellant company is the registered proprietor of trade
name bearing logo of "Ramdev", it was held that as the respondents
had started manufacturing and marketing spices under the trade name
"swad" and they had been selling spices in small packets and in view
of the averments made by the appellant that the labels and packings adopted by
the respondents were deceptively similar to the registered trademark 'Ramdev'
and, therefore, passing off goods as it is manufactured by the plaintiff. The
learned Judge further observed :
"Comparing the
packing material and label of both the parties, it is clear that the label of
the defendants is phonetically and visibly similar with the label of the
plaintiff. It is deceptively similar with the label of the plaintiff. It
creates deception as well as confusion in the minds of customers who are
literate, illiterate, male or female, who used to purchase in retail market
from small shops as well as big departmental stores. Therefore, there is every
likelihood of passing off the goods of the defendants as if it is manufactured
by the plaintiff."
It was opined :
"As stated
earlier, it is proved that the
plaintiff is the
regd. proprietor of trade-mark "Ramdev" bearing registration
No.44770. The plaintiff has acquired goodwill and reputation of the trade mark
"Ramdev Masala" in the market. Packing and label adopted by the
defendants for their products "Swad" containing the word
"Ramdev
Masala" on the front page of the label in larger size, in first alphabet
definitely creates deception and confusion. It is deceptively similar with the
trade-mark of the plaintiff. Therefore, the plaintiff has proved prima facie
case on this point. As regards the balance of convenience and
irreparable injury,
it is settled legal position that in case of deception public at large is
affected. Unvaried customers are likely to be deceived. When prima facie case
is proved, it is necessary in the interest of justice to maintain status quo.
Considering above all facts and circumstances, injunction should be granted against
the defendants."
The learned Judge
summarised his findings as under :
"Para 41 (i) The
defendant No.1 and consequently all defendants are entitled to use trade mark
"Ramdev" for the retail business of spices in 7 outlets as mentioned
in M.O.U. It is not mandatory for the defendants to purchase goods from the plaintiff
for retail sale in the said outlets. The defendants are at liberty to
manufacture spices in their factory and carry on retail business in 7 outlets
by using trade-mark "Ramdev" bearing registration No.44770.
(ii) The defendant
No.1 is at liberty to run business under the trade name "Ramdev Masala"
for retail and wholesale business of spices, instant mix and other articles. However,
he should not use trade-mark "Ramdev" except 7 outlets as mentioned
in
M.O.U.
(iii) Label and
packing adopted by the defendants for their goods under the trade- name
"Swad" containing word "Ramdev Masala" is creating
infringement of the trade-mark of the plaintiff as it is deceptively similar.
Therefore, the defendants should be prevented in using the word "Ramdev
Masala" on their label and packing in any manner. However, the defendants
are at liberty to manufacture and market spices in any trade name without using
the word "Ramdev" or "Ramdev Masala".
The respondents were,
thus, restrained by temporary injunction from using registered trademark, logo
'Ramdev' or any other trademark, which is identical and deceptively similar to
the trademark of the appellant in respect of label and packing material of
their goods except in seven outlets mentioned in MOU till final disposal of the
suit. They were held to be at liberty to run business of spices under the trade
name 'Ramdev Masala' without using the registered trademark 'Ramdev Masala'
except in seven outlets.
HIGH COURT JUDGMENT
Both the parties
preferred appeals there against before the High Court. The High Court by reason
of its judgment opined:
(i) The chain of
events goes to show that the business of grinding spices by using the words
"Ramdev" and "Masala" in the formation of firm name
continued all throughout and, thus, the respondents could be restrained from
carrying on business of manufacturing and selling of spices.
(ii) The respondents
were permitted users in view of the registered user agreement executed between
the parties. (iii) The effect of the MOU could not be wholly determined as the
deeds of retirement had not been produced.
(iv) Even if the MOU
is kept out of consideration in view of the Rules framed under Prevention of
Food Adulteration Act and Standards of Weights and Measures Act, the
manufacturer is duty bound to display its name and address in the manner, size
and placement as prescribed, on the packets. Thus, once a statute prescribes an
obligation on manufacturer and stipulates the minimum standards of measurement,
the manufacturer is bound to act in accordance with law and cannot be
restrained from complying with specific statutory provisions.
It, while upholding
the findings of the learned trial Judge contained in paragraphs 41(i) and
41(ii); in respect of the directions contained in Para 41(iii), opined:
"42.3 However,
finding in paragraph 41(iii) of the impugned judgment requires to be modified.
The trial court was in error for the aforestated reasons when it held that
printing and publication of the principal display panel was creating
infringement of trade mark as it was deceptively similar. The defendants cannot
be prevented from using the words "Ramdev" and "Masala" on
their label and packing in light of the statutory requirements as stated
hereinbefore. However, the defendants shall print the name of the manufacturer
using only the minimum standard prescribed, depending upon the nature of the
packing and the placement of the principal display panel shall be only at the
bottom on the reverse side of the packing and the front portion of the packing
shall not carry any principal display panel except for its own brand name
"SWAD".
SUBMISSIONS:
Mr. C.A. Sundaram and
Mr. Ashok Desai, learned Senior Counsel appearing on behalf of the appellant,
in support of these appeals submitted :
(i) The appellant was
entitled to an order of injunction in view of the well-settled principles of
law that in case of a registered trade mark, the use thereof by any other
person would constitute an infringement thereof.
(ii) As there can be
only one mark, one source and one proprietor and in particular having regard to
the public interest, it was impermissible for the Trial Judge as also the High
Court to allow the respondents to use the registered trade mark of the
appellant either in the seven outlets or the goods manufactured by them
independently.
(iii) The trade mark
'Ramdev Masala' used by the respondents being deceptively similar with that of
the registered trade mark, the same would interfere with the quality control
product of the appellant and, thus, an order of injunction as was prayed for
should have been passed.
(iv) The learned
Trial Judge as also the High Court misconstrued and misinterpreted the
provisions of the 1958 Act vis-`-vis Prevention of Food Adulteration Act and
Standards of Weights and Measures Act, as in a case of such nature, a mandatory
injunction could be issued directing change of the corporate name of the
respondent No.1; as the appellant's right to protect its trade mark is
absolute.
(v) By reason of the
MOU, the respondents were only allowed to carry on the existing trade and
thereby the respondents were not permitted to start manufacturing spices under
the name and style of 'Ramdev Masala' as would be evident from the fact that
they were only entitled to carry on retail business from the seven outlets for
the purpose of selling only the end products upon printing the words "not
for resale" which is a clear pointer to the fact that merely a right to trade
therefrom and not manufacture of spices in the said name had been granted in
terms thereof.
Mr. F.S. Nariman,
learned Senior Counsel appearing on behalf of the respondents, on the other
hand, submitted:
(i) The appellant
could exercise their right only for the purpose of implementing the MOU which
must be read with the deed of retirement dated 1st June, 1998, the remedies
under the Trade Marks Act are not available against the respondents who were
members of the family.
(ii) The Company,
although was not a party to the MOU, but having been represented by the
Directors therein must be held to be bound thereby and the parties to the MOU
having not filed any special leave petition in their individual capacities, these
appeals are liable to be dismissed.
(iii) As a
distinction exists between a lis based on infringement of a registered trade
mark and passing off, the principles which are applicable for grant of
injunction in an action for passing off are applicable in the instant case.
(iv) The claim of the
appellant to obtain an order of injunction is clearly barred by Sections 15(1)
and 15(2) of the 1958 Act insofar as a distinctive label having been registered
as a whole, no order can be passed restraining the defendants from using a part
thereof, as has been held in The Registrar
of Trade Marks v. Ashok Chandra Rakhit Ltd. [(1955) 2 SCR 252] and
Re Cadbury Brothers' Application [1915 (2) Ch. 307].
(v) The appellant
itself having applied for 'Ramdev' as a separate trade mark as would appear
from a public document, viz., the Trade Mark Journal No. 6 dated 25.11.2003 and
the said trade mark having not yet been registered in its favour, no order of
injunction as had been prayed for can be passed in its favour.
(vi) In any event, if
an order of injunction is passed, against the respondents, they would have to
be completely dependent upon the appellant for carrying on business which would
lead to discord between the members of the family, which was sought to be
avoided by the MOU.
(vii) In view of the
stipulations made in the MOU whereby and whereunder Shri Arvindbhai became the
absolute owner of both 'Ramdev Exports' and 'Ramdev Masala' and Hasmukhbhai and
Pravinbhai haing given up their right thereupon, the First respondent is
entitled to carry on the said business in those names which were not required
to be changed by reason of the said MOU.
(viii) Furthermore,
the stipulations made in the MOU clearly do not oblige the respondent to buy
any product from the appellant- Company, and in the event, if it be held that
the respondent is bound to sell only the products of the appellant, running of
business by the respondent would clearly depend upon the supply of the materials
by the appellant alone.
(ix) As by reason of
the said MOU, the respondent No.1 became entitled to use of mark from seven
outlets, the same envisages its right to sell goods having the said mark and
not sell of the plaintiffs' goods alone. The MOU must be interpreted in the
light of the deed of retirement dated 1.6.1998, which categorically contained a
stipulation that the continuing partner "have also decided to continue the
said business in the same firm names, viz., 'Ramdev Exports' and 'M/s. Ramdev
Masala'" and, thus, the appellant cannot now turn round and contend that
the respondent cannot carry on business of grinding and selling masala.
(x) In the event the
appellant's contention is accepted, the right of the respondent to continue the
business under the name and style of or in the firm name of 'M/s. Ramdev
Masala' and 'Ramdev Exports' would become inconsistent with the deed of
retirement of Hasmukhbhai and Pravinbhai from 'M/s. Ramdev Masala' and 'Ramdev
Exports'.
Dr. A.M. Singhvi,
learned senior counsel appearing on behalf of some of the respondents
supplemented Mr. Nariman urging that a document upon reading contextually may
be found to be a family settlement although the said expression was not used
therein. It was, therefore, urged that the courts would lean strongly in favour
of the family settlement and the MOU, so read, would operate as estoppel
against the other family members who have taken advantage thereof from denying
or disputing implementation thereof.
STATUTORY PROVISIONS
It is not in dispute
that the lis between the parties would be governed by the 1958 Act.
"Deceptively
similar" has been defined in Section 2(d) of the 1958 Act to mean as
under:
"A mark shall be
deemed to be deceptively similar to another mark if it so nearly resembles that
other mark as to be likely to deceive or cause confusion."
Section 2(j) defines
"Mark" to include "a device, brand, heading, label, ticket,
name, signature, word, letter or numeral or any combination thereof". The
expression "registered proprietor" has been defined in Section 2(q)
to mean a person for the time being entered in the register as proprietor of
the trade mark in relation to a trade mark. Chapter II provides for appointment
of the Controller-General of Patents, Designs and Trade Marks for the purpose
of the said Act. Sections 15 and 17 read as under:
"15.
Registration of parts of trade marks and of trade marks as a series.--(1) Where
the
proprietor of a trade
mark claims to be entitled to the exclusive use of any part thereof separately,
he may apply to register the whole and the part as separate trade marks.
(2) Each such
separate trade mark shall satisfy all the conditions applying to and have all
the incidents of, an independent trade mark.
(3) Where a person
claiming to be the proprietor of several trade marks in respect of the same
goods or description of goods which, while resembling each other in the
material particulars thereof, yet differ in respect of--
(a) statement of the
goods or services in relation to which they are respectively used or proposed
to be used; or
(b) statement of
number, price, quality or names of places; or
(c) other matter of a
non-distinctive character which does not substantially affect the identity of
the trade mark; or
(d) colour;
seeks to register
those trade marks, they may be registered as a series in one registration.
17. Registration of
trade marks subject to disclaimer. If a trade mark -
(a) contains any
part--
(i) which is not the
subject of a separate application by the proprietor for registration as a trade
mark; or (ii) which is not separately registered by the proprietor as a trade
mark; or
(b) contains any
matter which is common to the trade or is otherwise of a non-distinctive
character, The tribunal in deciding whether the trade mark shall be entered or
shall remain on the register, may require, as a condition of its being on the
register, that the proprietor shall either disclaim any right to the exclusive
use of such part or of all or any portion of such matter, as the case may be,
to the exclusive use of which the tribunal holds him not to be entitled, or
make such other disclaimer as the tribunal may consider necessary for the
purpose of defining the rights of the proprietor under the registration:
Provided that no
disclaimer shall affect any rights of the proprietor of a trade mark except
such as arise out of the registration of the trade mark in respect of which the
disclaimer is made."
Chapter III provides
for the procedure for and duration of registration. The 1958 Act envisages
filing of an application (Section 18), advertisement thereof (Section 20),
opposition thereto (Section 21) and correction and amendment thereof (Section
22). Registration of a trade mark is envisaged in Section 23 of the 1958 Act,
the effect whereof is stated in Section 27 thereof.
The rights which are
conferred by registration are stated in Section 28 of the 1958 Act in the
following terms:
"28. Rights
conferred by registration.--(1) Subject to the other provisions of this Act, the
registration of a trade mark in Part A or Part B of the register 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.
(2) The exclusive
right to the use of a trade mark given under sub-section (1) shall be subject
to any conditions and limitations to which the registration is subject.
(3) Where two or more
persons are registered proprietors of trade marks, which are identical with or
nearly resemble each other, the exclusive right to the use of any of those
trade marks shall not (except so far as their respective rights are subject to
any conditions or limitations entered on the register) be deemed to have been
acquired by any one of those persons as against any other of those persons
merely by registration of the trade marks but each of those persons has otherwise
the same rights as against other persons (not being registered users using by
way of permitted use) as he would have if he were the sole registered
proprietor."
Section 29 provides
for the consequences of infringement of trade marks in the following terms:
"29.
Infringement of registered trade marks.-- (1) A registered trade mark is
infringed by a person who, not being a registered proprietor of the trade mark
or a registered use thereof using by way of permitted use, uses in the course
of trade mark which is identical with, or deceptively similar to, the trade
mark in relation to any goods in respect of which the trade mark is registered
and in such manner as to render the use of the mark likely to be taken as being
used as a trade mark.
(2) In an action for
infringement of a trade mark registered in Part B of the register an injunction
or other relief shall not be granted to the plaintiff if the defendant
establishes to the satisfaction of the court that the use of the mark of which
the plaintiff complains is not likely to deceive or cause confusion or to be
taken as indicating a connection in the course of trade between the goods in
respect of which the trade mark is registered and some person having the right,
either as registered proprietor or as registered user, to use the trade
mark."
Section 33 provides
for saving of vested rights.
INTERPRETATION OF
DEED PRINCIPLES OF
MOU, for the purpose
of these appeals, may be treated to be a family settlement. It is, however,
well-known that intention of the parties to an instrument must be gathered from
the terms thereof examined in the light of the surrounding circumstances. [See Sohan Lal Naraindas v. Laxmidas
Raghunath Gadit, (1971) 1 SCC 276]
In Delta International Ltd. v. Shyam
Sundar Ganeriwalla [(1999) 4 SCC 545], this Court noticed:
"17. For
construction of contracts between the parties and for the interpretation of
such document, learned Senior Counsel, Mr Desai has rightly relied upon some
paragraphs from The Interpretation of Contracts by Kim Lewison, Q.C. as under:
"1.03 For the
purpose of the construction of contracts, the intention of the parties is the
meaning of the words they have used. There is no intention independent of that
meaning.
6.09 Where the
words of a contract are capable of two meanings, one of which is lawful and the
other unlawful, the former construction should be preferred.
Sir Edward Coke [Co.
Litt. 42a] expressed the proposition thus:
'It is a general
rule, that whensoever the words of a deed, or of one of the parties without
deed, may have a double intendment and the one standeth with law and right, and
the other is wrongful and against law, the intendment that standeth with law
shall be taken.'"
It is further stated:
"For that
purpose, he referred to the following observations of Buckley, J. from the
paragraphs which are sought to be relied upon from The Interpretation of
Contracts by Kim Lewison, Q.C.: "My first duty is to construe the
contract, and for the purpose of arriving at the true construction of the
contract, I must disregard what would be the legal consequences of construing
it one way or the other way.""
Moreover, the
document is to be read as a whole. It is equally well settled that the deed has
to be construed keeping in view the existing law.
It is now a
well-settled principle of law that a document must be construed having regard
to the terms and conditions as well as the nature thereof. [Union of India v. M/s. Millenium
Mumbai Broadcast Pvt. Ltd. 2006 (5) SCALE 44]
MOU
We may proceed on the
basis that the MOU answers the principles of family settlement having regard to
the fact that the same was actuated by a desire to resolve the disputes and the
courts would not easily disturb them as has been held in S. Shanmugam Pillai and Others v. K.
Shanmugam Pillai and Others [(1973) 2 SCC 312], Kale and Others v. Deputy Director of
Consolidation and Others [(1976) 3 SCC 119] and Hari Shankar Singhania & Ors. v.
Gaur Hari Singhania & Ors. [JT 2006 (4) SC 251].
Although at one point
of time the appellant-Company had taken a stand that it being not a party to
the MOU, it is not bound by the terms thereof but the same would not mean that
in an action for infringement of trade mark, when the MOU was put as a shield
to its claim, it could not have taken recourse to proper interpretation thereof
for the purpose of determination of the rights of the parties to use the trade
mark in question. It is not a case where the courts refused to lean in favour
of family arrangement or base its decision on technical or trivial ground. We
have been taken through the MOU again and again. It fell for judicial
interpretation. Interpretation processes were undertaken by the Courts below.
The same would also be reviewed by us hereafter.
MOU ANALYSIS OF
The appellant before
us is a Company registered and incorporated under the Companies Act.
Indisputably, the parties to the MOU being Arvindbhai, Hasmukhbhai and
Pravinbhai were its Directors. They are all brothers. All the shares of the
Company were held by them and their family members. The Company although is a
juristic person was not made a party thereto. The effect of the Company being
not a party may have to be considered by the Trial Court in the suit; but, as
the parties for the purpose of disposal of this appeal proceeded on the basis
that the MOU was entered into by and between the parties thereto; an endeavour
shall be made to construe the same as it stands. We would, however, like to
observe that in the event any other attending circumstances are brought on
record by way of adduction of oral evidences, if permissible in law, warranting
a different interpretation of the said MOU, the learned Trial Judge would be at
liberty to do so. We may furthermore place on record that we are construing the
said MOU only for the purpose of disposal of an interlocutory matter which
would not, thus, be binding on the courts below at the final hearing of the
suit.
The broad
propositions which are evident from a perusal of the said MOU appear to be as
under:
Among all the three
brothers, Arvindbhai who was the eldest among them is on one side and
Hasmukhbhai and Pravinbhai are on the other. The division of the assets is broadly
arrived at in that proportion. The Counsel appearing before us proceeded on the
basis that MOU for all intent and purport was a family settlement. Disputes and
differences having arisen between the parties, the said MOU was entered into
with a view to resolve the same as regards the business and property held by
them so as to enable them to be in peace, harmony and understanding in the
family. The said settlement was arrived at through the mechanism of mediation
of the well- wishers of the family. MOU was, thus, entered into for the purpose
of distribution of the properties and business and the same was given effect to
on and from 1.4.1998. It stipulates:
(i) Manufacturing and
selling of masala (spices) and instant mix was being done by the Company.
(ii) The goods used
to be manufactured in a factory situated in village Sola. Another factory was
constructed on block No. 527, 542 and 528 at Changodar. The Joint family, viz.,
the Partnership (Ramdev Masala) had been selling goods in retail in the name of
'Ramdev Masala' to seven outlets named therein.
(iii) The export
business in respect of goods, viz., pepper-spices, instant mix, groceries and
other articles was being done in the name of Ramdev Exports.
The Trade Mark or
trade name which was registered in the name of the company, viz., Ramdev and
its logo of a saint astride on a horse with a standard went to the Company. The
expression "Ramdev" is written in the Gujarati language just above
the said logo and the word "masala" which is again in the Gujarati
language appears just below the same.
Arvindbhai became the
exclusive owner of the business Ramdev Exports (Partnership Firm) and Ramdev
Masala (another Partnership Firm). MOU contained a clarification to the effect
that the other two brothers, viz., Hasmukhbhai and Pravinbhai became the owners
thereof and would carry on the management of the business of the Company. The
two brothers, Hasmukhbhai and Pravinbhai were given the right to carry on
export business under the brand name of 'Ramdev' but in a manner which would
not cause any loss to Arvindbhai or vice-versa. Whereas the land situated at
Sola went to Arvindbhai along with the building, the machineries belonging to
the company remained with the Company. The new factory and machinery also went
to the Company. A right of pre-emption in respect of the trade mark Ramdev was
also created in terms whereof Hasmukhbhai and Pravinbhai was to offer sale of
the said trade mark to Arvindbhai in the event they intend to do so. It was,
thus, made clear that the manufacturing activities were to be restricted to the
Company through Hasmukhbhai and Pravinbhai.
The two brothers,
viz., Hasmukhbhai and Pravinbhai, also had the right to carry out export
business under the brand name of Ramdev but in a manner which would not cause
any loss to the eldest brother or vice-versa.
We have noticed
hereinbefore that the partnership Ramdev Masala had an user agreement for seven
years from 1.4.1991 which lapsed on 31.3.1998. MOU came into force with effect
from 1.4.1998. By reason of the said MOU prima facie Arvindbhai had not been
given any manufacturing right through the user agreement. The trade mark
Ramdev, thus, belonged exclusively to the Company.
Although several
trade marks were registered and belonged to the Company, we are primarily
concerned with the trade mark bearing No. 447700 having the aforementioned
description.
Both the learned
Trial Judge as also the High Court proceeded on the basis that in terms of the
said MOU, the Company acquired an exclusive right to use the same.
It is not in dispute
that the respondents have been manufacturing spices under and name and style of
'Swad'. The said mark is a registered one.
The Courts below
proceeded on the basis that the mark used by the respondents are deceptively
similar to the trade mark registered in favour of the appellant. There is no
dispute in regard to the said findings. We would hereinafter consider the
effect thereof.
TRADE MARK-CONCEPT
The concept of
trade mark dates back to ancient times. Even in the Harappan Civilization marks
of trade with foreign countries such as Mesopotamia and Babylonia were found
embossed on articles. The law of trade marks was formalised with the
process of registration which gave exclusivity to a trader right to deal in
goods using a symbol or mark of some sort to distinguish his goods from similar
goods sold by other traders. Even today the grant of a trade mark is an
indicator of exclusivity in trade under that mark and this right cannot be
transferred. Only a limited right of user can be granted via licence.
In The Modern Law of
Trade Marks by Christopher Morcom, Butterworths 1999, it is stated:
"The concept of
distinguishing goods or services of the proprietor from those of others was to
be found in the requirements for a mark to be registrable. Essentially,
whatever the wording used, a trade mark or a service mark was an indication
which enabled the goods or services from a particular source to be indentified
and thus distinguished from goods or services from other sources. In adopting a
definition of 'trade mark' which simply describes the function in terms of
capability of 'distinguishing the goods or services of one undertaking from
those of other undertakings' the new law is really saying precisely the same
thing."
In Gujarat Bottling Co. Ltd. and
Others v. Coca Cola Co. and Others [(1995) 5 SCC 545], it was held that licensing of trade mark is governed by common law which
is also statutorily permissible provided:
" (i) the licensing
does not result in causing confusion or deception among the public; (ii) it
does not destroy the distinctiveness of the trade mark, that is to say, the
trade mark, before the public eye, continues to distinguish the goods connected
with the proprietor of the mark from those connected with others; and (iii) a
connection in the course of trade consistent with the definition of trade mark
continues to exist between the goods and the proprietor of the mark"
Making use of
another's trade mark is not only a violation of business ethics but has also
been linked to dishonestly making use of the goodwill and reputation built up
and associated with the mark.
In Laxmikant V. Patel v. Chetanbhai
Shah and Another [(2002) 3 SCC 65], it was stated:
"10. A person
may sell his goods or deliver his services such as in case of a profession
under a trading name or style. With the lapse of time such business or services
associated with a person acquire a reputation or goodwill which becomes a
property which is protected by courts. A competitor initiating sale of goods or
services in the same name or by imitating that name results in injury to the
business of one who has the property in that name. The law does not permit any
one to carry on his business in such a way as would persuade the customers or
clients in believing that the goods or services belonging to someone else are
his or are associated therewith. It does not matter whether the latter person
does so fraudulently or otherwise. The reasons are two. Firstly, honesty and
fair play are, and ought to be, the basic policies in the world of business.
Secondly, when a person adopts or intends to adopt a name in connection with
his business or services which already belongs to someone else it results in
confusion and has propensity of diverting the customers and clients of someone
else to himself and thereby resulting in injury."
PURPOSE OF TRADE MARK
A trade mark
is the property of the manufacturer. The purpose of a trade mark is to
establish a connection between the goods and the source thereof which would
suggest the quality of goods. If the trade mark is registered, indisputably the
user thereof by a person who is not otherwise authorised to do so would
constitute infringement. Section 21 of the 1958 Act
provides that where an application for registration is filed, the same can be
opposed. Ordinarily under the law and, as noticed hereinbefore, there can only
be one mark, one source or one proprietor. Ordinarily again right to user of a
trade mark cannot have two origins. The first respondent herein is a rival
trader of the appellant-Company. It did not in law have any right to use the
said trade mark, save and except by reason of the terms contained in the MOU or
continuous user. It is well-settled that when defences in regard to right of
user are set up, the onus would be on the person who has taken the said plea.
It is equally well-settled that a person cannot use a mark which would be deceptively
similar to that of the registered trade mark. Registration of trade marks is
envisaged to remove any confusion in the minds of the consumers. If, thus,
goods are sold which are produced from two sources, the same may lead to
confusion in the mind of the consumers. In a given situation, it may also
amount to fraud on the public. A proprietor of a registered trade mark
indisputably has a statutory right thereto. In the event of such use by any
person other than the person in whose name the trade mark is registered, he
will have a statutory remedy in terms of Section 21 of the 1958 Act.
Ordinarily, therefore, two people are not entitled to the same trade mark,
unless there exists an express licence in that behalf.
DIFFERENT FUNCTIONS
OF A TRADE MARK
We may now note a few
precedents on the function of a trade mark.
In Sumat Prasad Jain v. Sheojanam
Prasad (Dead) and Others and State of Bihar [(1973) 1 SCC 56], this Court held:
"Thus, the
distinction between a trade mark and a property mark is that whereas the former
denotes the manufacture or quality of the goods to which it is attached, the
latter denotes the ownership in them. In other words, a trade mark concerns the
goods themselves, while a property mark concerns the proprietor. A property
mark attached to the movable property of a person remains even if part of such
property goes out of his hands and ceases to be his."
In Canon Kabushiki
Kaisha v. Metro-Goldwyn-Mayer Inc. [(1999) RPC 117], the European Court of
Justice emphasised the test of likelihood of confusion in the following terms:
"40. That view
is also confirmed by the judgment of the court in SABEL, in which it held that
the "likelihood of confusion mustbe appreciated globally, taking into
account all factors relevant to the circumstances of the case" (at
paragraph 22). It is true that that statement was made in a different context:
the court was there considering the question whether conceptual similarity of
the marks alone could give rise to confusion within the meaning of Article
4(1)(b), in a situation in which the goods in question were clearly the same.
However, the statement is one of general
application."
In Baker Hughes Limited v. Hiroo
Khushalani [1998 PTC (18) 580], the question
as regards likelihood of confusion even by the enlightened public was noticed
in the following words :
"Again in
Grotrian, Helfferich, Schulz, Th. Steinweg Nachf, a Corporation Vs. Steinway
& Sons, a corporation, 365 F.Supp. 707 (1973), striking a similar note the
Court held as under:
"Plaintiff
argues that purchaser will not be confused because of the degree of their sophistication
and the price (B & L Sales Associates Vs. H. Daroff & Sons, Inc., supra,
421 F.2d at 354). It is true that deliberate buyers of expensive pianos are not
as vulnerable to confusion as to products as hasty buyers of inexpensive
merchandise at a newsstand or drug store [Callmann, Unfair Competition
Trademarks and Monopolies, (3d ed. 1971)]. The sophistication of buyers,
however, does not always assure the absence of confusion [Communications
Satellite Corp. Vs. Comcet, Inc., 429 F.2d at 1252]. It is the subliminal
confusion apparent in the record as to the relationship, past and present, between
the corporate entities and the products that can transcend the competence of
even the most sophisticated consumer.
Misled into an
initial interest, a potential Steinway buyer may satisfy himself that the less
expensive Grotrian-Steinweg is at least as good, if not better, than a
Steinway. Deception and confusion thus work to appropriate defendant's good
will. This confusion, or mistaken beliefs as to the companies'
interrelationships, can destroy the value of the trademark which is intended to
point to only one company [American Drill Busing Co. v. Rockwell Mfg. Co., 342 F.2d
1922, 52 CCPA 1173 (1965)]. Thus, the mere fact that purchasers may be sophisticated
or discriminating is not sufficient to preclude the likelihood of confusion.
"Being skilled in their own art does not necessarily preclude their mistaking
one trademark for another when the marks are as similar as those here in issue,
and cover merchandise in the same general field" [Id].
Having regard to the
above discussion prima facie I am of the opinion that the word Baker occurring
in the corporate name of the second defendant suggests its connection or nexus
with 'Baker', which depicts a wrong picture as from February, 1995 'Baker' has
terminated its relation with the defendants. The continuance of the word Baker
as part of the corporate name of the second defendant is likely to cause
deception and confusion in the mind of the customers. There would be no justification
for the second defendant to use the word Baker as part of its corporate name
after the ties between the first plaintiff and the second defendant have ceased
to exist."
The said decision has
been noticed by this Court in Baker Hughes
Ltd. and Another v. Hiroo Khushlani and Another [(2004) 12 SCC 628].In Milmet Oftho Industries and Others
v. Allergan Inc. [(2004) 12 SCC 624], in regard to medicinal
products, this Court opined:
"Whilst
considering the possibility of likelihood of deception or confusion, in present
times and particularly in the field of medicine, the courts must also keep in
mind the fact that nowadays the field of medicine is of an international
character. The court has to keep in mind the possibility that with the passage
of time, some conflict may occur between the use of the mark by the applicant
in India and the user by the overseas company. The court must ensure that
public interest is in no way imperilled"
We may in this
connection notice a recent judgment of the European Court of Justice in Canon
Kabushiki Kaisha (supra) wherein it was opined:
"28. That case
concerned the interpretation of Article 4(1)(b) of the Directive in so far as
it refers to "a likelihood of confusion on the part of the public, which
includes the likelihood of association with the earlier trade mark". The
court explained that it had been submitted that "the likelihood of association
may arise in three sets of circumstances: (1) where the public confuses the
sign and the mark in question (likelihood of direct confusion); (2) where the
public makes a connection between the proprietors of the sign and those of the
mark and confuses them (likelihood of indirect confusion or association); (3)
where the public considers the sign to be similar to the mark and perception of
the sign calls to mind the memory of the mark, although the two are not
confused (likelihood of association in the strict sense). (Paragraph 16 of the
judgment).
29. The court stated
that it was therefore necessary to determine "whether Article 4(1)(b) can
apply where there is no likelihood of direct or indirect confusion, but only a
likelihood of association in the strict sense" (paragraph 17 of the
judgment). It concluded: "The terms of the provision itself exclude its
application where there is no likelihood of confusion on the part of the
public". (paragraph 18 of the judgment). Thus, the court held that
"the mere association which the public might make between two trade marks
as a result of their analogous semantic content is not in itself a sufficient
ground for concluding that there is a likelihood of confusion" within the
meaning of Article 4(1)(b)."
TRADE MARK AND
GOODWILL
Traditionally,
a trade mark has always been considered a vital and inseparable part of the
goodwill of the business. In fact, the sale of a trade mark without the sale of
the goodwill to the same buyer is considered null and void. However, the trade
mark can be assigned with or without the goodwill of business though subject to
certain conditions. [See V.A. Mohta's Trade Marks, Passing Off and
Franchising, pages 12, 313.]
ENTITLEMENT TO USE
The contention of the
appellant before the Courts below was that its right to the said trade mark has
been entrenched by the respondents on account of use of the same as part of the
trade name in view of the fact that although it has started the business in the
trade name 'Swad', the first respondent, on the label and the packing material
of the said product, had printed the name of the manufacturer 'Ramdev Masala'
in such a prominent manner that the same would create an impression in the mind
of the ordinary unwary customer that the same is a product of the appellant
Company. It also alleged that the respondents had adopted advertisements,
marketed and displayed boards in such a manner so as to deliberately deceive
the customer.
The concurrent
finding of fact arrived at by both the courts was that the packing material and
wrapper of both the parties was phonetically and visibly similar to the
registered mark. The packing material and label used by the respondents were
deceptively similar to that of the appellant and the same creates deception as
well as confusion in the minds of customers who are literate, illiterate, male
or female, who used to purchase in retail market from small shops as well as
big departmental stores.
The learned Trial
Court as also the High Court proceeded on the basis that the respondents are
entitled to use the said trade mark by reason of the stipulations contained in
the said MOU as a result whereof they became entitled to use the trade mark
Ramdev for their retail business of spices in seven outlets, which used to be
belonging to the company. The said outlets were meant to be used for retail
sale of the products of the appellant alone.
The learned Trial
Judge as also the High Court, however, failed to notice two significant and
important provisions in the said MOU, viz., (i) the defendants could not carry
on business in wholesale of the said products; (ii) it was meant to be sold
directly to the consumers and on the productions "not for resale" was
required to be printed on each packet. What, therefore, could be done by the
respondents was to sell the products of the appellant through the said outlets.
It was one of the primary business of the partnership firm which was given to
the first respondent. Prima facie, therefore, the first respondent could sell
only the product of the appellant. The respondents, however, were not
restrained from manufacturing spices in their own factory. They were entitled
to do so. They started the same under the brand name of 'Swad'. They could even
use the same retail outlets for the purpose of promoting their own products but
prima facie they could not use the mark registered in the name of the appellant
Company. The registration number of trade mark is 447700. Once the appellant
had acquired goodwill and reputation thereto, in the event of any infringement
to the said right, the remedies provided for in the 1958 Act would be available
to it. The terms of the MOU, in our opinion, are clear and unambiguous. It was
required to be construed, even if it was obscure to some extent by making
attempt to uphold the one which would be in consonance with law and not offend
the same. Quality control by a registered trade holder vis-`-vis the one
produced by an unregistered one is one of the factors which is required to be
taken into consideration for the purpose of passing an order of injunction. It
is one thing to say that the respondents were permitted to carry on trade but
it would be another thing say that they would be entitled to manufacture and
market its products under a name which would be deceptively similar to that of
the registered trade mark of the appellant. So long the parties to an
arrangement can continue to carry out their respective businesses without
infringing the right of another, indisputably the terms thereof must be given
effect to. But the matter would be entirely different when a party who has not
been expressly authorised to manufacture the goods in which the Company had
been carrying on business under the same name, the respondents under law could
not have been permitted to carry on the manufacturing and marketing of their
products under the same name. In a case of this nature, even a mandatory
injunction can be granted. The respondents in the instant case have adopted a
part of the appellant's registered trade mark as a part of its corporate name.
They had merely been permitted to trade from seven outlets. In that view of the
matter, they had a limited right under the MOU and by reason thereof they could
not have been permitted to start manufacturing of spices under the name and
style of 'Ramdev Masala'. Even under the common law, licence has to be
interpreted to subsume the law and prevent the mischief which is deceptive
having regard to the fact that trafficking in trade mark is not permitted.
It is true that the
respondents have been permitted in terms of the MOU to continue their business
in the name of the partnership firm and to use the label mark, logo, etc. but
the said MOU must be construed in the light of the law operating in the field.
For the said purpose, prima facie, the deeds of retirement are not required to
be looked into. When a right to use a trade mark is given, such a right can be
exercised only in the manner laid down therein. If in absence of any express
licence or agreement to use its label the respondents use the self-same trade
mark, the same would not only lead to confusion but may also cause deception.
Even a common law licence, it is well-settled, cannot result in the dilution of
the trade mark.
In that view of the
matter, we are not in a position to subscribe to the views of the learned Trial
Judge and the High Court that although the first respondent would be at liberty
to carry on the business of manufacture of spices, it can use the mark 'Ramdev'
only in seven outlets. It evidently in view of the legal position, could do so
in respect of the products of the appellant alone, which would be evident from
the fact that at the relevant point of time, the respondents were not carrying
any such business. The direction of the learned Trial Judge that the
respondents should be prevented from using the word "Ramdev Masala"
and their label and packing, however, has been over-turned by the High Court on
the premise that they are required to observe the statutory requirements under
the Prevention of Food Adulteration Act, 1955 as also the Standards of Weights
and Measures Act, 1976.
NON-OBSTANTE
PROVISIONS
The non-obstante
nature of a provision although may be of wide amplitude, the interpretative
process thereof must be kept confined to the legislative policy. A non-obstante
clause must be given effect to, to the extent the Parliament intended and not
beyond the same. [See ICICI
Bank Ltd. v. Sidco Leathers Ltd. & Ors., 2006 (5) SCALE 27]
The question which
also escaped the attention of the High Court was that having regard to the
non-obstante clause contained in the 1958 Act ordinarily for any purpose, the
trade mark cannot be infringed. If an infringement of trade mark is
established, the onus would be on the defendants to show that he is entitled
thereto either by reason of acquiescence on the part of the owner of the
registered trade mark or he himself has acquired a right thereto. The
Provisions of the Standards of Weights and Measures Act or the Prevention of
Food Adulteration Act do not confer such right. Yet again, significantly, a
pre-emptive right had been conferred in favour of the first respondent which is
itself suggestive of the fact that the first respondent admitted and
acknowledged the right of the appellant to the said trade mark.
In the MOU,
furthermore it was categorically stated that the use of the trade mark was only
to the extent of retail sale as on the packages, the words "not for
resale" were to be printed. If the parties intended to allow the first
respondent herein to manufacture his own products and to market the same by
using the name of Ramdev Masala, the question of grant of a right to sell only
in retail and that also printing the words 'not for resale' would not have
arisen. A manufacturer is not only entitled to sell his own products in retail
but also in wholesale. It can use any outlet for the said purpose whether
belonging to it or any other. It would lead to an anomaly if it be held that
the first respondent would be permitted not only to sell the products of the
appellant but also its own products under the same trade name albeit only from
the seven outlets.
By reason of the said
MOU, the respondents are not bound to buy any product from the appellant but
there is an obligation on the part of the appellant to supply the same as
otherwise it would lead to closure of business of Arvindbhai which would have
been the intention of the parties. When the parties had settled their disputes,
it was expected that the outlets would be utilised for the purposes for which
they were meant to be utilised. What were the mutual obligations of the parties
is a matter which can be considered only at the trial or in any other
appropriate proceeding, but prima facie it goes without saying that the first
respondent, in any event, was entitled to sell also his own products from the
said outlets. The parties for the said purpose thought of remaining mutually
dependent as it was stipulated that while also competing with each other they
would see to it that by action of one, the other is not harmed at least while
exporting the materials. It is, thus, not a case where the appellant having
taken advantage of the terms of the MOU had resiled therefrom and in that view
of the matter the principle of estoppel cannot be said to have any application
in the instant case.
We are also not in a
position to accept the submission of Mr. Nariman that the MOU must be read with
the deed of partnership or the deeds of retirement whereby and whereunder the
firm 'Ramdev Masala' and 'Ramdev Exports' were permitted to use the word
'Ramdev'.
What is registered is
a logo wherein the words 'Ramdev' and 'Masala' are prominent. A person may be
held to be permitted to carry on business in spices as contradistinguished from
the permission to carry on manufacturing goods which are similar to that of the
appellant, but in terms of the statutory provisions, the respondents were not
legally permitted to sell its products in packages or labels which would be
deceptively similar to that of the registered owner of a trade mark. The right
to manufacture masala and to sell the same with the registered logo, it will
bear repetition to state, was assigned as far back in 1991. If the contention
of the Senior Counsel is accepted, the said purpose would be lost. In a case of
this nature, therefore, ordinarily an injunction would issue.
By reason of
interpretation of MOU, trade mark cannot be infringed and further when the
right of user has been relinquished, the same could not have been claimed by
the respondents.
WAIVER
The matter may be
considered from another angle. If the first respondent has expressly waived his
right on the trade mark registered in the name of the appellant-Company, could
he claim the said right indirectly? The answer to the said question must be
rendered in the negative. It is well-settled that what cannot be done directly
cannot be done indirectly.
The term 'Waiver' has
been described in the following words: "Waiver is the abandonment of a
right in such a way that the other party is entitled to plead the abandonment
by way of confession and avoidance if the right is thereafter asserted, and is
either express or implied from conduct.A person who is entitled to rely on
a stipulation, existing for his benefit alone, in a contract or of a statutory
provision may waive it, and allow the contract or transaction to proceed as
though the stipulation or provision did not exist. Waiver of this kind depends
upon consent, and the fact that the other party has acted upon it is sufficient
consideration It seems that, in general, where one party has, by his words or
conduct, made to the other a promise or assurance which was intended to affect
the legal relations between them and to be acted on accordingly, then, once the
other party has taken him at his word and acted on it, so as to alter his
position, the party who gave the promise or assurance cannot afterwards be
allowed to revert to the previous legal relationship as if no such promise or
assurance had been made by him, but he must accept their legal relations
subject to the qualification which he has himself so introduced, even though it
is not supported in point of law by any consideration.
[See 16 Halsbury's
Laws (4th edn) para 1471]
Waiver may sometimes
resemble a form of election, and sometimes be based on ordinary principles of
estoppel. [See 45 Halsbury's Laws (4th edn.) para 1269]
In Indu Shekhar Singh & Ors. v.
State of U.P. & Ors. [2006 (5) SCALE 107], this Court held:
"They, therefore,
exercised their right of option. Once they obtained entry on the basis of
election, they cannot be allowed to turn round and contend that the conditions
are illegal"
SECTIONS 15 AND 17
ISSUE
Section 15 of the
1958 Act postulates registration of the whole and a part thereof as separate
trade marks. The nature of the trade mark of the appellant has been noticed
hereinbefore.
There are three
elements in the said trade mark, viz., 'Ramdev', 'Masala' and the 'horse'. The
deception could be as regard the prominent features of the said trade mark.
Section 15 of the
1958 Act, in our considered opinion, is not attracted in the instant case. By
reason of the said provision, registration of trade mark in regard to the
exclusive use is permissible both in respect of the whole trade mark as also
the part thereof separately. Where such separate trade mark in regard to a part
of it is applied for, the applicant must satisfy the conditions applying to and
have all the incidents of an independent trade mark. Sub-section (3) of Section
15 of the 1958 Act provides for a case where the proprietor of several trade
marks claimed registration in respect of the same goods or description of the
goods which while resembling each other in the material particulars thereof yet
differ in respect of the matters provided for therein. We are not, in this
case, concerned with such a legal question.
In Ashok Chandra
Rakhit Ltd. (supra), whereupon reliance has been placed by Mr. Nariman, this
Court was concerned with a proprietary mark of 'Shree'. It was claimed that the
mark 'Shree' was a trade mark apart from the device as a whole and it was an
important feature of its device. The respondents were carrying on business in
the name and style of Shree Durga Charan Rakshit. It was in the peculiar
factual background obtaining therein, this Court, referred to the decision of
Lord Esher in Pinto v. Badman [8 RPC 181] to say that where a distinctive label
is registered as a whole such registration cannot possibly give any exclusive
statutory right to the proprietor of the trade mark to the use of any
particular word or name contained therein apart from the mark as a whole. This
Court in the aforementioned factual backdrop opined:
"This, as we
have already stated, is not quite correct, for apart from the practice the
Registrar did advert to the other important consideration, namely, that on the
evidence before him and the statement of counsel it was quite clear that the
reason for resisting the disclaimer in this particular case was that the
Company thought, erroneously no doubt but quite seriously, that the
registration of the trade mark as a whole would, in the
circumstances of this
case, give it a right to the exclusive use of the word "Shree" as if
separately and by itself it was also its registered trade mark and that it
would be easier for it to be successful in an infringement action than in a
passing off action. It was precisely the possibility of such an extravagant and
untenable claim that called for a disclaimer for the purpose of defining the
rights of the respondent company under the registration" (Emphasis
supplied)
The said decision has
no application to the fact of this case.
Mr. Nariman is also
not correct in contending that only a label has been registered and not the
name 'Ramdev'. Definition of 'mark' as contained in Section 2(j) of the 1958
Act also includes name, signature, etc.
SECTION 29 ISSUE
Section 28 of the
1958 Act confers the right of registration whereas Section 29 thereof provides
for the remedies for infringement of trade mark. What is needed by way of cause
of action for filing a suit of infringement of trade mark is use of a
deceptively similar mark which may not be identical. What would be deceptively
similar, as defined in Section 2(d) of the 1958 Act, would be a mark if it
nearly resembles that other mark as to be likely to deceive or cause confusion.
It is, therefore, not a case where the respondents could raise valid defence in
terms of Section 29 of the 1958 Act.
The right conferred
in terms of Section 28 of the 1958 Act although is required to be read with
Sections 15 and 17 thereof but it is difficult to accept that each part of the
logo was required to be separately registered. Section 28 of the 1958 Act
confers an exclusive right of using trade mark to a person who has got the
trade mark registered in his name. Such right is, thus, absolute. Sub-section
(3) of Section 28 raises a legal fiction for the purposes specified therein but
we are not concerned therewith in the instant case. Sub-section (2) of Section
29 inter alia provides for the defences.
We may not in this
case go into the question as to whether it was essential having regard to the
provisions contained in the MOU that the user agreement should have been
registered in terms of Section 49 of the 1958 Act as was opined by the High
Court. But, we have no doubt in our mind that the user agreement having come to
an end on 31st March, 1998, i.e., on the expiry of seven years from the date of
execution, the respondents could no more claim any right thereunder. The user
agreement was valid from 01.04.1991 to 31.03.1998. The MOU came into force from
1.4.1998. The right to user has not been conveyed by reason of the said MOU.
The cut off date for determining the respective rights of the parties would,
thus, be 1.4.1998. Submission of the learned counsel that the MOU for the
purpose of Section 28 of the 1958 Act should be read with the partnership deed
is not acceptable to us. In fact, the respondents have consciously relinquished
their right, if any.
It is not a case
where Sections 48 and 49 of the 1958 Act would be applicable so as to enable
the respondents to raise a defence in terms of Section 30(1)(b) thereof.
It is also not a case
where non-registration of MOU as was the case in Amteshwar Anand v. Virender Mohan
Singh and Others [(2006) 1 SCC 148] was taken as a shield to defeat
the purpose of the agreements entered into by and between the parties. In that
case, however, what was contended was that the agreement required registration
in terms of Section 17(1) of the Registration Act whereas the High Court had
found that the user agreement was not registered in terms of Section 49 of the
Act holding:
"The Composition
Deed in this case was a
transaction between
the members of the same family for the mutual benefit of such members. It is
not the appellants' case that the agreements required registration under any
other Act. Apart from this, there is the principle that Courts lean in favour
of upholding a family arrangement instead of disturbing the same on technical
or trivial grounds particularly when the parties' have mutually received
benefits under the arrangement. Both the courts below had concurrently found
that the parties had enjoyed material benefits under the agreements. We have
ourselves also re-scrutinized the evidence on record on this aspect and have
found nothing to persuade us to take a contrary view. Furthermore, in this case
the agreements had merged in the decree of the Court which is also excepted
under Sub-section 2(vi) of Section 17 of the Registration Act, 1908"
In re Cadbury
Brothers' Application (supra), it is stated:
"It seems to me
manifest that the registration of this trade mark cannot give rise to any
rights except a right to the mark as a whole. It cannot give any statutory
rights at all in respect of the word "Tudor"; and, that being so, it
is inexpedient to place on the register an unnecessary disclaimer, because the
effect of so doing is to unsettle the law and give rise to doubts in other
cases, where such disclaimers are not inserted"
For the self-same
reason, this decision is also not applicable.
ESSENCE OF PASSING
OFF ACTION
In a case of this
nature, the test for determination of the dispute would be the same where a
cause of action for passing off arises. The deceptively similar test, thus,
would be applicable herein.
The doctrine
of passing off is a common law remedy whereby a person is prevented from trying
to wrongfully utilise the reputation and goodwill of another by trying to
deceive the public through 'passing off' his goods.
In Kerly's Law of
Trade Marks and Trade Names' Supplement pages 42 and 43, paragraph 16-02, the
concept of passing off is stated as under:
"The law of
passing-off can be summarised in one short general proposition no man may pass
off his goods as those of another. More specifically, it may be expressed in
terms of the elements which the plaintiff in such an action has to prove in
order to succeed. These are three in number.
Firstly, he must
establish a goodwill or reputation attached to the goods or services which he
supplies in the mind of the purchasing public by association with the
identifying 'get-up' (whether it consists simply of a brand name or a trade
descrip- tion,or the individual features of labelling or packaging) under which
his particular goods or services are offered to the public, such that the
get-up is recognised by the public as distinctive specifically of the
plaintiff's goods or services.
Secondly, he must
demonstrate a misrepresentation by the defendant to the public (whether or not
intentional) leading or likely to lead the public to belief that the goods or
services offered by him are the goods or services of the plaintiff.
Thirdly, he must
demonstrate that he suffers or, in a quick time action, that he is likely to
suffer damage by reason of the erroneous belief
engendered by the
defendant's misrepresentation that the source of the defendant's goods or
service is the same as the source of those offered by the plaintiff..."
PASSING OFF -
INFRINGEMENT
Although, the
defendant may not be using the actual trade mark of the plaintiff, the get up
of the defendant's goods may be so much like the plaintiff's that a clear case
of passing off could be proved. It is also possible that the defendant may be
using the plaintiff's mark, the get up of the defendant's goods may be so
different from the get up of the plaintiff's goods and the prices also may be
so different that there would be no probability of deception of the public.
However, in an infringement action, an injunction would be issued if it is
proved that the defendant is improperly using the plaintiff's mark. In an
action for infringement where the defendant's trade mark is identical with the
plaintiff's mark, the Court will not enquire whether the infringement is such
as is likely to deceive or cause confusion. The test, therefore, is as to
likelihood of confusion or deception arising from similarity of marks is the
same both in infringement and passing off actions. [See Ruston & Hornsby Ltd. v. The
Zamindara Engineering Co., (1969) 2 SCC 727]
In Parle Products (P) Ltd. v. J.P.
and Co., Mysore [(1972) 1 SCC 618], emphasis was
laid on the broad and essential features of the impugned mark holding:
"It would be
enough if the impugned mark bears such an overall similarity to the registered
mark as would be likely to mislead a person usually dealing with one to accept
the other if offered to him"
Noticing the
similarity of the mark in question with that of the impugned mark, it was
opined that "if one was not careful enough to note the peculiar features
of the wrapper on the plaintiffs' goods, he might easily mistake the
defendants' wrapper for the plaintiffs' if shown to him some time after he had
seen the plaintiffs'".
It was further
stated:
"After all, an
ordinary purchaser is not gifted with the powers of observation of a Sherlock
Homes. We have therefore no doubt that the
defendants' wrapper
is deceptively similar to the plaintiffs' which was registered. We do not think
it necessary to refer to the decisions referred to at the bar as in our view
each case will have to be judged on its own features and it would be of no use
to note on how many points there was similarity and in how many others there
was absence of it."
In Kaviraj Pandit Durga Dutt Sharma
v. Navaratna Pharmaceutical Laboratories [AIR 1965 SC 980], this Court held: "These matters which are of the essence of the
cause of action for relief on the ground of passing off play but a limited role
in an action for infringement of a registered trade mark by the registered
proprietor who has a statutory right to that mark and who has a statutory
remedy for the event of the use by another of that mark or a colourable
imitation thereof. While an action for passing off is a Common Law remedy being
in substance an action for deceit, that is, a passing off by a person of his
own goods as those of another, that is not the gist of an action for
infringement. The action for infringement is a statutory remedy conferred on
the registered proprietor of a registered trade mark for the vindication of the
exclusive right to the use of the trade mark in relation to those goods"
(Vide Section 21 of the Act). The use by the defendant of the trade mark of the
plaintiff is not essential in an action for passing off, but is the sine qua
non in the case of an action for infringement. No doubt, where the evidence in
respect of passing off consists merely of the colourable use of a registered
trade mark, the essential features of both the actions might coincide in the
sense that what would be a
colourable imitation
of a trade mark in a passing off action would also be such in an action for
infringement of the same trade mark
In Poddar Tyres
Ltd. v. Bedrock Sales Corporation Ltd. and another [AIR 1993 Bombay 237],
Srikrishna, J., as His Lordship then was, repelled the contention that any
trader who exclusively sells the goods bearing a registered trade mark, has a
right to adopt a trade name which could include the said trade mark and that
such adoption would not amount to infringement or passing off stating:
"Mr. Rahimtoola
was not able to cite any authority for the proposition propounded, which I find
somewhat startling. The consequences of accepting this proposition would mean
that the registered proprietor would be at the mercy of anyone who sells the
goods bearing his trade mark. In a situation like the present, where the
businesses are overlapping, the trade channels are almost identical and the
family background is conspicuous, I am of the view that there would be an
inherent likelihood of confusion in the minds of the public that not only that
the goods, which emanate from the first defendants, are "Bedrock"
goods, but also further that the first defendants' business is somehow
intimately connected with the plaintiffs', either as a branch, agency or
otherwise. There is also the danger, as rightly emphasized by the plaintiffs,
that any act or omission of the first defendants would have deleierious
repercussion on the credit, reputation and goodwill of the plaintiffs
themselves. For example, if the first defendants were to commit an act of
insolvency or do any act which tarnishes their reputation in the market, there
is imminent likelihood of people jumping into the confused conclusion that the
plaintiffs had committed an act of insolvency or that they had done something objectionable.
I am, therefore, unable to accept the contention of the first defendant that,
by their purportedly selling exclusively "Bedrock" goods, they are
entitled to adopt the word "Bedrock" as a part of their company name
or trading style. That they have done so is not really disputed. In my view,
therefore, there is both infringement and passing off action, prima
facie."
De Cordova and
Others v. Vick Chemical Co. [1951 (68) RPC 103] is nearer the issue involved herein as in that case the registered trade
mark consisting of the word 'Vaporub' and another registered trade mark
consisting of a design of which the words 'Vicks Vaporub Salve' formed a part.
The defendants in the suit advertised their ointment as 'Karsote Vapour Rub'.
It was held that the defendants had infringed the registered trade mark.
The said decision was
quoted with approval by this Court in K.R. Chinna Krishna Chettiar v. Shri
Ambal and Co., Madras and Another [1969 (2) SCC 131] wherein the
question was whether the word 'Ambal' resembles the sound of the word 'Andal'.
It was held to be so upon rejecting an argument advanced on behalf of the
defendant that the same had distinct meanings stating:
"The Hindus in
the south of India may be well aware that the words Ambal and Andal represent
the names of two distinct Goddesses. But the respondent's customers are not
confined to Hindus alone. Many of their customers are Christians, Parsees,
Muslims and persons of other religious denominations. Moreover, their business
is not confined to south of India. The customers who are not Hindus or who do
not belong to the south of India may not know the difference between the words
Andal and Ambal. The words have no direct reference to the character and
quality of snuff. The customers who use the respondent's goods will have a
recollection that they are known by the word Ambal. They may also have a vague
recollection of the
portrait of a benign goddess used in connection with the mark. They are not
likely to remember the fine distinctions between a Vaishnavite goddess and a
Shivaite deity"
We may not lose sight
of the fact that the mark was assigned in favour of the Company as far back in
the year 1992. The mark did not come to the company through MOU or otherwise.
LACHES AND ACQUIESCENCE
The plea of
acquiescence on the part of the appellant herein has been raised on two counts:
(i) The plaintiffs-
appellant permitted the respondents to carry on business in the trade name of
'Ramdev Masala".
(ii) It is, thus,
also not entitled to an order of injunction.
The appellant by a
registered notice dated 12/15-12-1998 asked the defendant Nos. 1 and 7 that the
firm 'Ramdev Masala' had been unauthorisedly using the appellant-company
registered trade mark in respect of its product sold and manufactured by them
and on the packing materials, labels, boxes, poly pouches. They were called
upon to restrain from doing so with immediate effect and destroy the necessary
label/ packets of packing materials failing which it was threatened that a
legal action would be taken.
For determining the
said issues, we may notice the following facts.
A civil suit was
filed by the first respondent in the Ahmedabad City Civil Court wherein a
prayer was made that the deed of assignment be declared null and void and the
appellant herein be permanently restrained from using the same as also for a
declaration that they are the owners of the said trade mark/trade name.
However, an interim order as prayed for therein was not granted. A First
Information Report was also lodged against the respondents by the
appellant-Company before the Madhupura Police Station for commission of an
alleged offence under Section 63 of the Copyright Act and Sections 78 and 79 of
the 1958 Act as well as Sections 417, 420, 419 and 486 of the Indian Penal
Code. An application for quashing the said complaint was filed before the
Gujarat High Court on 4.8.1999. It was dismissed by an order dated 26.10.1999.
A Special Leave Petition preferred thereagainst being SLP (Crl.) No. 3900 of
1999 was also dismissed by this Court by an order dated 14.12.1999. In the
meanwhile, a rectification application was filed by the respondents before the
Registrar of Trade Mark, Mumbai allegedly stating that the registered trade
mark bearing No. 447700 was not being used by the plaintiff, it was not
entitled to continue to claim title thereover or use the same. Various
applications were moreover filed by the respondents herein for rectification of
the entry in the register in respect of various label marks of the appellant.
The appellant thereafter issued a public notice on 17.12.1999 calling upon the
respondents to restrain themselves from infringing upon the trade mark of the
appellant, in respect whereto a public notice was also issued by the
respondents herein on 21.12.1999. The suit thereafter was filed on 10.2.2000.
Contention of the respondents in this behalf was that not only in terms of the
MOU the appellant had been allowed to carry on business under the name and
style of 'Ramdev Masala', no immediate step having been taken after issuance of
the public notice dated 15.12.1998 for long time, they were not entitled to
obtain an order of injunction. Delay in some cases may defeat equity but the
chronology of events noticed hereinbefore do not suggest that the appellant's
consciously allowed the respondents to use the trade mark.
Acquiescence
is a facet of delay. The principle of acquiescence would apply where: (i)
sitting by or allow another to invade the rights and spending money on it; (ii)
it is a course of conduct inconsistent with the claim for exclusive rights for
trade mark, trade name, etc.
In M/s. Power Control Appliances and
Others v. Sumeet Machines Pvt. Ltd. [(1994) 2 SCC 448], this Court
stated:
"Acquiescence is
sitting by, when another is invading the rights and spending money on it. It is
a course of conduct inconsistent with the claim for exclusive rights in a trade
mark, trade name etc. It implies positive acts; not merely silence or inaction
such as is involved in laches"
In an infringement of
trade mark, delay by itself may not be a ground for refusing to issue
injunction as has been observed by Lahoti, J. (as His Lordship then was) in Midas Hygiene Industries (P) Ltd. v.
Sudhir Bhatia and Others [(2004) 3 SCC 90] in the following
terms:
"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)
The defence of
acquiescence, thus, would be satisfied when the plaintiff assents to or lay by
in relation to the acts of another person and in view of that assent or laying
by and consequent acts it would be unjust in all the circumstances to grant the
specific relief.
Kerr in his
"Treatise on the Law and Practice of Injunction", Sixth Edition at
pages 360-361 states as under:
"Mere delay
after knowledge of the infringement to take proceedings, not sufficient to call
the Statute of Limitations into operation, or where the infringement continues,
is not, it seems, a bar to the right of an injunction at the trial. Lapse of
time unaccompanied by anything else is, it seems, no more a bar to a suit for
an injunction in aid of the legal right than it is to an action deceit.
But delay may cause
the Court to refuse an interlocutory injunction, especially if the defendant
has built up a trade in which he has notoriously used the mark"
Specific knowledge on
the part of the plaintiff and prejudice suffered by the defendant is also a
relevant factor. [See Spry on Equitable Remedies, Fourth Edition, page 433]
Applying the
aforementioned principles in the instant case, it is evident that the time gap
between the issuance of the notice and filing of an application for grant of
injunction was not a voluntary act on the part of the appellant herein. It had
to wait for the outcome of various proceedings pending before different courts.
The respondents having themselves taking recourse to judicial proceedings, as
noticed hereinbefore, cannot now be permitted to set up the defence of
acquiescence on the part of the appellant. Indisputably, in a case of
infringement of trade mark, injunction would ordinarily follow where it is
established that the defendant had infringed the trade mark and had not been
able to discharge its burden as regard the defence taken by it.
In Pioneer Electronic Corporation and
Another v. Registrar of Trade Marks [(1978) RPC 716], an Australian Court referring to a large number of decisions observed:
"These cases
demonstrate that the essential requirement for the maintenance of the validity
of a trade mark is that it must indicate a connection in the course of trade
with the registered proprietor, even though the connection may be slight, such
as selection or quality control or control of the user in the sense in which a
parent company controls a subsidiary. Use by either the registered proprietor
or a licensee (whether registered or otherwise) will protect the mark from
attack on the ground of non- user, but it is essential both that the user
maintains the connection of the registered proprietor with the goods and that
the use of the mark does not become otherwise deceptive. Conversely,
registration of a
registered user will not save the mark if there ceases to be the relevant
connection in the course of trade with the proprietor or the mark otherwise
becomes deceptive."
[See also Holly
Hobbie Trade Mark, (1984) RPC 329.]
INJUNCTION ISSUE
It is although beyond
any doubt or dispute that the defendant had been manufacturing and selling its
products; what is sought to be injuncted is using a label which is deceptively
similar to that of the plaintiff.
Our attention has
been drawn to the right of the parties of the second and third part of the MOU
to carry out export business in the brand name of 'Ramdev' which, in our
opinion, does not advance their case as by reason thereof, the
appellant-Company had been also conferred right to carry on the export business
in the name of 'Ramdev'.
It is also not
correct that having regard to the fact that the property situated at Sola
having been given in favour of the respondents, they have acquired a vested
right in the trade mark as has been urged before us or otherwise. Respondents
did not have any right over the trade mark. They in fact, it will bear
repetition to state, assigned the same in favour of the appellant-Company. They
have assigned the said trade mark and having relinquished their right,
Respondents, thus, now cannot fall back on Section 33 of the 1958 Act. It may
be true that there exists a distinction between a suit in a trade mark action
against the whole world and a suit for implementation of division of assets
amongst the members of the family. But, after the MOU was entered into the
parties having separated ceased to be members of a joint family. What was,
thus, essential for determining the right of the parties would be the terms of
the MOU.
Registration of a
trade mark and user thereof per se may lead to the conclusion that the
plaintiff has a prima facie case, however, existence thereof would also depend
upon the determination of the defences raised on behalf of the respondents. The
appellant has raised a triable issue. The same by itself although may not be
sufficient to establish a prima facie case but in view of our findings
aforementioned, we are satisfied that the appellant has been able to establish
existence of a legal right in itself and violation of the registered trade mark
on the part of the respondents. We have also considered the comparable strength
of the cases of the parties and are of the opinion that the case of the
plaintiff-appellant stands on a better footing than the defendants-respondents.
A question as regards
the matter relating to grant of injunction has been dealt in S.M. Dyechem Ltd. v. Cadbury (India)
Ltd. [(2000) 5 SCC 573] wherein upon noticing a large number of
decisions including Colgate
Palmolive (India) Ltd. v. Hindustan Lever Ltd. [(1999) 7 SCC 1] as
also the subsequent distinction made in respect of the decision of the House of
Lords in American Cyanamid v. Ethicon Ltd. [(1975) 1 All ER 853], it was stated
:
"Therefore, in
trademark matters, it is now necessary to go into the question of
"comparable strength" of the cases of either party, apart from
balance of convenience.
In M/s. Transmission Corporation of
A.P., Ltd. v. M/s. Lanco Kondapalli Power Pvt. Ltd. [JT 2005 (10) SC
542], it was held :
"The interim
direction ordinarily would
precede finding of a
prima facie case. When existence of a prima facie case is established, the
court shall consider the other relevant factors, namely, balance of convenience
and irreparable injuries. The High Court in its impugned judgment although not
directly but indirectly has considered this aspect of the matter when on merit
it noticed that the Appellant has raised a dispute as regard payment of an
excess amount of Rs.35 crores although according to the Respondent a sum of
Rs.132 crores is due to it from the Appellant and the Appellant had been paying
the amount for the last two years as per the contract.
Conduct of the
parties is also a relevant factor. If the parties had been acting in a
particular manner for a long time upon interpreting the terms and conditions of
the contract, if pending determination of the lis, an order is passed that the
parties would continue to do so, the same would not render the decision as an
arbitrary one, as was contended by Mr. Rao. Even the Appellant had prayed for
adjudication at the hands of the Commission in the same manner. Thus, it itself
thought that the final relief would be granted only by the Arbitrator."
We also do not
appreciate the conduct of the respondents. They were aware of the rights under
the MOU. They had all along been enforcing the same. Legal defence were
available to them under the 1958 Act. Evidently, they filed a suit to scuttle
the intended action on the part of the respondents pursuant to the public
notice dated 15.12.1998.
In P.M. Diesels
Ltd. v. Patel Field Marshal Agencies & Others [2001 PTC 20 (Del)], the
High Court noticed the distinction between logo, trade mark and trade name and
was of the view that the defendants cannot be permitted to use the trade name
so as to defeat the other portion of the order of injunction already passed
against him. An injunction can also be granted against the respondents to use
the corporate name. Relief by way of interlocutory injunction would be material
in a suit for infringement of trade mark. Balance of convenience, however,
would have a vital role to play.
We are not oblivious
of the fact that respondents have been manufacturing and carrying on business
in the sale of spices under the name 'Ramdev Masala' even during pendency of
the suit. The learned Trial Judge had made an attempt to strike the balance.
The High Court, however, had overturned a part of it having regard to the
statutory interdict contained in the Rules made under the Prevention of Food
Adulteration Act and Standards of Weights and Measures Act.
Kerly's Law of Trade
Marks and Trade Names, Thirteenth Edition states as under about the general
test for grant of an interim injunction:
"In trade-mark
infringement cases irreparable damage, in this sense, is relatively easily
shown, since infringement may easily destroy the value of a mark or at least
nullify expensive advertising in a way that is hard to quantify for the
purposes of an inquiry into damages. This has more
recently come to be
referred to, in cases where the defendant's conduct is not directly damaging
but merely reduces the distinctive character of the claimant's mark, as
"dilution".
In particular,
although it is usually neither necessary nor appropriate to assess the degree
of probability of success which the claimant's action has (provided that it is
arguable, and subject to the principle of American Cyanamid that the merits may
be resorted to as a 'tie-breaker' if the balance of convenience is very even,)
in trade mark and passing off cases, it is very hard to avoid doing so, since
the better the claimant's case on the likelihood of deception (frequently the
major issue) the greater the harm which he is likely to suffer. Accordingly, in
appropriate cases, where the state of the evidence permits it, the court may
seek to weigh up the merits in deciding whether to grant interim relief."
Thus, when a prima
facie case is made out and balance of convenience is in favour of the
appellant, it may not be necessary to show more than loss of goodwill and
reputation to fulfil the condition of irreparable injury. In fact, if the first
two pre-requisites are fulfilled, in trade mark actions irreparable loss can be
presumed to have taken place.
The expression
"irreparable injury" in that sense would have established injury
which the plaintiff is likely to suffer.
In Mahendra & Mahendra Paper
Mills Ltd. v. Mahindra & Mahindra Ltd. [(2002) 2 SCC 147], this Court observed:
"23. The Bombay
High Court in the case of Kirloskar
Diesel Recon (P) Ltd. v. Kirloskar Proprietary Ltd. considered the
scope of granting injunction in a suit for infringement of a trade mark under
Section 106 of the Act by the use of the mark "Kirloskar", held:
"The
principle of balance of convenience applies when the scales are evenly
balanced. The existence of the 1st appellant in each appeal
is very recent whereas the existence of the respondents belonging to 'Kirloskar
Group of Companies' has been for over a period of 50 years. On their own
showing, the appellants are not using the word 'Kirloskar' as trade mark but as
part of trading style whereas the respondents have not only acquired
distinctiveness and goodwill in the word 'Kirloskar' but it is even the
registered trade mark of the 1st respondent. There is sufficient evidence on
record to show that the huge business is carried by 'Kirloskar Group of
Companies'.
There is nothing on
record to show the extent of the business of the appellants. The 2nd appellant
has throughout been aware about the business reputation of the respondents and
efforts of the respondents in protecting their rights in the trade marks as
also of preventing others to use the word 'Kirloskar' as a part of the trading
name or trading style. By grant of the interim injunction in favour of the
respondents, the appellants are not prevented from carrying on business without
the word
'Kirloskar' forming
part of the corporate name of the 1st appellant in each appeal. In the facts of
the case, the respondents' reputation is likely to be adversely affected if the
appellants are not prevented from using name of the 1st appellant in each
appeal. In the facts of the case, the balance of convenience is not in favour
of the appellants. * * *
The real question in
each case is whether there is as a result of misrepresentation a real
likelihood of confusion or deception of the public and
consequent damage to
the plaintiff. The focus is shifted from the external objective test of making
comparison of activities of parties to the state of mind of public in deciding
whether it will be confused. With the passage of time and reputation acquired,
the trade mark 'Kirloskar' has acquired the secondary meaning and has become
almost a household word. The judgments relied upon by Mr Kane pertain to the
cases of one type of business and not where variety of businesses have been
carried by the plaintiff and the defendant as in the instant case. The business
activities of the respondents vary from pin to piano as borne out from the
object clauses of the memorandums of association of the respondents. The
appellants have still to commence their business activities but as mentioned in
the memorandums of association of the 1st appellant in each appeal, some of the
object clauses therein overlap with the activities of respondents and more
particularly of Respondents 6 and 7."
APPELLATE COURT'S
JURISDICTION TO INTERFERE WITH ORDERS OF THE TRIAL JUDGE
We are not
oblivious that normally the appellate court would be slow to interfere with the
discretionary jurisdiction of the trial court. The grant of an interlocutory
injunction is in exercise of discretionary power and hence, the appellate
courts will usually not interfere with it. However, appellate courts will
substitute their discretion if they find that discretion has been exercised
arbitrarily, capriciously, perversely, or where the court has ignored settled
principles of law regulating the grant or refusal of interlocutory injunctions. This principle has been stated by this court time and time again. [See
for example Wander Ltd.
v. Antox India P. Ltd (1990) Supp SCC 727, Lakshmikant V. Patel v.
ChetanBhai Shah (2002) 3 SCC 65 and Seema Arshad Zaheer v. MC of Greater
Mumbai (2006) 5 SCALE 263]
The appellate
court may not reassess the material and seek to reach a conclusion different
from the one reached by the court blow if the one reached by that court was
reasonably possible on the material. The appellate court would normally not be
justified in interfering with the exercise of discretion under appeal solely on
the ground that if it had considered the matter at the trial stage it would
have come to a contrary conclusion.
However, in this case
the courts below proceeded on a prima facie misconstruction of documents. They
adopted and applied wrong standards. We, therefore, are of the opinion that a
case for interference has been made out.
CONCLUSION
Our findings
aforementioned, it goes without saying, are prima facie in nature. We place on
record that Mr. Nariman contended that there is evidence to show the contrary
intention of the parties in respect whereof a large number of documents are
available. Evidently respondents may prove. No such document is, however,
before us. If the respondents, at the trial, could bring the same on record,
evidently the court would be entitled to draw its own inference.
We have differed with
the findings of the courts below primarily on the interpretation of the MOU. In
that view of the matter, we are of the opinion that in this case this Court
would be justified to interfere with the said findings. We are, however, not
oblivious of the damages which may have to be suffered by respondents herein in
the event the suit of the appellant is to be ultimately dismissed. We intend to
protect the same also.
For the said purpose,
we would take into consideration the terms of the injunction granted by the
Trial Judge that the respondents were entitled to sell their products in the
name of M/s. Ram Dev Masala only from the seven outlets. The modification made
by the High Court has already been noticed by us.
We, in view of our
findings aforementioned, direct:
(i) The respondents
be restrained from using the trade mark including the trade name 'Ramdev
Masala' in any of their products.
(ii) They may,
however, carry on their business in any other name insofar as manufacturing of
spices is concerned.
(iii) The appellant
shall, as and when demands are made, supply spices produced by it for retail
sale thereof to seven outlets belonging to respondents on usual terms, and in
respect of such articles on the labels/pouches, on the reverse thereof, the
following shall be mentioned in the minimum permissible size in terms of the
provisions of Weights and Measures Act and Prevention of Food Adulteration Act:
"This product is
manufactured and marketed by M/s. Ramdev Masala (Arvindbhai Group) (Or M/s.
Ramdev Exports Arvindbhai Group) having no relationship whatsoever with Ramdev
Food Products Pvt. Ltd."
(iv) The appellant
shall deposit a sum of Rs. 50 lakhs before the Trial Court or furnish a bank
guarantee for the said sum by way of security.
(v) Despite pending
applications for rectification before the Registrar of Trade Marks, the final
hearing of Civil Suit No. 828 of 2000 shall be expedited and the learned Trial
Judge is hereby directed to complete the hearing as expeditiously as possible
preferably within a period of six months from the date of communication of this
order.
For the reasons
aforementioned, these appeals are allowed. The respondents shall pay and bear
the costs of the appellant of these appeals. Counsel's fee assessed at Rs.
25,000/-.
