M/s Laboratoire Garnier Vs ITC
29.08.2014
Present : Mr. Ajay Amitabh Suman Advocate for the Plaintiff
Mr. V.P.Singh, Senior Advocate for the Defendant
Mr. V.P.Singh, Senior Advocate for the Defendant
1. The plaintiff / applicant through constituted attorney Ms. Surbhi Bansal
filed joint application on behalf of plaintiff namely M/s Laboratoire Garnier
& CIE alongwith applicant M/s L'Oreal u/o 22 Rule 10 of CPC r/w order 6
Rule 7 of CPC also read with section 151 of CPC stating that during the
pendency of the proceedings, the plaintiff has been dissolved by applicant M/s
L'Oreal vide Deed of Dissolution dated 28.11.2011. The plaintiff was
incorporated under the Law of France and by way of commercial acquisition and
merger of corporation, the applicant herein had acquired all the shares in the
plaintiff company which had been a subsidiary company of applicant company.
Therefore, by virtue of aforesaid dissolution, the plaintiff has assigned all
its rights, statutory, common law pertaining to trademark “LONG & STRONG”
including the copy right trademark involved therein relation to the products
alongwith goodwill of business concerned. The applicant has been recorded as
subsequent proprietor of the subject matter trademark. A prayer was made that
applicant herein being a necessary and proper party be substituted and Ms.
Surbhi Bansal who instituted the suit is also the constituted attorney of
L'Oreal applicant be taken on record. Further prayer was made that in view of
above mentioned substitution and change of constituted attorney permission be
granted to make amendment in the case title and para 3 and 19 (f) of the plaint.
1.1. The
aforesaid application is accompanied by copy of dissolution deed dt.
28.11.2011, documents relating to recordial and copy of Resolution cum
Authority in favour of Ms. Surbhi Bansal, Constituted Attorney.
2.
The defendant
contested the application
and filed reply
inter alia
submitting that L'Oreal has no locus standi to move an application u/o 6 rule
17 of CPC which only allows a 'party' to move to amend pleadings
as plaintiff Laboratoire Garnier & CIE has already stated that they have
ceded their rights in the subject matter of the suit. This submission can only
be entertained only after adjudication of application u/o 22 rule 10 of CPC.
The document described as Dissolution Deed 28.11.2010 marked as Annexure P1
(the French and English language translation supplied therein) only stipulates
the conditions under which the dissolution may occur and does not evidence any
dissolution or creates or assignment of any right in favour of L'Oreal. No documents
have been placed on record pertaining to alleged merger of M/s Laboratoire
Garnier & CIE and M/s L'Oreal. A
commercial acquisition or merger cannot be assumed and the plaintiff has to
prove that the acquisition of assets, rights and liabilities if any, has even
taken place. The documents accompanying application do not in any manner show a
transfer of rights and liabilities of Laboratoire Garnier & CIE to L'Oreal.
The documents placed on record do not vest any rights particularly the intellectual
property of Laboratoire Garnier & CIE as L'Oreal. Further submitted that Dissolution Deed dt. 28.11.2011 has only
been brought to the notice of this Court after more than two and a half years
of existence. It is not even brought to the notice of Hon'ble High Court when
the plaintiff has filed appeal for setting aside order dated 17.4.2011 and when
if it is assumed that contents of the application under reply regarding the
joint applications claims viz a viz the import of this document were true, it would
vitiate all actions purportedly undertaken by the plaintiff in these and
related proceedings subsequent to 28.11.2011. On aforesaid grounds a prayer was
made that in the absence of any established rights of either party to
contribute proceedings in the instant suit, the application is liable to be
dismissed.
3.
Ld counsel for plaintiff argued that the name of M/s L'Oreal has been
substituted at the place of M/s Laboratoire Garnier & CIE to the subject
matter (registered trademark LONG & STRONG under no. 1238990 in class 03)
because of Dissolution Deed dated 28.11.2011. The Registrar of Trademarks has
recorded the name of M/s L'Oreal after obtaining the proofs of title within
meaning of S. 45 of the Trade Marks Act, 1999. By virtue of section 31, the
registration of trademarks and all subsequent assignments and transmissions of
the trademarks is prima facie evidence of proof of title and validity of
transfer of right in favour of M/s L'oreal.
3.1 Ld counsel further
argued that by virtue of true copy of Deed of Dissolution dt. 28.11.2011, the
applicant M/s L'oreal has become the owner of all
shares of M/s Laboratoire Garnier & CIE and the plaintiff has been
dissolved. All the rights and liabilities stood transferred in favour of M/s
L'Oreal.
3.2 Ld counsel
for plaintiff further argued that it is well settled preposition of law that by
virtue of assignment and dissolution, the other legal entity denies the rights
and liabilities of plaintiff company then on an application under order 22 rule
10 of CPC r/w order 6 rule 17 of CPC the entity may be substituted and placed
reliance upon following judgment and order :
(a)
Savitra
Minda vs. Minda industries, 1997 PTC (17) 257.
(b)
Order
dated 17.07.2014 passed by the Hon'ble Delhi High Court titled Court in suit
bearing No. CS(OS) No. 897 of 2004, as M/s Izuk Chemicals s. Babu Ram Om
Prakash & Ors.
3.3. Ld counsel
for plaintiff next argued that when the trademark rights has been duly assigned
by one party in favour of another party, the subsequent party becomes owner of
all rights under the trademarks involved and the earlier party is not left with
any right in the mentioned trademark and referred to following judgments:
(a)
2009 (41) PTC 320 Del. Paras No. 30 to 37 Cinni Foundation V. Raj Kumar
Sah & Sons.
(b) 2001 PTC
629 Del Para No. 6. Harman Singh Vs.
GurbaxSingh
(c)
AIR 2002
Calcutta 85 Para No. 13 and 14 Blue
(d)
2007 (35) PTC 365 (Del) Paras No. 10, 12 and 13, Harsh Vardhan Rastogi
V. Champion Corporation.
3.4 It was next
argued that the defendant in the reply did not challenge the validity of this
document. The factum of dissolution has been admitted by him. Ld counsel
referred the following judgment (2009) 107 DRJ 735 DB paras No. 8, 9 and 10,
Pfizer Enterprises Vs. Cipla.
3.5 Ld counsel
further argued that while deciding application u/o 22 rule 10 of CPC, a
detailed inquiry at the stage of granting leave is not contemplated. The court
has only to be prima facie satisfy for exercising its discretion in granting
leave regarding the dissolution of right by payment and dissolution. The
question about the existence and validity of assignment or dissolution can be
considered at final hearing of the proceedings and replied upon judgment AIR
2005 SC 2209, para no. 12 Amit Kumar Sah & Ors. Vs. Farida Khatin &
Ors.
3.6 Regarding
delay ld counsel for plaintiff urged that the deed of assignment was executed
on 28.11.11 and assignment was duly recorded by the Registrar of Trademarks
vide order dated 19.02.2014. Application was filed in month of July 2014. There
is no delay in filing of application and even if there is any delay the law of
limitation is not applicable in the application under order 22 rule 10 r/w
order 6 rule 17 of CPC and referred citations : C. Wright Neville V. E.H.
Freser and Anr AIR 1944 Nag 137.
3.7 Ld counsel
further argued that law is well settled that applications for seeking amendment
should be treated liberally. The proposed
amendment is necessary, for the purpose of adjudicating the lis between the
parties and moreover no prejudice will be caused to the defendant and referred
to citation Haridas Alidas Thadani and Ors Vs. Godrej Rustom Kermani AIR 1983
SC 319.
4. On the other hand, Ld. Sr. Counsel for defendant no.1 argued that
present suit for infringement and passing off the trade mark “LONG and STRONG”
was filed by Laboratoire Garnier, a French company on 24.11.2011. The
application for interim injunction was dismissed on 17.04.2012. and appeal was
preferred and the same was withdrawn on 03.02.2014 with the observation that
even if the suit is to be stayed so far as infringement action is concerned,
the suit so far as passing off action is concerned will continue. Thereafter
vide order dated 17.04.2014, the suit related to infringement of trade mark was
stayed.
4.1 It was
further argued that Joint application moved by plaintiff and applicant is
misconceived and liable to be dismissed as the only document filed by the
plaintiff herein in the support of dissolution and assignment of rights is a
photocopy of nonstatutory French document with an English Translation
purporting to be a Deed of Dissolution. No assignment of any rights can be
inferred there from. This document make no reference to any assignment of
rights of Laboratoire Garnier to L'Oreal.
4.2 This
documents only stipulates the conditions under which the dissolution may occur,
as a future date and does not even conclusive state that there is a dissolution
effective on a certain date. No date of dissolution of Laboratoire Garnier can
be identified from any of the documents placed on record. The English
translation of documents only states that “ a dissolution shall commence on
28.11.2011 in accordance with Article
18445 of Civil code”. Nothing has been placed on record to show that this
document has been followed through and a dissolution with proper transfer of
rights achieve in accordance with the French Law and consequent thereto a valid
assignment of right as alleged has taken place in accordance with Article
18445 of French Civil Code.
4.3 It is was
further argued that the Dissolution Deed can be no means be presumed that
L'Oreal will be successor in interest of or the Laboratoire Garnier rights
particularly with regard to the continuing litigation and intellectual property
rights. Which has to be specifically assigned. Even the judgments cited by Ld.
Counsel for plaintiff themselves speaks that assignment of rights has to be
clear and express in the documents being produced before the court and the same
cannot be presumed. It is incumbent upon the applicants to state the nature of
assignment or devolution is claimed and referred AIR 1969 Patna 228 Para no. 7
Ms. Jharkhand Mines & Industries Ltd. & Anr. V. Nand Kishore Prasad
& Anr.
4.4 Ld. Sr.
counsel further argued that Dissolution dated 28.11.2011 has only brought to the
notice of the court after more than two and half years of its alleged
existence. It was not even brought in the notice of Hon'ble High court when the
matter travelled up till there. Even presuming without prejudice that assertion
of the plaintiff are correct, all action purportedly undertaken by the
plaintiff in these related proceedings subsequent to 28.11.2011 stand vitiated.
4.5 Ld. Sr.
counsel further argued that defendant have already filed a fresh application
for rectification of Trade mark Registry vis. a vis trade mark number 1238990.
Any proceedings for passing of will rely on the goodwill and the goodwill over
long and strong cannot be assiged under law leaving L with no cause of action.
5. I have heard arguments advanced by Ld. Counsel for plaintiff and Ld. Sr.
counsel for defendant and gone through relevant law and judgments cited by
respective parties.
6. In order to
appreciate the issue involved in present application, it would be relevant to
refer to the provisions of Order 22 of the Code.
7. Rules 3 and 4 of Order 22 prescribe procedure in case of devolution of
interest on the death of party to a suit. Under these rules, if a party dies
and right to sue survives, the court on an application made in that behalf is
required to substitute legal representative of the deceased party for
proceeding with a suit but if such an application is not filed within the time
prescribed by law, the suit shall abate so far as the deceased party is
concerned. Rule 7 of order 22 deals with case of creation of an interest in a
husband on marriage and Rule 8 of order 22 deals with case of assignment on the
insolvency of a plaintiff.
8. Order 22
Rule 10 provides for cases of assignment, creation
and devolution
of interest during the pendency of suit other than those referred to in the
foregoing rules and is based on principle that trial of a suit cannot be
brought to an end merely because the interest of a party in the subject matter
of the suit is devolved upon another during its pendency but such a suit may be
continue with the leave of Court by or against the person upon whom such
interest has devolved.
9. In the case of Dhurandhar Prashad Singh AIR 2001 Supreme Court 2552 (1)
Hon'ble Supreme Court had observed as under :
The legislature while enacting Rules 3, 4 and 10
has made clearcut distinction. In cases covered by Rules 3 and 4, if right to
sue survives and no application for bringing legal representatives of a
deceased party is filed within the time prescribed, there is automatic
abatement of the suit and procedure has been prescribed for setting aside
abatement under R.9 on the grounds postulated therein. In cases covered by
R.10, the Legislature has not prescribed any such procedure in the event of
failure to apply for leave of the court to continue the proceeding by or
against the person upon whom interest has devolved during the pendency of a
suit which shows that legislature was conscious of this eventuality and yet has
not prescribed that failure would entail dismissal of the suit as it was intended
that proceeding would continue by or against the original party although he
ceased to have any interest in the subject of dispute in the event of failure
to apply for leave to continue by or against the person upon whom the interest
has devolved for bringing him on the record.
10. Appropriately guided by judgment (supra), it has been judicially settled
that the rights of applicant under order 22 rule 10 of CPC are not
prejudiced nearly because there has been delay. Further at the stage of
application, the court has to prima facie be satisfied about the factum of
assignment of the rights and not require to conduct deep inquiry.
11. In the present case, the applicant L'Oreal has filed alleged Deed of
Dissolution (Declaration of Dissolution of Company Laboratoire Garnier &
CIE carried out by company L'Oreal) dated 28.11.2011 and more important that
trade mark authority has brought on record the name of L'Oreal as subsequent
proprietor of impugned trademark “LONG AND STRONG”. These facts prima facie
satisfy the requirement of Order 22 and Rule 10 and therefore the name of
L'Oreal needs to be substituted. The question about the existence and validity
of assignment and devolution can be considered at the trial of the suit on
merits. However, it is also important that fact brought on record by way of
application has thrown another issue which need to be adjudicated during the
course of trial : Whether or not L'Oreal
is lawful assignee of impugned trade mark by Laboratoire Garnier & CIE as claimed? OPP.
12. Further it is a guiding principle of amendment that all amendments of
pleadings should be allowed which are necessary for determination of real
controversy in a suit provided the proposed amendment does not alter or
substitute a new cause of action on the basis of which the original lis was
raised or defence taken. Proposed amendment would only amounts to additional
approach on the same facts and avoid
multiplicity of suits and will not prejudice the defendant in any other way.
Accordingly application stands allowed.
Amended
memo as well as amended plaint is already on record. Relist this case for
filing of amended written statement if any for 08.09.2014 and disposal of
pending application.
(Vineeta
Goyal)
Additional
District Judge1
NDD/PHC
New Delhi/29.08.2014
