Telangana High Court
Pepsico Inc., vs M/S Magfast Beverages on 26 October, 2022
Bench: P Naveen Rao, G.Radha Rani
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
C.C.C.A Nos.20 & 21 OF 2021
AND
CROSS OBJECTIONS No.32 OF 2021
Between:
C.C.C.A Nos.20 OF 2021
Between:
# PepsiCo Inc. 700, Hill road, Purchase New York, 10577 U.S.A..
Rep. by its Assistant Secretary cum Trademark Counsel, Paul. A. Lee and another
.... Appellant
Vs.
$ M/s. Magfast Beverages, Rep. by its Proprietor Sri Syed Ghazudin, S/o. late Syed
Fakhruddin, aged 46 years, R/o.22-8-555/1 and 2, 2nd Floor, Chatta Bazar, Hyderabad-02.
..... Respondents
C.C.C.A Nos.21 OF 2021
Between:
# PepsiCo Inc. 700, Hill road, Purchase New York, 10577 U.S.A.. Rep. by its Assistant
Secretary cum Trademark Counsel, Paul. A. Lee and another
.... Appellant
Vs.
$ M/s. Magfast Beverages, Rep. by its Proprietor Sri Syed Ghazudin, S/o. late Syed
Fakhruddin, aged 46 years, R/o.22-8-555/1 and 2, 2nd Floor, Chatta Bazar, Hyderabad-500 002
and others.
..... Respondents
CROSS OBJECTIONS No.32 OF 2021
Between:
# Syed Ghazudin, S/o. late Syed Fakhruddin, aged 46 years, Proprietor M/s. Magfast
Beverages R/o.22-8-555/1 and 2, 2nd Floor, Chatta Bazar, Hyderabad-500 002 and another.
.... Cross objectors
Vs.
PepsiCo Inc. 700, Hill road, Purchase New York, 10577 U.S.A.. Rep. by its Assistant
Secretary cum Trademark Counsel, Paul. A. Lee and others.
.... Respondents.
JUDGMENT PRONOUNCED ON 26.10.2022
2
PNR,J & Dr.GRR,J
CCCA Nos.20 of 2021 & Batch
HONOURABLE SRI JUSTICE P. NAVEEN RAO
AND
HONOURABLE Dr. JUSTICE G. RADHA RANI
1. Whether Reporters of Local newspapers : Yes / No
may be allowed to see the Judgment?
2. Whether the copies of judgment may be
marked to Law Reporters/Journals? : Yes / No
3. Whether Their Lordships wish to
see the fair copy of the Judgment? : Yes / No
__________________
P. NAVEEN RAO, J
_____________________
Dr. G. RADHA RANI, J
3
PNR,J & Dr.GRR,J
CCCA Nos.20 of 2021 & Batch
* HONOURABLE SRI JUSTICE P. NAVEEN RAO
AND
HONOURABLE Dr. JUSTICE G. RADHA RANI
+ C.C.C.A Nos.20 & 21 OF 2021
AND
CROSS OBJECTIONS No.32 OF 2021
% 26.10.2022
C.C.C.A Nos.20 OF 2021
Between:
# PepsiCo Inc. 700, Hill road, Purchase New York, 10577 U.S.A..
Rep. by its Assistant Secretary cum Trademark Counsel, Paul. A. Lee and another
.... Appellant
Vs.
$ M/s. Magfast Beverages, Rep. by its Proprietor Sri Syed Ghazudin, S/o. late Syed
Fakhruddin, aged 46 years, R/o.22-8-555/1 and 2, 2nd Floor, Chatta Bazar, Hyderabad-02.
..... Respondents
C.C.C.A Nos.21 OF 2021
Between:
# PepsiCo Inc. 700, Hill road, Purchase New York, 10577 U.S.A.. Rep. by its Assistant
Secretary cum Trademark Counsel, Paul. A. Lee and another
.... Appellant
Vs.
$ M/s. Magfast Beverages, Rep. by its Proprietor Sri Syed Ghazudin, S/o. late Syed
Fakhruddin, aged 46 years, R/o.22-8-555/1 and 2, 2nd Floor, Chatta Bazar, Hyderabad-500 002
and others.
..... Respondents
CROSS OBJECTIONS No.32 OF 2021
Between:
# Syed Ghazudin, S/o. late Syed Fakhruddin, aged 46 years, Proprietor M/s. Magfast
Beverages R/o.22-8-555/1 and 2, 2nd Floor, Chatta Bazar, Hyderabad-500 002 and another.
.... Cross objectors
Vs.
PepsiCo Inc. 700, Hill road, Purchase New York, 10577 U.S.A.. Rep. by its Assistant
Secretary cum Trademark Counsel, Paul. A. Lee and others.
.... Respondents.
4
PNR,J & Dr.GRR,J
CCCA Nos.20 of 2021 & Batch
!Counsel for the Appellants : Sri K. Vivek Reddy, Senior Counsel representing
Sri T.G. Rajesh Kumar.
Counsel for the Respondents : Sri Sunil B. Ganu Senior Counsel
<Gist :
>Head Note:
? Cases referred:
1. 2018 (2) SCC 112
2. MANU/MH/1110/2011
3. (2006) 2 All Maharastra Reports 439
4. MANU/DE/4021/2019
5. (2018) 9 SCC 183
6. (2005) 1 SCC 787
7. (2014) 208 DLT 723
8. 2014(59) PTC 105 (Del)
9. CS(COMM)110/2019
10. (1960) 1 SCR 968
11. MIPR 2007 (1) 0041
12. 2006 (33) PTC 4 (Bom)
13. AIR 1981 Del 150
14. 1988 (8) PTC 1 (BOM)
15. 2018 (75) PTC 209 (SC)
16. (1997) 4 SCC 201
17. (1965) 1 SCR 737
18. (1969) 2 SCC 727
19. 1998 (18) PTC 698 (Del)
20. 1997 (17) PTC 453 (Del)
21. 2004 (28) PTC 384 (Del)
22. 1998 SCC OnLine Del 829
23. 91 (2001) DLT 321
24. 2014 (57) PTC 422 (Delhi)
25. 1997 SCC Online Bom 575
26. ILR (1995) 2 Del 817
27. ILR (2002) I Delhi 550
28. MANU/SC/0341/1965
29. MANU/UP/0296/2007
30. MANU/SC/0820/2020
31. (1994) 1 SCC 1
32. (2010) 2 SCC 114
33. (2008) 12 SCC 481
34. (1968) 3 SCR 862
35. (2007) 8 SCC 449
36. (1999) 78 DLT 811
37. 2012 (5) ALT 345
38. (1995) ILR 1 Del 76)
39. 2011 (46) PTC 244 (Del)
40. (2014) 57 PTC 398
41. FAO(OS)(COMM)74/2019
42. 2014 (58) PTC 14 (Bom)
43. MANU/MH/1733/2022
44. (2016) 2 SCC 672
45. (2004) 12 SCC 624
5
PNR,J & Dr.GRR,J
CCCA Nos.20 of 2021 & Batch
HONOURABLE SRI JUSTICE P. NAVEEN RAO
AND
HONOURABLE Dr. JUSTICE G. RADHA RANI
C.C.C.A Nos.20 & 21 OF 2021
AND
CROSS OBJECTIONS No.32 OF 2021
COMMON JUDGMENT:(Per Hon'ble Dr. Justice G. Radha Rani) Since common issues arise in all these appeals, they are being disposed of by this common judgment.
2. CCCA No.20 of 2021 was filed by PepsiCo against the judgment and decree in O.S No.95 of 2004 passed by the X Additional Chief Judge, City Civil Court, Hyderabad dated 31.12.2019 for dismissing the suit filed by them for infringement of trade mark, copy right, passing off, acts of unfair competition, dilution, damages / rendition of accounts etc.
3. CCCA No.21 of 2021 was filed by PepsiCo against the finding on issue No.1 in the judgment and decree in O.S. No.19 of 2004 passed by the X Additional Chief Judge, City Civil Court, Hyderabad dated 31.12.2019. The said suit was filed by M/s.MagFast Beverages claiming damages and for permanent 6 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch injunction. The said suit was also dismissed by the trial court however, observing that the rights conferred by registration of the trademark were subject to the rights of prior user of the trademark and that M/s.Magfast Beverages were prior users of the trademark 'Mountain Dew' and held on issue No.1 in their favour that they were holders of the trademark rights regarding the disputed trademark 'Mountain Dew'.
4. Cross Objections No.32 of 2021 is filed by M/s.Magfast Beverages for dismissing the suit filed by them in O.S. No.19 of 2004 vide judgment and decree dated 31.12.2019 by the X Additional Chief Judge, City Civil Court, Hyderabad.
5. The parties are hereinafter referred as per their array in OS No.95 of 2004 i.e. PepsiCo is referred as 'plaintiffs' and M/s.Magfast Beverages are referred as 'defendants'.
6. The plaintiffs filed the suit for injunction originally in the High Court of Delhi at New Delhi vide suit No.1332 of 2003. On the transfer petition filed by the defendants, as per the orders of the Hon'ble Apex Court, the case was transferred to the City Civil 7 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch Court, Hyderabad and the same was tried as O.S. No.95 of 2004 by the X Additional Chief Judge, Hyderabad.
7. The case of the plaintiffs was that PepsiCo Incorporation was a Corporation incorporated in USA having its registered office at Delhi and the 2nd plaintiff was duly authorized to protect the various trademarks of the 1st plaintiff. They were jointly referred as plaintiffs. The plaintiffs were the world renowned manufacturers and sellers of beverages under the trade marks Pepsi, Mirinda, 7UP, Aquafina etc. The various companies of the plaintiffs all over the world were also the largest manufacturers and sellers of snack food etc. One of the leading businesses of plaintiffs was also sale of carbonated citric soda under the name 'Mountain Dew'. The Mountain Dew drink was well known throughout the world. The public at large were well aware that Mountain Dew belonged to the plaintiffs. The total sales under the mark would run into billions of dollars. The plaintiffs spend approximately 15 million US Dollars per annum on the advertisement and promotion of 'Mountain Dew'. The global annual sale for the said trade mark was approximately 7 billion dollars.
8
PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch 7.1. The mark Mountain Dew was adopted in the year 1940 and was being continuously used since that date. The Mountain Dew soda was the first carbonated citrus flavoured soda said to be sold on national basis in the United States. Since its introduction in 1940, Mountain Dew soda had gained tremendous reputation and goodwill in the United States and abroad due to wide publicity and the intrinsic quality of the product. In India, the trade mark Mountain Dew Soda was introduced on 17.01.2003. It had received tremendous response in the Indian Market as well. The sale of Mountain Dew Soda from January to April 2003 was worth Rs.36.00 Crores approximately. The Mountain Dew soda had been heavily advertised in print as well as electronic media in India. There were number of popular advertisements of Mountain Dew soda being currently shown on various television channels. The advertising expenditure of the plaintiffs in the print and electronic media in India till April, 2003 was approximately Rs.5.00 crores. The trade mark Mountain Dew was registered in more than 100 countries.
9
PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch 7.2. The trade mark Mountain Dew was a registered Trade Mark of the plaintiffs in India. The details of the registration of the mark are as follows:
Trade Mark Appln. No. Date Goods
Mountain Dew 436257 9.04.1985 Soft drink beverages
(word mark) (Registered) syrups concentrates
for the preparations
thereof.
Mountain Dew 444078 8.10.1985 Non alcoholic beverages
(Logo) (Registered) concentrates and syrups,
and bases used in the
preparations of such
beverages.
Mountain Dew 766225 11.08.1997 Mineral and aerated
(Logo) waters and other non-
alcoholic drinks; fruit drinks
and fruit juices; syrups and
other preparations for
making beverages.
Mountain Dew 771568 14.08.1997 Mineral and aerated
(Logo) waters and other non-
alcoholic drinks; fruit drinks
and fruit juices; syrups and
other preparations for
making beverages.
Mountain Dew 771568 14.08.1997 Mineral and aerated
(Logo) waters and other non-
alcoholic drinks; fruit drinks
and fruit juices; syrups and
other preparations for
making beverages.
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CCCA Nos.20 of 2021 & Batch
7.3. The aforesaid Trade Marks were being renewed from time to time. The said registrations were more than 7 years old and were conclusively valid under the Trade & Merchandise Marks Act, 1958.
7.4. The plaintiffs came to know in January 2003 that the defendants were using the trademark Mountain Dew in relation to packaged drinking water under the name / trade mark 'Mountain Dew' which was identical to the plaintiffs' trademark. Apart from adopting an identical mark, the defendants also adopted a similar label and manner of the same trademark as that of the plaintiffs Aquafina. A mere comparison of the defendants' packaged drinking water under the mark 'Mountain Dew' and the 'Aquafina' bottle of the plaintiffs would reveal the similarities between the two products. The various common features between the defendants product viz., Mountain Dew and Aquafina of the plaintiffs product were as under:
(i) The mark was identical i.e. "MOUNTAIN DEW".
(ii) The label was identical in colour combination i.e. Blue and White. Even the shade of blue used by the plaintiffs was same as that of the defendant's "AQUAFINA" label i.e. royal 11 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch blue. In the defendant's "AQUAFINA" label, the beginning and the ending letters 'A' were written in an elongated / tapered manner. In the same manner, the plaintiff had used the letters 'M' and 'N' in an elongated and tapered manner.
(iii) Both the products bore device of mountains on the top portion of the label.
(iv) Both the products were sold in 1 litre bottles.
(v) Both products were priced at Rs.12/-.
(vi) The defendant used the following identical expressions:
PLAINTIFF'S AQUAFINA DEFENDANT'S MOUNTAIN DEW Packaged drinking water enjoy Packaged Drinking Water enjoy the crisp, refreshing taste of the taste and purity of Mountain Aquafina. This bottle contains Dew. This bottle contains water pure water guaranteed by our guaranteed by our state of the art state of the art reverse osmosis reverse osmosis, U.V. and ozonisation purification sterilisation and ozonisation system. purification system.
Ingredients: Pure Drinking Ingredients: Pure Drinking Water Water
7.5. According to the test of imperfect recollection, the consumers/ prospective consumers were likely to be confused that 12 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch the product of the defendant originated from or had connection with that of the Plaintiffs. The use by the defendant of the name/mark Mountain Dew, which was identical to the trade mark of the plaintiffs Mountain Dew would constitute infringement of the rights of the plaintiffs in the said mark. The plaintiffs were the owners of the trade mark Mountain Dew and also owned the copyright in the label of the product Aquafina that was an original artistic work as per the Copyright Act.
7.6. The mark Mountain Dew due to extensive use and advertising was exclusively associated with the plaintiffs and their business. The goodwill and reputation of the trademark 'Mountain Dew' transcended beyond the geographical boundaries of any particular country. The Mountain Dew soda had been advertised in renowned magazines, which had circulation in India. The same had also been widely publicized in electronic media. In fact in recent times, the plaintiffs had issued television advertisements which have attracted enormous response among the viewing public in India. It was inexplicable as to how the defendant came to adopt a mark, which was exactly identical to the plaintiffs' trademark. The 13 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch trademark mountain dew being an arbitrary and fanciful mark adopted by the plaintiffs, it was entitled to a highest degree of protection. It was extremely distinctive of the plaintiffs throughout the world. The use of the said mark or any other mark similar to that of the plaintiffs by any other party without the permission or authorization of the plaintiffs would constitute passing off of such goods or business as that of the plaintiffs or which was connected with the plaintiffs.
7.7. The defendants were apparently engaged in the sale of purified water under the mark/name 'Mountain Dew'. This came to the knowledge of the plaintiffs when the plaintiffs' marketing department came across the product of the defendants in June 2003.
Immediately, the plaintiffs took steps to file a suit in the High Court at New Delhi for perpetual injunction along with an application for interim injunction under Order 39 Rules 1 and 2 and for appointment of local commissioner.
7.8. The adoption of the registered mark of the Plaintiffs, 'Mountain Dew", by the defendant was completely illegal and unlawful. The fact that a mark which was exactly identical to the 14 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch Plaintiffs' mark had been adopted for bottled purified water with identical colour scheme as that of Plaintiffs' bottled purified water, 'Aquafina' itself would establish that the defendants intention was to encash upon the reputation and goodwill of the plaintiffs' mark. The manner in which the defendants had written the word 'Mountain Dew' with the beginning letter "M" of the word 'Mountain' in a slightly bigger size than the other letters and all letters written as capital letters itself would establish that the copying was not restricted merely to the mark but also to the manner of writing so that consumers were clearly led to believe that the defendants product was connected with the plaintiffs or originated from the plaintiffs. The said use of an identical logo also would constitute infringement of copyright. The defendants had used the same colour for their Label i.e. the colour blue as used for the Plaintiffs' 'Aquafina' bottled purified water, which further would affirm that the intention of the defendant was completely malafide. The whole purpose of the defendant in adopting an identical mark and logo as that of the plaintiffs was to give an impression that the product of the defendant originated from and/or 15 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch had connection with the plaintiffs. Any person who saw the product of the defendant would be confused into believing the same. 7.9. It was further submitted that the use of the word 'Mountain Dew' by the defendants led to confusion and deception. The same was completely unlawful and impinged upon the rights of the plaintiffs. The mark 'Mountain Dew' was a registered trademark of the Plaintiffs. The adoption of the said mark or other similar mark by any party was not accidental or incidental but was a deliberate attempt to benefit illegally using the same. The defendant could not be allowed to misuse the plaintiffs' mark in that manner. The use of the mark 'Mountain Dew' was not only in violation of the plaintiffs rights but could also be harmful to the public in as much as innocent consumers might be lured to buy the said purified water under a mistaken impression that it was as pure as the plaintiffs' products and might in fact endanger public health and safety. 7.10. The use of the mark 'Mountain Dew' for purified water which might not live up to the standards of the plaintiffs products would in fact result in dilution of the plaintiffs' mark. Such use of the mark 'Mountain Dew' by the defendant was nothing but a 16 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch misrepresentation in the course of customers/prospective customers that their product was the plaintiffs' product and such conduct was calculated to injure the goodwill and reputation of the plaintiffs. The acts of the defendant would constitute passing off of its product and business as that of the plaintiffs. 7.11. The use of the mark 'Mountain Dew' by the Defendant might also lead to initial interest confusion. The plaintiffs were world renowned players in the field of beverages. The Plaintiffs 'Mountain Dew' soda was extremely famous. The Plaintiffs also were selling bottled purified water under the trademark 'Aquafina' in India and abroad. The Defendants' 'Mountain Dew' mark with a colour scheme similar to that of the Plaintiffs' Aquafina used for bottled purified water might evince an initial interest from the purchaser who might think that it was another product of the Plaintiffs. Hence, the acts of the defendants would constitute infringement of registered trademark, infringement of copy right, passing off, unfair competition and dilution. The confusion was worsened by the fact that the plaintiffs were also in the same business i.e. packaged drinking water and consumers might be 17 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch confused into believing that the product of the defendants also originated from the plaintiffs. Such use constituted acts of passing off and unfair competition. The nature of the product was such that the same would be picked up off-the-shelf without much deliberation. The decision to purchase a product was made at the point of purchase and was almost instantaneous. The plaintiffs' and the defendants' products were being kept together at the same counters and shelfs. The chances of confusion were thus worsened & almost unavoidable. It was a case of triple identity:
(i) Identical mark;
(ii) Identical channel of purchase;
(iii) Identical customers, hence, passing off was inevitable.
8. Six months after filing of the suit by the plaintiffs, in January 2004, the defendants filed O.S. No.19 of 2004 inter alia seeking damages and permanent injunction against the plaintiffs for passing off their packaged drinking water by using the trademark 'Mountain Dew' by the plaintiffs. The defendants also made 'Times of India' Group of Publications and 'Vartha' Telugu 18 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch Newspaper as defendant Nos.3 and 4 in their suit for recovery of damages alleging publication of news items regarding injunction order passed by the Delhi High Court against Magfast and its proprietor Mr. Syed Ghaziuddin i.e. defendant herein as defamatory.
9. On 8th July, 2003 the Delhi High Court passed an interim order for appointment of local commissioner to visit the defendants' premises at Hyderabad and seize the printing material, packing material as well as mineral water bottles bearing trade mark 'Mountain Dew' and to handover the same on superdaari to the defendants. The local commission was executed at the premises of defendants on 19.07.2003. Subsequently, on transfer petition filed by the defendants, the Hon'ble Supreme Court transferred the suit filed by the plaintiffs to the City Civil Courts at Hyderabad and it was numbered as OS No.95 of 2004.
10. The defendants initially filed their written statement in August, 2003 and filed the amended written statement in August 2006. On 4th October, 2004 the trial court allowed the application for interim injunction filed by the plaintiffs and restrained the 19 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch defendants from manufacturing and selling the packaged drinking water under the mark 'Mountain Dew'. However, the trial court permitted the defendants to exhaust its stock within three months. The defendants challenged the said order by filing CMA No.4526 of 2004. The same was dismissed vide order dated 28.07.2008 with a direction to expedite the matter.
11. The case of the defendants in the written statement in O.S. No.95 of 2004 as well as in the suit filed by them in O.S. No.19 of 2004 was that the 1st defendant was a qualified Engineer. In the year 1997-98 he wanted to commence his own business. After making necessary enquiries in the field and after conducting extensive research, the 1st defendant decided to enter the business of packaged drinking water. The 1st defendant had conceived an idea and in fact had discussed the idea with Sri V.Kishore Gupta of M/s S.K. Graphics, the Artist who prepared the label. While discussing the matter, the 1st defendant had desired that he would like to have the label/Trade name to contain the natural source of water, suggesting purity and coolness. It was with the said intention, he conceived and developed the label of 'Mountain 20 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch Dew'. Before deciding the trademark, the defendant had meticulously searched the website which provided a list of 400 brand-names of the companies which produced bottled packaged drinking water either domestically or otherwise. In the said extensive enquiry the first defendant did not come across the name 'Mountain Dew' being used by any manufacturers. 11.1. After making further enquiries as to the nature of the business, he prepared project report and approached his bankers M/s. Central Bank of India. On necessary verification, his bankers approved the proposal for loan to install the requisite plant and machinery and commencement of production in 2000. Thereafter the defendants got it registered as small scale unit with the Directors of Industries Government of A.P. in 2001. The product was launched on 8.11.2000 with much fanfare and advertisement in most widely circulated Urdu news paper 'Siasat Daily'. The said news paper had a large circulation not only in India but also in countries like U.S.A., U.K. Qatar, U.A.E. Germany, Japan etc. The defendant started manufacturing the said product in 1 liter, 5 liters and 20 liters bottles. Over the years, the defendant developed its 21 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch market and reputation due to excellent quality of product. The defendants' unit was registered with the sales tax authorities and was also issued a certificate in that respect. The defendant had been an income tax assessee and had been filing returns regularly. The unit run by the defendants also held necessary license from the MCH as well as other concerned authorities of Government of A.P. The water manufactured by the defendants had been certified to confirm to the Bureau of Indian Standards and International Business Standards Organization (IBSO) Standards. The defendants applied for registration with ISI authorities in 2001 and the same was granted by Bureau of India Standards at Hyderabad. The licences were being renewed from time to time. Over the last 3 years, the defendants were able to establish themselves in the market and were supplying packaged drinking water to five star hotels, Government departments, apart from being official suppliers of packaged drinking water in National Games held in Hyderabad Even in February 2003, the authorities of Pollution Monitoring Laboratory, Center for Sciences and Environment conducted tests and found that the packaged drinking water manufactured by the 22 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch defendants was absolutely pure confirming to the required standards. The defendants also held certificates from BIS and other State and Central Government authorities. Due to the quality of product and due to the hard work put in by the defendants, the Trade mark 'Mountain Dew' had become closely associated with the product of the defendant and had acquired a secondary meaning.
11.2. While the matter stood thus the defendants were surprised to receive a notice from the court commissioner said to have been appointed as per the orders passed by the High Court at New Delhi. The defendants came to know that the plaintiffs filed O.S.No. 1332 of 2003 on 19.7.2003. The representatives of the plaintiffs who were accompanying the court commissioner had created a scene at the plant of the defendants. The court commissioner prepared an inventory and seizure panchnama of the ready stocks available within the premises, of packaged drinking water under the label 'Mountain Dew'. Though the defendants raised a protest, as they were told that the same was being done under the orders obtained from a competent court of law, as such, on legal advice decided to 23 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch seek redressal before the concerned court, so the defendant remained silent. The concerned officials of the plaintiffs threatened the defendant that he should immediately stop his business. 11.3. The defendants further stated that the plaintiffs claimed to have registration for the label/Trademark 'Mountain Dew' for their citric soda but admittedly not manufactured/sold the said product in India till January, 2003. Admittedly, the plaintiffs did not have any packaged drinking water under the label of 'Mountain Dew' anywhere in the world even till date. The plaintiffs were manufacturing and marketing packaged drinking water under the label 'Aquafina' which was totally a different label. Neither was it phonetically similar or otherwise bearing any similarity to the label of the defendants' 'Mountain Dew'. The packaged drinking water brought in by the plaintiffs under the label 'Aquafina' was totally different than that of the 'Mountain dew' label brought in by the plaintiffs and was being sold in one litre bottles only, whereas the defendants product was being sold in packages i.e. one litre, 2 litres, five litres, twenty litres. Mere registration for totally different goods without manufacture or sale of the said product in India was 24 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch of no consequence and the same would not create any right in respect of the said label for the plaintiffs or otherwise curtail rights of a honest concurrent user like that of the defendants. The plaintiffs did not have any right to use the label 'Mountain Dew' for category product of packaged drinking water as admittedly the defendants were the prior users of the same.
11.4. The defendants further submitted that when Pepsi's products were tested, they were found to contain pesticides and any use/passing off by the plaintiffs label 'Mountain Dew' could bring further disrepute to his business. The plaintiffs applied for a separate registration for 'Mountain Dew' mineral and aerated water and were in the process of introducing the same in the market. The same was apparent from the search report obtained by him. The plaintiffs were apparently doing so, so as to pass off their product as that of the defendants. Admittedly the defendants had commenced their business openly and after good publicity in the year 2000 and were carrying on the business of manufacture and sale of 'Mountain Dew' packaged drinking water to the knowledge of one and all. The plaintiffs did not raise any objection to the 25 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch manufacture and marketing of 'Mountain Dew' packaged drinking water since 2000. For the first time, the plaintiffs brought in their 'Mountain Dew' citric soda into market in India in January, 2003. In the said circumstances, admittedly, the defendants were prior users of the label 'Mountain Dew' in India. Their rights as prior users as well as honest concurrent users were substantial rights and the plaintiffs would have no right to seek or to curtail the same. 11.5. While contesting the claim put forth by the plaintiffs, the defendants realized that there was gross misrepresentation and suppression of material facts indulged into by the plaintiffs about passing of information to the newspapers i.e. defendants 3 and 4 in O.S No.19 of 2004 about the orders passed by the High Court of Delhi, as such claimed damages for a sum of Rs.25,00,000/- with interest @ 18% per annum and claimed permanent injunction against PepsiCo (Defendants Nos.1 and 2 therein referred as 'plaintiffs' herein).
12. Basing on the said pleadings, the following issues were framed in O.S. No.95 of 2004:
26
PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch (1) Whether the plaintiffs are the registered holders of the disputed Trade Mark?;
(2) Whether the defendant infringed the right of the plaintiffs to the exclusive use of the trade mark?;
(3) Whether the plaintiffs are entitled to the injunctions as prayed for?;
(4) Whether the plaintiffs are entitled to the damages as prayed for?;
(5) Whether the plaintiffs are entitled to deliver all material containing the Trade Mark?; and (6) To what relief ?
13. The following issues were framed in O.S.No.19 of 2004:
"(1) Whether the plaintiffs are holders of Trade Mark rights regarding disputed trade mark?;
(2) Whether the defendant Nos.1 and 2 violated the Trade Mark rights of the plaintiffs?;
(3) Whether the defendant Nos.3 & 4 committed defamation against the plaintiffs ?;
(4) Whether the plaintiffs are entitled to the decree as prayed for? And (5) To what relief ?"
14. Both O.S. No.95 of 2004 and O.S. No.19 of 2004 were tried together and evidence was recorded in O.S. No.95 of 2004. 27
PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch
15. On behalf of the plaintiffs PWs.1 and 2 were examined and Exs.A1 to A57 were marked. On behalf of defendants 1 and 2, DW1 was examined and on behalf of defendant Nos.3 and 4 in O.S.No.19 of 2004, DW2 was examined. Exs.B1 to B145 were marked on their behalf.
16. The trial court dismissed the suit filed by the plaintiffs on the grounds that:
(i) The plaintiffs could not have exclusive right on the mark "Mountain Dew" since Pepsi's predecessors-in-interest in USA, Hartman Beverages, had a disclaimer in its 1948 registration certificate of non-exclusivity regarding the mark 'Mountain Dew' and the mark 'Mountain Dew' had been used all over the world in all walks of life.
(ii) Since many products across the world bore the name of 'Mountain Dew' according to admissions made by PW1 & PW2, PepsiCo could not have exclusive right on the mark,
(iii) PepsiCo did not have the transborder reputation in the year 2000.28
PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch
(iv) Magfast had established with Exhibit B-1 to B-4 that it had started using 'Mountain Dew' in the year 2000, as such it was a prior user than PepsiCo, which started using the mark 'Mountain Dew' in India only in January, 2003. Since Magfast established that it was a prior user of the mark Mountain Dew, the claim of PepsiCo that it had got transborder reputation becomes obscured.
(v) PepsiCo cannot stop Magfast from using the trade mark in India as Magfast was the prior user of the mark in India and hence entitled to the benefit of Section 34 of the 1999 Act,
(vi) Since PepsiCo launched packaged drinking water under the name 'Aquafina' in the year 2002, ie., two years after the launch of Magfast packaged drinking water in the year 2000, therefore the question of copying shade of colour, letters of Aquafina does not arise. Even otherwise, on examination there was very little similarity between the two bottles.
17. While dismissing the suit filed by the defendants, the trial court held that the defendants were not entitled to any relief as it could not take contrary stands in the two suits i.e. the products manufactured by the plaintiffs and defendants would fall in 29 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch separate class and hence question of confusion would not arise, whereas, the defendants in its own suit had taken an opposite stand and contended that since the products of the parties fall in the same class, confusion amongst consumers was bound to arise, and hence declined to grant relief of injunction. The trial court also observed that the defendants admitted in their cross examination that the plaintiffs were the prior users and adopters of the trademark, as such also not entitled for the relief. It also dismissed the defendants claim for damages for defamation.
18. Aggrieved by the dismissal of the said suits, the plaintiffs preferred the present appeals contending that the trial court committed grave error in interpreting Section 34 of the Act that if a manufacturer was found to be prior user of a mark, irrespective of whether he had registration or not for his mark, the registered proprietor could not interfere with the use of the similar mark. The interpretation of the trial court was contrary to the settled law. To avail the defence of prior use, the defendant must prove about its use before the plaintiffs' use or registration, whichever was earlier. The defendants' use of the mark should have been before the 30 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch registration of PepsiCo's Trade Mark. The trial court proceeded on an erroneous basis in holding that the plaintiff's did not hold the title of "Mountain Dew" exclusively (with no limitation or disclaimer). The defendants had not denied that PepsiCo Inc. had prior registration and his application seeking cancellation of the registered Trade mark of PepsiCo Inc. had been dismissed, hence there was absolutely no basis for the findings of the trial court to the contrary.
18.1. The trial court failed to appreciate that the plaintiffs had beyond reasonable doubt established their transborder reputation in the mark "Mountain Dew" and that it had spilled over to India much before the defendants' alleged use of an identical Mark "Mountain Dew" in the year 2000. The trial court had misdirected itself in failing to appreciate the plethora of documents exhibited by the plaintiffs in respect of their claim.
18.2. As per Section 124 (4) of the Act, the findings of Intellectual Property Appellate Board (IPAB) were binding on the civil court. The trial court disregarded the findings of the IPAB solely on the ground that they were challenged before the Madras High Court 31 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch which was impermissible. IPAB gave its findings after considering the pleadings and evidence filed by both the parties. The IPAB was an expert quasi-judicial body presided over by a retired High Court Judge; IPAB did not hold summary enquiry under Section 92 of the Act. IPAB had been conferred powers to receive and scrutinise evidence and examine witnesses like a civil court. It was the defendant who approached the IPAB in the hope of getting a favourable outcome, but once IPAB's ruling came adverse to it, the defendant completely avoided it. Section 124 (4) of the Act would require the trial court to dispose of the suit in confirmity with IPAB's order. Instead of adopting the findings, the trial court conducted a de novo examination of all the issues which were subject matter before IPAB; the same was contrary to the ruling of the Hon'ble Apex Court in Patel Field Marshal Agencies v. PM Diesels Ltd.1 case. The defendant could not have raised the issues already decided by IPAB by virtue of doctrine of issue estoppel. The Hon'ble Supreme Court had categorically held that estoppel bars parties from raising the same dispute in a different proceeding. 1 2018 (2) SCC 112 32 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch 18.3. The trial court exceeded its jurisdiction in holding that registrations for the Mark "Mountain Dew" in favour of the plaintiffs were not absolute and would not confer exclusive rights in India. The plaintiffs had unconditional and unqualified registration in India. The trial court erred in looking at the U.S. Trade Mark registration of 1948 but not of the Indian Trade Mark registration. If the trial court was looking at the U.S. Trade Mark register, it ought to have looked at the plaintiff's registration of 1966 having no disclaimer at all and not the 1948 Hartman's registration. From 1966 onwards, the U.S. Trade Mark register would show the plaintiff as exclusive owner without any disclaimer.
18.4. The trial court wrongly held that since the mark "Mountain Dew" was used in all walks of life, plaintiff's had no exclusive right over the mark. Once registration for "Mountain Dew" Trade Mark was granted after an elaborate process, it had to be presumed that the Trade Mark had become distinctive and was not customary to the trade. The only remedy for defendant to challenge the registration was by filing a rectification application. The defendant 33 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch was estopped from challenging the distinctiveness of the mark when he himself had sought for registration of the mark. 18.5. Trade Mark holders were not required to go after all the infringers who might not be affecting their business. Even otherwise, use of plaintiff's Trade Mark by other third-parties would not give a right to the defendant to use the plaintiff's mark without authorisation. When the other entities had infringed the plaintiff's mark "Mountain Dew" on a commercial scale and harmed its business, the plaintiff successfully restrained them. The trial court wrongly held that defendant was a prior user, placing reliance on Exs.B.1 to B.4. However, Exs.B.1 to B.4 would not show the use of defendant from the year 2000. The evidence would show that the defendant admittedly obtained license for its beverages in the year 2002. Its illegal sales could not form the basis to assert its prior use. The defendant had not produced any document to establish the use of the mark "Mountain Dew" for the Financial Years 2000-01 and 2001-02. Admittedly, defendant failed to produce Income Tax Returns, Sales Tax Returns, VAT Returns, Balance-Sheet, etc. for the said financial years. 'Prior use' 34 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch must be substantial prior use and not sporadic prior use. Small amounts of sale in the market should not be treated as 'prior use'. In view of IPAB orders, the plaintiffs were not required to adduce additional evidence over and above the IPAB order. The trial court's findings were inconsistent. The trial court dismissed the defendant's passing off action on the ground that plaintiff was the prior user and adopter and dismissed the plaintiff's suit by holding that defendant was the 'prior user'. The said findings of the trial court would contradict one another.
19. Though O.S.No.19 of 2004 filed by the defendants was dismissed, plaintiffs contended that the trial court erroneously held Issue No.1 in favour of the defendants that they were prior users of the mark and fell in grave error of law in holding that the defendants were prior users of the mark "Mountain Dew" in complete ignorance of the prior statutory rights of the plaintiffs. Much prior to the filing of the above suits, Courts in India had acknowledged the goodwill and reputation of plaintiffs in the mark "Mountain Dew" in India. Besides, the plaintiffs held Trade Mark registration for the mark "Mountain Dew" in over 100 countries 35 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch world-wide. The mark "Mountain Dew" had been aggressively marketed and received unsolicited media attention world-wide in newspapers having circulation in India, besides being available on the internet which would clearly evidence that the mark "Mountain Dew" was selling not only intentionally but also in India prior to the defendants alleged adoption and use in the year 2000. 19.1. The trial court erred in not taking into consideration several news articles published in reputed newspapers and magazines such as Business Standard, Financial Times, Time Magazine, Business Week, The Economic Times and USA Today, which reported the plaintiff's growing sales, success and popularity for decades and reputation in the well-known mark "Mountain Dew". The trial court erred in accepting the defendants claim for use of the mark "Mountain Dew" since 2000, as they did not start manufacturing packaged drinking water since 2000 and were supplying bulk water by tankers and not in packaged bottles. The trial court failed to appreciate that the cross-examination of DW.1 would reveal that the Income Tax Returns for the Financial Year 2002-03 would show a meagre income of Rs.32,305/- from business. The gross 36 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch receipt from the supply of water was purportedly Rs.3,75,000/- compared to receipt of Rs.17,15,206/- from supply through lorries. It was evident that principle business of defendant was supply of water through lorries rather than packaged drinking water throughout. As per the admissions of DW.1 he was not in the business of packaged drinking water until March, 2003, whereas the plaintiffs launched their products in India on 17.01.2003. The invoices exhibited by the defendant pertain to supply of bulk water presumably through lorries. The invoices for the years 2000-02 would not even mention the mark "Mountain Dew" in the product description. Hence, it could not be said that defendant commenced use of the mark "Mountain Dew" prior to plaintiff's Trade Mark registration.
19.2. In the absence of proper licenses from the relevant departments, the business of defendant for manufacture and sale of packaged drinking water under the mark "Mountain Dew" was illegal and could not avail the use of the mark Mountain Dew, if any, for the period prior to obtaining such permissions. 37
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20. The defendants in their Cross Objections No.32 of 2021 in CCCA No.21 of 2021 contended that the trial court erred in rejecting the relief of injunction though held issue No.1 in their favour. Having decided the issue in their favour, the trial court ought to have granted injunction. The trial court ought to have taken into consideration that injunction was sought against the plaintiffs for passing off of their product packaged drinking water by using the trade mark 'Mountain Dew'.
20.1. The defendant further stated that the trial court had not discussed the pleas taken by the cross appellants as well as the evidence on record regarding mental agony, tension caused by the plaintiffs to them when the representatives of the plaintiffs came to their factory along with the Court Commissioner and created a scene there and subsequently, when the plaintiffs in collusion with defendants No.3 and 4 got paper publications issued which contained material beyond the order passed by the High Court of Delhi branding them as manufacturers of spurious products using Pepsi bottles and also stating that the Delhi High Court ordered them not to sell its packaged drinking water in the name of 38 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch "Mountain Dew". The trial court erred in dismissing their claim for damages, quantified at Rs.25.00 lakhs and prayed to set aside the judgment of the trial court by allowing the cross objections.
21. Heard Sri K. Vivek Reddy, learned Senior Counsel representing Sri T.G. Rajesh Kumar, learned counsel for the appellants in CCCA Nos.20 and 21 of 2021 and Sri Sunil B. Ganu, learned Senior Counsel appearing for the appellants in CCCA No.32 of 2021.
22. Now the points for consideration in these Appeals are:
i) Whether the plaintiffs are entitled for permanent injunction against the defendants for infringement of their registered trade mark?
ii) Whether the plaintiffs are entitled for permanent injunction against the defendants for infringement of their copy rights?
iii) Whether the plaintiffs are entitled for permanent injunction restraining the defendants for passing off, unfair competition and dilution?
iv) Whether the plaintiffs are entitled for damages, rendition of accounts of profits and 39 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch delivery of the impugned mark, label and devices?
v) Whether the defendants are entitled for permanent injunction to restrain the plaintiffs for passing off their products by using the trade mark "Mountain Dew"?
vi) Whether the defendants are entitled for recovery of damages @ Rs.25,00,000/- as claimed by them?
vii) Whether the Trial Court committed any error in dismissing the suits filed by both the parties?
viii) To what relief?
23. Before proceeding to answer the points for consideration, the undisputed facts are that the trade mark "Mountain Dew" was coined by M/s.Hartman Beverages in the year 1948 and was assigned to the plaintiffs Pepsi Co Incorporation in the year 1964 and had been continuously used by Pepsi Co since then. In India Pepsi Co Incorporation registered the word mark 'Mountain Dew' under Trade Mark No.436257 on 09.04.1985 in Class 32 covering "soft drinks, beverages and syrups and concentrates for the preparation thereof" and registered "Mountain Dew" Logo under 40 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch Trade Mark No.444078 on 08.10.1985 in Class 32 covering "non- alcoholic syrups, concentrates and bases used in the preparations of such beverages". Pepsi Co introduced "Mountain Dew" in India in January, 2003. Pepsi Co commenced production of their product 'Aqua Fina' in India in October 2002. Magfast commenced its business and production of packaged drinking water under the mark 'Mountain Dew' in the year 2000.
24. Learned counsel for the appellants/plaintiffs contended that Pepsi Co had unconditional and unqualified registration in India. There were no disclaimers entered in the register at the time of registration of the trade mark in India. The Trial Court did not consider the binding nature of the Intellectual Property Appellate Board (IPAB) order. The findings of IPAB were binding on the Civil Court. The Trial Court erred in not considering the same. The observations of the Trial Court in dismissing both the suits filed by Pepsi Co and Magfast holding that the other party was the prior user was diametrically opposite to each other and one would strike out the other. The Trial Court wrongly held that Magfast was a prior user. The finding of the Trial Court that Magfast was 41 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch protected under Section 34 of the Trade Mark Act, 1999, was erroneous. The trade mark was available for allied and cognate goods which would flow through the same trade channels. The Trial Court failed to recognize the transborder reputation of Pepsi Co trade mark of "Mountain Dew" in India and failed to observe the dishonest adoption of mark by Magfast. The Court ought to have granted injunction when a trade mark was dishonestly adopted and prayed to allow the appeals filed by them.
25. The main contention of the learned counsel for the respondents/defendants was that Pepsi Co never claimed the mark "Mountain Dew" to be a creation or invention by themselves. Admittedly, Hartman Beverages was the erstwhile owner of the mark and predecessors in interest of Pepsi Co. Even they never claimed to have created the mark "Mountain Dew". But, infact made a disclaimer at the time of registration of the trade mark in USA to the effect that "exclusive use of the words "Mountain Dew"
was not claimed apart from the rest of the mark". When Hartman Beverages had not claimed any exclusive use of the mark, Pepsi Co could not have acquired anything more than the rights held by their 42 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch predecessors. Admittedly, there were innumerable users of the mark "Mountain Dew" in various walks of life in USA even in 1940 and today, as such Hartman beverages being conscious of the said fact had specifically given the said disclaimer. Pepsi Co, who registered the mark in 1985 admittedly never manufactured the product "Mountain Dew" or sold the same in India till January 2003. Even the manufacturing of the product "Aqua Fina" relating to which infringement of copy right was claimed by Pepsi Co, on the basis of alleged similarities in the label by use of the colours white and blue and depiction of "Mountain Dew" was not commenced until October, 2002. As such Magfast, who commenced its business and production of packaged drinking water under the mark Mountain Dew in the year 2000 itself was a prior user and hence entitled to the relief of passing off.
26. Point No.1: Whether the plaintiffs are entitled for permanent injunction against the defendants for infringement of their registered trade mark?
43
PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch Under Section 31 of the Trade and Merchandise Marks Act, 19582, (for short 'the Act') registration is prima facie evidence of the validity of the trade mark3.
27. Registration confers certain rights under Section 28 of the Act. Section 28 speaks of the Rights conferred by the registration4. 2
31. Registration to be prima facie evidence of validity. (1) In all legal proceedings relating to a trade mark registered under this Act (including applications under section 56), the original registration of the trade mark and of all subsequent assignments and transmissions of the trade mark shall be prima facie evidence of the validity thereof. (2) In all legal proceedings as aforesaid a trade mark registered in Part A of the register shall not be held to be invalid on the ground that it was not a registrable trade mark under section 9 except upon evidence of distinctiveness and that such evidence was not submitted to the Registrar before registration, if it is proved that the trade mark had been so used by the registered proprietor or his predecessor in title as to have become distinctive at the date of registration.
3 As the Registration of Trade Mark 'Mountain Dew' by Pepsi in India is in the year 1985, the Trade and Merchandise Marks Act, 1958 which is in existence by that date is considered. 4
28. Rights conferred by registration. (1) Subject to the other provisions of this Act, the registration of a trade mark in Part A or Part B of the register shall, if valid, give to the registered proprietor of the trade mark the exclusive right to the use of the trade mark in relation to the goods in respect of which the trade mark is registered and to obtain relief in respect of infringement of the trade mark in the manner provided by this Act. (2) The exclusive right to the use of a trade mark given under sub- section (1) shall be subject to any conditions and limitations to which the registration is subject. (3) Where two or more persons are registered proprietors of trade marks, which are identical with or nearly resemble each other, the exclusive right to the use of any of those trade marks shall not (except so far as their respective rights are subject to any conditions or limitations entered on the register) be deemed to have been acquired by any one of those persons as against any other of those persons merely by registration of the trade marks but each of those persons has otherwise the same rights as against other persons (not being registered users using by way of permitted use) as he would have if he were the sole registered proprietor. 44
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28. Section 29 of the Act speaks of Infringement of trademark5.
29. Section 30 of the Act speaks of Acts not constituting infringement6.
5
29. Infringement of trade marks.
(1) A registered trade mark is infringed by a person who, not being the registered proprietor of the trade mark or a registered user thereof using by way of permitted use, uses in the course of trade a mark which is identical with, or deceptively similar to, the trade mark, in relation to any goods in respect of which the trade mark is registered and in such manner as to render the use of the mark likely to be taken as being use as a trade mark. (2) In an action for infringement of a trade mark registered in Part B of the register an injunction or other relief shall not be granted to the plaintiff if the defendant establishes to the satisfaction of the court that the use of the mark of which the plaintiff complains is not likely to deceive or cause confusion or to be taken as indicating a connection in the course of trade between the goods in respect of which the trade mark is registered and some person having the right, either as registered proprietor or as registered user, to use the trade mark. 6 Acts not constituting infringement (1) Notwithstanding anything contained in this Act, the following acts do not constitute an infringement of the right to the use of a registered trade mark:--
(a) where a trade mark is registered subject to any conditions or limitations, the use of the trade mark in any manner in relation to goods to be sold or otherwise traded in, in any place, or in relation to goods to be exported to any market, or in any other circumstances, to which, having regard to those conditions or limitations, the registration does not extend;(b) the use by a person of a trade mark in relation to goods connected in the course of trade with the proprietor or a registered user of the trade mark if, as to those goods or a bulk of which they from part, the registered proprietor or the registered user conforming to the permitted use has applied the trade mark and has not subsequently removed or obliterated it, or has at any time expressly or impliedly consented to the use of the trade mark;
(c) the use of a trade mark by a person in relation to goods adapted to form part of, or to be accessory to, other goods in relation to which the trade mark has been used without infringement of the right given by registration under this Act or might for the time being be so used, if the use of the trade mark is reasonably necessary in order to indicate that the goods are so adapted, and neither the purpose nor the effect of the use of the trade mark is to indicate, otherwise than in accordance with the fact, a connection in the course of trade between any person and the goods;45
PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch Thus a trade mark can be registered subject to any conditions or limitations as laid down under Section 30(i)(a) of the Act.
30. Under Section 17 of the Act, the Registrar can enter a disclaimer in the register if the trade mark contains any matter which is common to the trade or is otherwise of a non distinctive character. In the present case, the Registrar of Trade Mark had not entered any disclaimer while granting registration to Pepsi Co in 1985. In the absence of any such disclaimer Pepsi Co's rights are exclusive.
31. The contention of the learned counsel for the defendants was that Hartman Beverages made a disclaimer at the time of registration of the trade mark in USA and Pepsi Co, who were assigners of the trade mark could not have acquired anything more than the rights held by their predecessors. But the contention of the learned counsel for the appellants was that they relied upon the Hartman registration to show that the trade mark "Mountain Dew"
(d) the use of a registered trade mark, being one of two or more trade marks registered under this Act which are identical or nearly resemble ach other, in exercise of the right to the use of that trade mark given by registration under this Act. (2) Where the goods bearing a registered trade mark are lawfully acquired by a person, the sale of or other dealings in those goods by that person or by a person claiming under or through him is not an infringement of the trade mark by reason only of the trade mark having been assigned by the registered proprietor to some other person after the acquisition of those goods.46
PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch was in use since 1948 and was coined by their predecessors in title. The Hartman's 1948 registration expired long ago. Hartman's registration was not even in the US Trade Mark register. Infact, even in USA Pepsi Co holds registration for the trademark "Mountain Dew" under Trade Mark No.820362, dated 13.12.1966 without any disclaimer or conditions. As such, the mark "Mountain Dew" acquired distinctiveness since it was used from 1948 onwards. Pepsi Co has got word mark "Mountain Dew" registration without any disclaimer. Once the concerned US authorities granted registration without any disclaimer, it was admitted that the concerned authorities were satisfied with the requirements of distinctiveness of the mark. Magfast cannot challenge the US registration in the present proceedings and seek evidence to produce before the US Trade Marks Office about distinctiveness. Pepsi Co filed suit based on Magfast's infringement of Pepsi Co Trade Mark No.436257 registered in India, which registration does not have any disclaimer or conditions attached thereto. Therefore, the Trial Court ought not to have gone into the disclaimer of the Hartman's registration.
47
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32. This Court also agrees with the argument of the learned counsel for the appellants i.e., Pepsi Co, as the registration of the Trade Mark No.436257 was not having any disclaimer. Though Section 17 of the Act gives power to the Registrar to record a disclaimer, no such disclaimer was recorded by the Registrar while registering the trade mark of Pepsi Co in India. There is no such thing as an implied disclaimer and this Court cannot read a disclaimer which was not recorded in the register. It is a settled law that absence of disclaimer means exclusive use. In Skol Breweries Limited vs. Som Distilleries & Breweries Limited7, the High Court of Bombay, while referring to another judgment of its Single Judge in Shaw Wallace and Company Limited and another vs. Mohan Rocky Spring Water Breweries Limited8 extracted the observation of the said Court as held in Para Nos.12 and 13 that:
"12. It is submitted that there is no disclaimer. The registration certificate and the entry relating thereto clearly does not mention any disclaimer regarding the numeral "5000". It is submitted that whenever the Registrar required any numeral to be disclaimed, he made a specific reference to that as is to be found in the documents produced by the Defendants along with the further Affidavit of the said Kolambe dated 10th January, 2005 in respect of Application No.941704 in respect of "Haywards 5000" advertised before acceptance. The Registrar had suggested disclaimer in respect of 7 MANU/MH/1110/2011 8 (2006) 2 All Maharastra Reports 439 48 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch numeral "5000". Thus, whenever there is a disclaimer in respect of a numeral the reference is specifically made. In the instant case i.e. the mark which is registered, there is no such disclaimer in respect of the numeral "5000" and disclaimer is for descriptive words which obviously are "strong beer". In any event, the plaintiffs have by their letters dated 20-3-2003 objected to the disclaimer in the matter of the Plaintiffs' another application No.940878 in class 32 which are to be found at page 9 of the Affidavit of Sonali Chanda dated 20-1-
2005.
13. Now, if in the light of these rival submissions the record of the case is perused, it becomes clear that the trade-mark of the Petitioner "HAYWARDS 5000" is a registered trade-mark. Perusal of the registration show that numeral 5000" is not disclaimed. What is disclaimed is the descriptive material on the label. Whenever numeral in the label or trade mark is disclaimed, it is clear from the material available on record that it was specifically so mentioned and. therefore, in my opinion, it is clear from the material available on record that so far as the registration of the label of "HAYWARDS 5000" is concerned, the numeral has not been disclaimed and, therefore, in view of the registration of the trade- mark and the label, the plaintiffs will have a statutory right to prevent the Defendants from using a deceptively similar mark. In so far as the question whether the numeral is an essential part of the label is concerned, perusal of the judgment of this Court in Notice of Motion No.1259 of 1994 in the case of Shaw Wallace & Company Ltd. vs. Castle Douglas Industries Ltd. and anr., dated 20- 6-1996 shows that in that case the rade-mark involved was "HAYWARDS 2000". In that case the numeral "2000" was specifically disclaimed, still the court held that the said numeral was an essential part of the trade mark of the Plaintiff. In view of the judgment of this court referred to above, in my opinion, it cannot be said in the present case that the numeral ""5000" is not an essential part of the trade-mark of the Plaintiff and is not associated exclusively with the Plaintiffs."
33. It was held therein that whenever the Registrar intends ordering a disclaimer, it would be specifically so mentioned. The only remedy for a person aggrieved by lack of disclaimer in the 49 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch registered mark is to file a petition seeking rectification. As such under Section 57 of the Act, the defendants Magfast had already availed the said remedy before the Intellectual Property Appellate Board (IPAB), but failed in its attempt.
34. Before the IPAB, Magfast raised specific grounds challenging the registration that it was prior user of the "Mountain Dew" mark and not Pepsi Co; "Mountain Dew" trade mark was not distinctive; "Mountain Dew" trade mark had a disclaimer and therefore Pepsi Co did not have exclusive rights over it. "Mountain Dew" trade mark was common to the trade and therefore any one could use it and Pepsi Co did not have exclusivity. IPAB had not accepted the said contentions raised by Magfast and held that "Mountain Dew" trade mark was a distinctive trade mark. The liberal meaning of "Mountain Dew" had nothing to do with the products for which it was used. Therefore, it was not descriptive of the products being sold thereunder. Distinctiveness of the mark "Mountain Dew" was beyond doubt since it was used throughout the world over a long period of time, since 1940. "Mountain Dew"
was a unique combination of words that had gained popularity.50
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35. IPAB is an expert quasi judicial body. It was conferred with powers to receive and scrutinize evidence and to examine witnesses like a Civil Court. It can also decide any ancillary questions. Under Section 57(3) of the Trade Marks Act, 1999, IPAB was conferred with the power to decide any questions that may be necessary or expedient to decide in connection with the rectification of the Register.
36. Section 124(4) of the Trade Marks Act, 1999 Act, reads as follows:
124. Stay of proceedings where the validity of registration of the trade mark is questioned, etc. (1).......
(2).......
(3).......
(4) The final order made in any rectification proceedings referred to in sub-section (1) or sub-section (2) shall be binding upon the parties and the court shall dispose of the suit conformably to such order in so far as it relates to the issue as to the validity of the registration of the trade mark.
37. The Hon'ble Apex Court in the case of Patel Field Marshal Agencies and another vs. P.M.Diesels Limited and others (1 supra) at para 34 held that decision of IPAB on issues relating to 51 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch validity of trade mark is binding on Civil Court. The Delhi High Court also in the case of Vivek Kochher vs. KYK Corporation Limited9 held in paras 40, 43 and 46 that Civil Court cannot decide questions regarding the validity of trade mark, reasoning and decision of IPAB on issues relating to validity of trade mark. The decision of IPAB is binding upon the Civil Court.
38. The learned counsel for the appellants also relied upon the judgment of the Hon'ble Apex Court in the case of Nandhini Deluxe vs. Karnataka Cooperative Milk Producers Federation Limited10, wherein it was held in para 35 that IPAB judgments are binding by virtue of issue estoppel. He also relied upon the judgment of the Hon'ble Apex Court in Bhanu Kumar Jain vs. Archana Kumar11, wherein the Hon'ble Apex Court in para Nos.30 and 31 held as follows:
30. Res judicata debars a court from exercising its jurisdiction to determine the lis if it has attained finality between the parties, where as the doctrine issue estoppel is invoked against the party. If such an issue is decided against him, he would be estopped from raising the same in the latter proceeding. The doctrine of res judicata creates a different kind of estoppel viz. estoppel by accord.9
MANU/DE/4021/2019 10 (2018) 9 SCC 183 11 (2005) 1 SCC 787 52 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch
31. In a case of this nature, however, the doctrine of "issue estoppel" as also "cause of action estoppel" may arise. In Thoday's Lord Diplock held: (All ER p. 352 B-D) "... 'cause of action estoppel', is that which prevents a party to an action from asserting or denying, as against the other party, the existence of a particular cause of action, the non- existence or existence of which has been determined by a court of competent jurisdiction in previous litigation between the same parties. If the cause of action was determined to exist i.e. judgment was given on it, it is said to be merged in the judgment.... If it was determined not to exist, the unsuccessful plaintiff can no longer assert that it does; he is estopped per rem judicatam."
39. Since in the present case, the issues between the parties were already decided by IPAB order, the Civil Court i.e., District Court ought to have accepted the reasoning of IPAB that Pepsi Co was exclusive owner of the trade mark Mountain Dew and Magfast had no right to use the same for their business. But the Trial Court went wrong in holding that registration of the mark "Mountain Dew" in favour of Pepsi Co was not absolute and did not confer exclusive rights in India. Section 124(4) of the Trade Marks Act, 1999, requires the Trial Court to dispose of the suit conformably to the IPAB order. But the Trial Court conducted a de novo examination of all the issues which were subject matter before IPAB, contrary to Section 124(4) of the Trade Marks Act, 1999 and the judgments of the Hon'ble Apex Court. As the same is against the scheme of the 53 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch Act, hence the judgment of the Trial Court is liable to be set aside on this ground alone.
40. The learned counsel for the defendants contended that the IPAB order had not become final as a writ petition was filed challenging the same and it was pending before the Madras High Court, but the scheme of the Trade Marks Act, 1999 does not provide for an appeal against IPAB order. Just because a writ petition was filed by Magfast, which was pending since 2005, it could not be a reason for Magfast to urge that till the time the writ petition is decided, Pepsi Co cannot claim exclusivity. Section 124 of the Trade Marks Act, 1999 does not stipulate that the Trial Court had to wait till all the remedies against the IPAB order were exhausted. Therefore Magfast could not assert that since the writ petition was pending against the IPAB order, Pepsi Co could not rely upon the findings of the IPAB. Magfast could not argue in these proceedings about the correctness of the IPAB order, as it itself raised all the issues regarding validity of Pepsi Cos. trade mark before IPAB including the 'non user' since 1985. 54
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41. The learned counsel for the appellants/plaintiffs submitted that Magfast had filed an application in January 2003, to register the trade mark "Mountain Dew", but the Registrar objected to register the same as the mark proposed was identical or deceptively similar with previously registered marks of Pepsi Co and Magfast failed to state so in its written statement in the Suit which would amount to suppression of material facts. He further contended that when Magfast itself sought for registration of the mark, it was estopped from challenging the distinctiveness of the mark.
42. Learned counsel for the appellants relied upon the judgment of the Delhi High Court in Mind Gym Limited vs. Mindgym Kids Library Private Limited12, on the aspect that Magfast was estopped from challenging the distinctiveness of the mark when he himself had sought for registration of the mark. He also relied upon the judgment of the Delhi High Court in Anchor Health and Beauty Care Private Limited vs. Protector and Gamble Manufacturing (Tianjin) Company Limited and Other 13, wherein at para Nos.13, 14 and 18 it was held that when defendants attempted to register a 12 (2014) 208 DLT 723 13 2014(59) PTC 105 (Del) 55 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch mark, it could not later contend that it was generic. He also relied upon the judgment of the Delhi High Court in Bata India Limited vs. Chawla Boot House & Another14, wherein at para No.25, it was held that once party applies for registration, they were estopped from arguing that the term was generic or a dictionary word.
43. Another contention taken by the learned counsel for the defendants was that there were innumerable users of the mark "Mountain Dew" in various walks of life in USA. PWs.1 and 2 also admitted in their cross examination about the same. PW1, Executive Vice President (legal) of plaintiff No.2 Company, admitted in his cross examination that "we are aware that the words 'Mountain Dew' are being used all over the world in all walks of life including Irish whisky, Korean Tea and other products, such as music band in UK, traditional songs website in Scotland Europe, Irish Folk songs website in Ireland, Stud Farms for horses, Peterpan industry in USA, for music related books and for apparel in USA, in customs yarn company, advertising and printing company in Pakistan, by Sony music in their website offering Mountain Dew 14 CS(COMM)110/2019 56 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch sound disk etc". He also admitted that Mountain and Dew were normal words from common English language and that 'the words 'Mountain' and 'Dew' together are being used in normal course by various people in all walks of life, as seen from the documents filed.'
44. Learned counsel for the defendants further contended that it was apparent that the mark "Mountain Dew" had been in public domain since 16th century as Irish whisky, Korean Tea etc., as beverages. The lame attempt on the part of Pepsi Co on the basis of their 1966 registration under Clause 2(f) of the Trade Mark applicable in USA could not lead to a conclusion that the effect of disclaimer stood waived especially in view of the settled legal principle that in the absence of pleadings any amount of evidence was no evidence in law; PW2 admitted reference of Winchester and West Jefferson producing the same product 'Mountain Dew' citrus soda and 'Mountain Dew' being used in every walk of life for whisky, tea as beverages and other business entities. 57
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45. But PW2, the Pespsi Co's Legal Attorney since 1986 and its Assistant Secretary since 2000 and Global Beverage Intellectual Property Counsel denied the suggestion of Magfast that in USA, the word 'Mountain Dew' was being used in all walks of life. She stated that she was not aware of any third party using 'Mountain Dew' as trade name or a product name in USA. She stated that Pepsi Co investigated several such instances, for example, 'Mountain Dew' cottages and similar unrelated goods and services and had not elected to sue them as they were not worth it.
46. Learned counsel for the defendants argued that both PWs.1 and 2 admitted Winchester and Jefferson using 'Mountain Dew' trade mark in US. Hence Pepsi Co did not have an exclusive right even in US. But the learned counsel for the appellants submitted that Winchester and West Jefferson were merely bottlers and distributors of Pepsi Co's, 'Mountain Dew', citrus soda, they were not manufacturing their own citrus soda and they had absolutely no rights over the 'Mountain Dew' mark; as Magfast had not taken the said plea in its written statement there was no occasion for Pepsi Co to produce the agreements or deals with the said Companies before 58 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch the trial court and their use of mark was not against the interest of the Pepsi Co; mere fact that Pepsi Co trade mark was being used in other walks of life (whisky, Korean tea, etc.,) would not take away its distinctive character or bar Pepsi Co from seeking injunction against infringers; use of Pepsi Co trade mark by third parties would not give right to the Magfast to use the Pepsi Co's mark without authorization; Trade mark holders were not required to go after all the infringers, who might not be affecting their business; none of the above examples pertain to drinking water or other goods which were allied and cognate to 'Mountain Dew' citrus soda; no evidence was adduced by the defendants to prove that 'Mountain Dew' had been put to extensive use by any of these users or that their products were being used on a commercial scale.
47. DW1 in his cross examination admitted that packaged drinking water and soft drinks were sold in the same shops. Both soft drinks and packaged drinking water are allied and cognate goods. The consumer base and trade channels for soft drinks and packaged drinking water are also the same. These products are sold across the same counter and placed on the same shelfs in several 59 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch retail outlets. Thus, if soft drinks of the plaintiffs and packaged drinking water of the defendants were sold under an identical mark such as 'Mountain Dew', an unwary customer with average intelligence is likely to consider that both the products were coming from the same source i.e., Pepsi Co. The trial court dismissed the suit filed by Magfast i.e., the defendants on the ground that Magfast could not be allowed to approbate and reprobate as Magfast contended in Pepsi Co suit that the products manufactured by Pepsi Co and Magfast would fall in separate class and hence question of confusion would not arise, whereas, in its own suit had taken an opposite stand and contended that since the products of the parties fell in the same class 32, confusion amongst consumers was bound to arise.
48. DW1 in his cross examination admitted that "it is true generally soft drinks such as Pepsi, 7 UP and Mountain Dew etc. along with packaged drinking water were available for sale in the same counters". Soft drinks and packaged drinking water are allied goods that cater to the same class of customers and were usually sold together.
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49. The Hon'ble Apex Court in Corn Products Refining Company vs. Shangrila Food Products Limited15, at para 21 held that:
"Trade mark over Glucose supplements covers biscuits."
The Delhi High Court in Hindustan Pencils Limited vs. J.N.Ghosh & Brothers Private imited16 at para Nos.42, 54 and 55 held that:
"Trademark holder is entitled to injunction relief even if trademark is used for dissimilar goods. Trademarks for pencils would cover geometry boxes due to common consumers and same trade channel."
The Bombay High Court in H.M.Saraiya & Others vs. Ajanta India Limited and Another17 at para 58 and 59 held that:
"Trademark holder is entitled to injunction relief even if trademark is used for dissimilar goods. Trademark for toothbrush would cover toothpaste as allied products are usually sold together."
The Delhi High Court in Dalip Chand Aggarwal & Others vs. M/s.Escorts Limited, New Delhi18 at para Nos.7 and 12 held that:
"Trademark holder is entitled to injunction relief even if trademark is used for dissimilar goods, Trademark may come to be associated not just with particular goods but goods 15 (1960) 1 SCR 968 16 MIPR 2007 (1) 0041 17 2006 (33) PTC 4 (Bom) 18 AIR 1981 Del 150 61 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch generally. Customers will associate any goods marketed under the trademark with the proprietor of the mark."
The Delhi High Court in Mind Gym Limited vs. Mindgym Kids Library Private Limited, held at para 35 that:
"Trademark holder is entitled to injunction relief even if trademark is used for dissimilar goods, trademark over mental training program applies to book lending platform as well, as they are similar class of products and consumers will get confused about the origin."
The High Court of Bombay in Kamal Trading Company & Others vs. Gillette U.K. Limited19, at para Nos.8 and 11, held that:
"Trademark holder is entitled to injunction relief even if trademark is used for dissimilar goods. Trademark over shaving blades would cover the tooth brushes though not in the same class, as target consumers are same and they are sold together.
With regard to Transborder/worldwide reputation, it was held that:
"Goodwill or reputation cannot be extinguished merely because the goods are not available in the country. Sale of goods not necessary for transborder reputation, reputation can be spread through advertisements in newspapers, periodicals etc."
50. Learned counsel for the defendants relied upon the judgment of the Hon'ble Apex Court in Nandhini Deluxe vs. 19 1988 (8) PTC 1 (BOM) 62 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch Karnataka Cooperative Milk Producers Federation Limited20 to contend that registration of trade marks qua certain goods falling under one class would not vest monopoly over entire class of goods. But the Hon'ble Apex Court in the above judgment held that the goods of two parties were clearly different besides the fact that the application for registration of the milk and milk products was not granted to the restaurants and the manner in which they were traded by the appellant and the respondent were different; while the restaurant used and added the word Deluxe (making its mark "Nandini Deluxe") followed by the words 'the real spice of life' and the device of the lamp, the respondent therein used only the word 'Nandini' with a 'cow' as a logo encircled by an oval. The tagline and the device were sufficient to convince the Hon'ble Apex Court that they were hardly any similarities between the marks.
51. Learned counsel for the defendants also relied upon the judgment of the Hon'ble Apex Court in Vishnudas Trading vs. 20 2018 (75) PTC 209 (SC) 63 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch Vazir Sultan Tobacco Company Limited and Another21on the same aspect that registration of trade mark for certain goods falling under one class would not vest monopoly over the entire class of goods. The Hon'ble Apex Court made a cautionary note in the said order that it only dealt with the issue of validity of the order of rectification and not on issues of infringement or passing off, leaving the legal resort to passing off action to the registered proprietor.
52. The present case is pertaining to trade mark infringement and not against the IPAB order, what the judgment was concerned with. Even otherwise Magfast attempted to rectify the register vis a vis Pepsi Co mark and failed before the IPAB. As such, now Magfast cannot raise the plea of dissimilar goods. The Registrar's rejection of Magfast application to register "Mountain Dew" trade mark for packaged drinking water would also demonstrates that the mark was identical to Pepsi Co's, 'Mountain Dew' and that relate it to same class of goods.
21
(1997) 4 SCC 201 64 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch
53. When Magfast's mark is identical to the registered trade mark of Pepsi Co, the Court must grant injunction without going into the question whether it is likely to cause confusion. The Hon'ble Apex Court in Kaviraj Pandit Durga Dutt Sharma vs. Navaratna Pharmaceuticals Laboratories22, at para 28 held that when Court reaches the conclusion that the marks are visually or phonetically identical, no further evidence is required to establish that the parties rights are violated. Counsel for plaintiffs also relied upon the judgment of the Hon'ble Apex Court in Ruston & Hornsby Limited vs. The Zamindara Engineering Company23, wherein it was held at para 6 that when similar mark is used in relation to identical products, injunction to be granted.
54. The record also would disclose that Pepsi Co is vigilant about their rights in the mark 'Mountain Dew' and aggressively protected their rights in the trade mark 'Mountain Dew' across the world including India. In India, Pepsi Co filed a suit before the High Court of Delhi against Campa Beverages Private Limited seeking to register the mark "Orange Dew". The Delhi High Court 22 (1965) 1 SCR 737 23 (1969) 2 SCC 727 65 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch gave interim relief and subsequently the defendant therein agreed not to use the mark. In 2007 and 2008, Pepsi Co successfully contested and protected its trade mark Mountain Dew against other proprietors like 'Joy Dew' and 'Thundercool Dew'. The injunction order obtained against the user of the mark 'Orange Dew' in 1997 was three years prior to Magfast's alleged sale.
55. Hence point No.1 is answered holding that the plaintiffs are entitled for permanent injunction against the defendants for infringement of their registered trade mark Mountain Dew in India.
56. Point No.5: Whether the defendants are entitled for permanent injunction to restrain the plaintiffs for passing off their products as that of the defendants by using the trade mark Mountain Dew?
57. The defendants filed the suit in O.S.No.19 of 2004 seeking the relief of action for passing off.
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58. Section 34 of the Trade Marks Act, 1999, is pertaining to saving of vested rights24.
59. Thus, a registered proprietor of trade mark has right to use the said trade mark to the exclusion of others but the same is subject to right of prior user of trade mark under common law. Thus, prior user has superior right over registered owner. Section 34 of the Act carved out an exception and creates a over riding provision which prevents a registered trade mark user from interfering with the use of an identical trade mark or a mark which nearly resembles the registered trade marks. The fundamental requirements of Section 34 are:
1. The use by a person of a mark which is identical to or nearly resembles trade mark must be in relation to those goods and services for which the first mentioned mark has been registered.24
34. Saving of Vested Rights: Nothing in this Act shall entitle the proprietor or a registered user of registered trade mark to interfere with or restrain the use by any person of a trade mark identical with or nearly resembling it in relation to goods or services in relation to which that person or a predecessor in title of his has continuously used that trade mark from a date prior--(a) to the use of the first-mentioned trade mark in relation to those goods or services be the proprietor or a predecessor in title of his; or(b) to the date of registration of the first-mentioned trade mark in respect of those goods or services in the name of the proprietor of a predecessor in title of his; whichever is the earlier, and the Registrar shall not refuse (on such use being proved), to register the second mentioned trade mark by reason only of the registration of the first mentioned trade mark.67
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2. The use that is postulated by Section 34 is a continuous use of trade mark.
3. In order to avail all the protection, the trade mark must be used by the proprietor or by his predecessor in interest.
4. The mark in respect of the protection is sought must have been used from a date prior to the use of the registered trade mark or the date of registration of the registered trade mark whichever is earlier.
60. Thus, Section 34 of the Act provides for specific requirement which relate to the nature of the goods or services in relation to which the mark is used, the nature and character of use, the date from which the mark should have been used.
61. The contention of the learned counsel for the defendants was that though Pepsi Company had registered the trade mark in 1985, had not used it till 2003; while Magfast launched their packaged drinking water in November, 2000, and hence they were prior users; registration of trade mark without use was of no value. 68
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62. Learned counsel for the appellants on the other hand contended that 'Mountain Dew' trade mark was in use globally and became popular since long time, it was having transborder reputation; the goodwill or reputation could not be extinguished merely because the goods were not available in the country. While deciding prior use, global use had to be taken into account. Pepsi Co's global advertisement, sales and registration over 100 countries under 'Mountain Dew' mark were sufficient to establish its prior use.
63. Since, Magfast had taken the plea that he was a prior user of the trade mark 'Mountain Dew' since the year 2000, the onus is on Magfast to show that he was a prior user. Magfast had to demonstrate sales from the year 2000 by showing sales figures for each year in the name of 'Mountain Dew' and such sales should be substantial and not sporadic. DW1 had relied upon Ex.B1 to B4 to show that Magfast was a prior user. Ex.B1 is a news article dated 08.11.2000 from 'Siyasat' urdu daily newspaper. Ex.B1 would only show the inauguration of Mountain Dew packaged drinking water by one M.Abdul Nayeem from USA and the said article was not 69 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch evidence of its sales. Siyasat newspaper also had limited circulation in part of Hyderabad and had no electronic presence prior to the year 2004. Ex.B2 was a certificate given by the Manager of Central Bank of India, Chatta Bazar, Hyderabad, dated 29.07.2003. Ex.B2 would only show that Magfast was availing credit facility. It is also not proof of prior sales. The said certificate is dated July, 2003 i.e., after filing of the suit and much after Pepsi Co had commenced its sales. It would not prove actual use of the mark 'Mountain Dew' in relation to packaged drinking water. Ex.B3 was a certificate of registration as a Small Scale Industry issued by the General Manager, District Industries Center, Hyderabad, dated 14.06.2001. There was no reference of 'Mountain Dew' in the said certificate and it would not evidence use of the mark 'Mountain Dew' in relation to packaged drinking water. Ex.B4 was an acknowledgment cum demand notice/refund order issued by Commercial Tax Officer, Chatta Bazar, Hyderabad, dated 03.07.2003 issued to Magfast. This document also would not show the sales prior to January 2003.
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64. DW1 in his cross examination admitted that he obtained Bureau of Indian Standards (BIS) license in the year 2002. Learned counsel for the appellants contended that under Rule 49(28) of the Prevention of Food Adulteration Rules, 1958, framed under Prevention of Food Adulteration Act, 1957, obtaining the BIS license for manufacturing packaged drinking water is mandatory. Magfast did not obtain license under the Prevention of Food Adulteration Act in the year 2000, even though the same was mandatory. Infact the BIS license was obtained by Magfast only on 11.06.2002. Any sales of packaged drinking water prior to 2002 without BIS registration was violative of Prevention of Food Adulteration Rules, 1955. Under Prevention of Food Adulteration Rules, Magfast was required to not only register the name of manufacturer but also the brand. However, 2002 BIS registration filed by Magfast would not reflect the registration of any brand. In the absence of registration of the brand name Magfast could not have legally sold drinking water under the 'Mountain Dew' brand. As such the claim of Magfast that they were selling 'Mountain Dew' packaged drinking water from 2000 is belied and secondly 71 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch illegal sales could not form the basis to assert prior use and good will.
65. Admittedly, Magfast failed to produce any income tax returns, sales tax returns, VAT returns, Balance sheets etc. for the financial years 2000-2001 and 2001-2002. Magfast had not even stated the details of the sales of its products and its expenditure in its business for the said years in any of its pleadings or evidence. Magfast filed sales figures only for the financial year 2002-2003 showing an amount of Rs.3.75 lakhs of sales. Out of total sales of Rs.20,00,000/- sale of water through lorry tankers was shown as Rs.17,15,206/- and sale of packaged drinking water as Rs.3,75,000/-. Thus over 85% of the sale of water by Magfast is through lorry tankers and not through packaged drinking water. The invoices provided by Magfast only prove sale of drinking water through lorries and not 'Mountain Dew' branded packaged drinking water. The same was evident from the quantity of water supplied and the rate/price thereof mentioned in the invoices. Some of the invoices would show sale of packaged drinking water by Magfast during May 2000, whereas Magfast's own case was that it launched 72 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch the product only on 08.11.2000, as such the said invoices would seem to be fabricated.
66. It is also well established law that any prior use must be substantial prior use and not sporadic prior use. Small amount of sale in the market could not be treated as prior use. The Bombay High Court in H.M.Saraiya & Others vs. Ajanta India Limited and Another at para Nos.54 and 55 held that sporadic or small amount of sale in the market would not entitle any party to protection under Trade Mark law.
67. DW1 in his cross examination also admitted that Pepsi Co was prior user and adopter of trade mark 'Mountain Dew' globally. Pepsi Co contended that the public were well aware that the mark Mountain Dew belonged to Pepsi Co. The total sales under the said mark would run into billions of dollars and Pepsi Co. would spend approximately 15 million US dollars per annum on the advertisement and promotion of 'Mountain Dew' brand. The global annual sales of the trade mark was approximately 7 billion dollars. 'Mountain Dew' represented nearly 10% of Pepsi world wide sales 73 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch and almost 17% of the sales in United States. The Mountain Dew drink ranked sixth only next to Coca Cola, Pepsi Cola, Diet Coke, Dr.Pepper and Diet Pepsi in its world wide sales in United States. The plaintiffs 'Mountain Dew' soda enjoyed almost 90% of the citrus flavored carbonated soda market. The Trade Mark 'Mountain Dew' was registered in more than 100 countries including Afghanistan, Bahrain, Gaza, Qatar, Saudi Arabia, West Bank, Yemen, Algeria, Australia, Austria, Benelux, Botswana, Brazil, Canada, China, Denmark, Finland, France, Germany, Greece, Gautemala, Honduras, Hongkong, India, Indonesia, Italy, Japan, South Korea, Lebanon, Malaysia, Mexico, Netherlands, Antilles, New Zealand, Panama, Paraguay, Puerto Rico, Sabah, Russia, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand, Transkei, Uruguay and Venda.
68. Learned counsel for the appellants also contended that after the launch of 'Mountain Dew' mark in India, it was one of the most successful product with total sales of the product, under the mark 'Mountain Dew' in India crossing Rs.36 crores, in 4 months. Several news articles were published in reputed newspapers and 74 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch magazines such as Business Standards, Financial Times, Time Magazine, Business Week, the Economist, and USA Today. These articles were published much before Magfast's alleged use of mark 'Mountain Dew' in 2000. They would refer to Pepsi Cos growing sales, success and popularity for decades and reputation in the well- known mark 'Mountain Dew'. Online editions of these newspapers, magazines etc. were accessible on the Internet. Besides, print editions of the papers, magazines had also been in circulation in India. The Trial Court erred in facts and law in not taking into consideration the several news articles published in the reputed newspapers and magazines and failed to take judicial notice of the fact that India witnessed and continued to see the inflow and outflow of expats and Indians travelling 'to and from' other countries. Such travellers were bound to be exposed to goods sold under reputed trademarks and would carry such reputation back to India.
69. As per the judgment in MAC personal Care Private Limited vs. Laverna GMBH and Company KG and another25, 25 1998 (18) PTC 698 (Del) 75 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch if a trade mark is registered in a jurisdiction abroad, the said fact would demonstrate:
i) That the proprietor has declared to the world that the subject matter is its trade mark.
ii) That the declaration has been made in a public record open to inspection under the Trade mark Laws of most jurisdiction;
and
iii) That in all probability, the Registering Authority of the registering country satisfied itself that the mark was distinctive and therefore, capable of distinguishing the Registrant's Trade mark from those of other traders.
70. As against a single registration, registrations of Pepsi Co in multiple countries would create an even stronger presumption that reputation inures in favour of trade mark. Several international publications like TIME, Economist, New York Times, Financial Times, Business Week etc. had published stories regarding 'Mountain Dew' even prior to 2000. These newspapers and magazines had wide circulation in India. It was common knowledge that India and Hyderabad in particular had a significant 76 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch inflow of NRIs and foreigners from abroad who carried the PepsiCo's reputation along with them. Infact DW1 admitted that Hyderabad was a hub for IT Industry with several multinational companies. Naturally, through visitors, Hyderabad would be exposed to the product "Mountain Dew." Magfast's contention that international newspapers were not circulated in India was palpably false. It was only due to this global reputation that Pepsi was able to generate sales of Rs.36 crores within four months of its launch of "Mountain Dew" in India.
71. The High Court of Delhi in Time Warner Entertainment Company, LP vs. A.K.Das26 at para 19, held that reputation of a mark was spilled over into India due to the circulation of international magazines like TIME Magazine and in George V Records vs. Kiran Jogani and Others27 at para 10 held that international newspapers like TIME, New York Times etc. had wide circulation in India even prior to 2002. In several judgments it was also held that good will or reputation could not be extinguished merely because the goods were not available in the 26 1997 (17) PTC 453 (Del) 27 2004 (28) PTC 384 (Del) 77 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch country. The High Court of Bombay in Kamal Trading Company & Others vs. Gillette U.K. Limited, at para 11 held that sale of goods was not necessary for transborder reputation; reputation would spread through advertisements in newspapers, periodicals etc. The High Court of Delhi in Indian shaving Products Limited vs. Gift Pack28, at para 42 held that imports, advertisements and news media would lead to spread of reputation and good will to places where the connected goods were not even sold. The High Court of Delhi in MAC Personal Care Private Limited vs. Laverna GMBH and Company KG & Another (21 supra) at para Nos.18 to 21, held that factors to measure transborder reputation were registrations in multiple jurisdictions referred to by international magazines and volume of sales; in Playboy Enterprises Inc. vs. Bharat Malik and Another29, the Delhi High Court held that transborder reputation could exist even in places where the goods were not being served and in Cadbury UK Limited & Another vs. Lotto India Corporation Limited30 held that transborder reputation could exist even in a place where there was no trade of the goods. 28 1998 SCC OnLine Del 829 29 (2001) 91 DLT 321 30 2014 (57) PTC 422 (Delhi) 78 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch Transborder reputation can be established through advertisements on the internet and social media. An action for passing off is to protect good will attached to the name of the company and not to protect the trade mark.
72. In a suit for action of passing off, the Court would not grant injunction when trade mark was dishonestly adopted. The High Court of Bombay in Winthrop Products Incorporation vs. Eupharma Laboratories Limited31, at para 15 held that when defendant had knowledge of plaintiffs identical mark when adopting it, the defendant was not entitled to any protection. The High Court of Delhi in Daimler Benzaktiegesellschaft & Another vs. Eagle Flask Industries Limited32, at para 15 held that adoption of a widely popular mark like 'Mercedes' would indicate deliberate intention to take advantage of their reputation and no protection of Trade Mark law could be given to such users and in Jolen Incorporation vs. Doctor & Company33, at para 30 held that sales 31 1997 SCC Online Bom 575 32 ILR (1995) 2 Del 817 33 ILR (2002) I Delhi 550 79 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch and advertisements of trade mark were irrelevant if the mark was dishonestly adopted.
73. Learned counsel for the appellants/plaintiffs contended that Magfast had dishonestly adopted 'Mountain Dew' trade mark of the plaintiffs and the dishonesty in adoption of the mark was apparent as there was no plausible explanation for Magfast to use the mark 'Mountain Dew' which was identical to the well-known mark of Pepsi Co except to gain from the appellants international reputation. Magfast had alleged that it had coined and adopted the word 'Mountain Dew' in its additional evidence dated 22.04.2015. However, the story about how Magfast had allegedly coined the name 'Mountain Dew' was false and merely an after thought; the above plea of coining the trade mark was never set up in the plaint in O.S.No.19 of 2004 filed by Magfast or Written Statement in O.S.No.95 of 2004 or even in its first evidence affidavit dated 31.03.2011. Magfast had given no explanation in the said pleadings as to how and why it adopted the mark 'Mountain Dew'. The Trial Court even in its interim injunction order dated 04.10.2004 observed that Magfast had not come forth with any explanation as 80 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch to how and why it had adopted the mark 'Mountain Dew'. As an attempt to overcome the above observation and as an after thought without any pleading Magfast had set up a false story in its additional evidence for adoption of its mark. It was settled law that no evidence could be led on a fact or averment which had not been pleaded. Therefore, the said part of Magfast evidence was liable to be rejected and discarded. There was no explanation whatsoever as to why the same was not pleaded by Magfast prior to filing the additional evidence dated 22.04.2015.
74. Per contra, learned counsel for the respondents contended that Pepsi Co was guilty of suppression of material facts. The disclaimers given by Hartman beverages came out during the evidence led by both the parties. Hence, Magfast had sought for amendment of written statement vide application filed under Order 6 Rule 17 for addition of para 23A which was allowed on 17.08.2006. Admittedly, till March 2007, Pepsi Co did not file any rejoinder and as such it was treated that there was no rejoinder to be filed as per specific docket entry to that effect on docket of O.S.No.95 of 2004. In effect there was no pleading on record by 81 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch Pepsi Co as to their explanation to para 23A of amended written statement filed by Magfast. Necessary adverse inference had to be drawn for failure on the part of Pepsi Co to file rejoinder, though new set of facts were brought to their notice specifically and relied upon the judgment of the Hon'ble Apex Court in Sri-La-Sri Subramania Desika Gnanasambandana vs. State of Madras34 at para 17 and the judgement of High Court of Allahabad in Ajay Pratap Rai vs. District Basic Educational Officer35 at para 15, and contended that any amount of evidence without pleadings is no evidence in law. He relied upon the judgments of the Hon'ble Apex Court in Biraji and Others vs. Surya Pratap36 at para 7 and in S.P.Chengalvaraya Naidu Vs. Jagannath37, Dalip Singh vs. State of UP38, KD Sharma vs. Steel Authority of India39 on the aspect of suppression of material facts and relied upon the judgment of the Hon'ble Apex Court in Gopal Krishnaji Ketkar vs. Mohammad Haji Lathif40, M/s.Prestige Lights Limited vs. State Bank of 34 MANU/SC/0341/1965 35 MANU/UP/0296/2007 36 MANU/SC/0820/2020 37 (1994) 1 SCC 1 38 (2010) 2 SCC 114 39 (2008) 12 SCC 481 40 (1968) 3 SCR 862 82 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch India41 and the judgment of the High Court of Delhi in Puneet Industrial Controls (P) vs. Aditya Enterprises Private Limited42 on the aspect that best evidence in possession of Pepsi Co was not produced for obvious reasons.
75. Filing of replication is not mandatory under the Code of Civil Procedure, 1908. Order 8 Rule 9 CPC provides that no pleadings subsequent to the written statement than by way of defense to a set off or counter claim shall be presented except by leave of the Court and upon such terms as the Court thinks fit. The learned counsel for appellants/plaintiffs contended that every material averment made in the written statement was presumed to be denied by the plaintiffs and the plaintiffs would not need to file a replication for the said purpose and relied upon the judgments of the High Court of A.P. in T.Bheem Reddy and Others vs. P.Laxmi Bai and Others43 and the High Court of Delhi in Anant Construction Private Limited vs. Ram Niwas44, on the aspect that all pleas made in the written statement were deemed to have been 41 (2007) 8 SCC 449 42 (1999) 78 DLT 811 43 2012 (5) ALT 345 44 (1995) ILR 1 Del 76) 83 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch denied by the plaintiff. In the amended written statement, Magfast raised the issue of non-distinctiveness. As IPAB had already adjudicated on the said issue and gave its finding, hence even though there was no response to the same, the same would not affect the case of the plaintiffs.
76. Though Magfast claimed that it had coined the term "Mountain Dew" in the year 1999 as per Para 4 of the additional evidence, the same was never pleaded for a period of 10 years since the suit was filed. Though Magfast stated that it became aware of the plaintiffs mark 'Mountain Dew' only after filing the suit, from the website of the Indian Trademark registry, Magfast being informed about the plaintiffs registration on 03.04.2003 by the Registry itself would disclose that it was a false claim made by the defendants. Though DW1 claimed to have searched internet meticulously to ensure that he did not copy any other brand or label, but admittedly failed to take the most elementary and relevant precaution of making itself aware by looking at the public record of the registry as to whether the mark in question was the property of another. DW1 in his cross examination admitted that he did not 84 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch search the record of the Registrar to find out whether the mark 'Mountain Dew' subsisted on the register in someone else name. Magfast could not be permitted to take advantage of their negligence in not looking at the most relevant document to find out whether the mark 'Mountain Dew' was even available to them. It was also inconceivable that Magfast's alleged meticulous searches would not have picked up the internationally well known mark 'Mountain Dew' belonging to Pepsi Co.
77. The learned counsel for the appellants contended that the simple search on 'yahoo' and 'google' for the mark 'Mountain Dew' would throw up thousands of pictures about the appellants well known mark 'Mountain Dew'. He also contended that DW1 admitted in his cross examination that before its commencement of manufacturing the packaged drinking water under the mark Mountain Dew in India, DW1 worked with Multi National Companies and that he stayed in Saudi Arabia for a considerable time; being an internationally famous mark which was available in several countries world wide and also at International Airports and International Airlines, DW1 would have undoubtedly been exposed 85 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch to the mark 'Mountain Dew'. Magfast's use of the trade mark 'Mountain Dew' and use of the essential features of Aqua Fina label both belonging to the appellants could not be a mere coincidence and evidences its malafide intention to mislead the public and trade that its product was associated with the appellants and Court must grant injunction when a trade mark had been dishonestly adopted. He relied upon the judgment of the High Court of Delhi in Tata sons limited vs. Manoj Dodia and others45, at para 20 wherein it was held that when the defendant deliberately adopted TATA mark to encash on their reputation adequate protection must be granted.
78. Learned counsel for the appellants also further contended that DW1 stated that he had never visited USA or did not know people residing in USA; however as per the Siyasat advertisement dated 08.11.2000, the person inaugurating the business/distribution center of Magfast was a citizen of USA and the same was highlighted in the above advertisement of Magfast with a view to portray the connection of Magfast/its business with USA (where 45 2011 (46) PTC 244 (Del) 86 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch Pepsi Co was situated and where Mountain Dew was first launched). In his cross examination, DW1 took a stand that the said advertisement was not even issued by him but by its distributor and that he did not know the guest attending the inauguration ceremony mentioned in the advertisement. All these would show the dishonest adoption of mark by Magfast as such they were not entitled to the relief of injunction in the suit filed by them.
79. All the admissions in the cross examination of DW1 and the false statements given by him as pointed above would prove that Magfast had knowledge about the plaintiffs mark Mountain Dew and DW1's allegation that he became aware of Pepsi Co's trade mark Mountain Dew after filing of the suit by Pepsi Co is belied. DW1 in his cross examination admitted that Pepsi Co was prior user of the 'Mountain Dew' mark. The said admission also would prove the foremost ingredient of passing off i.e., prior use by Pepsi Co. Magfast could not claim any right over the mark Mountain Dew by its subsequent use, since Pepsi Co admittedly was the prior user globally and were registered proprietors of the said trade mark 87 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch both globally and in India. Hence Magfast failed to prove its prior use.
80. Section 34 of the Trade Mark Act, 1999 deals with saving of vested rights. However, the prior use of the unregistered holder must be either prior to the registered holders use or prior to registration whichever is earlier. Pepsi Co has trade mark registration in India since 1985 which was prior to the Magfast's alleged adoption of the mark Mountain Dew in 2000. Thus, Magfast's alleged use of Mountain Dew was 15 years after Pepsi Co's registration of Mountain Dew in India in 1985. In several judgments it was held that if the use was prior to the registration only then the benefit of Section 34 would be available to the prior user. For example, the High Court of Bombay in Aristo Pharmaceuticals Private Limited vs. Innova Cap tab46 at para 10.2 held that benefit of Section 34 would not be available when use was after the date of registration by proprietor. The High Court of Delhi in Devans Modern Breweries Limited vs. Radico Khaitan 46 (2014) 57 PTC 398 88 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch Limited47at para 13 held that defense of Section 34 would not be available when date of registration was prior to use by unregistered user. The High Court of Bombay in Wockhardt vs. Eden Healthcare48 at para Nos.18 and 19 held that trade mark was deemed to be used publicly after registration. Use of mark after date of registration is not prior use. The High Court of Judicature of Bombay in Iatros Pharmaceuticals Private Limited vs. Zenlabs India and Others49 at para Nos.11, 14, 15 and 19 held that to avail the benefit of Section 34, use of mark has to be prior to both registration and first use by registered proprietor. A man of prudence would check register of trade mark before using a mark.
81. The interpretation to Section 34 of the Trade Marks Act, 1999, given by the trial court that 'the verbatim in Section 34 of the Act makes it clear that if a manufacturer is found to be prior user irrespective of whether he has registration or not for his mark, the registered proprietor cannot interfere with the use of similar mark' is contrary to the plain meaning of Section 34 and settled 47 FAO(OS)(COMM)74/2019 48 2014 (58) PTC 14 (Bom) 49 MANU/MH/1733/2022 89 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch principles of law. The Hon'ble Apex court in Neon Laboratories Limited vs. Medical Technologies Limited50at para No.11 held that non usage of mark in India was irrelevant in establishing prior use as long as mark was being used world wide (Milmet Oftho Indistries vs. Allergan Incorporation51 at para Nos.8 and 9). Thus, Courts have held that global use can be taken into account to establish prior use. Thus, the defendants failed to establish that they were prior users of the mark 'Mountain Dew', and that they were entitled to the relief of passing off. Hence, point No.5 is answered in favour of the plaintiffs as against the defendants.
82. Point No.2: Whether the plaintiffs are entitled for permanent injunction against the defendants for infringement of their copy rights?
The plaintiffs contended that the defendants apart from adopting an identical mark had also adopted a similar label and manner of writing the said mark as plaintiffs 'Aqua Fina' and a mere comparison of the plaintiffs packaged drinking water under the mark 'Aqua Fina' and the 'Mountain Dew' bottle of the 50 (2016) 2 SCC 672 51 (2004) 12 SCC 624 90 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch defendant would reveal the similarities between the two products. The plaintiffs contended that there were various common features between the plaintiffs product i.e., 'Aqua Fina' and the defendants product 'Mountain Dew' as under:
i) The mark was identical i.e., 'Mountain Dew'.
ii) The label has an identical colour combination i.e., blue and white. Even the shade of blue used by the defendant is same as the plaintiffs Aqua Fina label i.e., Royal Blue.
iii) In the plaintiffs Aqua Fina label, the beginning and the ending letters "A" are written in an elongated/tapered manner. In the same manner the defendant has used the letters "M" & "N" in an elongated and tapered manner.
iv) Both the products bear device of mountains on the top portion of the label.
v) Both the products are sold in 1 litre bottles only.
vi) Both the products are priced at Rupees 12/-.
83. The plaintiffs also contended that the defendant used the following identical expressions:
91
PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch PLAINTIFFS' AQUA FINA DEFENDANT'S MOUNTAIN DEW Packaged Drinking Water Packaged Drinking Water Enjoy the crisp, refreshing Enjoy the taste and purity of taste of Aquafina. This bottle Mountain Dew. This bottle contains pure water guaranteed contains water guaranteed by our by our State-of-the-art reverse state of the art reverse osmosis.
osmosis and ozonisation U.V.sterilisation and ozonisation purifications system purification system.
Ingredients: Pure Drinking Ingredients: Pure Drinking Water Water
84. Learned counsel for the plaintiffs further submitted that according to the test of imperfect recollection, the consumers/prospective consumers were likely to be confused that the product of the defendant originated from and had connection with that of the plaintiffs.
85. A perusal of the similarities pointed out by the plaintiffs in their plaint in O.S.No.95 of 2004 and on physical examination of the two bottles, this Court is also of the opinion that the defendants in its label of 'Mountain Dew' had copied several essential features 92 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch of the 'Aqua Fina' label of the plaintiffs vis a vis colour combination, mountain device, manner and font of depiction of the marks. Besides similarities in the plaintiffs writing style of the mark 'Aqua Fina', the letters 'M' and 'N' in the word 'Mountain Dew' on the defendants label also have been written in an elongated manner. Moreover, the defendants had used identical expressions to define its product. Such substantial reproduction of the Aqua Fina label by the defendants amounts to infringement of copy right owned by the plaintiffs in Aqua Fina label. The defendants use of the essential features of the Aqua Fina label and use of the trade mark 'Mountain Dew' belonging to the plaintiffs cannot be a mere coincidence and evidences its malafide intention to mislead the public and trade that its product was associated with that of the plaintiffs.
86. The Delhi High Court while passing the interim order for appointment of a Local Commissioner directed the Commissioner to seize the printing material, packaging material as well as mineral water bottles bearing the trade mark 'Mountain Dew'. The Local Commission was executed at the defendants premises on 93 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch 19.07.2003. The Local Commissioner filed a report annexing an old label of the defendants which was different from that of plaintiffs 'Aqua Fina' label. The contention of the learned counsel for the plaintiffs was that the change in the 'Mountain Dew' label by the defendants was obviously done, so that it could look similar to the plaintiffs label of 'Aqua Fina'.
87. The Trial Court dismissed the claim of the plaintiffs for infringement of their copy rights on the ground that the defendants could not have adopted the label of the plaintiffs in the year 2000, when the plaintiffs had launched Aqua Fina in the year 2000. But this observation appears to be erroneous, as the defendants failed to place on record any label of their packaged drinking water pertaining to the period 2000-2002. The bottles on record were pertaining to June/July-2003 filed by the plaintiffs along with the suit. Though Aqua Fina was launched in India in 2002, the product was in global use by the date of its launch. Hence the observation of the trial court that the defendants could not have adopted the label of the plaintiffs is palpably wrong.
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88. As per Section 2(m) of the Copy Right Act, 1957, copy right exists in relation to artistic work of the label also. The manner of writing and the expressions used for describing the product are also copied by the defendants without the permission of the owner of the copy right. The reproduction of the work in any material form or adopting the work would also fall under the ambit of infringement of copy right in the work, within the meaning of Section 51 of the Copy Right Act. A perusal of Section 51 of the Copy Right Act would show that it shall be deemed that there shall be infringement of the copy right when any person does anything, when the exclusive right to do is conferred upon the owner of copy right or any person makes sale of copies of such work by infringement of the copy right in the said work. It is therefore clear that the infringement shall be deemed when an exclusive right as conferred upon the owner of the copy right was copied by the infringers. Hence, the trial court went wrong in declining the relief sought by the plaintiffs for infringement of their copy right. As such this point is also held in favour of the plaintiffs as against the defendants holding that the plaintiffs are entitled for permanent 95 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch injunction against the defendants for infringement of their copy right in copying the label and the manner of writing the word Mountain Dew as that of the plaintiffs Aqua Fina.
89. Point No.3: Whether the plaintiffs are entitled for permanent injunction restraining the defendants for passing off, unfair competition and dilution?
As the use of an identical mark or similar label is likely to create confusion as to source and origin of the defendants product 'Mountain Dew', such adoption and use would constitute a misrepresentation in the course of trade to consumers, which was likely to result in loss of goodwill and reputation of the plaintiffs. As both the plaintiffs and defendants were also in the same business of packaged water, the consumers might be confused into believing that the product of the defendants also originated from the plaintiffs. Such use would constitute acts of passing off and unfair competition. The nature of the product was such that the same would be picked up off the shelf without much deliberation. The decision to purchase a product would be made at the point of purchase and would be almost instantaneous. When the plaintiffs 96 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch and defendants products are kept together at the same counters and shelves, the chances of confusion would be almost unavoidable as it would be the case of triple identity pertaining to identical mark, identical channel of purchase and identical customers, hence passing off is inevitable.
90. Considering that the products of packaged drinking water manufactured both by the plaintiffs and defendants are for human consumption and have a direct bearing on public health and hygiene and if standards are not maintained, it would result in tarnishment of the image of the plaintiffs and as the consumers might purchase the product of the defendants under the mistaken impression, and if not satisfied with the quality, they would be dissuaded from purchasing the plaintiffs other products also and the use of an identical trade mark also constitutes blurring, it amounts to dilution. Thus, the plaintiffs are also entitled for permanent injunction restraining the defendants from passing off their products as that of the plaintiffs, causing unfair competition to them and diluting their image. In the result, point No.3 is also answered in favour of the plaintiffs as against the defendants. 97
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91. Point No.4: Whether the plaintiffs are entitled for damages, rendition of accounts of profits and delivery of the impugned mark, label and devices?
92. As point Nos.1 to 3 are answered in favour of the plaintiffs holding that they were entitled for permanent injunction for infringement of their registered trade mark and for infringement of their copy rights, for passing off unfair competition and dilution, they are also entitled for damages from the defendants for the unauthorized use of their registered mark and label. However, as the evidence of DW1 and the documents marked by them would show that their sale of packaged drinking water was only to an extent of Rs.3,75,000/- for the year 2002-2003, it is considered fit to direct them to pay damages of Rs.5,00,000/- to the plaintiffs and to direct them to deliver the impugned mark, label and devices used by them.
93. Point No.6: Whether the defendants are entitled for recovery of damages @ Rs.25,00,000/- as claimed by them? 98
PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch As point No.5 is answered against the defendants, they are not entitled for any damages as claimed by them. Hence point No.6 is also answered against the defendants.
94. Point No.7: Whether the Trial Court committed any error in dismissing the suits filed by both the parties?
As the findings of the Trial Court are inconsistent and dismissed both the suits filed by the plaintiffs as well as the defendants holding that the other party was prior user, which is basically wrong and the Trial Court committed error in considering the unqualified and unconditional registration of the plaintiffs in India and failed to consider the binding nature of the Intellectual Property Appellate Board order under Section 124(4) of the Trade Mark Act, 1999 and failed to appreciate the global popularity of the registered Trade Mark 'Mountain Dew' pertaining to the plaintiffs in various countries and dismissed the suit filed by them seeking permanent injunction by wrong appreciation of law and facts, it is considered fit to set aside the judgment and decree passed by the Trial Court in O.S.No.95 of 2004 and the findings of the Trial Court on issue No.1 in O.S.No.19 of 2004 against the plaintiffs 99 PNR,J & Dr.GRR,J CCCA Nos.20 of 2021 & Batch with regard to holding that the defendants were prior users of the trade mark Mountain Dew.
95. Point No.8: To what relief?
In the result, CCCA Nos.20 and 21 of 2021 are allowed by setting aside the judgment of the trial court in O.S.No.95 of 2004 as well as the findings on issue No.1 in O.S.No.19 of 2004 passed by the X-Additional Chief Judge, City Civil Court, Hyderabad, on 31.12.2019. The Cross Objections O.S.No.32 of 2021 filed by the defendants is dismissed.
__________________ P. NAVEEN RAO, J _____________________ Dr. G. RADHA RANI, J October 26, 2022 Note:
LR copy to be marked.
B/O. KTL/VSL