IN THE HIGH COURT OF DELHI AT NEW DELHI
SUBJECT : TRADE MARK MATTER
I.A. No.13426/2008 in CS(OS) 2314/2008
DATE OF DECISION: November 06, 2008
PERNOD RICARD S.A FRANCE, and ANR ..... Plaintiffs
Through: Mr. Hemant Singh, Ms. Mamta R. Jha
and Mr. Manish K. Mishra, Advocates
versus
RHIZOME DISTILLERIES PVT. LTD. and ORS ..... Defendants
Through: Mr. M.S. Ganesh, Sr. Advocate with
Mr. K. Seshachary and Mr. Manish
Gandhi, Advocates
REVA KHETRAPAL, J.
1.
The present action has been filed by the plaintiffs for permanent injunction
against the defendants restraining infringement of its registered trademark, copyright,
passing off, rendition of accounts of profit/damages, delivery up, dilution, unfair
competition, etc. against the defendants. FACTS
2.
The material facts are not in dispute. The plaintiffs are a part of the 'Groupe
Pernod Ricard', a group of companies held by Pernord Ricard S.A., the plaintiff No.1
herein. The plaintiffs No.2 and 3 are the ultimate subsidiaries of the plaintiff No.1. The
'Groupe Pernod Ricard' features as one of the two leading players of the world in the
spirits and wine market having presence in many countries of the world. Its products are
sold under various internationally renowned and acclaimed brands such as ROYAL
SALUTE, CHIVAS REGAL, 100 PIPERS, BALLANTINES, BEEFEATER, CLAN
CAMPBELL, SOMETHING SPECIAL, THE GLENLIVET, MALIBU, KALHUA,
WILD TURKEY, JAMESON, PERNOD, RICARD, JACOB'S CREEK, MARTELL,
BLENDERS PRIDE, PASSPORT, HAVANA CLUB, etc. Apart from the aforesaid
famous international brands, the plaintiff No.1 through its subsidiaries, the plaintiffs No.2
and 3 owns locally acclaimed brands such as IMPERIAL BLUE and ROYAL STAG,
which are subject matter of the present proceedings.
3.
The plaintiffs claim to have adopted and used the trademark IMPERIAL BLUE
for the sale of their whisky in India continuously and uninterruptedly since the year 1997.
The turnover of the said product for the year 2007 was over Rs.317 crores, while the
promotional expenses are claimed to be over Rs.13 crores per annum. Sales invoices
from the year 1997 onwards have been placed on record by the plaintiffs (262 in
number). In order to obtain statutory protection for its trademark IMPERIAL BLUE, the
plaintiff No.1 applied for and obtained registration for the said trademark in several
countries, including India. The plaintiff No.3, the wholly owned subsidiary of the
plaintiff No.1, also adopted the mark IMPERIAL RED for another variety of grain spirit
blended with imported malt and obtained registration of the said trademark in Class 32 on
17th August, 2005. The aforementioned trademark registrations are valid, subsisting and
in full legal force. Hence, the plaintiffs claim that the use of the trademark IMPERIAL, in
conjunction with any other mark signifying colour, indicates that the goods originated
from the plaintiffs, and accordingly the use of the trademark IMPERIAL may lead to
confusion or deception in the minds of consumers about a nexus or trade connection
between such business and the business of the plaintiffs, leading to the passing off such
unauthorised products for those originating from the plaintiffs.
4.
Yet another whisky manufactured and marketed by the plaintiff No.3 is under the
trademark ROYAL STAG, which is another popular whisky in the lower price segment.
The plaintiff No.3 is a licensed user thereof in India since the year 1995. The plaintiff
No.2 is the proprietor of the trademark ROYAL STAG, which is a coined mark having
no significance or meaning in common parlance. The plaintiff No.2 applied for and
obtained registration of the trademark ROYAL STAG internationally as well as in India
under various classes and registrations numbers as set out in paragraph 14 of the plaint.
The aforesaid registrations are valid and subsisting till date. ROYAL STAG has an
annual turnover of over Rs.644 crores, while promotional expenses are claimed to be in
the sum of Rs.38 crores. Sales invoices to show the use of the mark since the year 1995
have been placed on record.
5.
According to the plaintiffs, the ROYAL STAG whisky has been marketed by the
plaintiffs No.2 and 3 for the past over a decade under a distinctive label and trade dress.
The aforesaid label and trade dress constitute an original artistic work within the meaning
of Section 2(c) of the Copyright Act, 1957. The plaintiff No.2 is the owner of the
copyright in the said artistic work under the provisions of Section 17 of the Copyright
Act, 1957, thereby having exclusive right to use and reproduce the same. On account of
extensive trade usage since 1995, the plaintiffs' trademark comprising ROYAL STAG
label and the trade dress have become distinctive of the whisky marketed by and
originating from the plaintiffs in the minds of the consumers at large. The trade dress and
the overall get up of the plaintiffs' ROYAL STAG whisky bottle and the accompanying
label constitute trademark within the meaning of Section 2(1)(m) read with Section
2(1)(zb) of the Trade Marks Act, 1999.
6.
The plaintiffs' grievance is that though the plaintiffs are the prior users and
proprietors of the trademark IMPERIAL BLUE and the said trademark has become
distinctive of the plaintiffs' liquor business, which enjoys formidable goodwill and
reputation in the market, the defendants have infringed the plaintiffs' trademark
IMPERIAL BLUE by adopting the trademark IMPERIAL GOLD and that too by using
the trade dress, get up, colour combination and label of ROYAL STAG, thus committing
acts of infringement of trademark and passing off. The defendants are thereby trading
upon the goodwill and reputation built up by the plaintiffs in the aforesaid two products.
7.
It is claimed that a glance at the defendants' IMPERIAL GOLD label and trade
dress, and at the plaintiffs' IMPERIAL BLUE label and the overall trade dress of the
plaintiffs' ROYAL STAG whisky, clearly establish the overall deceptive similarity
between the two products, which is delineated in paragraph 24 of the plaint as follows: (i)
The defendants have adopted the trade mark IMPERIAL GOLD for their whisky which is
an imitation of and is structurally as well as phonetically deceptively similar to the
plaintiffs' reputed trade mark IMPERIAL BLUE and registered trade mark IMPERIAL
RED; (ii) The defendants have further deliberately imitated the overall trade dress of the
plaintiffs' ROYAL STAG whisky bottle, such as the shape and design of the botle, the
colour combination and overall get up of ROYAL STAG label. The plaintiffs are not
claiming proprietory right in any individual features which form part of the trade dress
but together, they constitute distinctive trade dress. The defendants have also not copied
any individual feature, but copied all the features that collectively distinguish plaintiffs'
trade dress; (iii) The defendants' bottle has a label affixed upon the front and rear panels
having same colour combination of cream, burgundy and golden as that of ROYAL
STAG label; (iv) The front panel depicts two thick ribbon devices having burgundy
colour background and golden border upon which the trade mark IMPERIAL GOLD is
represented in cream colour in bold capital letters in the same manner as that on ROYAL
STAG label; (v) The rear panel label also has same size, cream background with ribbon
devices as that appear on plaintiffs' bottle; (vi) The defendants are in fact using plaintiffs'
ROYAL STAG used and discarded bottles after purchasing them from kabariwalas which
is a stamp of seal on the fraudulent intention and conduct of the defendants.
8.
The adoption and use of the trademark IMPERIAL GOLD by the defendants
alongwith the adoption and use of the trade dress pertaining to the plaintiffs' ROYAL
STAG product by the defendants, according to the plaintiffs, is thus evidently dishonest,
malafide and fraudulent in nature and with a view to practice confusion and deception on
consumers at large. The defendants are conspiring, selling and abetting sale of substandard whisky under the trademark, label and trade dress which are deceptively to those
of the plaintiffs, and which have no connection or nexus whatsoever with the goods or
business of the plaintiffs. The sole motive of the defendants is to mislead the consumers
and to trade upon the goodwill and reputation that vest in the trademark IMPERIAL
BLUE (word) and the ROYAL STAG label of the plaintiffs.
9.
The plaintiffs claim to have come across the trademark registration applications
filed by the defendant No.1 for registration of trademarks RHIZOME'S IMPERIAL
WHITE (No.1374617), RHIZOME'S IMPERIAL RED (No.1374616) and RHIZOME'S
IMPERIAL GREEN (No.1374618), all advertised together in the Trade Marks Journal
No.1372 (Regular) dated 16th July, 2007 towards the end of October, 2007. All the three
applications were opposed by the plaintiff No.1 vide Opposition Nos.719925
(RHIZOME'S IMPERIAL RED), 719924 (RHIZOME'S IMPERIAL GREN) and 719923
(RHIZOME'S IMPERIAL WHITE), all dated 15th February, 2008. Before filing the
notice of opposition, the plaintiffs, through their marketing network and sales
representatives, made all efforts to find out from the liquor market in India whether any
alcoholic beverages under the aforesaid trade names were available for sale, but no such
goods were reported to be found. Accordingly, the plaintiffs decided to await
adjudication of the opposition proceedings, which are still pending before the Registrar.
10.
On 16th February, 2008, however, the plaintiffs came across yet another
application for registration of the trademark Rhizome's IMPERIAL GOLD whisky label
vide trademark application No.1454195, advertised in the Trade Mark Journal 1386
Suppl. (1) dated 16.02.2008. The plaintiff No.1filed notice of opposition to the said
application before the Registrar of Trademarks on 16.06.2008. Once again, the plaintiffs
made attempts to verify whether any whisky under the impugned Rhizome's IMPERIAL
GOLD label is being sold in any market in India, but it was only in the second week of
September, 2008 that the plaintiffs came across the infringing bottle of the defendant
No.1 bearing the impugned Rhizome's IMPERIAL GOLD, a sample whereof was
obtained from the Hyderabad and Delhi markets. The plaintiffs were shocked to learn that
the defendants had not only copied the overall colour combination and get up of the
ROYAL STAG label and the trade dress thereof, but had even used the ROYAL STAG
bottles of the plaintiffs for sale of Rhizome's IMPERIAL GOLD whisky. The plaintiffs
filed their opposition, to which the defendant No.1 filed its counter-statement before the
Registrar. The opposition proceedings are stated to be pending before the Registrar and
are yet to be adjudicated upon. The plaintiff No.1 also claims to have filed rectification
petition before the Intellectual Property Appellate Board (IPAB), Chennai seeking
cancellation of the trademark registration No.1161682 of the defendant No.1. The said
proceedings are also pending adjudication.
11.
The present suit has been instituted on 3rd November, 2008 during the pendency
of the aforesaid proceedings. A caveat having been filed by the defendants, and the
defendants having appeared as caveators on the very first day of hearing, that is, 5th
November, 2008 and filed Affidavit in opposition to the grant of injunction order in
favour of the plaintiffs, Mr. Hemant Singh, the learned counsel for the plaintiffs and Mr.
M.S. Ganesh, the learned senior counsel for the defendants have been heard at length on
the aspect of grant of injunction. Contentions of the plaintiffs
12.
The learned counsel for the plaintiffs submits that there is ample evidence on
record to show that the plaintiffs are the prior users and proprietors of the trademark
IMPERIAL BLUE since the year 1997, as evidenced from the sheaf of invoices (262 in
number) placed on record with the plaintiffs' documents. The defendants on the strength
of registration of the trademark Rhizome's IMPERIAL GOLD and their claim of having
obtained copyright registrations (of which no copies have been filed) cannot be allowed
to trade upon the enviable goodwill and reputation built up by the plaintiffs for their
products IMPERIAL BLUE and ROYAL STAG. None of the registrations, assuming
they exist, whether trademark or copyright, provide any defence to the action for passing
off, which entitles the plaintiffs to an order of interim injunction. The learned counsel
also submits that though the suit is for infringement of trademark as well as for passing
off, for the purposes of the interlocutory application, the plaintiffs are pressing for
injunction on account of passing off alone, and the relief of injunction may be granted in
favour of the plaintiffs and against the defendants on account of passing off. Thus
viewed, the registration obtained by the defendants, whether considered valid or invalid
in the cancellation proceedings, has no relevance to the cause of action of passing off, as
held by the Division Bench of this Court in the case of N.R. Dongre and Ors. vs.
Whirlpool Corporation and Ors., AIR 1995 Delhi 300.
13.
According to the learned counsel for the plaintiffs, the test of overall similarity as
delineated by a three Judge Bench of the Supreme Court in the case of Parle Products (P)
Ltd. vs. J.P. and Co., Mysore, AIR 1972 SC 1359 is the relevant deciding factor.
Reference is made in this regard to paragraphs 8 and 9 of the judgment, which read as
follows:- 8. According to Kerly's Law of Trade Marks and Trade Names (9th Edition
Paragraph 838): ``Two marks, when placed side by side, may exhibit many and various
differences, yet the main idea left on the mind by both may be the same. A person
acquainted with one mark, and not having the two side by side for comparison, might
well be deceived, if the goods were allowed to be impressed with the second mark, into a
belief that he was dealing with goods which bore the same mark as that with which he
was acquainted. Thus, for example, a mark may represent a game of football; another
mark may show players in a different dress, and in very different positions, and yet the
idea conveyed by each might be simply a game of football. It would be too much to
expect that persons dealing with trade marked goods, and relying, as they frequently do,
upon marks, should be able to remember the exact details of the marks upon the goods
with which they are in the habit of dealing. Marks are remembered rather by general
impressions or by some significant detail than by any photographic recollection of the
whole. Moreover, variations in detail might well be supposed by customers to have been
made by the owners of the trade mark they are already acquainted with for reasons of
their own.
9.
It is therefore clear that in order to come to the conclusion whether one mark is
deceptively similar to another, the broad and essential features of the two are to be
considered. They should not be placed side by side to find out if there are any differences
in the design and if so, whether they are of such character as to prevent one design from
being mistaken for the other. It would be enough if the impugned mark bears such an
overall similarity to the registered mark as would be likely to mislead a person usually
dealing with one to accept the other if offered to him.
14.
It is further contended that as far as deceptive similarity is concerned, it should be
borne in mind that the similarity may be visual or phonetic or both, and the consumers to
be considered are the ones having average intelligence and an imperfect recollection.
Reliance is placed, in this context, upon the test of imperfect recollection as adumbrated
by the Supreme Court in Amritdhara Pharmacy vs. Satya Deo Gupta, AIR 1963 SC 449
and in particular on paragraphs 7 to 9 of the said judgment, which read as follows:- 7. It
will be noticed that the words used in the sections and relevant for our purpose are likely
to deceive or cause confusion. The Act does not lay down any criteria for determining
what is likely to deceive or cause confusion. Therefore, every case must depend on its
own particular facts, and the value of authorities lies not so much in the actual decision as
in the tests applied for determining what is likely to deceive or cause confusion. On an
application to register, the Registrar or an opponent may object that the trade mark is not
registrable by reason of clause (a) of Section 8, or sub-section (1) of Section 10, as in this
case. In such a case the onus is on the applicant to satisfy the Registrar that the trade
mark applied for is not likely to deceive or cause confusion. In cases in which the tribunal
considers that there is doubt as to whether deception is likely, the application should be
refused. A trade mark is likely to deceive or cause confusion by its resemblance to
another already on the Register if it is likely to do so in the course of its legitimate use in
a market where the two marks are assumed to be in use by traders in that market. In
considering the matter, all the circumstances of the case must be considered. As was
observed by Parker, J., in Re Pianotist Co.'s Application, (1906) 23 RPC 774, which was
also a case of the comparison of two words You must take the two words. You must
judge them, both by their look and by their sound. You consider the goods to which they
are to be applied. You must consider the nature and kind of customer who would be
likely to buy those goods. In fact you must consider all the surrounding circumstances;
and you must further consider what is likely to happen if each of those trade marks is
used in a normal way as a trade mark for the goods of the respective owners of the marks.
(p. 777) For deceptive resemblance two important questions are: (1) who are the persons
whom the resemblance must be likely to deceive or confuse, and (2) what rules of
comparison are to be adopted in judging whether such resemblance exists. As to
confusion, it is perhaps an appropriate description of the state of mind of a customer who,
on seeing a mark thinks that it differs from the mark on goods which he has previously
bought, but is doubtful whether that impression is not due to imperfect recollection. (See
Kerly on Trade Marks, 8th Edition, p. 400.) 8. Let us apply these tests to the facts of the
case under our consideration. It is not disputed before us that the two names 'Amritdhara'
and 'Lakshmandhara' are in use in respect of the same description of goods, namely a
medicinal preparation for the alleviation of various ailments. Such medicinal preparation
will be purchased mostly by people who instead of going to a doctor wish to purchase a
medicine for the quick alleviation of their suffering, both villagers and townsfolk, literate
as well as illiterate. As we said in Corn Products Refining Co. v. Shangrila Food Products
Ltd., (1960) 1 SCR 968 : (AIR 1960 SC 142) the question has to be approached from the
point of view of a man of average intelligence and imperfect recollection. To such a man
the overall structural and phonetic similarity of the two names 'Amritdhara' and
'Lakshmandhara'
is,
in
our
opinion,
likely
to
deceive
or
cause
confusion.................................... 9. We agree that the use of the word 'dhara' which
literally means 'current or stream' is not by itself decisive of the matter. What we have to
consider here is the overall similarity of the composite words, having regard to the
circumstance that the goods bearing the two names are medicinal preparations of the
same description. We are aware that the admission of a mark is not to be refused, because
unusually stupid people, fools or idiots, may be deceived. A critical comparison of the
two names may disclose some points of difference, but an unwary purchaser of average
intelligence and imperfect recollection would be deceived by the overall similarity of the
two names having regard to the nature of the medicine he is looking for with a somewhat
vague recollection that he had purchased a similar medicine on a previous occasion with
a similar name. The trade mark is the whole thing the whole word has to be considered.
In the case of the application to register Erectiks (opposed by the proprietors of the trade
mark 'Erector') Farwell, J., said in William Bailey (Birmingham) Ltd.'s Application,
(1935) 52 R.P.C. 136: I do not think it is right to take a part of the word and compare it
with a part of the other word; one word must be considered as a whole and compared
with the other word as a whole.............. I think it is a dangerous method to adopt to
divide the word up and seek to distinguish a portion of it from a portion of the other
word.
15.
Applying the test of deceptive similarity as laid down by the Supreme Court, the
learned counsel for the plaintiffs contends that a clear case of passing off is made out and
the defendants ought to be injuncted forthwith not only to protect the business interest,
goodwill and reputation of the plaintiffs, but also so as to protect the members of the
public from the acts of deception of the defendants. He further submits that the grant of
injunction is necessary if it prima facie appears to the Court that the passing off action is
maintainable, but injunction is imperative if it prima facie appears that the adoption of the
mark was itself dishonest. [Midas Hygiene Industries (P) Ltd. and Anr. vs. Sudhir Bhatia
and Ors. (2004) 3 SCC 90].
16.
Reliance is also placed by learned counsel for the plaintiffs on a judgment of the
House of Lords in Office Cleaning Services, Ld. vs. Westminster Window and General
Cleaners, Ld., 63 RPC 39 and, in particular, on the following observations made therein:Confusion innocently caused will yet be restrained. But if the intention to deceive is
found, it will be readily inferred that deception will result. Who knows better than the
trader the mysteries of his trade.....................................
17.
Learned counsel also seeks rely upon the following observations made by the
Supreme Court in the case of Laxmikant V. Patel vs. Chetanbhat Shah and Anr., AIR
2002 SC 275:- Once a case of passing off is made out the practice is generally to grant a
prompt ex parte injunction followed by appointment of local commissioner, if necessary.
Contentions of the defendants
18.
To counter the submissions made by the learned counsel for the plaintiffs, Mr.
M.S. Ganesh, the learned senior counsel for the defendants submits that whereas in the
instant case, both the parties have registered trademarks and the plaintiffs have filed a
rectification application before the IPAB followed by a composite suit for infringement
as well as passing off, the plaintiffs cannot be permitted to bifurcate their suit for the
purpose of ad interim relief to claim ad interim injunction only with reference to the relief
of passing off. Such an approach, the learned senior counsel contends, amounts to:- (a)
abuse of the process of the Court, viz., seeking leverage from the present suit for the
purpose of their pending rectification application before the Board; (b) forum shopping,
viz., first moving the rectification application before the IPAB and then seeking to
trammel its consideration by moving this Court for alleged infringement by the
defendants' registered trademark and seeking an injunction in common law jurisdiction;
(c) multiplicity of proceedings for substantially the same relief, viz., for invalidating and
neutralizing the defendants' registered trademark at an interlocutory stage of the
rectification proceedings before the IPAB and the infringement suit before this Court; and
(d) putting the cart before the horse, viz., seeking restraints on the use of the defendants'
registered trademarks even before its alleged invalidity has been adjudicated by the
IPAB.
19.
In the above context, Mr. Ganesh urges that the IPAB being a statutory quasi
judicial tribunal, subject to the superintendence of the High Court under Article 227 of
the Constitution of India, the present suit can be considered to be filed only for the
purpose of seeking leverage in the pending rectification application before the Board,
more so, as it was open to the plaintiffs to have invoked the jurisdiction of the Board
itself.
20.
Without prejudice to the aforesaid submission, learned senior counsel submits
that in any case, the plaintiffs are not entitled to the grant of an ad interim injunction as
they are guilty of suppression of material facts in the plaint, inasmuch as there is not even
a whisper in the plaint as to when the plaintiffs became aware of the marketing activities
of the defendants' product in Andhra Pradesh. The defendants' application for a registered
trademark was advertised in the Trade Marks Journal in 2002 and, after obtaining
registration, the defendants commenced marketing of their product in Andhra Pradesh in
2006. The present suit has been filed in November, 2008.
21.
The plaintiffs, the learned senior counsel for the defendants urges, are also guilty
of delay and laches, having raised no opposition to the defendants' trademark registration
from 2002 to 2005, and again to its marketing activities from April 2006 (when the
defendants started marketing their products) to October-November, 2008, that is, for a
period of over two and a half years, during which period the plaintiffs neither appealed to
the IPAB against the defendants registration nor moved any competent Court for the
alleged infringement or passing off. By sleeping over their rights, the plaintiffs thus
acquiesced in the defendants trademark registration and its continuous user, thereby
allowing the defendants to built up their business and market for the sale of their product.
22.
In the context of delay and laches and non-disclosure of material facts, the learned
senior counsel for the defendants heavily relies upon a recent judgment of this Court in
BDA PRIVATE LTD. vs. PAUL P. JOHN and ANR. reported in 152 (2008) DLT 405. In
the said case, while rejecting the plea of passing off the defendants' product, that is,
whisky under the trademark Original Choice, alleged to be deceptively similar to the
plaintiff's registered mark Officer's Choice, the learned Single Judge, after reviewing the
case law on the subject, held that delay and acquiescence were major considerations in
any action for passing off and it was, therefore, incumbent upon the plaintiff in the said
case to have disclosed as to when it became aware of the defendants' use of the trademark
Original Choice. Had it disclosed that it was aware of the defendants' trademark for such
a long time, then perhaps, it would have dented its case for seeking an interim injunction
on the ground of passing off, for, the delay in approaching the Court would have come in
the way of the plaintiff for the purpose of an interim injunction.
23.
Next, the learned senior counsel for the defendants contends that in any event, the
words IMPERIAL and ROYAL are publici juris and are words and connotations which
can be used by anyone, and are admittedly used as registered trademarks for various
products, including whisky. The plaintiffs cannot, therefore, claim exclusive
appropriation thereof. Referring to a Division Bench judgment of this Court in
Astrazeneca UK Limited and Anr. vs. Orchid Chemicals and Pharmaceuticals Ltd.
reported in 141 (2007) DLT 565, the learned senior counsel contends that in the said
case, the learned Single Judge and subsequently on appeal, the Division Bench had
refused to grant ad interim injunction to the plaintiff, who claimed infringement of his
registered trademark 'Meronem', alleging it to be deceptively similar to the trademark
'Meromer' of the defendant, on the premise that 'Mero' was a generic term/publici juris
and the plaintiffs/appellants could not claim exclusive right to use 'Mero' as constituent of
their trademark. In doing so, the learned Division Bench relied upon an earlier judgment
by another Division Bench of this Court in SBL Limited vs. Himalaya Drug Company
reported in 67(1997) DLT 803, wherein it was held as under:25.(3) Nobody can claim exclusive right to use any word, abbreviation, or acronym
which has become publici juris. In the trade of drugs it is common practice to name a
drug by the name of the organ or ailment which it treats or the main ingredient of the
drug. Such an organ ailment or ingredient being publici juris or generic cannot be owned
by anyone for use as trade mark.
24.
The learned senior counsel for the defendants vehemently urges that in any case,
the presence of the defendants' name on their product, viz., RHIZOME'S is an indication
that there is no passing off, even assuming the trademark IMPERIAL GOLD is similar to
the trademark of the plaintiffs' IMPERIAL BLUE and the trade dress of the plaintiffs'
whisky ROYAL STAG and that of the defendants' whisky RHIZOME'S IMPERIAL
GOLD is identical. Reference in this context is made by senior counsel to a decision of
the Supreme Court rendered in the case of S.M. DYECHEM LTD. VS. CADBURY
(INDIA) LTD. (2000) 5 SCC 573. In the said case, the appellant Company (plaintiff in
the Suit) had been using the trademark PIKNIK for various products, including
confectionery chocolates. The respondentdefendant was found using the mark Cadbury's
PICNIC for chocolates. Declining the prayer for temporary injunction, the Supreme
Court held that the occurrence of the name Cadbury on the defendant's wrapper was a
factor to be considered while deciding the question of passing off, and that the presence
of the defendant's name on his goods was an indication that there was no passing off,
even if the trade dress was the same.
25.
Countering the contention of the counsel for the plaintiffs that the test to be
applied in a passing off action is that of the imperfect recollection of a man of average
intelligence, the learned senior counsel submits that the crucial test to be applied is not
that of the impact of the product on an ignorant customer, but the impact of the product
on a customer whose views can properly be regarded by the Court. In this context, the
following observations made by the Supreme Court in S.M. DYECHEM LTD. (supra)
are relied upon:- 54. As to scope of a buyer being deceived, in a passing-off action, the
following principles have to be borne in mind. Lord Romer, L.J. has said in Rayton and
Co. v. Snelling, Lampart and Co. that it is a misconception to refer to the confusion that
can be created upon an ignorant customer. The kind of customer that the courts ought to
think of in these cases is the customer who knows the distinguishing characteristics of the
plaintiff's goods, those characteristics which distinguish his goods from other goods in
the market so far as relates to general characteristics. If he does not know that, he is not a
customer whose views can properly be regarded by the Court. (See the cases quoted in
N.S. Thread and Co. v. Chadwick and Bros. which was a passing-off action.) In
Schweppes case Lord Halsbury said, if a person is so careless that he does not look and
does not treat the label fairly but takes the bottle without sufficient consideration and
without reading what is written very plainly indeed up the face of the label, you cannot
say he is deceived.
26.
Lastly, the learned senior counsel for the defendants contends that under subsection (5) of Section 124, no ad interim injunction can be granted to the plaintiffs by this
Court in view of the fact that the present suit is liable to be stayed under the sub-section
(1) of the said section and the parties must be left to abide by the adjudication of the
IPAB in the rectification proceedings. REJOINDER ARGUMENTS
27.
In rejoinder, Mr. Hemant Singh, the learned counsel for the plaintiffs submits that
the plea of publici juris raised by the defendants must fail at the threshold itself firstly, in
view of the fact that no evidence of the mark IMPERIAL being used by others in the
market has been produced or placed on record by the defendants and secondly, in view of
the fact that mere cited registrations are no evidence to uphold any plea of common usage
as held by the Supreme Court in the case of Corn Products Refining Co. vs. Shangrila
Food Products Ltd., AIR 1960 SC 142 wherein it was observed as follows:- It is possible
that the marks may have been registered but not used. It is not permissible to draw any
inference as to their user from the presence of the marks on the register.
28.
As regards the pleas of concealment of material facts and delay and laches raised
by the defendants, learned counsel submits that the said pleas are also baseless, as there is
no evidence produced by the defendants to show that the plaintiffs knew about the sale of
IMPERIAL GOLD whisky of the defendants prior to the second week of September,
2008. More importantly, there is no evidence produced by the defendants to show prima
facie the extent of the defendants' sale of their aforesaid products prior thereto. Not a
single invoice is forthcoming on the record to substantiate the statement of the defendants
that they had commenced use of the mark IMPERIAL GOLD in about April, 2006. The
defendants no doubt had been filing trademark applications for the marks IMPERIAL
RED, IMPERIAL WHITE and IMPERIAL GREEN before the Registrar of Trade Marks
falsely claiming their use since 2002 and 2006, but in fact no such sale had been made.
Hence the defendants themselves are guilty of making false statements and
misrepresentations before the Registrar of Trademarks as well as before this Court.
29.
Even otherwise, the learned counsel submits that delay cannot be a ground for
refusing the interim injunction prayed for by the plaintiffs once the defendants are found
guilty of acts of passing off. This is by now a well settled principle of law recognised by
this Court and by the Supreme Court. Reference in this regard is made by him to the
judgment of this Court in M/s. Hindustan Pencils Pvt. Ltd. vs. M/s. India Stationery
Products Co. and Anr., AIR 1990 DELHI 19. Paragraph 39 of the said judgment in
particular is relied upon, which reads as follows:- 39. It had been submitted that there was
an inordinate delay on the part of the plaintiffs in filing the present suit. I have already
held that inordinate delay would not defeat an action for the grant of a temporary
injunction especially where the use by the defendant of the mark was fraudulent. An any
case, in my opinion, the delay in the present case cannot be regarded as inordinate.
Assuming for the sake of argument that, as contended by the defendants, the plaintiffs
came to know about the user by the defendants of the infringing mark in March, 1982, it
is not as if the plaintiffs slept over their rights for a number of years. It is to be seen that
the plaintiffs' principal place of business is in Bombay while the defendant is a small
businessman carrying on its business in Sadar Bazar, Delhi. The plaintiffs, in 1985, did
filed in application for cancellation of the registration of copyright of the defendant. This
amounted to first step being taken by it. The plaintiffs waited and within 3 years
thereafter filed the present suit. The defendant must have known that it was adopting a
mark which belongs to some one else. Any infringer who uses or adopts some one else's
mark must be aware of the consequences which may follow. The defendants ran the risk
in using a mark which belonged to some one else. It continued its business
uninterruptedly for a number of years before any action was taken by the plaintiffs
against it. Any growth after notice is at the risk and peril of the defendant. The defendant
certainly had notice of application of the plaintiff having been filed against it in the year
1985 for cancellation of registration of the copyright. The defendant should have been
warned, at that stage, that the plaintiff is not likely to accept the user of its mark by the
defendant. If the defendant continued to do business by using the impugned mark, it did
so at its own peril. The continued user cannot be set up as a defence under these
circumstances.
30.
Reference is next made by the learned counsel for the plaintiffs to the decision
rendered by this Court in Automatic Electric Limited vs. R.K. Dhawan and Anr. reported
in 1999 PTC (19) 81. In the said case, an advertisement of the defendants featured in the
same trade magazine in which the advertisement of the plaintiff was also published, and
on the basis thereof, the defendants submitted that it was inconceivable that the plaintiff
was not aware of the defendants' use of the trademark DIMMER DOT, and that the
plaintiff stand that they did not have knowledge about the infringement of its trademark
DIMMERSTAT till much later was false. Rejecting the said plea, a learned Single Judge
of this Court (Hon'ble Dr. Justice M.K. Sharma, as His Lordship then was) held:- The
plaintiff is a Bombay based company. Merely because in a particular magazine
advertisement of the defendants was published on the cover page, cannot by itself be a
case of deduction that the plaintiff was aware of the advertisement of the defendant's
trademark in the said magazine. However, even if such a presumption could be made, the
same cannot deprive the registered owner of a trade mark from getting his rights
established in a Court of Law, particularly, when the same cannot amount to a case of
inordinate delay.
31.
Relying upon the aforesaid observations, Mr. Hemant Singh, the learned counsel
for the plaintiffs contends that the present is an appropriate case for the grant of an ad
interim injunction in favour of the plaintiffs. It is also Mr. Singh's contention that interim
injunction can be granted, even if rectification/cancellation proceedings are pending as is
evident from a bare reading of the provisions of Section 124(5) of the Trade Marks Act,
1999. FINDINGS:
32.
Keeping in view the aforesaid contentions raised at the Bar and the precedents
laid down by the various Benches of this Court and by the Hon'ble Supreme Court, I am
of the considered view that the instant case is a clear cut case of passing off. I say so on
the basis of the fact that it is undisputed that the plaintiffs adopted the trademark
IMPERIAL BLUE in the year 1997 and since then the said trademark has become
distinctive of the plaintiffs' product, resulting in a huge turnover in the sum of Rs.317
crores for the year 2007. Likewise, on account of extensive trade usage since the year
1995, the plaintiffs' trademark comprising ROYAL STAG label and trade dress have
become distinctive of the whisky emanating from the plaintiffs. The defendants have
slavishly copied the former as well as the latter. The former by adopting the trademark
IMPERIAL GOLD for their whisky, knowing fully well that the plaintiffs have registered
trademarks for IMPERIAL BLUE and IMPERIAL RED. The defendants did not stop
there. But went on to imitate the latter, i.e., the overall trade dress of the plaintiffs'
ROYAL STAG, such as the shape and design of the bottle, the colour combination and
the overall get up of the ROYAL STAG label, including its special features, such as two
thick ribbon devices on the front panel having the same colour combination of burgundy
and golden, with the rear panel also having the same size and the same cream background
with ribbon devices as appear on the plaintiffs' bottle. Not only this, the defendants
appear to have either used the discarded bottles of the plaintiffs' ROYAL STAG whisky
with 'SEAGRAM' embossed at the bottom of the bottle or have got manufactured the
same. Such fraudulent and dishonest adoption, in my view, of not one but two of the
products of the plaintiffs, which have been in the market since the years 1995 and 1997
respectively and have a huge turnover (Rs.317 crores and Rs.644 crores respectively),
cannot be shrugged off as coincidental.
33.
Then again, even according to the defendants themselves, their product has
emerged in the market in April, 2006. Assuming the same to be correct (though there is
not a single invoice to substantiate the same), the defendants have launched their product
in the market more than a decade after the launch of the plaintiffs' product in the market.
In such circumstances and keeping in view the fact that the defendants are manufacturing,
distributing, marketing and selling the same product as the plaintiffs, in the same area as
the plaintiffs and targetting the same section of consumers as the plaintiffs, the
inescapable conclusion is that the defendants want to ride piggy back on the goodwill and
reputation painstakingly built up by the plaintiffs over the course of a decade.
34.
Coming to the aspect of delay and laches. The defendants claim that their product
emerged in the market in April, 2006. The plaintiffs dispute this and state that the market
research from their end showed that the defendants' product was not available even in the
year 2007. And it was only in September, 2008 that they first came across a bottle of the
IMPERIAL GOLD whisky of the defendants in the market. Assuming for a moment the
version of the defendants to be correct, there is not an iota of evidence on record to prima
facie show the launch of the defendants' product in the year 2006, except the bald
statement made by the defendants which appears to be with a view to contest the claim of
the plaintiffs on the ground of delay and laches. In such circumstances, to hold that the
plaintiffs are not entitled to interim injunction on the ground of delay and laches and/or
on account of suppression of material facts would be wholly untenable. More so, as the
Hon'ble Supreme Court in Midas Hygiene Industries (supra) categorically held:- 5. The
law on the subject is well settled. In cases of infringement either of trade mark or of
copyright, normally an injunction must follow. Mere delay in bringing action is not
sufficient to defeat grant of injunction in such cases. The grant of injunction also
becomes necessary if it prima facie appears that the adoption of the mark was itself
dishonest.
35.
Equally untenable is the contention of the defendants that the word IMPERIAL is
a generic term and hence publici juris. The word IMPERIAL may be generic if used by a
member of the royal family, but certainly it will be arbitrary when applied to a whisky
and that too, a whisky other than Scotch, and furthermore a whisky in the lower price
segment.
36.
The prefix RHIZOME is also neither here nor there, as, to my mind, even a
seasoned consumer is liable to be misled by the IMPERIAL GOLD label and the overall
trade dress of the bottle of the defendants including its shape into believing that the
plaintiffs group, which is engaged in the sale of IMPERIAL BLUE whisky for more than
a decade, has now launched IMPERIAL GOLD with a trade dress similar to the plaintiffs
ROYAL STAG whisky. Confused by the trade name IMPERIAL GOLD as well as by
the trade dress and shape of the bottle, it would be too much to expect the consumer,
assuming him to be well versed with the liquor and wine market, to search for the word
RHIZOME, inconspicuously printed on the label, more so, when examining the bottle
upside down the word SEAGRAM also appears at the bottom of the bottle. 37. Thus
viewed, the relative strength of the case of the plaintiffs appears to be robust in
proportion to the relative strength of the defendants' case. The dishonest intention of the
defendants calculated to encash upon the goodwill of the plaintiffs cannot be ignored and
weighs heavily in favour of the plaintiffs. The following observations of the Supreme
Court in Heinz Italia and Anr. vs. Dabur India Ltd. (2007) 6 SCC 1 have a direct bearing
on the matter and are accordingly reproduced hereunder:- 15. We have also considered
the arguments with regard to the prior user of the trademark ``Glucon-D'` and the specific
packaging. It is the admitted case that the term ``Glucose-D'` has been used by the
respondent from the year 1989 and that the packaging which is the subject-matter of
dispute in the present suit has been in use from the year 2000. In Century Traders it has
been held that in an action for passing off, the plaintiff has to establish prior user to
secure an injunction and that the registration of the mark or similar mark in point of time,
is irrelevant. This Court in Cadila Health Care case also laid down the tests in the case of
passing off and observed as under: (SCC p.80, para10) ``In other words in the case of
unregistered trade marks, a passing-off action is maintainable. The passing-off action
depends upon the principle that nobody has a right to represent his goods as the goods of
somebody. In other words a man is not to sell his goods or services under the pretence
that they are those of another person. As per Lord Diplock in Erven Warnink BV v. J.
Townend and Sons the modern tort of passing off has five elements i.e. (1) a
misrepresentation, (2) made by a trader in the course of trade, (3) to prospective
customers of his or ultimate consumers of goods or services supplied by him, (4) which is
calculated to injure the business or goodwill of another trade (in the sense that this is a
reasonably foreseeable consequence), and (5) which causes actual damage to a business
or goodwill of the trader by whom the action is brought or (in a quia timet action) will
probably do so.'` 16. Likewise, it has been repeatedly held that before the use of a
particular mark can be appropriated it is for the plaintiff to prove that the product that he
is representing had earned a reputation in the market and that this reputation had been
sought to be violated by the opposite party. In Corn Products case it was observed that
the principle of similarity could not to be very rigidly applied and that if it could be prima
facie shown that there was a dishonest intention on the part of the defendant in passing
off goods, an injunction should ordinarily follow and the mere delay in bringing the
matter to court was not a ground to defeat the case of the plaintiff. It bears reiteration that
the word ``Glucon-D'` and its packaging had been used by Glaxo since 1940 whereas the
word ``Glucose-D'` had been used for the first time in the year 1989. 17. In Cadila Health
Care case, it has also been held that in the case of a passing-off action the similarities
rather than the dissimilarities have to be taken note of by the court and the principle of
phonetic ``similarity'` cannot be ignored and the test is as to whether a particular mark
has obtained acceptability in the market so as to confuse a buyer as to the nature of
product he was purchasing. We observe that the both Glucon-D and Glucose-D are items
containing glucose and to us it appears that there is remarkable phonetic similarity in
these two words.
37.
The argument of the defendants' senior counsel that no ad interim injunction can
be granted to the plaintiffs under sub-section (5) of Section 124 in view of the fact that
the suit is liable to be stayed under sub-section (1) thereof is also wholly misconceived
and is being noted for the purpose of being rejected as it is well established that Section
124(5) empowers this Court to grant interim injunction in appropriate cases even if
rectification/cancellation proceedings are pending [see Jagan Nath Prem Nath vs.
Bhartiya Dhoop Karyalaya, Khari Baoli, Delhi AIR 1975 DELHI 149, Surjeet Book
Depot vs. Surjeet Book Depot (P) Ltd. and Anr. 1982 PTC 297 and Ahmed Oomerbhoy
and Anr. vs. Gautam Tank and Ors. 2008 (36) PTC 193 (Del.)].
38.
On the aspect of the relative strength of the case of each party, before American
Cyanamid Co. vs. Ethicon Ltd. (1975) 1 All ER 504, it was customary for the Courts to
go into the prima facie case in a trademark case for grant or refusal of temporary
injunction. But in American Cyanamid, it was observed that it was sufficient if a triable
issue was presented by the plaintiff and the merits need not be gone into. The said
judgment was referred to by the Supreme Court in Wander Ltd. vs. Antox India (P) Ltd.
1990 Supp SCC 727 and again in Power Control Appliances vs. Sumeet Machines (P)
Ltd. (1994) 2 SCC 448. But in Gujarat Bottling Co. Ltd. vs. Coca Cola Co. (1995) 5 SCC
545, the Supreme Court again adverted to the prima facie case principle while granting
temporary injunction. However, all the aforesaid rulings were again reviewed in Colgate
Palmolive (India) Ltd. vs. Hindustan Lever Ltd. (1999) 7 SCC 1. In the said case, the
Supreme Court reconsidered the principles laid down in the American Cyanamid case
and in the process referred to the judgment in Series 5 Software Ltd. vs. Clarke (1996) 1
All ER 853 (Ch D), in which Laddie, J. explained that in the American Cyanamid case,
Lord Diplock did not lay down that the relative strength of the case of each party need
not be gone into. The Supreme Court in the Palmolive case (supra) affirmed the view of
Laddie, J. as correct, holding that American Cyanamid cannot be understood as having
laid down anything inconsistent with the old practice. Therefore, in trademark matters, it
is now necessary to go into the question of comparable strength of the cases of either
party, apart from balance of convenience. Thus viewed, the strength of the plaintiffs'
case, on facts, in my view, is such that ad interim injunction must be granted in favour of
the plaintiffs.
39.
To conclude, even proceeding on the assumption that the purchasers of the
defendants' product are discerning persons with proper knowledge of the liquor market
and the brands available on the counter, I have no hesitation in holding that the plaintiffs
have made out a prima facie case for the grant of an injunction order in their favour and
against the defendants. Keeping in view the comparable strength of their case, grave and
irreparable loss is likely to ensue to the plaintiffs in case interim protection is not granted
in their favour and against the defendants. The injunction, in my view, is also imperative
keeping in view the dishonest adoption of the mark and trade dress of the plaintiffs'
product by the defendants and the larger interest of the consumers of the product. It is not
inconceivable that sub-standard whisky may prove to be even more injurious than a substandard medicinal or pharmaceutical product, and may lead to lethal consequences, even
wholesale disastrous ones. The balance of convenience also clearly tilts in favour of the
plaintiffs and against the defendants. Both in justice and equity, the plaintiffs must be
held entitled to the injunction prayed for by them.
40.
Accordingly, the plaintiffs' prayer in this application is allowed. The defendants,
their partners/proprietor, assigns in business, distributors, dealers and agents are
restrained from manufacturing, selling, offering for sale, advertising, directly or indirectly
dealing in whisky or any other alcoholic beverages under the impugned trademark
IMPERIAL GOLD or the impugned label/trade dress pertaining thereto or any other
trademark/label/trade dress as may be deceptively similar to the trademarks IMPERIAL
BLUE, IMPERIAL RED or ROYAL STAG label of the plaintiffs which may lead to
confusion and deception amounting to acts of passing off.
39.
I.A. No.13426/2008 stands disposed of accordingly. CS(OS) 2314/2008 List
before the Joint Registrar on 9th January, 2009 for completion of pleadings in the suit and
for admission/denial of documents and before the Court on 20th March, 2009 for framing
of issues.
Sd./REVA KHETRAPAL, J.
NOVEMBER 06, 2008