Calcutta High Court
Calvin Klein Inc. vs International Apparel Syndicate on 16 March, 1994
Author: Ruma Pal
Bench: Ruma Pal
JUDGMENT Ruma Pal, J.
1. The Court : The petitioner is a Company incorporated in America. It gets its name from its promoter Calvin Klein. Calvin Klein is a resident of America. He is a fashion designer. Before the petitioner was incorporated Mr. Klein designed and sold men's and women's apparel and accessories under the mark Calvin klein or CK. Mr. klein had started his business of tailoring and designing in 1968 using his name Calvin Klein or CK as his trade label. The petitioner company now carries on the same and other business as the owner of 'Calvin Klein' and 'CK'. The range of business includes perfumes, toiletry & optical glasses. Goods bearing the name Calvin Klein or CK have been sold by the petitioner or its predecessor-in-interest throughout the world but not in India. The products bearing the trade mark Clavin Klein & CK have been advertised in diverse magazines such as Vogue, Cosmopolitan, New York Times particularly with regard to denim wear such as jeans, jackets, shirts, skirts and T. shirts etc. The petitioner has claimed that the magazines in which the petitioner's products have been and are advertised have extensive circulation in the major cities in India.
2. The petitioner appears to be the registered owner of the trade mark Calvin Klein arid CK in various countries including the United States of America, almost all the European countries and several Asian countries. As far as India is concerned the petitioner is the registered proprietor of in trade marks in Class 24 and has applied for registration in respect of Class 25, 3 and 18 under the Trade and Merchandise Marks Act 1958.
3. The petitioner's grievance is that in September 1993, the petitioner found that the respondents Nos. 1 and 2 were representing to the customers in India that the respondents 1 and 2 were the owners of the mark Calvin Klein and were soliciting business in respect of wearing apparel namely Jeans which were described as Calvin Klein Jeans. The petitioner has produced diverse advertisements made by the respondents Nos. 1 and 2 from which it appears that even the advertisements issued by the respondents Nos. 1 and 2 in respect of their products are visually and in substance virtually identical with those issued by the petitioner in respect of its products. The advertisements of, the respondent No. 1 read as follows :
"Calvin Klein Jeans will shortly be available at the best stores in town; a product of international Apparel Syndicate (the official brand owner)."
4. The plaintiff accordingly filed a suit against the respondents inter alia for perpetual injunction restraining the defendants from, passing off or attempt to pass off their, jeans, t-shirts, shirts or cognate goods as those of the petitioner by use of the mark or label Calvin Klein or CK. The plaintiff has also claimed a perpetual injunction against the defendants from infringing the petitioner's registered trade mark.
5. An interlocutory application was moved and an interim order was passed restraining the respondents from passing off their goods including jeans, shirt, t-shirts and other wearing apparels by use or in connection with the mark Calvin Klein or CK. A receiver was also appointed for making an inventory of the jeans, t-shirts and shirts and other wearing apparels manufactured or sold or dealt with by the respondents and also the packing and other materials, which were used by the respondents for printing or embossing the word Calvin Klein or CK.
6. The respondents have contended that they have been carrying on business in manufacturing and marketing Hosiery and ready-made garments and shoes under trade mark Calvin Klein since 1992 and they have been using not only the trade mark Calvin Klein but also CK on the buttons. The respondents have contended that admittedly the petitioner does not carry on business in India and that it was registered only in respect of Class 24 which did not cover the merchandise in respect of which the respondents were using the name or mark Calvin Klein or CK. It is stated that the goods in question were covered by Class 25 in respect of which the defendant no. 1 applied for registration more than a year earlier than the petitioner.
7. It has been contended by the petitioner that it is the prior user of the trade mark which conferred ownership and the fact that the user has taken place outside India did not affect the question of ownership. Reliance has been placed on the decision of the Bombay High Court in Consolidated Foods Corporation v. Bran-don and Company : . Secondly it is submitted that a foreign plaintiff can proceed against an Indian defendant on the ground of passing off and a fraudulent trading even though the foreign plaintiff had no business in India and its mark was not registered in India. It is submitted that for a passing off action there has to be misrepresentation made by trader in the course of trade to prospective customers or ultimate consumers of goods or services supplied by him which is calculated to injure the business, goodwill or reputation of another trader. It is stated that the goodwill and reputation is not confined only to the product but also to the name particularly when the name is that of an individual who has promoted a Corporation. It is further stated that goodwill and reputation are entitled to protection even though there was no user of the mark in India by the plaintiff. Reliance has been placed on the following decisions : Sheraton Corporation Of America v. Sheraton Motels Ltd. : 1964 RPC 202 : LA Society Anonyme Des Anciens Extablish-Sements Panhard Led Levassor v. Panbard Levassor Motor Company Ltd. : 1901 (2) Ch. 513; Eraven Warnink Besloten Vennootschap and Anr. v. J. Townend & Sons (Hill) Ltd. and Anr.; 1979 Ac 731; Maxim's Ltd. and Anr. v. Dye : 1978 (2) All ER 55; Express Bottlers Services Pvt. Ltd., v. Pepsico Inc. and Anr.; (1988) IPLR 99; Colin's Co, v. Brown ; 69 Ex 114; And Orkin Extranuating Company v. Pestco Of Canda; 5 CPR (30) 433.
8. It is then contended that in a passing off action no case of actual deception nor any actual damage need be proved. Reliance has been place on the decisions of East End Hosiery Pvt. Ltd. v. A. Textiles Company AIR 1971 Cal 37 and Ruston and Hornby Ltd. v. Zamindars Engineering Co. in this context.
9. It is finally submitted where there is complete identity of the marks and trading style of the plaintiff and the defendant the Court must grant an injunction.
10. The respondents have submitted that the petitioner not being the registered proprietor of the trade mark Calvin Klein in Class 25 was not entitled to maintain an action with regard to infringement. Secondly it is submitted that the petitioner could not maintain any action even on the basis of passing off as the petitioner has no local goodwill. Accordingly to the respondents local goodwill must be based on business within the country and secondly it must be shown that the petitioner has suffered consequential damage. The respondents have relied upon passages in Kerly's Law of Trade Marks and Trade name (11th Edn) as well as passages in Clerk and Lindsell on Torts (15th Edn) as well as on the following decisions : Athletes Food Marketing Associates Inc. v. Kobra Sports Ltd. and Anr. : 1980 RPC 343; Renter Coy Ltd. v. Mulhena Vol. 70 RPC 235; Reynods Tobacco Company v. ITC : 1987 (1) Arbitration Law Reporter 156; Alain Barnarden ET Compagnie v. Pavelien Properties Ltd., : 1967 RFC 581 and Aktiebolaget Jonkoping Vulcan v. V.S.V. Palanichamy Nadar and Ors : .
11. The petitioner has not, at the time of hearing seriously pressed its action on the ground of the infringement of a registered trade mark. It has sought to claim the reliefs on the basis of passing off not only of its name but also the marks of Calvin Klein and CK.
12. The basis of an action of passing off is :
"Is the defendant selling goods so marked as to be designed or calculated to lead purchasers to believe that they are the plaintiff's goods?" (See : Ruston & Hornby Ltd. v. Z. Engineering Co.: .
13. The questions therefore are :-
(i) Whether the plaintiff has a reputation with regard to the goods, and (ii) Whether there is a possibility of confusion between the plaintiff's and the defendant's goods in the sense that the people purchasing the defendant's goods might do so in the belief that the goods are those manufactured by the plaintiff.
14. The answer to these questions are to be determined prima facie in order to determine if any relief may be granted to the petitioner at this interlocutory stage. From the definition of passing off in Ruston & Hornby Ltd. (Supra) there does not seem to be any requirement that the plaintiff must carry on business in India before bringing an action for passing off if he can prove that he has otherwise established a reputation in the country.
15. The authorities cited on the point are now considered. The earliest decision on the point is the Collins Company v. Brown (Supra) relied on by the petitioner. In that case it was argued by the defendant that the plaintiff could not sue for protection of its mark as it was an American Company, that they had no establishment in England and that they had never manufactured or sold goods in the country. The argument was rejected. Sir W. Page Wood, V.C., held :-
"If a man has been in the habit of using a particular mark for his goods for a long time, during which no one else has used a similar mark, and then another person begins to use the same mark, that can only be with a fraudulent intent; and any fraud may be redressed in the country in which it is committed, whatever may be the country of the person who has been defrauded."
16. The next decision cited, chronologically speaking/is the Panhard case (Supra) which was decided in 1901. The plaintiff in that case was a French Company. They manufactured motors. The plaintiff did no business in England. But the word 'Panhard' or 'Panhard levassor' in England denoted the plaintiffs goods as the motors had frequently been imported into England. The defendant was a company called The Panhard Levassor Motor Company' formed with the object of manufacturing and selling motor cars. The plaintiff sought to restrain the defendant from using the names of Panhard or Levassor in connection with the manufacture or sale of motor cars. The Court found that there was absolutely no sort of excuse or justification for the defendant taking the name Tanhard Levassor' and said."
"The question of the plaintiffs right to an injunction is covered by Collins Co. v. Brown (1); but, apart from that authority, I should have thought it was plain that in a case such as I have stated this Court would certainly interfere to protect a foreign trader who has a market in England, in the way I have specified, from having the benefit of his name annexed by a trader in England who assumes that name without any sort of justification."
17. The case of R.J. Renter Coy v. Mulhens (Supra) or the "4711 Cologne" case was cited by the respondent. That was a case in which the issue of passing off was to be decided with reference to the validity of an assignment of goodwill. If the assignment was valid there was no question of passing off; if it were not there was. The Court held that the assignment was valid. The decision is not relevant.
18. Chronologically, the next decision cited on the issue is Alain Barnarden et Compagnie v. Pavelien Properties Ltd. (Supra) or "The Crazy Horse' case. The decision was relied on by the respondents. The plaintiff in that case ran a place of entertainment in Paris called 'Crazy Horse Saloon". The defendant set up a similar establishment in London with the identical name. The plaintiff had no business in England. The Court dismissed the application for interlocutory relief holding that the plaintiff had been unable to show that it had acquired by user any goodwill or reputation in England.
19. I am unable to accept the grafting on of the concept of user to the requirement of reputation as envisaged in the definition of passing off. It may be noted that the learned Judge rejected the interpretation of the Law by Kerly 9th Edn. para 719 : that if in fact the plaintiff has the necessary reputation in this country, it does not matter whether it was acquired by user here or in any other way. Interestingly a later Edition of Kerly (11th Edn.) records that Irish Courts had refused to follow 'Crazy Horse' and approved a comment in Kerly that it was an unreasonable decision.
20. The decision of Aktiebolaget Jonkoping Vulacn v. S.V. Palanichamy Nadar (Supra) referred to by the respondents is of no assistance to them. The case was one of rectification of the register of trademarks on the ground of non-user/and what would amount to 'non-user'. The issue before this Court is whether user in the country is a relevant consideration at all in determining an action for passing off.
21. In the decision in Erven Warnink B.V. v. J. Townend & Sons (Hull) Ltd. (Supra) commonly known as the 'Advocate' case the House of Lords was not called upon to decide the issue to be resolved in this case.
22. Walton-J. in Athletes Foot Marketing Associates Inc. v. Copra Sports Ltd. (Supra) reviewed the decisions on the subject and said it does not matter that the plaintiffs are not at present actually carrying on business in this country, provided they have customers here. However His Lordship emphasised that the principle enunciated in Panhard Levassors case was not excluded. In other words customers who purchased abroad and then imported the product would meet the qualification.
23. The last decision cited by the respondents on this issue is the decision of a learned Judge of the Delhi High Court in R.J. Reynords Tobacco Company v. ITC Ltd. (Supra). This was not a case of passing off but of infringement of a trademark. Paragraph 4 of the report reads :
"It was not disputed that the design, lettering, lay-out, colour scheme and general get-up of the packets in which the respondent has marketed its "NOW" brand is entirely different from the packets in which the plaintiff is marketing its cigarettes. In fact, no serious case of passing off, has been made out and it was rightly not argued by the Learned Counsel for the plaintiff. The contentions were confined to infringement of the trade mark."
24. As far as this Court is concerned it has in the decision of Express Bottlers Services Pvt. Ltd. v. Pepsico Inc. and Ors. (Supra) said, albeit in connection with a case for rectification of the register of trade marks on the ground of non-user;
"There can be acquisition of goodwill or reputation for the mark by the proprietor thereof in a country without carrying on business in that particular country."
25. The Court approved the decision of a Canadian Court of Appeal in Orkin Exterminating Co. Inc. v. Pestco Co. of Canada Ltd. (Supra). The decision followed the Irish view and held that the Crazy Horse principle was wrong. The action was brought by an American Company which did not carry on business in Canada. It claimed to restrain a Canadian Company from using the Orkin trade mark and logo. The plaintiff and the defendant carried on the same business viz. Pest Control. The plaintiff was one of the largest companies in the world carrying on the business with a high reputation. As far as the plaintiff's reputation in Canada was concerned it was observed :
"Canadians travelling in the United States are exposed to Orkin's extensive advertising and the use of its trade marks in the country. There was evidence adduced that millions of Canadians travel in the United States every year, particularly in the southern vacation states, where Orkin's operations are extensive. Canadians in Canada are exposed to Orkin's advertising and articles appearing in American publications which circulate here ....."
26. In this state of the law the evidence before me is considered. The international reputation of the petitioner in the name and mark Calvin Klein Jeans, shirts and t-shirts is borne out by the advertisements of the respondents where Calvin Klein had been advertised as the "Great American Classic". There is nothing American about the respondent No. l. One of the Magazines relied upon by the respondents refers to "Another Denim Giant Enters India." The only Denim Giant with the mark of Calvin Klein outside India is the petitioner. There is no evidence to the contrary. The article in the Magazine reads :
"Calvin Klein of the international fame needs no introduction in the ever expanding jeans Market. Turning their attention to India the denim giants are planning a massive launch of their range in mid-August. Entering the Indian market will be Calvin Klein's line of jeans, jackets, waist coats, shirts and sweat shirts. Indian shoppers will no longer have to look elsewhere for international brands."
27. The fact that the name of Calvin Klein is well known in India is reasonably clear from the passage quoted above. The reference to the sale of Calvin Klein line of jeans etc., in India being sold mid August is not a reference to the petitioner but to the respondent No. 2. The respondent no. 2's advertisement appeared just below the article quoted above making it seem as if the Calvin Klein of international fame were selling the great American Classic in India.
28. The second article on which the respondent no. 1 has relied reads as follows :
"CALVIN KLEIN
29. Calvin Klein denimwear has arrived at premium stores of Capital. The, prime brand reaches India courtesy International Apparels Syndicate with directors Rajesh and Madhu Agarwal who carry a "Jeans industry track record of nearly two decades. Their expansion plan aims at consolidating the North Indian Market before reaching the South. The jeans are cut to suit a range of tastes and body contours. Choice denims from India are matched with imported trimming and accessories. The exclusive range tops it all by a variety of sweat and t-shirts. Calvin Klein, the great American Classic is now a neighbourhood shopping reality."
30. The implication in this advertisement is that the American Calvin Klein denim wear was available in India : Courtesy the respondent No. 1.
31. The advertisement also refers to the respondent No. 1 as the official brand licensee in India. Who is the Licensor ? The respondent No. 1 does not say. In another magazine which refers to international style trends and campaigns, Calvin Klein jeans of the petitioner have been referred to. There are also other advertisements relied upon by the respondents where the respondent No. 2 has utilised the name and mark Calvin Klein and has claimed to be the official brand, owner.
32. In view of this admission of the reputation of the name Calvin Klein with regard to Apparels including jeans at least outside the country, the only question which remains to be resolved is whether it is necessary that the petitioner should carry on the business in India before being entitled to sue for passing off as contended by the Respondents.
33. I am inclined to accept the Irish and Canadian views on the matter and not the 'hardline' approach of Walton J. in the 'Athletes Foot' case. The insistence of trade within the country by the applicant overlooks the nature of the complaint in passing off. The basis of the action is deception or the persuasion of the public to purchase good of one in the belief that it is another's. It should not matter whether that other carries on business in the country. I am fortified by the observations in the Pepsico Case as also by the statement of the law in England by Graham J. in Maxim's Ltd. v. Dye (Supra). He said :-
"If it is in law correct to say that a plaintiff cannot establish that he has goodwill in England which will be protected by our courts without actually showing that he has a business in England, then of course that is the end of the matter and the plaintiff cannot recover here, but in my judgment that is not the law."
34. Accepting the principle enunciated by Walton J. and as contended by the defendants, the petitioner's claim for interlocutory relief cannot be rejected on this ground. In paragraph 11 of the petition the petitioner has categorically stated that a large number of persons from India going abroad every year purchase Calvin Klein Jeans which are imported into India. This statement has not been specifically denied by the respondents. This according to the hardline approach would be sufficient user within the country.
35. In the case of Sheraton Corporation v. Sheraton Motels (Supra) also relied upon by the petitioner, the plaintiff was an American Company owning a chain of hotel in the USA, Canada, Havana, Jamaica and Israel. They had no hotel in England.
The defendant was incorporated for the purpose of carrying on business in hotels in England. At the interlocutory stage an order was passed restraining the defendant from advertising any hotel under the name 'Sheraton', which it may contemplate operating in England, used in any way calculated to suggest that it is connected with the plaintiff's business. One of the reasons that weighed with the Court was that when the matter came to trial the plaintiff may well be able to say that :-
"They have got a reputation and a goodwill which would be exposed to risk resulting from the confusion between the plaintiffs and the defendants not withstanding that they are carrying on business in different part of the world.
36. It may well be, having regard to the respondent's failure to controvert the petitioner's case, that the petitioner will be able to establish its case of user at the hearing even if one accepts the rather insular view expressed in 'Crazy Horse'.
37. The second question formulated above, in other words the possibility of people purchasing the defendant's goods in the belief that the goods are manufactured by the plaintiff, must be answered in the affirmative. This follows from the fact that the petitioner's marks and the defendant's marks are identical. Even the mode of advertising adopted by the respondent No. 2 is an exact reproduction of the petitioners advertisements including the stance of the models. The frequent reference to the "Great American Classic" in the respondent No. 2's advertisement would appear to show that custom was sought to be attracted by the respondent No.2 on the ground that the products were the products of the American Company. No reason whatsoever has been given for choosing Calvin Klein or CK as the marks to trade under by the respondent No. 2. It would appear therefore that the adoption of the disputed mark and name was deliberately made by the respondent No. 2 in a manner calculated to deceive and to "cash in" on the international reputation of the petitioners. At the time of the issuing the ad interim order on the petitioner's application in this case the learned Judge had come to a prima facie finding regarding the similarity between the defendant's marks and the plaintiffs marks and the possibility of confusion. No material has been adduced to displace the view of the learned Judge even after the filing of the affidavit.
38. For the reasons aforesaid the interim order is made absolute. The costs will be costs in the cause.