MIPR2015(1)246,
2015(63)PTC87(Del)
IN THE HIGH COURT OF DELHI
Decided On: 19.02.2015
Appellants: Laverana
Gmbh & Co. KG
Vs.
Respondent: Mac Personal Care Pvt. Ltd. and Ors.
Judges/Coram:
Counsels:
For Appellant/Petitioner/Plaintiff: Manav Kumar , Adv.
For Respondents/Defendant: S.K. Bansal ,
Ajay Amitabh Suman and Vikas Khera , Advs.
JUDGMENT
1. The present suit has been filed by
the plaintiff for permanent injunction restraining passing off, damages,
delivery up etc. against the defendants with regard to trade name/trademark
LAVERA in relation to natural cosmetics and other body care products. Along
with the suit, plaintiff also filed an application being I.A. 18151/2012 under
Order 39 Rule 1 and 2 read with Section 151 CPC.
2. The defendant No. 1 is a private
limited company engaged in the business of manufacturing and marketing of
cosmetics, creams for hair/skin/oral/personal care products etc. Defendant nos.
2 and 3 are the Directors of the defendant No. 1.
3. The suit as well as the interim
application was listed before Court on 28th September, 2012 when summons were
issued in the suit and notice was issued in the application. The court also
passed an ad interim ex-parte order against the defendants restraining from
using the trademark LAVERA or Mac's LAVERA in respect of cosmetics/body care
products.
4. Upon service, the defendants filed
the written statement as well as an application being I.A. No. 19804/2013 under
Order 39 Rule 4 CPC for vacation of the ex-parte interim order. By this order,
I propose to decide both pending applications.
5. The case of the plaintiff is that
the plaintiff is carrying on the business of manufacturing and marketing
cosmetics and body care products and uses the trade name/trademark LAVERA in
the course of its business. The plaintiff adopted the trademark LAVERA in early
1980 which is an arbitrary mark in connection with cosmetic products. The
trademark LAVERA was used for the first time in Germany in 1982. Since then the
mark LAVERA has been extensively used in many countries worldwide. In Latin,
LAVERA means "the truth". The aforesaid mark, LAVERA is inherently
distinctive of the goods of the plaintiff. The plaintiff was the first to use
the mark LAVERA in relation to cosmetics and other body care products. The mark
is exclusively associated with the business and products of the plaintiff.
6. It is averred in the plaint that the
plaintiff's mark LAVERA enjoys statutory protection being registered trade mark
in several countries of the world namely Germany, Denmark, Hong Kong, Italy,
France, Japan, Singapore, Ireland etc. to name a few. In India the plaintiff's
application for mark LAVERA is pending for registration under No. 1863388.
7. It is alleged in the plaint that
from the year 1982 and since then, in the International market and in India,
plaintiff's products under the mark LAVERA have become extremely popular and
widely available/sold all over the world. The plaintiff's trademark LAVERA due
to quality of ingredient used in the products has earned substantial goodwill
and reputation in the minds of the public all over the world who recognizes
this brand for its excellence in quality and free from synthetic preservatives,
additives, petroleum-based ingredients, emulsifiers, colors and fragrances.
8. It is stated in the plaint that the
products bearing the mark are freely available for purchase on ebay and several
online stores. The plaintiff has also won several awards in relation to the
LAVERA products, which itself provides ample evidence of the quality of its
products.
9. As per averments made in the plaint,
the plaintiff has also incurred huge expenditures to promote the brand
worldwide. The advertisement expenses for LAVERA products worldwide are stated
below:
10. It is stated that the plaintiff's
trademark LAVERA is a well known mark and substantial goodwill and reputation
has accrued to it on account of the relentless adherence to unmatchable
standards of quality and intelligent marketing strategies of the plaintiff The
worldwide sales figures for LAVERA products for the period 2007-2011 are given
in Para 9 of the plaint, which are reproduced as below:
11. The plaintiff has also obtained
domain name registrations for the mark LAVERA such as www.lavera.com,
www.lavera.de, www.lavera.in, www.lavera.jp, www.lavera.cz, www.lavera.eu,
www.lavera.ca. The plaintiff also sells its product online and its products and
catalogue can be accessed by consumers in India. Furthermore search for the
word LAVERA on popular search engines such as Google, Yahoo, bing, rediff, etc,
show only plaintiff's products among the top 10 results.
12. It is also stated in the plaint that
large number of Indians traveling overseas are also exposed to the plaintiff's
brands through television, magazines, in flight catalogues/magazines, etc.
around the world frequently visited by travelers. There is a large expatriate
population of Indians residing in the UK, Europe, Australia, South Africa and
the Middle East where the plaintiff's goods are sold freely. Many Indian
families have relatives and friends residing in these countries where the
plaintiff's goods are sold and advertised. Further a large number of students
from India go to the UK, Australia and USA to pursue higher studies. By virtue
thereof, and otherwise, the international reputation enjoyed by the plaintiff's
trademark LAVERA has spilled over to India which is evident as per following:
a) India and Germany has
diplomatic ties that go back to over 60 years. The current bilateral trade
between two countries currently stands at over 15 billion Euros. Several
airlines including Air India and Lufthansa have been operating direct flights
to several cities of Germany from India. Thus many Indian tourists and business
persons travel to Germany every year and are exposed to the plaintiff's brand
and its products.
b) A report of NRIs living
overseas has been compiled by the High Level Committee on the Indian
Diaspora-formulated under the aegis of Ministry of External Affairs, Foreign
Secretary's Office in the year 2000-according to which around 2% (i.e., 2
crore) of the Indian population is living overseas which further strengthens
the plaintiff's submission that the international notoriety associated with the
plaintiff's LAVERA mark/product amongst the Indian community has spilled over
to the Indian market. The detailed report is available at
www.indiandiaspora.nic.in.
13. Therefore, by virtue of the
widespread availability, extensive advertising and promotion of plaintiff's
trademark LAVERA through media such as fashion magazines, catalogues and
outdoor advertisements including hoardings, banners and sponsorships of national
and international events.
14. The plaintiff's products under the
trademark LAVERA are extensively advertised in several international magazines
which have a large circulation in India namely Cosmopolitan, Marie Claire,
Women's Health, Elle, Oprah, Glamour etc. Many of the magazines are brought to
India and distributed to subscribers by leading book distributors such as India
Book Distributor. These books and magazines are also available at leading
libraries and through old magazine dealers all over India and by virtue thereof
are able to remain in circulation for a very long time and are therefore
accessed and read by a large number of people. Internet users can access the
plaintiff's website www.lavera.com at all times and see the plaintiff's
products. In addition a number of online stores are advertising and selling
LAVERA products which are accessible to consumers in India and in view of
liberal foreign exchange control laws, the consumers are able to order these
goods as well.
15. The case of the plaintiff against
the defendants is that in or about September 2010, the plaintiff became aware
of the defendants LAVERA mark when it was published in the Trademarks Journal
no. 1441 for opposition purposes. The plaintiff filed notice of opposition
against the defendants' application under No. 1725333. The defendants also
filed an application under No. 1787014 for registration of the mark MAC'S
LAVERA which was published in the Trademarks Journal No. 1443. The plaintiff
has also filed opposition against the defendants' application for the mark
MAC'S LAVERA.
16. On enquiry, it came to the notice of
the plaintiff that the defendants are manufacturing and marketing cosmetic
products under the name Mac's LAVERA which is identical to the plaintiff's mark
LAVERA. It is stated that the addition of the word 'Mac's' does not make the
defendants mark distinctive as the prominent and pertinent element is the word
LAVERA in the defendants' mark. The defendants are also advertising the
infringing Mac's LAVERA product on their website www.macpersonalcare.com.
17. The defendants have adopted an
identical mark in relation to identical products to cash in on the reputation
and goodwill of the plaintiff. It is averred that the defendants have no
explanation for adoption of the said trademark. The defendants have merely
added the word 'Mac's' before LAVERA. The intention of the defendants is to
cause confusion and deception among the trade and public and reap benefits from
their illegal act.
18. It is argued by the plaintiff that
the defendants have deliberately used the similar mark in order to appropriate
the rights of the plaintiff's product as possible and the adoption of an
identical mark by the defendants are in utter bad faith. The defendants being
in the same industry ought to have actual knowledge of LAVERA products and the
quality for which it is known by consumers globally.
19. It is alleged that in view of
statement made in the plaint and material placed on record, the trademark
LAVERA deserves protection by virtue of the following reasons:
(i) The trademark LAVERA is
prima facie inherently distinctive of the products and business of the
plaintiff. The said trademark has been continuously and extensively used by the
plaintiff for many years. Therefore, the use of any identical/deceptively similar
trademark would be construed and associated exclusively with the business of
the plaintiff.
(ii) The plaintiff has
extensively promoted and advertised the LAVERA trademark worldwide. As a result
of which, the relevant and substantial section of the public associates and
knows that the said trademark belongs to the plaintiff.
(iii) The plaintiff's
LAVERA trademark has been extensively advertised by way of print and visual
mediums around the world. As a result of such publicity, the relevant section
of the public recognizes and acknowledges the LAVERA trademark as that of the
plaintiff.
(iv) The plaintiff has
obtained several registrations for the LAVERA mark in numerous countries around
the world. A vast number of registrations attained for the LAVERA trademark
worldwide clearly reflects and indicates that the plaintiff is the exclusive
proprietor thereof.
20. It is stated that the consumers are
bound to presume that the goods provided under the impugned mark 'Mac's LAVERA'
actually originate from the plaintiff or may presume that the defendants are
under some sort of affiliation/link/connection with plaintiff when, in fact, no
such affiliation or connection exists. Such misrepresentation and
misunderstanding may not only cause damage to plaintiff's trade but also
tarnish its reputation. The defendants have no explanation to adopt and use of
identical trademark and in respect of same goods. Hence, the conduct of the
defendants is dishonest and tainted.
21. The defendants have taken various
defences in their written statement and in the grounds of application under
Order 39 Rule 4 CPC. Relevant details for the purpose of deciding the present
applications are mentioned below:
(i) The plaintiff is guilty
of delay, latches and acquiescence inasmuch as it was already aware of the said
rights and user of the said Trademark in relation to its said goods since the
year 2005, and it has acquiesced for continuous period of more than 5 years to
the user of the defendants. The plaintiff was aware of the rights of the defendants
in the said Trademarks LAVERA and MAC'S LAVERA at the latest from September
2010, by its own admission still no action was taken by the plaintiff for two
years, after having knowledge.
(ii) The plaintiff obtained
the impugned ex-parte order by knowingly making false and misleading statements
as to material particulars.
(iii) The plaintiff has not
complied with the provision of the proviso to Order 39 Rule 3 CPC.
(iv) The plaintiff is
neither the proprietor of the impugned trademark under statutory law nor under
the common law. The plaintiff fails to satisfy the requisite ingredients to
sustain an action of passing off. The plaintiff holds no goodwill or
reputation, distinctiveness or any user leave aside significant user in
relation to the impugned trademark within the jurisdiction of this Court.
Further, the plaintiff has miserably failed to make out any case of
trans-border reputation. There is no question of confusion and deception being
ensued in the market and trade vis-`-vis the said user of the defendants. The
people at large identify the said products of the defendants with defendants
only. Even otherwise it is submitted that in an action of passing off, the
heavy onus lies on the plaintiff to establish prior, continuous and extensive
user of the said trademark, in which the plaintiff miserably failed. The
defendant is entitled to use the said trademark/label LAVERA and MAC'S LAVERA
on the basis of the law of honest adoption and concurrent user.
22. As far as adoption of same trademark
LAVERA is concerned, it is the case of the defendant that one Sh. Rajesh
Bansal, K-2035, Chitranjan Park, Ground Park, New Delhi-110019, the
predecessor-in-interest of the defendant No. 1 had coined and adopted the
trademarks LAVERA and Mac's LAVERA in respect of the products namely, bleaching
preparations, other substances for laundry use, cleaning, polishing, scouring
and abrasive preparations, soaps, perfumery, essential oils, cosmetics, hair
lotions and dentifrices etc on 1st August, 2005. At the time of such adoption,
the said predecessor was engaged in the trade of Henna, Sandal, Rose Water and
other cosmetic goods containing Aloevera and to distinguish his goods from the
goods of other traders, he took word LOAVERA from ALOEVERA and coined a new
mark/word LAVERA. In order to protect the intellectual property in the
trademarks LAVERA and Mac's LAVERA, Sh. Rajesh Bansal had also applied for the
registration of his trademark LAVERA vide application No. 1725333 dated 26th
August, 2008 in class 3 claiming user since 1st August, 2005 and Mac's LAVERA
application No. 1787014 dated 18th February, 2009 claiming user since 1st
August, 2005 which are in the process of registration and are likely to be
registered in favor of the defendant No. 1.
23. The defendant No. 1 was incorporated
on 1st May, 2007 as MAC PERSONAL CARE PRIVATE LIMITED who is engaged in the
manufacturing, marketing and selling of the goods namely, bleaching
preparations, other substances for laundry use, cleaning, polishing, scouring
and abrasive preparations, soaps, perfumery, essential oils, cosmetics, hair
lotions and dentifrices etc included in class 03 under the trademarks
LAVERA/Mac's LAVERA since its incorporation with the permission of the said
predecessor. However, in the year 2008, due to some personal reasons, the said
predecessor assigned all his rights, title and interests in the trademarks
LAVERA and Mac's LAVERA together with the goodwill of the business concerning
the goods for which trademark registration application bearing No. 1725333 dated
26th August, 2008 and application bearing No. 1787014 dated 18th February, 2009
in class-03 pending before the concerned Trademarks Registry in favor of the
defendant No. 1 vide Deeds of Assignment dated 5th September, 2009 and 16th
February, 2009 respectively. It is stated that the defendant No. 1 has already
filed request on Form TM-16 for entering its name as the applicant in the
aforesaid applications and the same is likely to be allowed by the Registrar of
Trademark. It is also stated that the trademark/label LAVERA as well as the
trademark/device Mac's LAVERA are registered in Nepal in favor of the M/s. R.B.
Brush Industries Private Limited, which is also a unit of the said Mr. Bansal
and the said registration is valid, effective and subsisting till now.
24. It is alleged that the defendant No.
1 is also having active and interacting website namely www.macpersonalcare.com
and the said website displays the entire range of products of the defendant No.
1. The advertisement expenses relating to the products under the said
trademarks are as under:-
25. The defendants have already spent a
huge sum of money as well as efforts/skills on the publicity/advertisement of
their lawful trademark LAVERA/Mac's LAVERA and the same is also evident from
the Annual Sale Figures of the goods under the aforesaid trademarks. The
word/mark LAVERA/Mac's. LAVERA is exclusively associated with the goods of the
defendants which is being used continuously and extensively
publicized/advertised its products under the said trademark of the defendants.
As the plaintiff is not using the trademark LAVERA in India, the question of
confusion and deception does not arise.
26. In the replication, it is denied by
the plaintiff that the plaintiff has not come to this Court with clean hands
and is guilty of suppressing material facts. It is submitted that the plaintiff
has a strong cause of action against the defendants and is maintainable in the
eyes of law. It is denied that the plaintiff has dishonestly mentioned the old
address of the defendants i.e. 203, Bajaj House 97, Nehru Place, New
Delhi-110019, in the memo of parties. It is stated that the defendants are
running and operating their business from the address 203, Bajaj House 97,
Nehru Place, New Delhi-110 019 also. It is stated that the defendants have
admitted that they are operating from the said address as well and the said
address of the defendants is being reflected in the documents filed by the
defendants. The user claimed by the defendants is also denied by the plaintiff.
27. It is alleged that the defendants
being in the same industry ought to have actual knowledge of LAVERA products,
the quality for which is known by consumers globally. The plaintiff will also
like to bring to the Court's attention the fact that the defendants have not
only copied their brand name LAVERA but also the trademark MAC of Makeup Art
Cosmetics Inc. It is stated that the defendants are habitual infringers of
international brand names and have deliberately copied plaintiff's internationally
well reputed trademark LAVERA with the intention to pass off their products as
that of the plaintiff's products. The mark LAVERA is completely arbitrary when
used in relation to cosmetics. It is stated that it was copied and popularised
by the plaintiff in relation to cosmetics.
28. The plaintiff has also produced some
evidence in order to show that the products of the plaintiff are available to
the customers in India through online retail outlets and online retail stores,
satellite televisions, mobile phones, air travel etc. consumers and markets
world-wide are connected with each other. Thus, it is argued by the plaintiff
that knowledge of products and brands travel much more quickly. The products
are freely available for purchase to consumers in India. The use and reputation
of plaintiff's brand LAVERA has spilled over into India coupled with the fact
that the defendants have failed to assign any reason to adopt the same
trademark. It is argued that the justification given by the defendants that the
mark LAVERA is from the ALOEVERA is without any substance and the plaintiff has
no objection if the defendants may use the mark ALOEVERA in respect of cosmetic
goods. The same trademark cannot be allowed to be used by the defendants who
are using the mark LAVERA in identical manner.
29. It is submitted that the plaintiff
became aware of the defendants product under the mark "LAVERA" and
"Mac's LAVERA" in September, 2010, when the Defendants mark
"LAVERA" was published in the Trademark Journal No. 1441 for
opposition purposes. It is the plaintiff who first adopted the mark LAVERA in
the early 1980's and since then the mark has been used extensively all over the
world.
30. As far as user of the plaintiff's
trade mark in India is concerned, the plaintiff's products under the trademark
LAVERA are extensively advertised in several international magazines which have
a large circulation in India namely Cosmopolitan, Marie Claire, Women's Health,
Elle, Oprah, Glamour etc. Many of the magazines are brought to India and
distributed to subscribers by leading book distributors such as, India Book
Distributor. These books and magazines are also available at leading libraries
and through old magazine dealers all over India.
31. It is denied by the plaintiff that
the adoption by the defendant is bonafide i.e. to distinguish their goods from
the goods of other traders, the defendants took the word LOEVERA from ALOEVERA
and coined a new mark/word LAVERA, is denied by the plaintiff.
32. It is denied that the defendant no.
1 was incorporated on 1st May, 2007 as MAC PERSONAL CARE PRIVATE LIMITED. It is
denied that the defendant No. 1 has been engaged in the manufacturing,
marketing and selling of the goods namely, bleaching, preparations, other
substances, for laundry use, cleaning, polishing, scouring and abrasive
preparations, soaps, perfumery, essential oils, cosmetics, hair lotions and
dentifrices etc included in class 03 under the trademarks LAVERA/Mac's LAVERA
since its incorporation with the permission of the said predecessor. It is also
denied that in the year 2008, due to some personal reasons, the said
predecessor assigned all his rights, title and interest in the trademarks
LAVERA and Mac's LAVERA together with the goodwill of the business concerning
the goods for which trademark registration application bearing No. 1725333
dated 26th August, 2008 and application bearing No. 1787014 dated 18th
February, 2009 in class-03 pending before the concerned trademarks registry in
favour of the defendant No. 1 vide deeds of assignment dated 5th September,
2009 and 16th February, 2009 respectively.
33. It is denied that the defendants are
the prior users of the trademarks LAVERA and Mac's LAVERA and have been using
the same continuously, extensively and openly since the year 2005 in relation
to their goods falling in class 3. It is denied that the use of the trademarks
LAVERA and Mac's LAVERA on the part of the defendants have been without any
hindrance from any corner including the plaintiff herein.
34. It is also denied that the defendants
have continuously and extensively publicized/advertised its products under the
said trademarks through various media including print and electronic media. It
is further denied that the defendant No. 1 has also participated in various
national and international trade exhibitions. The defendants have not attached
any documentary proof in support of their version.
It is submitted that the
defendants cannot by claiming false and fictitious sales justify their malafide
adoption of an identical mark in relation to identical goods.
35. The plaintiff submits that the
present case is only in respect of the illegal adoption of the mark LAVERA by
the defendants and the same does not pertain to the packaging of the products
of the parties. The defendants by contending that the packagings of the
products of the parties are different and are only trying to divert the Court's
attention from the real controversy between the parties. It is also denied that
the defendants have already spent a huge sum of money as well as efforts/skills
on the publicity of their lawful trademark LAVERA & Mac's LAVERA.
36. The plaintiff submits that the
defendant cannot on one hand submit that the mark is generic and at the same
time seek its registration. It is submitted that the plaintiff is the
proprietor of the mark LAVERA and the same is also registered in several
countries of the world. Further, due to its well known nature and spill over
reputation into India, the mark LAVERA is well known to the customers in India
and the plaintiff has the exclusive rights to its use and also restrains any
third party from adopting and using an identical or deceptively similar mark.
37. The matter was heard and the order
was reserved on 22nd July, 2014. The matter was put up for direction on 1st October,
2014 and the following order was passed by this Court:
"The parties in the
above said matter made their submissions in the applications and the order was
reserved. The entire matter revolves around the issue of prior user of the
trade mark Laverana in question.
While dictating the orders,
it has been noticed that parties have not filed the original documents on the
basis of which the prior user is claimed. Even some of the advertisements
appeared in the newspapers filed by the defendants are not complete newspapers.
The plaintiff is claiming the earlier user in overseas countries. On the other
hand, the case of the defendants is that the defendants are the prior and
concurrent users of the trademark in India though the rival marks are identical
so that goods. In the absence of all the original documents, it is not possible
to reach at a definite conclusion, as to who is the prior user of the
trademark. Let all the original documents be filed by both the parties within
two weeks."
38. The plaintiff has filed following
documents along with the plaint:
List of documents on behalf
of plaintiff filed on 27.09.2012
39. The plaintiff also filed another
list of documents dated 3rd July, 2014.
List of documents on behalf
of plaintiff filed on 03.07.2014
40. The plaintiff has also filed few
documents after hearing of the interim application by way of list of documents
filed on 30th October, 2014, the details of which are given as under:
41. The documents filed subsequent to
the argument of interim application and order being reserved cannot be
considered.
42. The defendant has also filed large
number of documents and list of original documents along with original
documents on behalf of the defendant. From the documents placed on record, it
is evident that the defendants have been using the trademark LAVERA openly
since 2009 in respect of cosmetic goods.
43. From the material placed on record
by both the parties, it is clear that the plaintiff is the first adopter of the
trademark which is being used by the plaintiff in overseas countries prior to
the defendants and the trademark was being advertised through various modern
media definitely prior to the defendant.
44. As far as user of the trademark
LAVERA in India is concerned, the plaintiff no doubt has to establish prima
facie that the trademark in question is unique goodwill in other countries and
then the benefit of trans border goodwill and reputation can be derived by the
plaintiff.
45. One of the essential ingredients is
goodwill. The classic case of passing off as it existed since its genesis
always insist the existence of goodwill of a merchant in order to give him a
locally enforceable right to sue for passing off. This has been explained by
Kerly's in his book called Law of Trade Marks and Trade Names (Fourteenth
Edition) (South Asian Edition 2007), wherein the concept of goodwill has always
been categorized as local in character and the learned author observed thus:-
"Since an essential
ingredient of passing off is damage (or prospective damage) to goodwill, he
(the Plaintiff) must show that he had, at the date when the Defendants started
up, in this country not merely a reputation but a goodwill capable of being
damaged. Goodwill, however, is local; it is situated where the business is.
Thus a foreign claimant may have a reputation in this country-from travellers
or periodicals of international circulation or, increasingly, from exposure on
the Internet-yet still fail in an action for passing off because he has here no
business and so no goodwill. Such cases have been not uncommon in recent years,
and have caused considerable difficulty. Where there is a substantial
reputation here, our courts will often accept minimal evidence that a business
exists here, but there has to be some".
46. This concept of goodwill and the
insistence of localized business has been traditional concept of passing off
which sometimes is called as classic case of passing off. However, this concept
of passing off has undergone changes due to advent of technology and
modernization. For the said reason the tendency to insist localized goodwill
has been transformed into proving reputation of a global character. All this
would mean that courts entertaining the case of passing off can discount the
localized existence of goodwill and the business in the territory specific if
the substantial nature of reputation has been proved which has some kind of
nexus in the territory where the protection is sought and the said concept in
the modern language is called trans-border reputation whereas the goodwill is
always local in character, the concept of reputation is dynamic and is all
encompassing.
47. The reputation of a person can
transcend boundaries by virtue of its advertisement in the newspapers, media
circulation, expatriate reputation due to cultural akinness and all other
relevant factors which connect one country's business with that of another.
This has been aptly explained by the Division Bench of this Court in the case
of N.R. Dongre v. Whirlpool Corporation, MANU/DE/0700/1995 : AIR 1995 Delhi 300
wherein the concept of trans-border reputation was approved in the following
words:-
"(25) Thus a product
and its trade name transcend the physical boundaries of a geographical region
and acquire a trans border or overseas or extraterritorial reputation not only
though import of goods but also by its advertisement. The knowledge and the
awareness of the goods of a foreign trade and its trade mark can be available
at a place where goods are not being marketed and consequently not being used.
The manner in which or the source from which the knowledge has been acquired is
immaterial".
48. The said judgment of Whirlpool
[supra] has been approved by the Supreme Court in the case of N.R. Dongre and
Ors. vs. Whirlpool Corpn. and Anr., MANU/SC/1223/1996 : 1996(2) ARB. LR 488
(SC) wherein the exposition of law laid down by the Division Bench of this
Court was again reiterated. This exposition of 1996 in the case of Whirlpool
[supra] has been further revisited by the courts in India more importantly in
the case of Allergan Inc. v. Milment Oftho Industries, MANU/WB/0094/1997 : 1999
PTC (19) (DB) 160 wherein Ruma Pal, J. has carefully analyzed the interplay
between the goodwill and reputation in a case of passing off action and has
laid down that the Courts in India have followed the third approach which is a
middle path wherein strict insistence of localized business is not necessary.
However, reputation which is sought to be protected has to be substantial one
having global character. The observation made by Hon'ble Judge is as under:-
"13. Reputation is the
connection that the public makes between a particular product or service and a
particular source which may or may not be known. Some Courts have held that
reputation which is built up on the basis of trade within the country is
entitled to protection from passing off. Others Court have made some concession
to the communication explosion and held that if the plaintiff has a reputation
in another country, his right to the mark will be protected if it is coupled
with some actual or proposed business activity within the country (See Alain
Beniardin et Cie v. Pavilion Properties, (1967) RFC 581 ;
Amway Corporation v. Eurway Int. Ltd. (1974) RFC 82 .
"Still other Courts have held that with the increase in international
commerce, mass media communications and the frequency of the foreign travel,
political and geographic boundaries do not stem the exchange of ideas and
instant information. Local business is not an essential ingredient of a passing
off action. However, the reputation must be well established or a known one
See: Panhard et Levassor v. Panhard Motor Co. Ltd., (1901) 18 RPC
405 ; Sheraton Corpn. v. Sheraton Motels, (1964) RPC 202 ;
Orkin Exterminating Co. Tnd. v. Pest Co. of Canada (1985) 5 Canadian
Patent Reporter 433 ; Vitamins L. D.'s Application for Trademark, 1956(1)
RPC 1 . The decisions which reflect the first and second view have
so held for reasons which are partly historic, partly geographic and partly
because reputation was equated with goodwill. Goodwill has been defined as the
benefit derived from reputation. It is not the reputation required to found a
passing off action. The law of passing off is not trammeled by definitions of
goodwill developed in the field of revenue law [per Hockhart J., Conagra Inc.
v. McCain Foods (Aust) P. Ltd., 1993(23) IPR 193 231].
It is an asset of a business assessable in terms of money and transferable (See
IRC v. Muller, (1901) AC 217 , Trego v. Hunt (1896)
AC 7 ; ITC v. B.C. Srinivas Shetty. In my opinion reputation framing the
basis of a passing off action need not be so localised. Whatever the compulsion
for the Courts taking the first or second view in other countries, as far as
this country is concerned, Courts in India prescribe to the third view and have
held that a plaintiff with a reputation which is established internationally
can sue to protect it in this country even if it does not have any business
activity here. In other words reputation of a product may precede its
introduction and may exist without trade in such product in the country. See
N.R. Dongre v. Whirlpool Corporation, (DB); J.N. Nichols (Vimto) Ltd. v. Rose
& Thistle, MANU/WB/0005/1994 : 1994 PTC 83 (DB); Calvin Klein Inc. v.
International Apparels, (1995) FSR 515 : 1995
IPLR 83 ; Conagra Inc. v. McCain Foods (Supra) at p. 133."
49. The Courts in India have started
recognizing the global character of the brand names and have started giving
them protection merely on the basis of global nature of reputation without
insisting any localized business which was significant departure from the
classic trinity laid down by Lord Diplock in the case of Erven Warnink BV vs.
J. Townend and Sons (HULL) Ltd. (1979) 2 ALL ER 927 .
50. Recently, this Court has rendered a
decision in the case of Cadbury U.K. Limited & Anr. vs. Lotte India
Corporation Ltd., reported in MANU/DE/0372/2014 : 2014(57) PTC 422 (Delhi)
wherein the decision of law relating to trans-border reputation has been
further strengthened and has been taken to another level wherein the court has
not merely relied upon the decision of Milment (supra) and Whirlpool (supra)
but has also extended the principle of trans-border reputation by observing
that the existence of a merchant on web pages which are of foreign origin and
social media are sufficient to show the trans-border nature of reputation
without having any activity in India at the relevant time. Though it is very
broad extension of the concept of trans-border reputation, but it is a question
of fact in each case as to how the internet documents are sufficient to show
the global character of the trademark and the reputation attached to the same.
The impact of the said decision which has been given very recently is yet to be
seen and analyzed by the other Courts in India in the upcoming times.
The concept of trans-border
reputation and goodwill is interesting in academic sense. However, due to
advent of internet media, international travel, the insistence on the localized
business as well as trans-border reputation is nowadays more or less dealt with
in a kind of presumptive approach rather than by actual establishment of the
same. As the international businesses grow and proximity between the markets
would increase, over the time this concept will become weaker and on one good
day world will be treated as one market.
51. Reliance is also placed on the
following decisions:
(i) In Milment Oftho
Industries & Ors. Vs. Allergan Inc MANU/SC/0512/2004 : 2004(28) PTC 585 (SC),
it was observed that whilst considering the possibility of likelihood of
deception or confusion, in present times the Courts must also 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 imperiled. It must also
be remembered that nowadays goods are widely advertised in newspapers,
periodicals, magazines and other media which is available in the country. This
results in a product acquiring a worldwide reputation. Thus, if a mark is
associated with the worldwide reputation it would lead to an anomalous
situation if an identical mark in respect of a similar goods is allowed to be
sold in India. However, one note of caution must be expressed. Multinational
corporations, who have no intention of coming to India or introducing their
product in India should not be allowed to throttle an Indian Company by not
permitting it to sell a product in India, if the Indian Company has genuinely
adopted the mark and developed the product and is first in the market. Thus,
the ultimate test should be who is first in the market. The mere fact that the
respondents have not been using the mark in India would be irrelevant if they
were first in the world market.
(ii) Lowenbrau AG v. Jagpin
Breweries Ltd. MANU/DE/0022/2009 : 157 (2009) DLT 791: 2009(39) PTC 627 (Del)
to contend that the question of prior use cannot be agitated on the basis of
user in India alone and that national and manmade boundaries and borders are
getting diluted and the world has to be viewed as one common market.
(iii) N.R. Dongre v.
Whirlpool Corporation MANU/DE/0700/1995 : AIR 1995 Delhi 300 (DB): 1996(16) PTC
(Del) to contend that from prima facie evidence of advertisements in
international publications and sale of products bearing the Whirlpool trademark
in various geographical regions of the world and inspite of sales in India
limited to the US Embassy and the US Aid Office in Delhi, injunction was issued
in this case.
Thus, in the present case
the plaintiff prima facie has been able to make out a strong case of goodwill
and reputation as well as trans-border user of the mark LAVERA.
52. As far as two marks LAVERA and MAC
LAVERA are concerned, both are deceptively similar. Reliance is placed on Kedar
Nath vs. Monga Perfumery & Flour Mills, MANU/DE/0014/1974 : AIR 1974 Delhi
12, wherein this Court held that the mark Sudarshan and Vijay Sudarshan are
deceptively similar.
53. The defendants in the present case
have made its application for registration of the trademark LAVERA which was
accepted and is now pending under opposition filed by the plaintiff. It is
settled law that if a party at the time of making the application for
registration of the trademark had knowledge that the mark applied for had
already been used by another trader in relation to the said goods then the
claim of the proprietorship made by him is false and frivolous. The heavy
burden lies on the said party who had applied for registration of the same
trade mark. Indian trader has to justify before the Court in order to claim the
proprietorship of the mark if the mark is a foreign mark.
54. It is also settled law that under
those circumstances if the foreign proprietors have an intention to use the
mark in India then the conduct of the party, who has applied for registration
of the same foreign mark in his name, is questionable. Under Section 11 of the
Trade and Merchandise Marks Act, 1958 there is prohibition of registration of
the similar trade mark which is already well-known and if the later mark would
cause unfair advantage or be detrimental to the distinctive character or repute
of the earlier trademark.
55. Provision of Section 17D of the
Drugs and Cosmetics Act, 1940 mandates that if a cosmetic is manufactured under
a name which belongs to another cosmetic or if it is an imitation of, or a
substitute for, another cosmetic or resembles another cosmetic in a manner
likely to deceive another cosmetic, the same amounts to spurious cosmetic
within the meaning of said provision.
56. Thus, if the defendants are not able
to justify a valid reason for adoption of the peculiar mark, they cannot derive
the benefit of its proprietorship because this element in Trademark Law is very
essential in order to determine as to whether any case is made out to contest
the suit by the defendants. The mark LAVERA is not a common word/known mark in
India by any third party.
57. The issue of delay in passing off
matters has been considered by Courts from time to time. Some of them are
referred to as under:
a) In the case of Midas
Hygiene Industries Pvt. Ltd. vs. Sudhir Bhatia and Others, MANU/SC/0186/2004 :
2004(28) PTC 121, wherein it was held in the judgment that in case, no explanation
could be given as to why the identical label is used and there is dishonest
intention to pass off his goods as those of plaintiff, then the interim order
can be passed.
b) In the case of Hindustan
Pencils Pvt. Ltd. Vs. M/s. India Stationery Products Co., MANU/DE/0383/1989 :
AIR 1990 DELHI 19 it was held as under:
".........It was
observed by Romer, J. in the matter of an application brought by J.R.
Parkingnon and Co. Ltd., (1946) 63 RPC 171 at page 181
that "in my judgment, the circumstances which attend the adoption of a
trade mark in the first instance are of considerable importance when one comes
to consider whether the use of that mark has or has not been a honest user. If
the user in its inception was tainted it would be difficult in most cases to purify
it subsequently". It was further noted by the learned Judge in that case
that he could not regard the discreditable origin of the user as cleansed by
the subsequent history."
c) In the case of M/s.
Bengal Waterproof Ltd. Vs. M/s. Bombay Waterproof Manufacturing Co.,
MANU/SC/0327/1997 : AIR 1997 SC 1398 it was held as under:
"20.........It is now
well settled that an action for passing off is a common law remedy being an
action in substance of deceit under the Law of Torts. Wherever and whenever
fresh deceitful act is committed the person deceived would naturally have a
fresh cause of action in his favour. Thus every time when a person passes off
his goods as those of another he commits the act of such deceit. Similarly
whenever and wherever a person commits breach of a registered trade mark of
another he commits a recurring act of breach or infringement of such trade mark
giving a recurring and fresh cause of action at each time of such infringement
to the party aggrieved. It is difficult to agree how in such a case when in
historical past earlier suit was disposed of as technically not maintainable in
absence of proper relief, for all times to come in future defendant of such a
suit should be armed with a license to go on committing fresh acts of infringement
and passing off with impunity without being subjected to any legal action
against such future acts."
The ratio of the aforesaid
decisions is squarely applicable to the facts of the present case. Thus,
injunction cannot be refused on account of delay as the plaintiff has made a
strong prima facie case of passing off.
58. Prima facie it appears to the Court
that the plaintiff adopted the trademark LAVERA which is a completely arbitrary
mark/word when used in connection with cosmetic products prior to use of the
mark by the defendants. It is averred that the trademark LAVERA was used for
the first time in Germany in 1982 and the same has been used in many countries
worldwide. Thus, prima facie it appears to the Court that the plaintiff is the
first to use the mark LAVERA in relation to many kinds of cosmetics and other
body care products.
59. For the aforesaid reasons mentioned
above, it is evident that the defendants are not the proprietor of the
trademark LAVERA which is an unusual, uncommon and arbitrary mark. The
defendants have failed to give any valid justification for using the mark
except vague reply is given. At the time of adoption of the mark, the
defendants must be aware about the mark of the plaintiff. Therefore, the
adoption and use on the part of the defendants is not honest. The balance of
convenience lies in favour of the plaintiff and against the defendants even
otherwise is under injunction last since 28th September, 2012. On the other
hand, if the interim order already granted is vacated, the plaintiff would
suffer irreparable loss and injury. The sale of cosmetic products by the
plaintiff on internet is valid sale and it amounts to use of a mark. The
defendants' argument about the non-user of the mark is without substance. The
compliance of Order 39 Rule 3 CPC has been made by the plaintiff as per record
available. The plaintiff has filed an affidavit of compliance as per time
granted by this Court.
60. Under these circumstances, ex-parte
ad interim order dated 28th September, 2012 is made absolute. The plaintiff's
application being I.A. No. 18151/2012 is accordingly disposed of. The
defendants during the pendency of the suit are refrained from using the
trademark LAVERA in respect of all kinds of cosmetic goods and body products
included in class 3.
61. In view of order passed in I.A. No.
18151/2012, the defendants' application being I.A. No. 19804/2013 is dismissed.
62. It is clarified that the finding
arrived by this Court are tentative which shall have no bearing when the matter
would be decided at the final stage after trial.
63. No costs.
CS(OS) 3000/2012
List the matter before the
Joint Registrar on 26th March, 2015 for further proceedings.
