TERRITORIAL JURISDICTION OF COURT IN INFRINGEMENT OF TRADE MARK CASES

The existence is outcome of continuous process of Struggle. A baby is outcome of fight amongst hundreds of thousands of brother sperms in penetrating one ovum. In ancient days man struggled against the nature in order to survive. Changing time witnessed the fight amongst the feudal society in order to advance their respective interest on the land. With Advent of nuclear era and advent of global economy ,concept of direct war amongst the nations seems to be a distant possibility and the same has been replaced by the battle amongst the multinational corporations/companies on economic front. Modern days, the multinational companies are trying to extend their economic interest in as much countries as possible.

A civilized society guarantees the fairness in battle. Providing equal opportunities to all the contesting parties is one of the prime objectives of the modern society. While writing this article ,the mythological story of famous battle between the giant Elephant and the Crocodile ( as mentioned in the Hindu scriptures),flickers across my mind.

“Once upon a time there was a giant Elephant. His mere glimpse was sufficient to instill feeling of fear amongst the small animals. Once the Elephant went to the bank of the Ganga, in order to quench his thirst. Inside the water there was a Crocodile, lying in waiting for a prey. As soon as the Elephant entered into the water, the Crocodile caught one of his legs and started to drag him into the water. As tug of war progressed, the Crocodile was prevailing over the Elephant and for a moment life of Elephant was seemed to come to an end. Getting panicky, the Elephant fervently began to pray Lord Vishnu (The Hindu God) and Lord Vishnu descended upon Earth in order to rescue the life of Elephant by killing the Crocodile." The Crocodile prevailed over the Elephant not because he was more powerful than the Elephant but because of the fact that the battle was fought inside the water, which was more suitable to the Crocodile . Place of battle plays decisive role in its outcome and present story highlights the same. Had the battle would have been fought on the land , there would have been different story. "

In modern civil disputes, the concept of territorial jurisdiction draws its origin from the fact that defending party should not be put to inconvenience at the instance of another party. The idea is to provide fair opportunity to both the party. Today territorial jurisdiction plays important role in outcome of civil disputes amongst the parties. This article proposes to deal with the significance of trade mark application vis-à-vis territorial jurisdiction in an action of Trade Mark Infringement and an action of Passing off especially in light of recent Judgment passed by the Hon'ble Apex Court in DHODHA HOUSE VS. S.K.MAINGI as reported in 2006(32) PTC 1 (SC) and different interpretations given thereto by the Hon’ble High Courts.

CAUSE OF ACTION.

Sections 16-20 of Code of Civil Procedure deal with the territorial jurisdiction in civil court. Section 16-18 of C.P.C deal with territorial jurisdiction in suits pertaining to immovable property. Section 19 of C.P.C deals with territorial jurisdiction in suit pertaining to movable property. Section 20 of C.P.C deals with all other cases not covered by the aforesaid provisions of C.P.C. Indisputably suit for Infringement of trade mark/Passing off would be governed by Section 20 of C.P.C and according to which all such suit may be filed ,at the option of plaintiff , in any of the following court viz:-

(a) Within whose local jurisdiction ,the cause of action , wholly or in part arises or

(b) Within whose local jurisdiction the defendant resides or carries on business or personally works for gain.

To appreciate the significance of trade mark application filed either by the plaintiff or the by the defendant, in conferring the jurisdiction of the court, it is necessary to understand the term “cause of action” as application for filing of registration of trade mark, would be covered under the Section 20 (c) of C.P.C, which says that the suits can be filed at the places where the cause of action, wholly or in part arises.

The term cause of action has not been defined in C.P.C however this term can be understood with the help of interpretations given thereto by various courts.

A Cause of action means every fact, which if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the court. AIR 1949 PC 78(at 86),AIR 1989 SC 1239.

It is a action which gives occasion for and forms the foundation of the Suit. AIR 1970 SC 1059. Cause of action is bundle of essential facts which are necessary for the plaintiff to prove before he can succeed in the suit. (1978) 2 SCC 91(Para10). Cause of action means every fact which it would be necessary for the plaintiff to prove, if traversed in order to support his right to the judgment of the court. It doesn’t comprise every piece of evidence which is necessary to prove each fact but every fact but every fact which is necessary to be proved .Everything which, if not proved, gives the defendant an Immediate right to judgment must be part of cause of action. Read Vs Brown (1888) 22 Q.B.D 128. From the aforesaid interpretations given by various courts it can be said that cause of action means every fact which is necessary for the plaintiff to prove to support his right to the judgment of the court and everything which if not proved, gives the immediate right to the defendant for the judgment.

WHAT FACTS ARE NECESSARY TO BE PROVED IN AN ACTION OF PASSING OFF

In Trade Mark Act 1999, the term Passing off is nowhere defined, however some guidance can be taken from the interpretation given to the term Passing Off by different courts.

In N.R.Dongre Vs Whirlpool Corporation 1996 (5) SCC 714 case the Hon'ble Apex Court observed: "The concept and principle on which passing off action is grounded is that a man is not to sell his own goods under the pretence that they are the goods of the another man". The Apex court further clearify in Kaviraj Durga Dutt Sharma Vs Navratna Pharmaceutical Laboratories AIR 1965 SC 980. " The use by the defendant of the trade mark of the plaintiff is essential in an action of Passing off". In Ruston & Hornby Ltd Vs Zamindara Engineering Co AIR 1970 SC 1649,the Hon'ble Court observed that " In a passing off action the issue is as follows - Is the defendant is selling his goods so marked as to be designed or calculated to lead purchasers to believe that they are the plaintiff's good." In Laxmikant V Patel Vs Chetanbhai Shah AIR 2002 SC 275,The apex Court observed " the law does not permit anyone to carry on his business in such a way as would persuade the customers or client in believing that the goods or services belonging to someone are his or associated therewith. In Ellora Industries Vs Banarasi Dass Gupta AIR 1980 Del 254 the Hon'ble Delhi Court observed as follow " In an action of passing off all that is needs to be proved is that the defendant's Goods are so marked ,made up or described by them as to calculated to mislead ordinary purchasers and to lead them to mistake the defendant's goods for those of the plaintiff's and it is the tendency to mislead or to confuse that forms the gist of passing off action.

In an action of passing off the plaintiff is required to prove (1) Reputation (2) Deception and (3) Damage . P. Narayanan (Para 25.13 ,Vol VI,Page 696).

Section 134 (1) (c) of Trade Marks Act 1999,also helps us in understanding that what are the things/facts, which the plaintiff is not required to establish in an action of passing off. Section 134 (1) (c) of Trade Marks Act 1999 reads as follows:-

"No suit for passing off arising out of use by the defendant of any trade mark which is identical with or deceptively similar to the plaintiff's trade mark, whether registered or unregistered ,shall be instituted in any court inferior to a District court having jurisdiction to try the same."

Bare perusal of the above mention section makes it quite clear that an action of passing off has got nothing to With the plaintiff’s Trade Mark being registered or unregistered. Further reading of the section clearly establishes this fact that the cause of action for Passing off arise only by the use of impugned Trade Mark by the defendant. This fact has been confirmed by the various courts.

To appreciate the term use by the defendant of any trade mark, it is necessary to understand the term trade mark, as defined in Trade Mark Act 1999.

Section (zb) of Trade Mark Act 1999, reads as follows:

2(zb)Trade Mark means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours; and-

(i) In relation to chapter XII(other than Section 107), a registered trade mark or a mark used in relation to goods or services for the purposes of indicating or so to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right as proprietor to use the mark; and

(ii)In relation to other provisions of this Act , a mark used or proposed to be used in relation to goods or services for the purposes of indicating or so to indicate a connection in the course of trade between the goods or services , as the case may be , and some person having the right, either by way of permitted user ,to use the mark whether with or without ant indication of the identity of that person and includes a certification trade mark or collective mark.

The above mentioned section makes it clear that for a mark, to be qualified as a trade mark, its user; inter-alia has to in the course of trade. In other way the user of the trade mark has to be in the course of trade or a commercial user. It is submitted that a user which does not pertain to user of a mark in the course of trade and/or a commercial user it can never amount to user of a trade mark and by necessary implication the same can never be basis of bringing an action of either Infringement of trade mark or an action of passing off.

From the above discussion, it is quite clear that in an action of passing off, the cause of action can be based on every fact which

(a) establishes tremendous reputation of plaintiff’s trade mark,

(b) proves misrepresentation/user by the defendant in the course of trade, that his good are the goods of the plaintiff, and
(c) pertains to damage occurred to the plaintiff because of impugned activity of the defendant. Every fact which establishes these facts, can be said to form the part of cause of action in an action of passing off.

SIGNIFICANCE OF TRADE MARK APPLICATION IN CREATING JURISDICTION IN AN ACTION OF PASSING OFF.

In para 38 of the Dhodha House case (Supra) the Hon'ble Apex Court, after relying on the Premier distelleries Pvt Ltd Vs Shashi Distilleries cae [2001 PTC 907(Mad)],held that the cause of action in a suit for passing off has nothing to do with the location of Registrar's office or the factum of applying or not applying for registration. In AIR 1991 Karnataka 303 and 2002 ( 25) PTC 704 (Karnataka) , it has been held that registration of trade mark is wholly irrelevant for the action of passing off. In AIR 1978 Delhi 250, the Hon'ble court observed that the registration of the mark or similar mark prior in point of time to user by the plaintiff is irrelevant in an action of passing off.

CONCLUSION: From above discussions it is quite clear that in an action of passing off, the filing of trade mark application either by the plaintiff or by the defendant is totally irrelevant and no cause of action can be based thereon. It is trite to say that cause of action constitutes every fact, which if not proved, gives the defendant an immediate right to judgment. In an action of passing off, every fact which is necessary in establishing goodwill and reputation of the plaintiff’s trade mark can be said to gives accrual of cause of action. Now question is that whether filing the trade mark by the plaintiff, establishes the goodwill and reputation of the plaintiff’s trade mark or not? Answer is no. As the goodwill and reputation of a trade mark can be established only by the commercial user of the same in the market and filing of trade mark application has got nothing to do with commercial user of the same. Thus trade mark application filing by the plaintiff does not give rise to accrual of cause of action in an action of passing off.

More so in an action of passing off, the plaintiff is not required to establish that he is registered proprietor of the trade mark. In the other way it can be said that an action of passing off lies irrespective of this fact that whether the plaintiff is registered proprietor of trade mark or not? It has also been observed by the Apex Court in Corn Products Refining Co Vs Shangrilla Food Products Ltd AIR 1960 SC 142 that preserve of mark in the register doesn’t prove its user at all. This view was supported by various courts AIR 1978 DELHI 250. Thus the factum of plaintiff, being registered proprietor of a trade mark also does not give rise to accrual of cause of action in an action of passing off.

Moreover filing of trade mark application by the defendant doesn’t correspond to defendant's user. In other way filing of trade mark application by the defendant has got nothing to do with the user in the course of trade and by mere filing trade mark application, the defendant is not trying to misrepresent in the course of trade that his goods are the goods of the plaintiff. It is well settled proposition of law that registration is prima facie evidence of the validity and preserve of a mark on the register does not proves the user at all. Hence filing of trade mark application by the defendant and/or registered trade mark of defendant is irrelevant in an action of passing off. In other way it can be said that in an action of passing off, the locus of trade mark office, in no way gives rise to cause of action. The same view has been duly supported by the Apex court in Dhodha House(Supra) Judgment.

With due respect to the Hon'ble Delhi High Court, it is submitted that the in its recent judgment viz: Pfizer Products Inc Vs Rajesh Chopra & others 2006 ( 32) PTC 301 (Del) the Hon’ble court did not perceive the ratio of Dhodha House Judgment in right perspective in as much as in an action of passing off the Hon’ble court relied on the filing of trade mark application.

In a very recent Judgment titled as M/s Parle Products Pvt. Ltd Versus M/s Surya Food 7 Agro Ltd , reported as 2007 (35) PTC 542 (Mad), the Hon’ble Madras High Court observed “ in order to establish his right to an injunction in an action for passing off, it is wholly un necessary for the plaintiff to demonstrate that he had applied for registration of the mark under the Trade Mark Act . His failure to demonstrate that he had applied an application for registration will not clothe the defendant with a right to obtain dismissal of the suit. The application for registration is therefore , a factor of no relevance in an action for passing off(para 6)”.

In the said judgment the Hon’ble Court further observed “ the essence of the action of passing off id deceit on the part of the defendant in trying to pass off his goods as that of the plaintiff. That is a pure question of fact to be established by the proper evidence. The cause of action can arise where deceit is practiced. It can not arise at a location where the plaintiff who claims the relief, chooses to lodge an application for registering his mark, without any deceit having been practiced within that Jurisdiction.(para 7)”.

In para 9 of the said Judgment the Ho’ble have gone one step further in observing that that in an action for passing off , the cause of action has got nothing to do with the location of the registrar’s office or factum of applying or not applying for registration. Filing of an application for registration of a trade mark therefore doe snot constitute a part of cause of action where the suit is one for passing off”.

By necessary implication it is clear that filing of trade mark application either by the plaintiff or by the defendant has got nothing to do with the passing off action. Or in other words it can safely be said that locus of office of trade mark office , either qua the plaintiff’s trade mark application filing or qua defendant’s trade mark application filing do not form part of cause of action in an action of passing off. Any reliance on the same is extraneous and irrelevant in such cases.
WHAT FACTS ARE NECESSARY/RELEVANT IN AN ACTION OF INFRINGEMENT OF TRADE MARK

In order to understand that what facts are necessary/relevant in an action of Infringement of trade mark, few relevant sections of the Trade Marks Act 1999 are required to be gone through.

Section 27(1) of trade marks act 1999 reads as follows:

No person shall be entitled to institute any proceeding to prevent, or to recover damages for, infringement of an unregistered trade mark.

While Section 134(1)(a)and (b) or trade marks act 1999 reads as follows:

No Suit (a) for infringement of a registered trade mark, or (b) relating to any right in a registered trade mark; shall be instituted in any court inferior to a District Court having jurisdiction to try the suit.

Combined reading of section 27(1) and section 134 (1)(a) and (b) of Trade Marks act 1999 makes it quite clear that for the purposes of bringing an action of Infringement of a trade mark, plaintiff is required to establish that he is the registered proprietor of the trade mark. In other way it can be said that in an action of infringement of trade mark, the factum of plaintiff in failing to establish that he is registered proprietor of the trade mark, gives an immediate right of judgment to the defendant. The logical conclusion is that, every fact which establishes that the plaintiff is registered proprietor of the trade mark, gives rise to cause of action in an action of infringement of trade mark. Prima facie it appears that locus of trade mark office, qua the plaintiff’s trademark application filing, gives rise to cause of action.

More so same view was supported by Division Bench, Madras High Court in Premier Distilleries Pvt Ltd Vs Shashi Distilleries Case 2001 PTC 907 (Mad)(DB) Where the Hon’ble DB observed as follows” The right to bring an action for infringement in the court within whose jurisdiction the trade mark registry is located ,is founded on the fact that the relief sought in the action one for infringement and not merely for passing off. Where it is alleged that a trade mark is infringed, it is essential for the plaintiff to show that the mark had, in fact, been registered. The failure to establish that fact will result in the dismissal of the suit for infringement, satisfying the test formulated by Fry, L.J. ”for ascertaining the cause of action, namely everything which, if not proved, entitles the defendant to an immediate right to judgment”.

With due respect to the Hon’ble DB it is submitted that mere the locus of trade mark registry , qua the plaintiff’s trade mark application filing can not be basis in assuming the jurisdiction of court.

Let us examine relevant section of the Act. Section 134(2)of Trade Marks Act1999 provides for additional forum to the plaintiff according to which the suit for infringement of trade mark can be filed to the court, in whose jurisdiction, at the time of institution of suit, the plaintiff actually and voluntarily resides or carries on business or works for gain. This additional forum was not there in the old Trade & Merchandise Marks Act 1958.Had the presumption “that the locus of trade mark registry, qua the plaintiff’s trade mark application filing can provide the jurisdiction of court” be taken to be reasonable, then there would not have been any occasion for the legislature to providing for additional forum to the plaintiff by virtue of Section 134 (2) of Trade Mark 1999. Let this proposition be explained by one example.

A legal entity namely X carries on its business in Delhi. A files trade application before the trade mark registry, at Delhi office and after some time the same gets registered in his name. A files a suit for infringement against Y(residing at Ghaziabad )before the Delhi High Court in the old Trade & Merchandise Marks Act1958.In old Act additional forum was not there. If we take the above presumption to be reasonable i.e.( the locus of trade mark registry , qua the plaintiff’s trade mark application filing can provide the jurisdiction of court), then mere this fact that plaintiff’s trade mark was filed and registered from trade mark registry, Delhi, could give rise to accrual of cause of action even in old Act. Hence even in old act , for the purposes of conferring jurisdiction to Delhi High Court this fact became irrelevant, whether the plaintiff was actually carrying on its business or works for gain at Delhi or not? The insertion of additional forum by legislature in Section 132(2)Trade Marks Act 1999 creates clouds over this proposition. There are also many other reasons which further fortify this argument that in infringement case ,trade mark application filing by the plaintiff cannot give rise of accrual of cause of action, or in other words it can be said that the same can not be a basis of conferring jurisdiction in such cases.

Bare perusal of Scheme of the Trade Mark Act 1999 and rules framed there under clearly establishes this fact that location of trade mark registry is not based on jurisdiction basis, rather it meant for facilitating the registration of trade marks only.

Section 5 of the Trade Marks Act 1999 provides for head office and branch offices of Trade Mark Registry. In fact in Mumbai, there is head office of Trade Mark Registry while branch offices are located in Delhi, Chennai, Calcutta and Ahmedabad. Section 6 of the Trade Mark Act provides for the register where entry shall be entered pertaining to all the registered trade mark. The compilation and publication of the trade mark journal is handled only by the head office. Thus it is quite clear that different branch offices are not intended to work as independent offices. Rule 4(a)(ii) of Trade Marks Rule 2002 provides that where there is no any entry in the register as to principal place of business in India ,Appropriate office of trade mark registry for the purposes of making trademark application, or for the purposes of filing notice of opposition would be guided by the place mentioned in addresses for service in India. Thus the locus of appropriate trade mark office does not correspond to actual place of business of the applicant. Rule 5 of the Trade Marks Rules 2002 provides that jurisdiction of the appropriate Trade Mark office is not altered by change in the principal place of business or address for service in India. Under Trade Marks Act 1999,all the appeals against the order of Registrar of Trade Marks, instead of going to Different High Court according to the Jurisdiction, has to go before the Intellectual Property Appellate Board at Chennai only, irrespective of the jurisdiction. Thus in view of scheme of the Trade Marks Act 1999 and rules made there under it is clear that locus of trade mark registry cannot be taken to be one of the basis for the purposes of conferring jurisdiction in Infringement of Trade Marks cases. More so , in AIR 1974 DELHI 40 the Hon’ble High Court also returned this finding that the registration in plaintiff’s favour of the trade mark by itself is not sufficient to support the action of infringement.

Now let us examine that whether in infringement cases, jurisdiction can be based on the factum of trade mark application filed by the defendant?Let us examine Dhodha House Case in this behalf. In Dhodha House case(Supra) the Apex court dealt With two civil appeals.

In Civil Appeal no 6248 of 1997,the plaintiff was carrying on its business in the District of Ghaziabad while the defendant was based in Faridkot. Plaintiff claimed to be registered proprietor of Trade Mark Dhodha House under no 277714-B in class 30 and registered copyright holder under no A-5117/1970 and A-5330/1970.The Plaintiff filed composite suit of infringement of trade mark/passing off/infringement of copyright against the defendant before the District Judge Ghaziabad. It is important to mention here that no trade mark application was filed by the defendant.

In Civil Appeal No.16/1999,both the plaintiff and the defendants were based at Rajkot. The plaintiff claimed to be registered proprietor of Trade Mark and copyright Field Marshal. The first defendant was alleged to be registered under the Companies Act in Delhi. The impugned Trade Marks of defendant were published in India by trade mark registry in respect of defedant's applications for registration, including the Union Territory of Delhi. The Plaintiff filed composite suit of infringement of trade mark/passing off/infringement of copyright against the Defendant before the Hon'ble Delhi High Court.

In Civil Appeal no 6248 of 1997, counsel for the plaintiff relied on M/S Jawahar Engineering Company Vs M/S Jawahar Engineers Pvt Ltd 1983 PTC 207. In Jawahar Engineers Case ,plaintiff was registered proprietor of Trade Mark Jawahar whereas the defendant has applied for registration of the trade mark Jawahar for few states of India. In that case it was held “ having regard to the fact that an advertisement had appeared in the trade mark journal as regard application for registration of the trade mark of defendant therein, the Delhi high Court would have jurisdiction in the matter.”

In para no 31 of the Dhodha House Judgement , the Hon’ble Supreme Court discussed the Jawhar Engineering case and returned the finding as follows:-The said decision has no application in the instant case for more than one reason. For the purposes of registration of a trade mark,an application must be filed in the branch office of registrar of trade mark. In the said para the Hon’ble Court further observed “ An advertisement by itself in a journal or a paper would not confer jurisdiction upon a court.

In para 32 the Dhodha House Judgement,the Apex Court further observed” a cause of action will arise only when a trade mark is used and not when an application is filed for registration of the trade mark. In a given case an application for grant of registration certificate may or may not be allowed. In said para the Hon’ble Apex Court further observed “ In other words a suit may lie where an advertisement of trade mark or copyright has taken place but a cause of action for filing the suit would not arise within the jurisdiction of court only because an advertisement has been issued in the Trade Mark Journal or any other Journal notifying the factum of filing of such an application”.

Thus it is quite clear that the Hon’ble Apex Court returned the finding that cause of action for infringement of trade mark shall arise only when the trade mark is used and not an trade mark application is filed. By logical conclusion it can be said that no cause can be based on defendant’s application, as the same does not correspond to defendant’s commercial user.
Even Section 31 of trade marks Act 1999 says as follows:- Registration to be prima facie evidence of validity.

Section 29 of trade marks act provides that in what circumstances it can be said that a registered trade mark is being infringed.

29 (1) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade ,a trade mark which is identical with ,or deceptively similar to ,the trade mark in relation to goods or services in respect of which the trade mark is registered and in such a manner as to render the use of the mark likely to be taken as being used as a trade mark.

29(2) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use ,uses in the course of trade ,a mark which because of ---------
29(4) A registered trade mark is infringed by a person who not being a registered proprietor or a person using by way of permitted use, uses in the course of trade , a trade mark which --------

29(5) A registered trade mark is infringed by a person if he uses such registered trade mark as his trade name or part of his trade name or name of the business concern or part of the name ,of his business concern dealing in goods or services in respect of which the trade mark is registered.

29(6) For the purposes of this section, a person uses a trade mark, if, in particular, he-
(a) affixes it to the goods or the packaging thereof;

(b) Offers or exposes goods for sale, puts them on the market, or stocks them for those purposes under the registered trade mark , or offers or supplies services under the registered trade mark

(c) imports or exports goods under the mark;

(d) uses the registered trade mark on business papers or in advertising.

29(7) A registered trade mark is infringed by a person who supplies such registered trade mark to a material intended to be used for labeling or packaging goods, provided such person, when he applied the mark, knew or had reason to believe that the application of the mark was not duly authorized by the proprietor or a licensee.

29(8) A registered trade mark is infringed by any advertising of that trade mark if such advertising-

(a) takes unfair advantage of and is contrary to honest practices in industrial or commercial matters; or

(b) is detrimental to distinctive character; or

(c) is against the reputation of the trade mark.

29(9) Where the distinctive elements of a registered trade mark consists of or includes words, the trade mark may be infringed by spoken use of those words as well as by their visual representation and reference in this section to use of a mark shall be construed accordingly.

It is clear that for an action of Infringement, the commercial user of impugned trade mark by the defendant has to be established.

Now let us examine that on the question of infringement of trade marks, what stand has been taken by the various courts.

Infringement is use by the defendant for trading purposes upon or in connection with the goods of the kind for which the plaintiff’s right to exclusive use exists, not being the goods of the plaintiff, of a mark identical with the plaintiff’s mark or comprising something some of its essential features or colorably resembling it so as to be calculated to cause goods to be taken by ordinary purchasers for the goods of the plaintiff. Abbey Sports Co Ltd Vs Priest Brothers, (1936)53 RPC 300 at 304.

A Plaintiff , in a suit on the basis of infringement, has to provide not only that his trade mark is infringed but a person who is not a registered proprietor of the mark or the registered user thereof but that the said person is using a mark in the course of trade. S.M.Dychem Ltd Vs Cadbury (India) LTD AIR 2000 SC 2114.

The use by the defendant of the trade mark of the plaintiff is sine qua non in an action for infringement of trade mark. Kaviraj Pandit Durga Dutta Sharma Vs Navratna Pharmaceutical Laboratories AIR 1965 SC 980. In the same judgment it was further held that “ When once the use by the defendant of the mark which is claimed to infringe the plaintiff’s mark is shown to be in the course od trade , the question whether there has been an infringement is to be decided by the comparison of the two trade mark.

From above mentioned discussions it can be said that in order to bring an action of infringement of registered trade mark, the plaintiff has to establish the user/proposed user of trade mark by the defendant in the course of trade. Any user , which is not in the course of trade, cannot be said to form cause of action in infringement of trade mark cases.

Now let us examine the term Use in the course of trade. The term use in the course of trade has no where been defined in the Trade Mark Act 1999.In Hermes Tm (1982)RPC 425 AT 432 it is observed that “In the course of trade is wide enough to cover the steps necessary for the production of goods as well as their actual placing on the market.”

The user of trade mark can further be explained by bare perusal of a recent judgment of Hon’ble Delhi high Court titles as M/s Yonex Kabushiki Kaisha Versus M/s Phillips International & others , reported as 2007 (35) PTC 345 (DEL) , where in para 14 of the judgment the Hon’ble Court observed as follows” the plaintiff has sought to establish the allege use of the trade mark YONEKA in the India on account of the letter dated 06.08.2005 purported to have been issued by the Badminton Association of India.The said declaration also did not prove use of the trade mark on commercial basis in any manner whatsoever. The said letter talks about supply of the shullecocks “free of costs”. The question whether any shuttlecocks, as per alleged agreement with association ,were supplied or not remains unanswered on the part of the plaintiff. Furthermore , distribution of free samples does not constitute commercial use of the trade mark ‘.

It is submitted that the Hon’ble Delhi High Court emphasized on this fact that alleged user of the trade mark has to be commercial user and in the given case the Hon’ble Court returned the finding that distribution of free samples does not constitute commercial use of the trade mark. The facts remains that use of a trade mark has to be commercial in nature.

Further it is observed in para no. 23.24 of Trade Marks & Passing off, Volume VI, P.Narainan , relying on the Irvings Vs Horsenail (1934) 51 RPC 110 at 116 case explained the term “ use as a trade mark”. The expression (use as a trade mark) means “ in such a manner as to render the use of the mark likely to be taken as being use as a trade mark”. Thus it is clear that in order to constitute infringement the defendant must use the offending mark as a trade mark within the meaning of definition under 2 S(1)(Zb).It is submitted that Section 2 S(1)(Zb) of the act contemplates the user by the defendant in the course of trade. In para 2.21 of the said book, P.Narainan further observed “it is fundamental principle of law that the function of a trade mark is to indicate the origin of the goods to which it is applied. Aristoc Vs Rysta (1945) 62 RPC 65 at 79. Connection in the course of trade would therefore, mean any kind of connection consistent with this principle. A connection with the goods in the course of trade means an association with the goods in the course of their production and preparation for the market.

CONCLUSION: From combined reading of section 2 (zb)(i)(ii)of Trade Mark Act 1999 [as already mentioned in passing off section of this article],section 29 of Trade Mark Act 1999, and also from perusal of the above mention judgments of the courts, it is quite clear that in order to succeed in an action of Infringement of trade mark, the plaintiff is required to prove the user/proposed user of the impugned trade mark by the defendant in the course of its trade activity. The said user has to be commercial user.Thus every fact which proves the actual commercial user and/or proposed commercial user of impugned trade mark by the defendant is a relevant fact and the same gives rise to cause of action.

Defendant’s filing of application and/or advertisement thereof in the trade mark journal does not amount to commercial user/proposed commercial user at all. Even Hon’ble Delhi High Court observed in AIR 1972 DELHI 248 that mere acceptance of an application for registration of a trade mark or its advertisement confers no right. Mentioning of user column in the application is not conclusive proof of the commercial user/proposed commercial user by the defendant. That’s why there is provision of opposition so that the claimed user and or proposed user(remember, the same doesn’t qualify for proposed commercial user) of the defendant can be challenged. Even if the defendant’s application qualifies the opposition and gets registered, even then there is provisions for rectification of the same whereby the proprietary rights of the defendant over the impugned trade mark including its user can also be challenged. Even various court also held that registration is prima facie evidence of validity(AIR 1972 DELHI 248 , AIR 1972 DELHI 46).The defendant is not getting any right in the trade mark by filing application or by its advertisement nor the same is any proof the user of the defendant’s trade mark, leave aside the commercial user. This is the reason why the legislature, while enacting the Trade Mark Act 1999, did not include the act of trade mark application filing by the defendant as infringement of trade mark (Section 29 of Trade Mark Act 1999).While bringing an action of infringement of trade mark, onus heavily lies on the plaintiff to establish the infringement of his trade mark by the defendant and the same cannot be discharged only qua defendant’s trade mark application filing. Thus it can be safely be said that in an action of infringement of trade mark/passing off, no cause of action can be based on trade mark application filling, either by plaintiff or by defendant.

BY AJAY AMITABH SUMAN

ADVOCATE

DELHI HIGH COURT

BABBAR WRECKERS PRIVATE LTD VS ASHOK LEYLAND LTD.

* IN THE HIGH COURT OF DELHI AT NEW DELHI DECIDED ON: 02.11.2010

+ I.A. Nos.5916, 8163/2009 & 1396/2010 in CS (OS) 803/2009

M/S BABBAR WRECKERS PRIVATE LTD. ..... Plaintiff Through: Mr. Hemant Singh with Ms. Mamta R. Jha and Mr. Manish Mishra, Advocates.

versus

M/S ASHOK LEYLAND LTD. & ORS...... Defendants Through: Mr. S.K. Bansal with Mr. Ajay Amitabh Suman, Mr. Anand Vikas Mishra and Mr. Pankaj Kumar, Advocates.

CORAM:MR. JUSTICE S. RAVINDRA BHAT

Whether the Reporters of local papers YES may be allowed to see the judgment?





To be referred to Reporter or not? YES





Whether the judgment should be YES reported in the Digest?

MR. JUSTICE S.RAVINDRA BHAT

% I.A. Nos.5916/2009 (O-XXXIX, R-1&2, CPC) & 8163/2009 (O-XXXIX, R-4, CPC)

1. The plaintiff (hereafter referred to as "Babbar Wreckers") seeks a decree for permanent injunction against the defendants (the first defendant is hereafter called "Ashok Leyland"; the second defendant is hereafter called "Perfect" and the third defendant is hereafter called "Niles"), to restrain the manufacturing, fabrication, sale and offering for sale light recovery vehicles (LRVs) using, or reproducing in any manner engineering drawings which are the subject matter of the technical specification Nos. CQA (QFV)/VEH/STLN/003/2005 and CQA (QFV)/VEH/STLN/003/2001 (hereafter called as 2005 and 2001 specifications) and other injunctive reliefs including a decree for mandatory injunction to direct Ashok Leyland to take delivery of 50 LRVs fabricated by





Babbar Wreckers. Consequential money decrees and a decree for rendition of accounts in respect of the sale of superstructure mounted on Stallion 4X4 vehicles of Ashok Leyland produced in accordance with 2005 and the 2001 specifications, are claimed.

The Court had initially granted the ex parte injunction on 4.5.2009 restraining the use of the drawings pertaining to the two specifications or even from manufacture and supply to the fourth defendant i.e. Central Government. The defendants had carried the matter in appeal; the Division Bench disposed of the appeal recording that Ashok Leyland would move an application for vacation of the interim order. Accordingly, I.A. No.8163/2009 was filed by Ashok Leyland on which notice was served. This order proposes to dispose of the plaintiff’s interim injunction application -I.A. No.5916/2009 and the defendant’s application for vacation of the interim order, I.A. No.8163/2009.





The brief facts necessary for the case according to the suit averments are that the Babbar Wreckers claims to be engaged in manufacturing and designing wreckers (also known as LRVs) for more than 40 years and to having supplied them to various Government departments. The equipments are reliable and easy to operate and are mounted on suitable commercial vehicles. Babbar Wreckers claims to have earned substantial reputation and goodwill for the performance of its wrecker equipment and also claims to have spent considerable money in designing and development them having regard to their functionality. It is submitted that in 1980-85, one model of a wrecker known as "Babbar Model GN-7 Medium Recovery Breakdown" (BWGN-7) was designed. An application for trademark registration was made on 28.7.1983. Babbar Wreckers claims to have participated in 1995 in the India International Trade Fair and demonstrated its equipments mounted on TATA 1210D LPT to various vendees. It is submitted that in September, 1995, Central Government through the Ministry of Defence was looking for supply of LRVs and the first defendant submitted its specifications to Army Headquarters with regard to development and supply of LRV on 5/7.5 Ton Stallion MK-II on Ashok Leyland Chassis for procurement of purchase order. It is stated that this was rejected by the Ministry of Defence. Subsequently, on 9.1.1996, a technical group of the Army Headquarters wrote to the Director General, EME (Eqpt.), informing that preliminary assessment of the specifications submitted by the Ashok Leyland for

development of LRV on 5/7.5 Ton Stallion MK-II was found untenable. It is stated that

the same letter recommended the plaintiff for development of LRVs of 7.5 Ton capacity.

The plaintiff’s name was recommended to Ashok Leyland. The said letter reads as

follows:

"4. In Dec. 95 M/s Babbar Wrecker Pvt. Ltd. demonstrated their wrecker eqpt during the exhibition of India International Trade Fair –

95. This firm has been manufacturing wrecker eqpt. for last 30 yrs and they have already supplied over 200 wrecker eqpts to various agencies in India. The gist of the points, after detailed discussion with M/s Babbar Wrecker Pvt. Ltd., are as follows:

(a) Thefirm demonstrated their wrecker eqpt mounted on Tata 1210D LPT, to Chief Automotive Engineer, which could lift 7.5 ton dead weight on outriggers, without stay anchor, with single line pull. They have already developed PTO, winch-gear, booms, super structure and outriggers to handle load up to 15 Tons on single line pull.





(b) M/s Babbar Wrecker Pvt. Ltd. claims that their wrecker eqpt, to handle 7.5 tons lift and line pull, will weigh under 3.5 Tons.





(c) The firm offers to supply wrecker eqpt with 7.5 Ton line pull within 4 to 6 weeks on receipt of orders, for trials. They have also offered to undertake development of 7.5 ton LRV on any suitable chasses.

In view of para 4 above M/s Babber Wrecker Pvt. Ltd. has been asked to provide specifications compatible to GSQR. In addition, Mr. P. Dhanasekaran, Senior Dev elopement Manager (Spl Veh) of M/s Ashok Leyland, has also been provided details of M/s Babber Wrecker Pvt. Ltd. to facilitate dev elopement of Light Recovery Vehicle of 7.5 Ton capacity.





Considering the feasibility of development 7.5 ton Wrecker eqpt, the following options are now available.

 Option-1. M/s Ashok Leyland be advised to procure 7.5 ton wrecker equipment from M/s. Babbar Wrecker Pvt. Ltd. for development of prototype LRV.

 Option-2. One 5/7.5 ton Stallion MK-II be offered to M/s.

Babbar Wrecker for development of LRV preferably on „no cost no commitment‟ basis under the aegis of HQ Tech Group. This

option provides a scope for development of LRV by the Army Base Wksp.  Option-3. Assigning one of the Army Base Wksp eqpt. Ex. M/s. Babbar Wrecker. One 5/7.5 Ton Stallion MK-II be made

available to the assigned Base Wksp for this task. This option will be suitable on long term basis as the existing financial rules

and procedure would require some alterations."

4. Babbar Wreckers contends having represented on 24.1.1996, enclosing its "Breakdown Wrecker" brochure to the Army Headquarters showing its interest for the supply of the required equipment. The suit avers that Ashok Leyland on 12.03.1996 wrote to Babbar Wreckers requesting it to provide super structure drawings and technical data in respect of 7.5 ton wrecker equipments to seek further approval from the Army Headquarters. The material part of the letter reads as follows: -

"… In order to proceed with the project, it is necessary to make a superstructure drawing and get it approved. Kindly also furnish all the technical data regarding the 7.5 ton Wrecker to enable us make an offer to Defence and to recheck at our end the Wreckter transmission ratio, service drum gear ratio and the sprocket ratio.

Kindly arrange to send the drawing and the technical details at

the earliest…."

5. Babbar Wreckers submits that on 31.07.1996 it informed Ashok Leyland about fabrication of a prototype recovery breakdown Wrecker of 7.5 tons capacity on its

(Ashok Leyland’s) vehicle, Stallion 4X4 and that it was ready for inspection and testing

by the Army.

6. The suit further states that Ashok Leyland on 11.12.1999 wrote a letter to Babbar Wreckers asking it to prepare and submit the fabrication drawings of the LRV. The suit relies upon the Minutes of the Meeting dated 17.04.2000 held at the Army Headquarters to decide the modalities for inspection of pilot LRV 5/7.5 Stallion and states that its drawings were actually agreed to be furnished to Central Government. Babbar Wreckers states that it thereafter prepared the engineering drawings which were computer generated and specially prepared by its Draftsman under the direct supervision of Mr. Naresh Babbar, its Managing Director. The drawings were furnished to Ashok Leyland and the Central Government. They were provisionally approved by the Deputy Controller, CQAE (OFV), Jabalpur, of the Central Government. Babbar Wreckers further states that it developed and designed the wrecker equipment as per specifications of the Central Government which were tested and approved. Later on 9.6.2000, the Central





Government issued a purchase contract to Ashok Leyland for supply of 195 LRV based on 5/7.5 ton Stallion as per the approved specification No. CQA (OFV)/VEH/STLN/LRV/2K/03 (hereafter called as "2K specification") on the understanding that Babbar Wreckers would be fabricating the LRVs on Ashok Leyland’s vehicles. Ashok Leyland thereafter issued a letter of intent dated 8.8.2000 for supply of 195 breakdown wreckers units, out of which 100 were supplied by Babbar Wreckers and 95 by Perfect. Babbar Wreckers relies upon a joint inspection and its Minutes of meeting to say that the LRVs were fabricated by it was in conformity with its engineering drawings and specifications. The Minutes of meeting/inspection report has been filed.

Babbar Wreckers claims to have entered into an arrangement whereby Perfect was granted license to use its drawings at the behest of Ashok Leyland; reliance is placed on agreements dated 8.9.2000, 21.9.2000, 7.2.2002 and 15.4.2002 for payment of what is termed as nominal royalty of 3% to 7% of the basic price of the LRVs. Perfect is alleged to have paid royalty to Babbar Wreckers, till 2002. The agreement between the parties dated 7.2.2002 was valid till completion of the work order. It is stated that even though Perfect did not pay royalty despite its obligation to do so, Babbar Wreckers allowed it to use the drawings as a gesture of goodwill but at the same time that cannot be construed as waiving its right to claim such royalty. Babbar Wreckers then mentions about the various contracts between 2000-2005 where the work orders were procured by Ashok Leyland for supply of the entire LRV; the fabrication and supply of wreckers were distributed between the Babbar Wreckers and Perfect. These have been detailed in paragraph-24. For the period 2000-2009, such orders for supply of 1121 vehicles was given by the Central Government in five lots; Babbar Wreckers was given the contract (or sub-contract) to fabricate 664 wreckers assemblies. Babbar Wreckers submits that according to the understanding between the parties whenever Ashok Leyland procured the orders for supply of the vehicles with the wrecker assemblies, it (Babbar Wreckers) invariably was given a proportionate order for fabrication of the wrecker assembly and Perfect was to get a proportionately lower quantity. The suit mentions about a legal notice dated 1.10.2005 to Perfect, calling upon it to pay royalty which led to intervention

of the Central Government. In this letter, the Central Government stated that unless the

matter was resolved inter se, it would not place any further orders on Ashok Leyland. It

is stated that in these circumstances, on 27.12.2005, Babbar Wreckers wrote to the

Central Government stating that the matter had been resolved.

8. Babbar Wreckers relies upon the grant of provisional Proprietary Article

Certificate by the Central Government on 9.6.2004, which was granted. The said

Proprietary Article Certificate dated 2.2.2005 reads as follows:

"M/s Babbar Wrecker Pvt. Ltd., B-11, Mayapuri Industrial AreaPh-1, New Delhi -110 064

PAC FOR SUPERSTRUCTURE OF LRV 5/7.5 TON MODEL BWGN-7C/BWGN-7C/A MOUNTED ON STALLION 4X4

Dear Sirs,

Reference: (i) Your letter No.BWPL/CQAV/04 dt. 25.12.04.

(ii) this office letter of even No. dt. 5.1.05 and 25.1.05.

Superstructure Model BWGN-7C/BWGN-7C/A, developed and designed by M/s. Babbar Wreckers was trial evaluated at VRDE and by users extensively. Accordingly, Specification No. CQA (OFV)/VEH/STLN/003/2001 was formulated.





Details of items for which PAC is accorded except bought out and hardware items as indicated in the ISPL submitted by you are enclosed as

Appendix „A‟.

4. Further, as requested vide our letter dated 25.1.05 copy of two sets of complete manufacturing drgs. consisting of Gp 32.01 to 32.23 including Assys/Sub-Assys as given in general arrangement, Accessories and SMTs may please be forwarded to this Controllerate. The drgs. are required to be forwarded within 7 days to this Controllerate four our sealing and scrutiny purpose. It is pertinent to mention here that no changes/modification shall be carried out without the prior approval of this Controllerate.

Thanking you, Yours Sincerely

(J.S. Sangwan)"

9. Babbar Wreckers complains that a departure from the previous understanding and

agreement took place, when Ashok Leyland was placed with an order of supply of 286

LRVs in January, 2009, the contract/order for fabrication and supply of all the wrecker

assemblies was, however, placed on Perfect. It is stated that this was in breach of the

agreement as Babbar Wreckers had put in tremendous labour and effort in securing its

drawings approved and was entitled to at least half of the order but was content to

maintain cordial relations by executing the orders for wrecker assemblies only in respect

of 50 LRVs. It is submitted that if the past precedent and practice were to be taken into

account, Babbar Wreckers was entitled to manufacture at least 50% of the total orders

placed upon Ashok Leyland; the latter kept on evading and giving vague assurances.

Ultimately, a legal notice dated 7.4.2009 was issued to the first three defendants,

terminating the license to use the drawings and specifications. Babbar Wreckers claims

that it is the author and owner of the copyright in the 2001 and 2005 specifications; the

claim is founded on the following plea:

"36. It is submitted that the specification no.CQA(OFV)/VEH/STLN/LRV/2003/01 and specification no.CQA (OFV)/VEH/STLN/LRV/2003/05 approved by the Ministry of

Defence for fabrication of LRVs comprise of Plaintiff‟s

engineering drawings, specifications and technical know-how. The subject matter of the said specification contains several engineering drawings of Wrecker equipments which illustrate the functional features thereof. The said engineering drawings constitute original artistic works within the meaning of Section 2

(c) of the Copyright Act, 1957 and are entitled to copyright protection. All the engineering drawings are computer generated drawings prepared by the draftsman Mr. Aman under the employment of the plaintiff and under the supervision of Mr. Naresh Babbar, Managing Director of the Plaintiff. The said engineering drawings are artistic works, designed and created at instance of Plaintiff for valuable consideration paid. The plaintiff, therefore, is the owner of copyright therein having exclusive right to use or reproduce features thereof in any material form, directly or indirectly, including three dimensional form from two dimensional drawings or three dimensional form by the process of

"reverse engineering". The fabrication of any Wrecker

equipment (LRV) based on the engineering drawings and specifications of the Plaintiff without plaintiff‟s authorization constitute violation of Plaintiff‟s copyright in the engineering drawings pertaining thereto, which, apart from constituting infringement under Section 51 (a) of the Copyright Act, 1957, also amounts to cognizable offence, punishable with imprisonment up to three years and fine up to Rupees Two lakhs, under Sections-63

and 64 of the Copyright Act, 1957."

10. The plaintiff argues that the pleadings and documents on record prove beyond doubt, that it is the copyright owner of the drawings conforming to the specifications of 2001 and 2005, used by the Ashok Leyland and Perfect for assembling the wrecker units. It is submitted that such drawings are artistic works under Section 2 (c) of the Copyright Act, 1957 (hereafter called "the Act"). Counsel argues that these drawings are product of the creative effort put in at the plaintiff’s behest. It is submitted the authority and





right to exclusively reproduce the drawings in material, three dimensional form, vests in the plaintiff, which both Ashok Leyland and Perfect have infringed.

Babbar Wreckers relies on the judgments reported as John Richard v. Chemical Process Equipment (P) Ltd. AIR 1987 Del 372; Escorts Construction Equipment Ltd. & Anr. v. Action Construction Equipment (Pvt.) Ltd. 1999 PTC 36 (Del), etc. for the proposition that drawings are deemed to be artistic works, and entitled to protection under the Act. It is submitted that having used Babbar Wreckers drawings, and secured orders from the Central Government, which were exploited fully, the plaintiff cannot be deprived of the benefit of copyright, by the defendants. It is submitted that despite service of summons, steps have not been taken by the Central Government to contest the suit.

The plaintiff contends in addition that the defendants particularly the Ashok Leyland and Perfect cannot dispute its copyright because of the circumstance that royalty was consistently paid in accordance with the previous arrangements. It is argued that the Babbar Wrecker’s copyrights thereby stand explicitly established and it is entitled to the injunction as claimed. The reliance is placed upon the judgment reported as Najma Heptulla v. M/s Orient Longman Ltd. & Ors. AIR 1989 Del 623.





14. The first three defendants have filed a common written statement. They contend that in 1995, Ashok Leyland offered to supply LRVs consisting of its Stallion 4X4 Chassis with wrecker to the Central Government as per the latter’s requirement which was later published as JSQR No.2320-03 of 1996. It is stated that in 1995 itself Ashok





Leyland prepared its drawing X9828800 disclosing the basic lay out of the proposed LRVs. The submission is that the Ashok Leyland does not fabricate wreckers itself and, therefore, had approached various vendors. It is stated that in 1996, the plaintiff’s name -for fabrication of the concerned wrecker units-was suggested to the Central Government. The defendants’ claim that the wrecker units were assembled according to the specifications spelt out on the basis of the said drawing X9828800 and even the proto-type was made subsequently.



The defendants’ emphasize on the averments in the suit to the effect that the prototype of the recovery breakdown wrecker of 7.5 tons capacity, was fabricated sometime in July, 1996 and a letter to the same effect had been given by the plaintiff. It is submitted that the documents placed on the record clearly demonstrates that the drawings on which copyright is claimed are dated 9.7.2000 and consequently the claim for creation of original drawings in 1996 is ex facie untenable. The defendants argue that the entire basis of the suit claim about the subsistence of the copyright, therefore, is without documentary basis.





Amplifying the submissions, it is further stated that the plaintiff’s case that the prototype of the wrecker were ready in 1996 in turn constitute a implicit admission that they were based on some other drawings which unambiguously point to the plaintiff’s JSQR No.2320-03 of 1996 specifications and drawing X9828800. The defendants argued that the plaintiff could not have developed and fabricated the wrecker unit or even its pilot prototype in the absence of drawings. It is, therefore, urged that these facts are sufficient to foreclose the claim for injunction and certainly prima facie rebut the submission that the plaintiff is a copyright owner of the drawings embodying in the 2001, 2003 and 2005 specifications. The defendants urged that any two dimensional rendering or reduction/recording of a three dimensional object is subject to copyright protection in terms of Section 14; according to them in this case, the three dimensional rendering was of prototype/pilot wreckers in 1996 itself. The plaintiff, it is stated, does not claim copyright over such articles -nor can claim it. Therefore, the copying or recording of such articles in two dimensional forms does not confer exclusive rights.





The defendants argue that the wrecker units are just constituents of an overall

article which they were contracted to supply to the Central Government. It is stated that such articles i.e. LRVs are essential for public use by the defence forces and that grant of an injunction of the kind sought for, would led to untoward consequences. The defendants, in this regard, submit that the drawings are not subject to copyright protection since they constitute Government works under Section-17 (d) of the Copyright Act, which is in the following terms:

"17. First owner of copyright.-Subject to the provisions of this Act, the author of a work shall be the first owner of the copyright therein Provided that-

XXX XXX XXX

(d) in the case of a Government work, Government shall, in the absence of any agreement to the contrary, be the first owner of the copyright therein;"

18. The defendants further submit that in any event, the use of drawings as is complained of does not constitute copyright infringement under Section-52 (x) of the Act which is in the following terms:

"52. Certain acts not to be infringement of copyright. -(1) The following acts shall not constitute an infringement of copyright, namely:

XXX XXX XXX

(x) the reconstruction of a building or structure in accordance with the architectural drawings or plans by reference to which the building or structure was originally constructed:

Provided that the original construction was made with the consent or licence of the owner of the copyright in such drawings and plans;"

19. The defendants further submit that in terms of the JSQR No.2320-03 of 1996 published by the Central Government which forms the basis or foundation in the formulation of specifications for wrecker units, the proprietary rights over all the drawings and allied literature vests with the Central Government. The relevant condition in Paragraph-37 is relied upon:

"PROPRITORY RIGHTS 37. In the event of the proto-type vehicle being accepted as a standardized product, the aforesaid vehicle design and literature submitted by the firm concerned shall be deemed to have become the property of Govt. of India, Ministry of Defence."

It is submitted that there cannot be any estoppel as is argued by the plaintiff; as it would amount to undermining the public interest. The reliance is placed upon the judgment of the United States Court of Appeal of the VIth Circuit reported as Beer Nuts, INC, v. King Nut Company 477 F.2d 326. It is stated that the said judgment though in the context of patent protection applies equally in the case of copyrights where if a monopolist claims and is granted royalty on premises which the later discovered to be unfounded, it is in the public interest that estoppel is not held against the ostensible licensee. The defendants also rely upon the judgment reported as BRY Air India (P) Ltd. & Anr. v. Western Engineering Company 1999 PTC (19) 48 for the submission that when information is furnished to someone on the basis of which drawings or specifications are formulated, the person who creates such drawings or specification under these circumstances cannot claim copyright.





It is argued that the injunction granted initially by this Court is holding up all further negotiations and consequent award of similar contracts to Ashok Leyland which was undisputedly given the assignment of all previous actions, even according to the plaintiff. Ashok Leyland argues that its tender for supply of further 116 numbers of LRVs mounted on its 4X4 Stallion is subject to advance negotiations and only the price component has to be finalized. Learned counsel argues that if the Court were to confirm the injunction, even without a formal contract, it would be mandated to award a part of the contract to the plaintiff -a proposition which is contrary to the principles for grant of injunction which clearly are that the Courts cannot in exercise of their jurisdiction compel the parties to enter into a contract. It is submitted that at best if the Court is satisfied that the plaintiff is the prima facie copyright owner and that the previous arrangement between the parties entitled it to royalty, suitable orders to secure the plaintiff’s interest in that regard may be made.





22. It can be seen from the above discussion that Ashok Leyland manufactures the main assemblies of the LRVs; Babbar Wreckers and Pefect manufacture the wrecker





units, mounted on it (Ashok Leyland’s heavy vehicle is known as the Stallion 4X4). It is the common case of parties that these vehicles are utilized by the Ministry of Defence. Babbar Wreckers claims to have been manufacturing 3.5 tonne capacity wreckers, earlier, and developed the prototype which matched the Central Government’s requirements, sometime in 1995. Its positive case is that its drawings formed the basis for a prototype manufactured, for the first time, in 1996; a letter dated 31-7-1996 is relied on. Similarly, it relies on several letters by Ashok Lelyland, asking it to prepare the drawings, for manufacturing the wrecker unit. The other materials include the letter to Ashok Leyland, dated 11-7-1999, and agreements dated 8.9.2000, 21.9.2000, 7.2.2002 and 15.4.2002 for supply of various quantities of wrecker assemblies, where the second defendant had agreed to pay royalty to the plaintiff.



The plaintiff is correct when it submits that copyright can subsist, in mechanical drawings. The question here, however is, whether such prima facie case about the

proprietorship as asserted by it has been made out. Though the plaintiff’s argument is that the drawings were made in 1996, under its Managing Director’s supervision, and

direction, no such drawing has been produced. Significantly, all the drawings placed on the record are of mid-2000 vintage; each is contemporaneous to the date when the Central Government placed the orders upon Ashok Leyland. The plaintiff carefully avers that the prototypes of the wreckers, which were ultimately supplied, and were the subject matter of inter se understanding or arrangement with Ashok Leyland, were assembled for the first time, in 1996. Undeniably, such prototypes must have been prepared on the basis of some drawings. Yet, those drawings are not forthcoming. The plaintiff argues that the drawings were prepared, on the basis of such prototype. Now, a facial look at the product drawings and photographs would lead on to infer, at least prima facie, that some technical drawings were required for their manufacture, as they are expected to haul and carry heavy weights, and are to be mounted on chasis manufactured by another concern. Such being the case, the plaintiff’s argument about creation of the drawings after the prototypes were manufactured, seems implausible, to say the least. What is prima facie

credible, on the other hand, is Ashok Leyland’s assertion that its prototype and

specifications JSQR No.2320-03 of 1996 and drawing X9828800 were accepted by the Central Government, in 1995, after which Babbar Wreckers was approached in 1996, to make the wrecker units. The inter se correspondence with Ashok Leyland, then becomes

comprehensible, as the latter’s insistence that the drawings, according to its

specifications, were to be prepared.

24. The second aspect, and an important one at that is that the court cannot shut its eyes to clause 37 of the JSQR which formed the basis for awarding the contract, unambiguously states that the Central Government would be the proprietor of the design

and product ("proto-type vehicle being accepted as a standardized product, the aforesaid vehicle design and literature submitted by the firm concerned shall be deemed to have become the property of Govt. of India, Ministry of Defence."). This stipulation-coupled with Section 17 (d)-also prima facie point to copyright ownership of the Central Government, in the drawings. Here, one cannot lose sight of the fact that the contracts were primarily awarded to Ashok Leyland, which only parted with a portion of them, to the plaintiff, as regards wrecker assemblies. They were and are meant to be used for transportation of materials, and hauling of heavy loads and equipment, for defense purposes, and cater to an obvious public or national purpose.

25. As far as estoppel is concerned, the plaintiff relies on Najma Heptulla‟s case. In that, the plaintiff was a legal representative of Maulana Azad, who had supplied his book to Prof. Humanyun Kabir for its narration and translation. The plaintiff had received 50% royalty for 30 years, and granted copyrights to the publisher. The court restrained the plaintiff from challenging the validity of the agreement. The plaintiff was not granted injunction to stop the defendant from publishing the book even after the said term was over. In this case, however, the materials on record suggest that Perfect had stopped paying royalty to the plaintiff, sometime in 2002; this had led to exchange of legal notices, and the Central Government intervening with the plaintiff, which had withheld supplies. The plaintiff resumed supplies, and did not claim royalties. The legal notice which preceded the present case, too, did not claim royalty arrears, nor was any leave sought to claim them; in any case, such claims are now time barred. An added circumstance is that for the subsequent supplies, there was no payment of royalty. In these facts, the court is of the opinion that having regard to the wide nature of copyright claims, in such cases, which amount to declaration of monopolistic rights over the entire world, the grant of an equitable remedy of injunction solely on the behavioral principle of estoppel, would be inappropriate. In trademark infringement, however, considerations are different, because the nature of defences vary, as the defendant can establish honest concurrent user, prior user, etc, since the claim is uniquely asserted on a case to case basis. However, a copyright subsists for the longest duration, in the cluster of intellectual property rights, and the courts are entitled to test the wide and sweeping nature of rights asserted, undoubtedly in the context of an estoppel, but not soley on such bases. In this case, royalty was paid in about two instances, and had not been paid for over 7 years before this case was instituted. In the circumstances, there is no estoppel which bars the

defendants from contesting the plaintiff’s copyright in the drawings.

The court has noticed more than once, previously, in this judgment, that the contracts have an underlying public purpose, ie. catering to the needs of the Ministry of Defence. The documentary materials on record prima facie suggest that even though Ashok Leyland granted Babbar Wreckers the contract to manufacture wrecker assemblies, roughly in the proportion of 50% of what granted in the orders, there is no written arrangement. The plaintiff of course has averred that royalty of 3% to 7 % used to be paid to it by Perfect in respect of the wrecker units assembled by it. However, in the absence of any indication about the duration of the arrangement, and any positive evidence that such understanding was to operate in a specific manner, for all times to come, or for a period, it would be imprudent for the court to issue a direction to Ashok Leyland, to share its contract execution with Babbar Wreckers. Such a direction would result in the court enjoining a party to enter into a contract, which it clear cannot issue. Furthermore, the court is of the opinion that attaching any condition of the kind insisted upon by the plaintiff to permit execution of any contract by the Central Government with Ashok Leyland, would clearly not be in the public interest. Clause 37 of the JSQR, also points to the possibility of the Government being the owner and author of the works. In the circumstances, the court cannot be blind to the public interest element, which looms large in this case.





In view of the above discussion, it is held that the plaintiff has been unable to

establish, prima facie, to its being a copyright owner. At the same time, the court is conscious that it has been beneficiary in previous contracts, and that 3-7 % royalty was being paid to it – although some time ago. Having regard to these overall circumstances, and to balance the competing rights, and protect the plaintiff’s interest, Ashok Leyland is

directed to furnish an undertaking to pay damages in the event of the plaintiff succeeding. It shall, to that end, also file accounts, and statements, in respect of the amounts received and profits, if any, derived in the contracts that were executed when the suit was filed, and further contracts to be executed, in the event of their being awarded to it, by the Central Government. Such accounts shall be filed once each year. Ashok Leyland is also directed to furnish a bank guarantee for the sum of Rs. 30,00,000/-in favour of the Registrar of this Court, to satisfy any money decree, within four weeks from today.

28. IA Nos.5916, 8163/2009 and 1396/2010 are disposed of in the above terms.

CS (OS) 803/2009

th

The suit shall be listed for further proceedings, on 29November, 2010.

S. RAVINDRA BHAT (JUDGE)

NOVEMBER 2, 2010

Ishi Khosla vs Anil Aggarwal

Delhi High Court

Mrs. Ishi Khosla vs Anil Aggarwal & Anr. on 20 March, 2009

Author: Anil Kumar

* IN THE HIGH COURT OF DELHI AT NEW DELHI + CS(OS) No. 309/2005 % Date of Decision: 20.03.2009 Mrs. Ishi Khosla .... Plaintiff Through: Mr. Nitin Sharma and Mr. Ankush Mahajan, Advocates.
Versus
Anil Aggarwal & Anr. .... Defendants Through: Mr. Ajay Amitabh Suman and Mr. Shashi P. Ojha, Advocates.
CORAM:
HON'BLE MR. JUSTICE ANIL KUMAR
1. Whether reporters of Local papers may be YES allowed to see the judgment?
2. To be referred to the reporter or not? NO
3. Whether the judgment should be reported in NO the Digest?
ANIL KUMAR, J.
*
+ IA No.3811/2009 in CS(OS) No.309/2005
This is an application by the parties for decreeing the suit in terms of the settlement arrived at between the parties. The terms of the settlement are incorporated in the application under Order XXIII Rule 3 read with Section 151 of the Code of Civil Procedure, 1908 (hereinafter referred to as 'CPC') being I.A. No. 3811/2009. Under the settlement, the defendants have agreed that a decree for injunction be passed restraining them from using the trade mark of the plaintiff and the plaintiff has agreed to give up his claim of damages against the defendants.
CS(OS) No. 309/2005 Page 1 of 3 The defendants have also agreed to withdraw their application seeking registration of the trade mark 'Whole Foods' and have also agreed to withdraw the opposition filed by the defendants to the application of the plaintiff for registration of the trade mark 'Whole Foods'.
The application is signed by the plaintiff and defendants and their respective counsels and is also supported by the affidavits of Mrs. Ishi Khosla, plaintiff and Mr. Anil Aggarwal, defendant No. 1 and the sole proprietor of defendant No. 2. There does not seem to be any impediment in allowing the application.
Consequently, the application is allowed and the suit of the plaintiff is decreed in terms of the settlement arrived at between the parties, the terms of which are incorporated in I.A. No. 3811/2009 under Order XXIII Rule 3 read with Section 151 CPC. The application stands disposed of.
CS(OS) No. 309/2005
The parties have settled their disputes and their application incorporating the terms of the settlement being I.A. No. 3811/2009 under Order XXIII Rule 3 read with Section 151CPC has since been allowed.
Consequently, the suit of the plaintiff is decreed in terms of the settlement arrived at between the parties in I.A. No. 3811/2009 under Order XXIII Rule 3 read with Section 151 CPC. Decree sheet be drawn where I.A. No. 3811/2009 shall form part of the decree. All the CS(OS) No. 309/2005 Page 2 of 3 pending applications are also disposed of and parties are left to bear their own costs.
MARCH 20, 2009 ANIL KUMAR, J. sb

KAMDHENU ISPAT LIMITED Vs NANDLAL FRUIT PROCESSOR PVT LTD

M/S Kamdhenu Ispat Limited vs M/S Nandlal Fruit Processor Pvt ... on 10 July, 2012

$~ R-37
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Pronounced on: July 10, 2012
+ RFA(OS) 129/2010
M/S KAMDHENU ISPAT LIMITED ..... Appellant Represented by: Mr.Ajay Amitabh Suman, Advocate with Mr.Pankaj Kumar, Advocate
versus
M/S NANDLAL FRUIT PROCESSOR PVT LTD & ANR ....Respondents
Represented by: None
CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MR. JUSTICE MANMOHAN SINGH
MANMOHAN SINGH, J. (ORAL)
1. The present Regular First Appeal arises out of the judgment/order dated 18th October, 2010 whereby the appellant's suit bearing CS(OS) No.2301/2008 for infringement of trade mark and passing off was dismissed along with the pending applications.
2. The finding of the learned Single Judge was that the suit itself does not disclose any cause of action for any reliefs claimed.
3. The suit as well as the interim application was listed before the Court. Learned counsel appearing on behalf of the appellant states that only in the interim application, arguments were addressed by both sides.
4. As far as the finding arrived in the interim application is concerned, we have heard the learned counsel
RFA(OS) 129/2010 Page 1 of 3 appearing on behalf of the appellant and after hearing, we are of the considered view that it is not a fit case which requires any interference, in view of the averments made in the pleadings of the defendants and documents placed on record. The learned Single Judge after examining those documents has rightly come to the conclusion that the documents filed by the defendants therein showed that they have been using the word 'KAMDHENU' as their corporate name/trade name since 1969; their documents also revealed a partnership deed of 1986 and the material on record also suggested that they have been using the mark at least since 2000 if not earlier. The suit was filed in the year 2010. The business activities of both the parties are different, as the plaintiff/appellant is engaged in the business of manufacturing and selling steel products and on the other hand, the defendants/respondents are in the business of trading spices, pickles etc.
5. We agree with the said finding arrived by the learned Single Judge who dismissed the interim application being I.A. No.13348/2008. However, by rejecting the interim injunction, the learned Single Judge has also rejected the plaint by observing that the suit itself does not disclose any cause of action for any of the reliefs claimed.
6. We are not agreeable with the said view taken by the learned Single Judge, as a cause of action is a bundle of facts which are required to be pleaded and proved for the purposes of obtaining relief claimed in the suit. Whether a plaint discloses a cause of action or not is an essential question of fact, but whether it does or does not, must be found out from reading of the plaint itself. In ascertaining, whether the plaint shows a cause of action, the Court is not required to make an elaborate inquiry into doubtful or
RFA(OS) 129/2010 Page 2 of 3 complicated question of law and facts. Rejection of plaint is a serious matter, as it non-suits the plaintiff and it finishes a cause of action, the moment plaint is rejected. In the present case, we feel that the plaint ought not to have been rejected while deciding the interim application. Even there was no representation on behalf of the respondents in this regard.
7. Under these circumstances, the appeal is partly allowed. As far as the interim application under Order XXXIX, Rules 1 & 2 CPC being I.A. No.13348/2008 is concerned, the same shall be treated as dismissed. The suit is accordingly restored at its original position.
8. The suit shall be listed before the Joint Registrar on 16th August, 2012 who shall serve the defendants afresh and after completion of admission/denial of the documents would list the suit before Court for settling issues and directions for trial.
(PRADEEP NANDRAJOG)
JUDGE
(MANMOHAN SINGH)
JUDGE
JULY 10, 2012/ka
RFA(OS) 129/2010 Page 3 of 3